The Ominous Employee Free Choice Act: This Legislation Represents a Dramatic Departure from Previous Labor Law
Epstein, Richard A., Regulation
The history of American labor law, to date, can be broken into two broad periods, animated by fundamentally different world views. The first period was marked by the ascendancy of common law principles, which dominated American labor law from the late 19th century until it was fully displaced by passage of the Wagner Act in 1935. The second period runs from that time to the present, and has as its two main landmarks the Taft-Hartley Act of 1947 and the Landrum-Griffin Act of 1959. In between those periods lies a short but important transition that runs, roughly speaking, from the Railway Labor Act of 1926 through the Norris-LaGuardia Act of 1932--a Herbert Hoover confection--and Franklin Roosevelt's ill-fated National Industrial Recovery Act of 1933. Today may prove to be the dawn of a third broad period, defined by the oft-proposed Employee Free Choice Act (EFCA) that passed the U.S. House of Representatives in 2008 only to fall prey to a Republican blockade in the Senate.
In broad outline, I will summarize the salient features of these three approaches as a progression from markets, to politics, to dictatorship. The earliest period, which is uniformly discredited today in polite circles, adopted a basic free-market approach to labor relationships. The second period attempted to introduce a version of union democracy into labor markets, in which organization campaigns were followed by secret ballot elections under the supervision of the National Labor Relations Board (NLRB) . The third period, should it come to be, would introduce a system of dictatorial union and arbitral workplace decrees implemented through a lethal one-two punch. The first blow comes from allowing a union to substitute, at its option, a card-check selection for the current secret ballot elections in recognition disputes. The second blow is the introduction of compulsory interest arbitration that authorizes a panel of arbitrators under a set of procedures as yet to be determined to hash out an initial two-year "contract"--i.e. arbitral award--binding on the parties, who have no recourse to judicial review.
The initial legislative rejection of the common law during the pre-New Deal Progressive Era was stymied by judicial action before 1920, only to be blown away in the United States Supreme Court in the post-1926 period. It is my unrepentant view that earlier judges had it right when they rejected, on constitutional grounds no less, the collective bargaining system subsequently enshrined in the Wagner Act. I review those developments in part for theoretical completeness, knowing that a return to the common law regime has zero political traction in Congress. Understanding that history is critical, however, for setting the stage for a different constitutional indictment of the EFCA that I believe is valid under current law.
Accordingly, the first part of this article examines the common law system that was displaced decisively by the Wagner Act. The second section then looks at the Wagner Act synthesis. The last section examines the EFCA and the constitutional challenges that can be raised against it.
THE COMMON LAW APPROACH
The rise of labor law as a separate branch of law is a creature of the first half of the 20th century. Prior to that time, labor disputes were governed by general principles that common law courts (including the courts of equity that could issue injunctive relief) applied to all business conflicts. Those principles can be briefly summarized as follows: First, the parties had to keep their promises. Except for the usual prohibitions against force and fraud, the parties were left to devise for themselves on the critical matters of wages, termination, discipline, and other terms and conditions of contract. The ostensible imbalance of economic power between the rich employer and the poor employee--a stereotype that is true in some instances, but not in all--was of no moment to the legal system. …