The Supreme Court on Unions: Why Labor Law Is Failing American Workers 9781501703652

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THE SUPREME COURT ON UNIONS

THE SUPREME COURT ON UNIONS WHY LABOR LAW IS FAILING AMERICAN WORKERS

Julius G. Getman

ILR Press an imprint of CORNELL UNIVERSITY PRESS ITHACA AND LONDON

Copyright © 2016 by Cornell University All rights reserved. Except for brief quotations in a review, this book, or parts thereof, must not be reproduced in any form without permission in writing from the publisher. For information, address Cornell University Press, Sage House, 512 East State Street, Ithaca, New York 14850. First published 2016 by Cornell University Press Printed in the United States of America Library of Congress Cataloging-in-Publication Data Names: Getman, Julius G., author. Title: The Supreme Court on unions : why labor law is failing American workers / Julius G. Getman. Description: Ithaca ; London : ILR Press, an imprint of Cornell University Press, 2016. | ©2016 | Includes bibliographical references and index. Identifiers: LCCN 2015046438 | ISBN 9781501702730 (cloth : alk. paper) Subjects: LCSH: Labor unions—Law and legislation—United States | United States. Supreme Court—Decision making. Classification: LCC KF3389 .G48 2016 | DDC 344.7301/88—dc23 LC record available at http://lccn.loc.gov/2015046438 Cornell University Press strives to use environmentally responsible suppliers and materials to the fullest extent possible in the publishing of its books. Such materials include vegetable-based, low-VOC inks and acid-free papers that are recycled, totally chlorine-free, or partly composed of nonwood fibers. For further information, visit our website at www.cornellpress.cornell.edu. Cloth printing

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To the many students with whom I have traded ideas and from whom I have learned in fifty years of teaching and with special affection to those who are continuing to teach, write, and practice in the field

CONTENTS

Preface Acknowledgments

ix xi

Introduction

1

1. The Court and Union Organizing

15

2. The Supreme Court and Collective Bargaining

35

3. The Supreme Court and the Right to Strike

52

4. The Court and the Protected Status of Economic Pressure

69

5. The Supreme Court, Union Picketing, and Boycotts

89

6. Exclusivity and the Duty of Fair Representation

110

7. The Court and the Definition of “Employee” under the NLRA

137

8. The Supreme Court and Arbitration

160

Conclusion

189

Notes Index

199 219

vii

PREFACE

This book is the culmination of a long transformative process that began in the late 1950s when I was a student at Harvard Law School. While there I studied labor law with the master—Archibald Cox, from whom I learned that labor law issues were often legally complex and morally ambiguous. Cox taught the course with a magisterial neutrality that drew its essence from his many years as a scholar and his work as a neutral labor arbitrator, and its focus from the language and legislative history of the National Labor Relations Act. Shortly after law school, I began my career as a labor lawyer as a staff attorney at the National Labor Relations Board (NLRB) in Washington. I began in the Advice Section dealing with difficult cases that were sent from the Board’s regional offices to Washington for disposition. Gradually I began to think of myself as an expert versed in the intricacies of doctrine and interplay of subsections—the special language of labor law. When I began teaching labor law in 1963 at Indiana University School of Law in Bloomington, Archibald Cox provided the model and my NLRB experience the language by which I conveyed to students the moral ambiguity and analytic difficulties that lay hidden in labor law issues. I took pride in the thought of myself as a neutral labor law expert and was delighted when perplexed students asked me if I was prolabor or promanagement. ix

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PREFACE

What changed my approach to labor law and teaching was contact with reality. It is the study of and participation in labor relations reality that has most shaped my career as a scholar and teacher. My first significant contact with labor relations reality was the ten-year study of union organizing that I conducted with Professors Goldberg and Brett in the late sixties and early seventies. During the course of the study I interviewed employees, union organizers, management officials, lawyers, and consultants. I began to realize how different the law looked from the perspective of the workers in whose interest it was regularly justified but whose voice was seldom heard. During the late seventies and early eighties I served as chief negotiator for the Connecticut State Police Union and played an active role in support of the union organizing campaign of Yale’s clerical and technical workers conducted by UNITE HERE. From 1986 to 1988 I served as national president of the American Association of University Professors, which among other things represents faculty members in collective bargaining. In the 1990s I did a major field study of the bitter strike by Local 14 of the United Paperworkers International Union (UPIU) against the International Paper Company. I interviewed permanently replaced strikers, replacement workers, company and union officials, the parish priest of Jay, Maine’s, largest church, and the town manager. I walked through deserted streets where half the homes had “for sale” signs out front. The more I learned about labor relations reality, the less persuasive I found the standard Labor Board analysis and the reasoning of the major court opinions that I taught in my labor law classes. I finally retired in the summer of 2014 after fifty years of law teaching. I have long since given up the pose of neutrality and made clear to my students the values, assumptions, and factual conclusions that shape my analysis of labor law issues. I also make clear that I believe in the importance of unions and the value of collective bargaining. My scholarship and my participation in labor relations have taken a great toll on my youthful idealism and faith in the neutrality and expertise of federal judges and NLRB board members. In this book I seek to explain the analytic inconsistency, the repetitive bias, and the factual ignorance that have reshaped basic labor law and rendered it ineffective.

ACKNOWLEDGMENTS

I thank Terri LeClercq for her many suggestions, world-class editing, and continuing moral support; also for the benefit of our twentyfive-year discussion of the elements of good writing. Thanks also to Marsha Moyer, novelist and faculty assistant, for editing, typing, and perceptive criticism of the early drafts of the manuscript. Special thanks to my colleague and friend Professor Richard Markovits, who provided constant encouragement and significant editorial help. Thanks to my student assistant Tyler Somes for his great help with the form and substance of the footnotes; to Professor Justin Driver of the University of Chicago Law School for enjoyable discussion that led me to select the topic; to Fran Benson of Cornell University Press for encouraging me to write this book; and to the anonymous reviewers of the manuscript for their many useful suggestions. I also thank Susan Specter, the production editor, for capably shepherding the project, and Jamie Fuller for her careful copyediting.

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INTRODUCTION

Labor unions and courts have rarely been allies. From their earliest efforts to organize, unions have been confronted with hostile judges and antiunion doctrines. In the early 1800s, when labor law was developed primarily by state courts, union activity and unions themselves were often declared to be criminal conspiracies to distort the market. It wasn’t until 1842 that the conspiracy doctrine was effectively challenged by Lemuel Shaw, a highly regarded member of the Supreme Judicial Court of Massachusetts, in the case of Commonwealth v. Hunt.1 Shaw’s analysis pretty much ended the conspiracy doctrine, but it did not usher in an era of mutual accommodation between unions and courts. In the aftermath of the Hunt case, courts shifted from holding unions illegal by virtue of their antimarket goals to finding many of their activities, particularly strikes and boycotts, unlawful. As noted by Frankfurter and Greene in their classic book The Labor Injunction, courts were quick to find a variety of union goals and tactics unlawful. Courts regularly found unions guilty of violence or illegal coercion when their conduct involved nothing more than peaceful picketing or demonstrations. One court announced that “there is and can be no such thing as peaceful picketing, any more than there can be chaste vulgarity, or peaceful mobbing, or lawful lynching.” Findings of violence or other union impropriety 1

2

INTRODUCTION

invariably led to the issuance of an injunction often drafted by employer counsel forbidding a wide range of activity.2 During the late nineteenth and early twentieth centuries, injunctions became a far more powerful weapon against unions than the criminal law had ever been. If union members or leaders violated the broad terms of an injunction, they could be held in contempt and jailed without the need for a jury trial. Injunctions also provided a speedy remedy for employers facing a strike or boycott who needed to find only a single, sympathetic judge to obtain an immediate temporary injunction to halt ongoing union activity.3 The Supreme Court was a minor player in labor relations until the last decade of the nineteenth century. But once it began to address labor relations issues, it did so by firmly supporting the traditional rights of employers. One of the Court’s first important labor decisions was In re Debs,4 in which it affirmed the right of a federal court to broadly enjoin a railroad strike and imprison those whom it found to have disobeyed its order. The case grew out of a strike called by the American Railroad Union led by Eugene V. Debs to protest a 25 percent wage cut. Soon after the strike began, a federal judge ordered the defendants “and all persons combining and conspiring with them, and all other persons whomsoever, absolutely to desist and refrain from in any way or manner interfering with, hindering, obstructing, or stopping any of the business” of “any of a list of railroads.” Debs and four other union leaders were arrested and imprisoned on grounds that they violated the injunction. Speaking for a unanimous Court, Justice Brewer stressed the right of federal courts to issue injunctions when federal interests (in this case in the transportation of mail) were threatened. “Indeed, it is more to the praise than to the blame of the government that, instead of determining for itself questions of right and wrong . . . and enforcing that determination by the club of the policeman and the bayonet of the soldier, it submitted all those questions to the peaceful determination of judicial tribunals . . . and invoked their consideration and judgment as to the measure.”5 Justice Brewer also insisted that “the power to enjoin requires the power to punish for disobedience. To submit the question of disobedience

INTRODUCTION

to another tribunal, be it a jury or another court, would operate to deprive the proceeding of half its efficiency.”6 To further justify the propriety of the injunction and the imprisonment of the union leaders, Justice Brewer quoted the remarks of one of them: “As soon as the employees found that we were arrested, and taken from the scene of action, they became demoralized, and that ended the strike. It was not the soldiers that ended the strike. It was not the old brotherhoods that ended the strike. It was simply the United States courts that ended the strike.” The lament of the union leader was the boast of Justice Brewer. “The outcome, by the very testimony of the defendants, attests the wisdom of the course pursued by the government, and that it was well not to oppose force simply by force, but to invoke the jurisdiction and judgment of those tribunals to whom . . . is committed the determination of questions of right and wrong.”7 In 1907, the Court expanded on the potential liability of unions in Loewe v. Lawlor,8 holding that the Sherman Antitrust Act, created to prevent business monopolies, could be employed against a union boycott.9 The case arose when a complaint charged members of the United Hatters of America with “attempting to restrain trade through strikes and boycotts in order to unionize all of the workers in the industry.” The lower court dismissed the complaint on the grounds that unions and their activities did not fall under the Act. The Supreme Court reversed, rejecting the argument that there was an implicit exemption for unions under the Sherman Act. The opinion rested in part on the broad language of the Act but even more on the Court’s perception of union goals as counter to public policy. “And that conclusion rests on many judgments of this court, to the effect that the act prohibits any combination whatever to secure action which essentially obstructs the free flow of commerce between the states, or restricts, in that regard, the liberty of a trader to engage in business. . . . [E]very person has individually, and the public also has collectively, a right to require that the course of trade should be kept free from unreasonable obstruction.”10 Under the Court’s reasoning, almost any union instigated strike or boycott constituted an antitrust violation. The Court’s opposition to unions and support for employers also manifested itself in its rejection or strained reading of prounion acts

3

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INTRODUCTION

of Congress. In Adair v. United States,11 decided in 1908, the Court overturned an act of Congress that sought to outlaw discrimination against union members and yellow-dogcontracts12 in the railroad industry. The Court declared that the Constitution protected the right of an employer to refuse to employ union members and to make nonmembership a requirement of the employment contract. It framed its opinion as an effort to protect the autonomy of workers. The right of a person to sell his labor upon such terms as he deems proper is, in its essence, the same as the right of the purchaser of labor to prescribe the conditions upon which he will accept such labor from the person offering to sell it. So the right of the employee to quit the service of the employer, for whatever reason, is the same as the right of the employer, for whatever reason, to dispense with the services of such employee . . . and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land.13 Shortly thereafter, in Hitchman Coal v. Mitchell,14 the Court enforced an injunction to prevent mine worker organizers from interfering with existing contracts under which employees promised not to join a union during the course of their employment. Not only did the Court declare these contracts valid, but it insisted that the mine workers’ union, which was not a party to the contracts, nevertheless had to honor them by ceasing its organizing efforts. The Court equated peaceful efforts to persuade miners to join the union with breaches of the peace: “In our opinion, any violation of plaintiff ’s legal rights contrived by defendants for the purpose of inflicting damage, or having that as its necessary effect, is as plainly inhibited by the law as if it involved a breach of the peace. A combination to procure concerted breaches of contract by plaintiff ’s employees constitutes such a violation.”15 It remains striking how committed the Court was to freedom of contract—whether achieved by negotiation or by adhesion—and

INTRODUCTION

how little recognition it gave to freedom of association and the right to join unions, a right that it acknowledged in dicta but never used as the basis for decision. In the aftermath of Hitchman, organized labor became increasingly active politically, seeking immunity from the antitrust laws and significant reductions in the use of injunction. In 1912 it played an important role in the election of Woodrow Wilson and a progressive Congress. The Wilson Congress amended the antitrust laws in the Clayton Act that contained two provisions responsive to labor’s concerns. Section 6 purported to grant unions an exemption from the antitrust laws, and Section 20 purported to eliminate the use of injunctions in labor disputes.16 Samuel Gompers hailed the amendments as “the magna carta of labor,” but he failed to take into account the ability of the Court to interpret legislation in accordance with its own views of desirable public policy. In 1921 in Duple Printing Press Co. v. Deering,17 the Court interpreted the amendments in a manner that rendered them ineffectual. The case involved union efforts to pressure Deering’s customers to support an effort to unionize a Deering facility in Michigan. The court of appeals held that the Clayton Act forbade the grant of injunction in such circumstances. The Supreme Court disagreed. It read Section 6 not as an effort to amend but rather as a restatement of existing law. And it read Section 20’s statement that no injunction should issue “in any case between an employer and employees, or between employers and employees” as applying only to disputes between an employer and its own employees. The majority opinion made little effort to hide its distaste for legislation aimed at helping organized labor: “Section 20 must be given full effect according to its terms as an expression of the purpose of Congress; but it must be borne in mind that the section imposes an exceptional and extraordinary restriction upon the equity powers of the courts of the United States and upon the general operation of the anti-trust laws, a restriction in the nature of a special privilege or immunity to a particular class, with corresponding detriment to the general public.”18

5

6

INTRODUCTION

Justice Pitney referred to the “extreme and harmful consequences” of permitting the union to continue picketing, which the court described as “a general embargo . . . and a nationwide blockade.”19 These terms—normally used to describe military actions—suggest that the unions were feared as an enemy force applying the tactics of warfare to disrupt the normal flow of business.

THE ERA OF PROUNION LEGISLATION

In the 1930s, when organized labor once again became politically powerful, it pressed its supporters in Congress to take steps to reduce the power of courts to stifle union activity through injunctions. In 1932 Congress passed the Norris-LaGuardia Act, which denied federal courts the ability to issue injunctions in “labor disputes.”20 The carefully drafted statute made it almost impossible for federal courts to issue injunctions against peaceful picketing in “a case involving or growing out of a labor dispute.” And it defined “labor dispute” very broadly to include any type of possible union action “regardless of whether or not the disputants stand in the proximate relation of employer and employee.” Legislation favorable to unions became a hallmark of the early New Deal, during which period the Railway Labor Act, the National Recovery Act, and the National Labor Relations Act were passed. Although the Court in 1935 declared the National Recovery Act unconstitutional,21 two years later by a five-to-four vote it upheld the National Labor Relations Act as a valid exercise of congressional power under the Commerce Clause of the Constitution.22 When the constitutionality of the Act was established, the Court continued to play a major role in interpreting the broad, sometimes vague, language of the Act. Each of the acts regulating labor relations passed in the 1930s sought to promote the rights of workers to unionize, bargain collectively, and strike. Each had among its aims limiting the role of courts, both federal and state, in the formulation and effectuation of basic labor policy. Each provided for an administrative agency that had initial jurisdiction to interpret and enforce the statute. The advantages

INTRODUCTION

of agencies over courts were thought to be manifold. If a single agency developed labor policy and rules, it could help to createa single, uniform system of laws that the parties would understand. An agency appointed by the president would, it was thought, be composed of experts in labor relations, people not committed to the outmoded antiunion views that predominated in the courts. And because the agencies would not have the injunctive powers of the courts, they would play an appropriately modest role in labor relations. These are the concepts that gave rise to and shaped the Wagner Act, officially known as the National Labor Relations Act.23 In its introductory passage, the Act announced as its primary goals: “encouraging the practice and procedure of collective bargaining and . . . protecting the exercise by workers of full freedom of association and selforganization and designation of representatives of their own choosing for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.” To permit employees free choice with respect to unionization24 and to prevent employer interference and retaliation, Section 8 of the Act created five employer unfair labor practices. Subsection (1), the broadest of the Act’s prohibitions, made it an unfair labor practice for an employer to “interfere with, restrain or coerce employees in the exercise of the rights guaranteed in section 7.” Section 8(2), aimed at “company unions,” made it an unfair labor practice for an employer “to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.” Section 8(3), aimed at preventing employer retaliation against union supporters, outlawed “discrimination in regard to hire or tenure or to encourage or discourage membership in any labor organization.”25 Finally, to make certain that collective bargaining in fact followed from the exercise of employee choice, Section 8(5) of the Act made it an unfair labor practice for an employer to “refuse to bargain collectively with the representatives of his employees.” The Act also provided for representation elections to be conducted by the National Labor Relations Board. The role of the courts under the statute was intended to be as minimal as possible under our constitutional system. The U.S. courts of

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INTRODUCTION

appeal, which could review Board decisions prior to enforcing them, were not to consider any “objection that has not been urged before the Board.” Nor were courts permitted to make independent findings of fact—“the findings of the Board as to the facts if supported by evidence shall be conclusive.” And the courts were largely excluded from the election process, set forth in Section 9, by which unions were chosen or rejected as exclusive representatives for a unit of employees. The Act was passed during the heyday of belief in the potential of administrative agencies. Its drafters assumed that the Board would have the definitive voice in establishing national labor policy. The classic statement of the Board’s role was made some years later by Justice Frankfurter in holding that states were given only a limited power to deal with any issue that might be covered by the Act. “Congress has entrusted administration of the labor policy for the Nation to a centralized administrative agency, armed with its own procedures, and equipped with its specialized knowledge and cumulative experience. . . . Courts are not primary tribunals to adjudicate such issues. It is essential to the administration of the Act that these determinations be left in the first instance to the National Labor Relations Board.”26 From 1935 to 1947, union membership grew from two million to twelve million. During this period, the NLRB and the courts worked in relative harmony as they struggled to define the terms of the NLRA and enunciate its basic policies. The Court had become less hostile to unions during the late thirties and early forties, with the addition of Roosevelt appointees including Justices Black, Murphy, Rutledge, Jackson, and Frankfurter.

AMENDING THE NLRA

During World War II, unions, which continued to grow in numbers and wealth, voluntarily agreed not to strike. When the war ended, so did the union’s no-strike pledge. Wages during the war had not kept pace with inflation, and many grievances had piled up during the nostrike period. A great wave of strikes ensued. According to one estimate, the “post-war strike wave” that swept the United States involved

INTRODUCTION

180,000 autoworkers, more than half a million steelworkers, 200,000 electrical workers, and 150,000 packing house workers, along with hundreds of thousands involved in smaller strikes. In the year 1946 alone, 4.6 million workers had been on strike.27 Within a short period, the power of unions became a polarizing political issue. In 1947, Congress with a new postwar Republican majority passed the Taft-Hartley amendments to the NLRA, overriding the veto of President Truman.28 The Taft-Hartley legislation mainly left intact the rights granted to employees to form, join, and assist unions and to bargain collectively through representatives of their own choosing. But it added a series of union unfair labor practices. The Act’s key provision, Section 8(b) (4), outlawed a broad range of strikes, boycotts, and picketing characterized as “secondary” by the Act’s proponents. Taft-Hartley also provided for injunctions and civil actions against unions that engaged in secondary strikes or picketing. The Taft-Hartley law narrowed the definition of “employee,” specifically excluding “any individual having the status of independent contractor.” It further eliminated supervisors, a term that it defined very broadly, from the definition of employees.29 And it provided additional protection for employer speech by enacting Section 8(c), which stated that “the expressing of any views argument, or opinion . . . shall not constitute or be evidence of an unfair labor practice.” The impact of Taft-Hartley on unions and collective bargaining remains difficult to chart. Between 1947, when it was enacted, and 1957, unions added over three million members. “Even as a percentage of the civilian labor force, union membership rose from about 23 percent to about 26 percent.”30 Although union growth was impressive, it did not equal the fivefold increase under the Wagner Act. And prounion commentators argued that growth would have been considerably greater had the Act not been passed.31 Over the next decade, organized labor made repeal of Taft-Hartley their major political goal. The Taft-Hartley Act was a major issue in the 1948 presidential campaign, and when President Truman, who had vetoed the law and strongly criticized the Congress that passed it, won a surprising victory, most political commentators believed that

9

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INTRODUCTION

the Act’s days were numbered. But the careful strategy of its backers together with the all-or-nothing approach of labor toward the Act made repeal impossible. Professor Aaron singled out the mistakes of the union leaders in his recounting of what went wrong from labor’s point of view: Finally, the unions’ strategy was poor. Their “all or nothing” demands seemed arrogant and unreasonable, especially when contrasted with the deceptively conciliatory proposals of Taft to discuss and, if need be, amend or eliminate any provisions of the existing law that were demonstrably unworkable or prejudicial to labor’s legitimate interests. Whatever slight hope there might have been for popular support of substantial revision of TaftHartley was shattered by the unions’ intransigent position.32 By the mid-1950s, unions were once more under attack. This time the issue was not strikes so much as the claim that many unions, the Teamsters in particular, were antidemocratic, run by corrupt, dictatorial leaders. “Attention was focused not on labor-management relations but upon . . . the ugly details of looted union treasuries, violated fiduciary obligations, sweetheart contracts, exploitation of union members, and stuffed ballot boxes and rigged conventions.”33 The issue of union democracy had achieved national prominence in 1957 as the result of televised hearings held before a select U.S. Senate committee chaired by Senator John McClellan. The committee explored corruption in unions generally but focused on the International Brotherhood of Teamsters.34 The McClellan committee’s hearings were the catalyst for the Landrum-Griffin Act of 195935 and for a series of amendments to the NLRA that were defended as prohibitions against tactics regularly employed by the Teamsters. Newly added Section 8(b)(7) was justified as an effort to prevent the Teamsters from using what was called “blackmail picketing.” That tactic consisted of picketing vulnerable employers until they entered into standard agreements with the Teamsters and forced their employees to sign up with the union. The Teamsters had also managed to avoid violating the secondary boycott

INTRODUCTION 11

provision of the Taft-Hartley Act by insisting that their collective agreements contain clauses giving drivers the right to refuse to make deliveries or pickups at striking or nonunion facilities. To counter this tactic Congress added a new Section 8(e) outlawing agreements by which an employer “ceases or refrains from . . . doing business with any other person.” The NLRA that emerged from the combining of the Wagner, Taft-Hartley, and Landrum-Griffin Acts was among other things a mass of contradictions, maintaining the broad rights of employees to concerted activity while condemning in equally broad language many traditional forms of union pressure. The often vague, frequently inconsistent language of the twice-amended NLRA posed a continuing problem of interpretation for the Court, which had to decide how broadly the language of Section 8(b)(4) should be interpreted and how to reconcile it with the broad language of Sections 7 and 13. It is not surprising that in the intervening years, given its changing personnel and their lack of labor relations experience, the Court’s interpretation of the law has been confusing, biased, and inconsistent. Congress could have made the process of interpretation easier. It has the ability to override faulty interpretations, clarify confusing language, and change failed policies through amendment. But Congress has remained divided with respect to labor policy. Since 1959 there have been repeated efforts to amend the Act, mostly to make it more favorable to unions and collective bargaining.36 But none have passed. Nor has the Supreme Court benefited from the decisions of the courts of appeals or the NLRB, both of which pass on labor law questions before they are heard by the Supreme Court. The courts of appeals have provided as much confusion as insight. Inconsistent approaches from court to court and within each circuit are common, and careful elucidation of statutory meaning and policy is rare. Nor was the National Labor Relations Board ever in a position to play the central role in developing labor law that Justice Frankfurter so eloquently described. He assumed that the Board would possess a unique understanding of labor relations, but he did not explain how it would develop this expertise.

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INTRODUCTION

Unfortunately, the expertise of the labor board is largely a myth.37 Although it has been administering the National Labor Relations Act for nearly eighty years, the Board has never engaged in a serious effort to determine empirically the actual impact of challenged conduct. Nor is it common for Board members or employees to come to the agency with insights or knowledge untainted by partisan involvement. Board members have come from the ranks of lawyers, politicians, and Board staff, rarely from scholars or neutral experts, and even more rarely with any history of empirical investigation. Even if the Board had great understanding of labor relations and law, it was never in a position to educate the courts or to challenge their misconceptions. The Board operates through case-by-case decisions, all of which are subject to review by both the courts of appeals and the Supreme Court. To have its judgments upheld, it must make them acceptable to the reviewing courts. Board opinions are almost invariably written with a view to acceptability, which makes for subservience rather than innovation. Moreover, the assumption that the courts that review its decisions would defer to the NLRB’s legal conclusions was never realistic. Thus for almost sixty years the Supreme Court has had the unrestrained, deciding voice with respect to labor law and policy. During that time the institution of collective bargaining has been consistently weakened. When the hegemony of the Court began in 1959 with passage of the Landrum-Griffin Act, collective bargaining was a major force in the economy. More than seventeen million workers in all and more than one-third of private-sector workers were unionized. Collective bargaining had brought great benefits to workers. It came with a wage premium and improved benefits.38 Union workers were the ones with health insurance and retirement plans. Collective agreements prohibited discrimination and provided protection against arbitrary treatment. Almost all collective bargaining agreements limited the employer’s ability to discharge or otherwise discipline to cases of “just cause.” Once employers and unions began to engage in collective bargaining, negotiating contracts to govern the workplace, they realized that they had a common interest in resolving disputes during the term of the agreement without strikes. To achieve this goal, they had by

INTRODUCTION 13

1959 developed a highly sophisticated system of dispute resolution common to almost all collective bargaining relationships. Under this system, when an employee or the union feels that rights under a collective agreement have been violated, they can file a grievance that sets in motion an elaborate process. If the union supports a grievance, it handles it on behalf of the filing employee or employees through a series of steps. At the first step the grievance is handled for the union by shop stewards who negotiate its merits and discuss possible compromises with floor- level supervisors. Unless it is settled, the grievance is dealt with by successively higher levels of management and union officials. At each stage, management may affirm its original decision, grant the grievance, or offer to grant it in part. At any stage the union may withdraw the grievance or accept a compromise. If the grievance is not resolved through negotiation, the union has the option of demanding arbitration. The parties agree to accept the decision of the arbitrator as final and binding.39 This system changed the basic nature of unionized enterprises, replacing total management control with a rule of law. It gave union officials a significant voice in the enterprise.40 The grievance system reduced the discretionary power of management but it also provided several major benefits for employers. It avoided strikes, lowered quit rates, and provided information about employee attitudes and morale. Collective bargaining also carried with it the use of seniority in determining such things as layoffs, promotion, and rates of pay. Seniority provides a barrier against discrimination, and it grants to experienced workers claims for benefits acquired through their labor. During the late sixties and early seventies management officials and lawyers learned not only ways to combat unions but how to cooperate with them. Thus by 1959 the goals of the National Labor Relations Act in establishing a form of workplace democracy seemed in the process of accomplishment. Nothing in the amended NLRA required altering course, but the ambiguities in the law presented questions for resolution by the Supreme Court that would determine whether the law would continue to provide support for collective bargaining. These questions involved the law governing union organizing, strikes, the

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INTRODUCTION

bargaining process, and the Act’s coverage. The Court’s decisions in each of these areas are discussed in the chapters below. The makeup of the Supreme Court has continually changed during the years that it has been setting basic labor policy by interpreting the National Labor Relations Act. The New Deal Supreme Court of the early years, which was concerned with enforcing the policies of the Act and which was supportive of the NLRB, has been replaced by the current, far more conservative Roberts Court, which has shown little interest in protecting the basic rights of workers to join and support unions and which pays little heed to decisions by the Board. What has remained constant over the years has been judicial arrogance—the willingness of the Court to establish factual premises for its decisions with little basis in reality. Once announced, these facts become the basis for statutory interpretation. The results have rarely been consistent with the basic policies of free, informed employee choice as to unionization or the policy of “encouraging the practice and procedure of collective bargaining,” which the NLRA has proclaimed for eighty years. The purpose of this book is to examine critically the decisions of the Supreme Court in those areas that are crucial to unions and the workers they represent: organizing, bargaining, strikes, and dispute resolution. I find little to praise in the Court’s treatment of basic labor law issues. During the sixty-plus years of the Court’s dominant role, both unions and the institution of collective bargaining have been substantially weakened. It is of course difficult to measure the extent of the Court’s responsibility for the current weak state of organized labor. Many factors have contributed to the weakening of unions. However, it seems clear that the Supreme Court has played an important role in transforming the law and defeating its central policies.

1 THE COURT AND UNION ORGANIZING

The primary goal of the Wagner Act was to ensure “employee free choice” with respect to unionization and collective bargaining. The right to bargain collectively contained in Section 7 has, in practice, always been a group right that required support from a majority of employees in a unit appropriate for bargaining. The Act assigns to the Board the role of determining, through secret ballot elections, when a union has obtained majority support. Before seeking an election a union must obtain signed authorization cards from at least 30 percent of the employees in a bargaining unit. In actuality, unions do not seek elections until they have authorization cards signed by at least a majority of employees in the desired bargaining unit. A union that has obtained a large majority will generally request recognition from the employer; however, as the Supreme Court has stated, “[A]n employer can insist that a union go to an election, regardless of his subjective motivation, so long as he is not guilty of misconduct; he need give no affirmative reasons for rejecting a recognition request, and he can demand an election with a simple ‘no comment’ to the union.”1 Thus the duty of an employer to bargain in the vast majority of cases does not become operative until the union wins a majority vote in a secret ballot election. Before the election takes place, the parties almost always conduct rival campaigns seeking to persuade the employees to vote either in 15

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CHAPTER 1

favor of or against representation. The basic rules for the pre-election campaign, established by the Supreme Court, significantly favor employers seeking to convince employees to vote no. The employer’s advantage is based on traditional “property rights” recognized by the Court as applicable to union representation campaigns. The NLRA gives no rights to employers, but the Constitution and the common law do. The Constitution gives employers the right of free speech, and the common law permits them to control the entrance to, and the use of, their property.

INFORMED CHOICE VERSUS PROPERTY RIGHTS

The conflict between informed choice and employer property rights first came before the Supreme Court in Republic Aviation Corp v. NLRB.2 In that case, the Supreme Court affirmed the Board’s conclusion that a broad no-solicitation rule, even one promulgated without regard to its impact on union organizing, violates the Act. The Court did not examine and did not require the Board to make findings about the actual effect of any such rule in a particular case. The Court also affirmed the Board’s finding that in punishing employees who violated their rules the companies had engaged in “discrimination . . . to encourage or discourage membership in any labor organization” in violation of Section 8(3) of the Act. The Republic Aviation case was a signal that the New Deal Court meant to support the basic policy of the Act to promote collective bargaining even when that meant intrusion on traditional employer property rights. The Court’s early cases also demonstrated its willingness to allow the Board to define the meaning of the Act’s general phrases and to enunciate its basic policies. The Taft-Hartley and Landrum-Griffin amendments to the Act did not significantly change either the rules or the process by which issues of representation were decided, but they did signal a new mood of concern for the traditional rights of employers. By proclaiming the employer’s right to state its views with respect to unionization, Section 8(c) of the amended Act indirectly raised the question of whether

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the employer, by virtue of its management and property rights, could assemble the employees and make its case against the union in what are known as “captive audience speeches,” and whether if it did so it was required to permit the union to respond. The Supreme Court in a series of cases dealing with access to employees has given employers virtually unlimited access to the employee voters, and it has denied the union a meaningful right of response. The first major decision favoring property rights over the concept of informed choice occurred in the 1956 case NLRB v. Babcock & Wilcox.3 In that case the Supreme Court overturned a Board decision requiring the employer to grant limited access to its property (the parking lot, in fact) to union organizers. The Board had concluded that, without access, the union would be at a serious disadvantage in getting its message to the employees. The facts of the case supported this conclusion.4 The Board ordered the employer to rescind its no-distribution order for the parking lot and walkway, subject to reasonable and nondiscriminating regulations “in the interest of plant efficiency and discipline, but not as to deny access to union representatives.” The Supreme Court reversed. It held that the Board had improperly treated organizers under the same standard that it used to determine employee rights. “It is our judgment, however, that an employer may validly post his property against nonemployee distribution of union literature if reasonable efforts by the union through other available channels of communication will enable it to reach the employees with its message and if the employer’s notice or order does not discriminate against the union by allowing other distribution.”5 What was particularly questionable about the opinion was the fact that the Court made no real effort to review the Board conclusion that the union did not have the prospect of reaching the employees through “reasonable efforts.” Although the Court drew a distinction between the rights of employees and the rights of nonemployee union organizers, it did acknowledge that “the right of self-organization depends in some measure on the ability of employees to learn the advantages of self-organization from others. Consequently, if a location of a plant and the living quarters of the employees place the

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employees beyond the reach of reasonable union efforts to communicate with them, the employer must allow the union to approach his employees on his property.”6 The majority opinion noted that the issue of access to company premises by nonemployee organizers involved a balancing of Section 7 rights against the rights of ownership. And it stated that “[a]ccommodation between the two must be obtained with as little destruction of one as is consistent with the maintenance of the other. . . . [W]hen the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels, the right to exclude from property has been required to yield to the extent needed to permit communication of information on the right to organize.”7 In NLRB v. United Steel Workers of America (Nutone),8 the Supreme Court held that the employer was not required to give unions the chance to respond to captive audience speeches. Writing for the Court, Justice Frankfurter stated that “the Taft-Hartley Act does not command that labor organizations as a matter of abstract law, under all circumstances, be protected in the use of every possible means of reaching the minds of individual workers, nor that they are entitled to use a medium of communication simply because the employer is using it.” Justice Frankfurter seemed to contemplate a vigorous effort by the Board to evaluate the relative ability of the parties to get their message heard. “If, by virtue of the location of the plant and of the facilities and resources available to the union, the opportunities for effectively reaching the employees with a pro-union message, in spite of a no-solicitation rule, are at least as great as the employer’s ability to promote the legally authorized expression of his anti-union views, there is no basis for invalidating these otherwise valid rules.”9 The Court’s opinion in Nutone did not describe how the Board was to measure whether an appropriate balance existed. The Board tried to address the question of balance of opportunities, indirectly, when in 1966, in Excelsior Underwear Inc.,10 it ruled that “within 7 days after . . . a consent agreement or after the . . . Board has directed an election the employer must file with

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the Regional Director an election eligibility list” which would then be turned over to the union. In NLRB v. Wyman-Gordon Co.,11 the Supreme Court upheld the Board’s authority to do so, noting that “Congress granted the Board a wide discretion to ensure the fair and free choice of bargaining representatives. The disclosure requirement furthers this objective by encouraging an informed employee electorate and by allowing unions the right of access to employees that management already possesses. It is for the Board and not for this Court to weigh against this interest the asserted interest of employers in avoiding the problems that union solicitation may present.”12 But “Excelsior lists” do not give unions “the right of access to employees that management already possesses.” They do very little to balance access opportunities. To use them, an organizer must travel from home to home usually in the evening, after working hours, making short stops in a variety of locations over a brief period. Most of the voters will already be committed when the list arrives. Using names and addresses to make contact during nonworking time is a difficult and sensitive business. Some employees inevitably resent the intrusion. In addition, my experience as the recipient of more than thirty lists13 revealed that Excelsior lists are never totally accurate and are often filled with wrong names and old addresses. In Jean Country,14 decided twenty years after Nutone, the Board finally attempted to give meaning to the balancing approach suggested by the Supreme Court. Referring to the language of Babcock, the Board developed a general test for determining when organizers might have access to company property. In all access cases our essential concern will be the degree of impairment of the Section 7 right if access should be denied, as it balances against the degree of impairment of the private property right if access should be granted. We view the consideration of the availability of reasonably effective alternative means as especially significant in this balancing process. In the final analysis however there is no simple formula that will immediately determine the result in every case.15

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The standard was not one that could be easily applied given the Board’s limited understanding of campaign dynamics. But when the Board applied this standard in Lechmere, Inc.,16 in which it ordered the company to “cease and desist” from barring the union organizers from the parking lot, it seemed to have chosen an obvious case.17 In Lechmere, the union’s repeated efforts to organize employees working at a grocery store in a suburban Connecticut shopping center were stunningly unsuccessful. No obvious alternative place existed, and the workers’ homes were scattered. After several tactical failures, only one worker had signed a union authorization card. The Board’s opinion was affirmed by the First Circuit. Writing for the majority, Judge Selya concluded that the Jean Country approach was well within the Board’s discretion. He noted that “[a]lthough the Section 7 right is the workers’ right, not the union’s right, unions and their agents, derivatively, enjoy the protection of Section 7.”18 The Supreme Court reversed.19 Justice Thomas, who wrote the majority opinion, accused the Board of “eroding Babcock’s general rule that an employer may validly post his property against nonemployee distribution of union literature.”20 “We reaffirm that general rule today, and reject the Board’s attempt to recast it as a multifactor balancing test.” While Justice Thomas was willing to recognize the possibility that organizers, in some limited, unusual circumstances, might be entitled to minimal access to company property, he warned that to “gain access, the union has the burden of showing that no other reasonable means of communicating its organizational message to the employees exists.”21 Justice Thomas mentioned that the union could have used mailings, phone calls, and home visits. But to make clear how heavy the burden on the union is, he stated that “[s]uch direct contact, of course, is not a necessary element of ‘reasonably effective’ communication; signs or advertising also may suffice.” And he pointed out that “signs (displayed, for example, from the public grassy strip adjoining Lechmere’s parking lot) would have informed the employees about the union’s organizational effort.”22 The clear import of Justice Thomas’s language is to suggest that informing the workers that the union was seeking to organize was sufficient, and opportunity to state why employees should support the union was

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not required. This approach manifests a significant weakening of the standard set forth in Babcock v. Wilcox that the union must be able by “reasonable efforts . . . to reach the employees with its message.” The Court did not explain why so drastic a rule was necessary or how it was compatible with a statute that sought to increase the practice of collective bargaining or even of achieving the lesser goal of permitting employees to make informed choices about unionization. The Lechmere decision marked the end of the period in which the policy of free, informed choice was thought to be important enough to limit the exercise of traditional property rights. Lechmere, while controversial among commentators, was quickly followed by the courts of appeals.23 The Court’s access decisions reveal a major theme in the development of the NLRA, the increasing triumph of traditional property rights over the stated policies of the Act. Taken together they give employers a massive advantage over unions that they quickly learned to exercise. During a period between 1970 and 1976, Professors Goldberg, Brett, and I interviewed employees in hard-fought elections. Among other things, we measured the familiarity of the workers with the rival campaigns. We learned that even before the Lechmere decision, employers in a typical organizing campaign had a marked advantage in terms of organizational communication. And we concluded that the employer’s advantage is primarily due to the powerful correlation between campaign familiarity and attendance at meetings. The employer tends to be far more successful in attracting employees to meetings on working time and premises than does the union in attracting them to meetings outside of working hours and away from company premises. . . . The company has a great advantage in communicating with the undecided and those not already committed to it. This advantage is particularly important since attendance at union meetings is significantly related to switching to the union.24 It is the company’s huge advantage in access that most invalidates the analogy between Board elections and political elections.25

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According to union organizers, this advantage has become increasingly significant because company campaigns are currently more intense and involve more meetings than they did when we conducted our study. As summarized by Tom Woodruff, organizing guru of the Service Employees International Union (SEIU), “The law hasn’t changed. But what’s socially acceptable has changed. So it’s now acceptable for employers to turn a place upside down and do nothing but campaign for a couple of weeks.” The net result of these cases is that management has instant and total access to employees. It can and usually does deliver its antiunion messages on company time all during the campaign. Indeed, a strongly antiunion employer can announce to employees when they are hired that the company is nonunion, and wants to stay that way. It can show antiunion films or CDs at various times throughout the workplace. It can have its supervisors engage in discussions with the employees, and it can fill its message boards with antiunion arguments and slogans. The right to campaign against unionization is protected by the First Amendment. The union has no effective right of response. In Lechmere the Court rejected the policy of informed choice initially set forth in Republic Aviation and repeated in a variety of subsequent decisions such as NLRB v. Wyman-Gordon, in which the Court referred to the policy of “encouraging an informed employee electorate by allowing unions the right of access to employees that management already possesses” and concluded, “It is for the Board and not for this Court to weigh against this interest the asserted interest of employers.” 26 In recent years, unions have been able to obtain greater access to employees through e-mail and social media. The ubiquity of smartphones has provided unions an increased ability to develop contact with even low-paid workers. However, nothing can come close to the value of face-to-face contact. That is partly so because the employees often make their decision on the basis of their appraisal of the union organizer.27 The law governing access to employees has been set almost entirely by the Supreme Court, which has followed a steady course of development, moving from concern with the right of workers to learn about unionism to a rigid commitment to property rights.

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FREE CHOICE AND EMPLOYER SPEECH

Many of the tactics previously used by employers to defeat unionization were prohibited as “unfair labor practices” by Section 8. Subsection 1, the broadest of the subsections, made it unlawful for employers to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed by Section 7,”28 while Subsection 3 prohibited “discrimination” as to “hire or tenure.” Violations of Subsection 1 occur when employers threaten reprisals for union activity and violations of Subsection 3 occur when employers take reprisals against union supporters.29 The regulation of employer speech in regard to union organizing was bound to be troublesome. The policy of free employee choice required the Board and the Court to determine whether strongly worded employer statements urging employees to vote against unionization interfered with the policy of free choice enunciated by Section 7 and protected by Section 8. A general free speech right for employers was rarely questioned, but in the context of specific union organizing efforts, unions and their supporters regularly claimed that coercion was inherent in the manner, context, and wording of employer comments about unionization. The complexity inherent in judging when employer speech was coercive of employee rights was evident in the Supreme Court’s initial treatment of it in NLRB v. Virginia Power.30 In that case, the Board had specifically found employer statements and bulletin postings coercive. The Supreme Court, which remanded the case for further proceedings, acknowledged both that employers had a free speech right to address the issue of unionization and that employer speech containing no overt threats could nevertheless be part of a pattern of coercion. The tension between free speech and coercion was discussed by Justice Murphy: The Board specifically found that the bulletin of April 26 and the speeches of May 24 “interfered with, restrained and coerced” the Company’s employees in the exercise of their rights guaranteed by Section 7 of the Act. The Company

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strongly urges that such a finding is repugnant to the First Amendment. Neither the Act nor the Board’s order here enjoins the employer from expressing its view on labor policies or problems. . . . The employer in this case is as free now as ever to take any side it may choose on this controversial issue. But certainly conduct, though evidenced in part by speech, may amount in connection with other circumstances to coercion within the meaning of the Act. . . . For “Slight suggestions as to the employer’s choice between unions may have telling effect among men who know the consequences of incurring that employer’s strong displeasure.”31 In the quoted language Justice Murphy recognizes an employer’s First Amendment right to speak against unionization. This recognition is coupled with a warning that forceful or ambiguous speech might be found coercive. The Court accepted and justified the practice by the Board of carefully parsing employer speech on the grounds that employees as a vulnerable audience will be particularly susceptible to intimations of coercion. If the utterances are thus to be separated from their background, we find it difficult to sustain a finding of coercion with respect to them alone. The bulletin and the speeches set forth the right of the employees to do as they please without fear of retaliation by the Company. Perhaps the purport of these utterances may be altered by imponderable subtleties at work which it is not our function to appraise. . . . [W]hether the whole course of conduct evidenced in part by the utterances was aimed at achieving objectives forbidden by the Act, are questions for the Board to decide upon the evidence.32 The Court remanded the case to the Board to consider whether the employer’s statements were coercive in the particular context in which they were uttered. The Board understood the grant of power implicit in the Court’s opinion and continued to carefully regulate employer speech, sometimes finding threats in ambiguous statements, other

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times finding speech part of a coercive pattern based on the employer’s “totality of conduct.”33 The Taft-Hartley and Landrum-Griffin amendments left employer unfair labor practices largely intact under Section 8(a), although they attempted to ensure an employer’s right to speak out through a new Section 8(c), which stated,“Expression of views without threat of reprisal or force or promise of benefits . . . shall not constitute or be evidence of an unfair labor practice. The wording of this clause was sufficiently ambiguous to leave it to the Board and courts to determine how explicit the prediction of harmful consequences following unionization must be to constitute a threat. The Supreme Court has addressed the issue directly only once, in NLRB v. Gissel Packing Co.,34 in which it reviewed four different circuit court decisions. One of the cases reviewed was NLRB v. Sinclair Co.35 In Sinclair, the First Circuit had enforced the Board’s bargaining order remedy, which had been based largely on employer speech. The company claimed that the finding of violation violated its First Amendment rights to express its views as to unionization. The Supreme Court, in an opinion by Chief Justice Warren, rejected the company’s First Amendment claim. The employer speech in Sinclair as described by the Court included the following arguments. “The company president argued that the union was a ‘strike happy outfit’ and warned that a strike could put the company in economic jeopardy and lead to its closing. He warned the employees to ‘look around Holyoke and see a lot of them out of business.’ ”36 His speech contained no explicit threats of retaliation. The union lost the representation election conducted by the Board by a vote of eight to seven. The Board concluded that the employer’s comments made a fair election impossible because they “reasonably tended to convey to the employees the belief or impression that selection of the union could lead the [company] to close its plant or transfer the weaving operation.” The Supreme Court affirmed. Any assessment of the precise scope of employer expression of course must be made in the context of its labor relations setting. Thus an employer’s right cannot outweigh the equal rights of

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the employees to associate freely . . . and any balancing of those rights must take into account the economic dependence of the employees on their employer and the necessary tendency of the former because of that relationship to pick up intended implications of the latter which might be more readily dismissed by a more disinterested ear.37 Chief Justice Warren set forth a highly limited First Amendment right for employers to discuss the effect of unionization, limiting them to “prediction carefully phrased on the basis of objective facts to convey an employer’s belief as to demonstrably probable consequences beyond his control.”38 The Court declared that an employer was not constitutionally protected in expressing his belief that unionization might lead to plant closing, even if his belief was sincere,“unless, which is most improbable, the eventuality of closing is capable of proof.”39 In responding to the argument that “the line between threat and prediction thus drawn, is too weak to withstand constitutional scrutiny,” the Court commented that “an employer . . . can easily make his reasons known without engaging in internal brinkmanship. . . . [A]t least he can avoid coercive speech simply by avoiding conscious overstatement.”40 The Court declined to give Section 8(c) any independent meaning, stating that it “merely implements the First Amendment.41 The Court’s discussion of employer speech raises more questions than it settles. It refers to “the intended consequences” as though those were discernible without indicating what factors, if any, other than the words can be used to determine intent. The Court also assumed that because of the employment relationship the employees necessarily perceived implications of threatened reprisal that would be “dismissed by a more disinterested ear” and that they would be moved to vote against the union for fear of reprisal. The assumption that employees, because of their economic dependence, are more likely than a neutral observer to perceive threats and are more likely to vote against unionization because of that perception has been widely articulated by courts and liberal academics. It is the underlying assumption upon which numerous, carefully constructed statements have been characterized as threats. Yet

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there is little empirical basis for these conclusions. They are far from self-evident. In particular, it is difficult to explain why, in a secret ballot election, union supporters who perceive the employer to be making threats of reprisal would be motivated to vote against the union. An intelligent union supporter would surely feel more vulnerable to reprisal if the union lost the election. How, one wonders, did the Court containing none but disinterested ears know how the ears and minds of the employees would respond to ambiguous employer statements? No one in the chain of investigation, litigation, and appeal actually spoke to or in any way questioned the employees to whom the employers’ statements were directed to determine how they in fact reacted. It is not clear that the dynamic the Court presumes is accurate. Employees about to vote on unionization have in the great majority of cases already formed opinions about the trustworthiness of employer speech and about the likelihood of reprisal. Employees who sign up with or otherwise support the union may have already contemplated and discounted threatening statements by management. It was to study the validity of the assumptions about employee behavior used by the Court and the NLRB that Professors Goldberg, Brett, and I undertook a study of union representation elections shortly after the Gissel decision. We studied thirty-one contested Board representation elections, which were chosen because they were likely to be hard-fought. We were able through collection of information and interviews with organizers and lawyers to form an accurate portrait of the campaign tactics used. These were then submitted to Melvin Wells, the chief administrative law judge of the NLRB. Wells ruled on the legality of the tactics employed. Of thirty-one elections studied, the employer was found to have engaged in illegal behavior in twenty-two. In all these cases employers made statements that might be deemed coercive under the standard set forth in the Gissel case. In each election we interviewed voters early in the campaign and soon after the election. The great majority of employees agreed to be interviewed and answered our questions honestly.42 In every campaign that we studied, employer statements were largely ambiguous, pledging to obey the law but also suggesting that

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the employees might be harmed in some way if they voted for a union. In each election studied, some employees perceived the employer to be making threats, although the perception of threats was not noticeably related to the employer’s language. But there was little evidence of coercion. Those who perceived the most threats were likely to vote for the union. Of those who voted for the union, 47 percent reported that the company utilized job-loss themes; only 24 percent of company voters mentioned this. Company voters tended to focus on the positive aspects of company communication: “The decision is up to you”; “If required by law we will bargain with the union.” Those employees who initially told us that they supported the union but who voted against representation reported no more unlawful campaigning than those who did not switch their intent. All these findings are inconsistent with the behavioral assumptions contained in the Gissel opinion. There remains no easy way to determine the legality of employer campaign statements. Much turns on the political composition of the Board and the courts that review its findings. The Supreme Court has not, since its Gissel decision, addressed the line between threats and predictions. The Court’s assurance that an employer can easily make its views known without coming close to the brink would have been more convincing if the Court had explained how the question of possible harmful effects resulting from collective bargaining could have been addressed legally. Perhaps the Court intended to prevent employers from addressing the possibility of harmful effects because it deemed it to be too frightening to employees. If so, the Court chose to ignore the fact that it was limiting speech with respect to a legitimate issue; there is a respectable economic argument to the effect that unions and collective bargaining might lead to plant closing or transfers of work. This is not, however, an argument that can be conveyed solely by objective fact without distortion because it is based upon assumptions about likely union behavior. It is also difficult to discuss this issue fully and openly without leaving some room for employer discretion.43 The Court’s decision in Gissel did very little to limit the advantage to the employer granted in the Lechmere case. For a variety of

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reasons, the impact of the Gissel decision has been limited. Employers in carefully constructed speeches and pamphlets continue to stress the possibility of harmful consequences arising if the employees vote to unionize. Courts of appeals may quote the Gissels standards, but they rarely apply them as fully as the quoted language implies. Comments inconsistent with the Gissel standard are regularly held to be legal.44 In addition, as discussed below, the remedy for making threats in violation of Section 8(a)(1) unless they are accompanied by serious violations of other subsections, is not very potent. The Supreme Court had earlier affirmed the Board’s conclusion that a grant of benefits to employees during an organizing campaign was coercive and likely to have an impact similar to that of a threat. In NLRB v. Exchange Parts Co.,45 the Supreme Court undertook to explain why a grant of benefits to employees during an organizing campaign, even though the benefit was not conditioned on the outcome of the election, was similar to a threat. The Court in an opinion by Justice Harlan stated, “The danger inherent in well-timed increases in benefits is the suggestion of a fist inside the velvet glove. Employees are not likely to miss the inference that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged.”46 Although the Court assumes that the grant of benefits will be perceived by the employees as a threat, there is no empirical basis for this conclusion. Nor is the Court’s explanation of employee thinking persuasive. Why should it take a grant or promise of benefits during a representation election to make employees aware that the employer is the source of job benefits and that it will be the source of future benefits? Could they not have deduced this from examining their paychecks? It should not be surprising that in our study of union organizing the grant of benefits was not in any way correlated with the perception of threatened reprisal. As is often the case with limitations on employer speech and conduct, the Exchange Parts rationale was soon applied with very little persuasive reasoning to union promises. In NLRB v. Savair Manufacturing Co.,47 the Supreme Court held that a union’s offer to waive initiation fees for all employees who signed cards before an

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election interfered with employee free choice. The Court reasoned that employees might be tempted to sign a card to avoid the initiation fee and might then feel compelled to support the union because their having signed a card would become known. The Court also viewed the practice as improper because it would permit the union to claim support it did not have. The Court assumed that such a misleading claim of support would help the union and that any votes it thereby acquired would not be an expression of free choice. Finally, the Court concluded that “the failure to sign a recognition slip may well seem ominous to nonunionists who fear that, if they do not sign, they will face a wrathful regime, should the union win.”48 The Court’s explanation reflects the same patronizing view of employees that the Court exhibited earlier in its Exchange Parts decision. Why, for example, would employees who know of the conditional offer assume that other employees who signed cards were not doing so to take advantage of the offer? Why would they be persuaded to vote contrary to their own attitudes toward unionization in any case? The fear of a wrathful union regime, if it is at all a reason why employees sign cards—and existing data suggest it is not—should be the same whether or not the union offered a conditional waiver.49 The Supreme Court’s precedent with respect to campaign regulation seems to point in opposite directions. It is favorable to employers in permitting them unfettered access to the employees with no corresponding obligation to grant access to the union. But it is unfavorable to employers and protective of employees with regard to the regulation of speech and conduct. The net effect of the Court’s opinions is, however, strongly favorable to employers. That is because access matters far more than speech or minor actions. Employers and their labor consultants have been able to take increasing advantage of the Court’s access opinions to schedule regular, often incessant, often intensive meetings with employees, while union organizers are prohibited from parking lots or unutilized space. Constant reiteration of basic employer themes can be effective. Employers have legitimate persuasive arguments. In particular, they can turn the centrality of the strike weapon against the union by announcing their intention to bargain hard and thereby force the

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union to strike and their willingness to then hire permanent replacements. They can make appeals to loyalty, which many lawyers and organizers that I have spoken to believe is the most effective of employer tactics, and they can express their desire to make the enterprise a wonderful place to work—all without a hint of reprisal.

REMEDIES FOR EMPLOYER UNFAIR LABOR PRACTICES

The Board has standard remedies for employer misconduct during an organizing campaign. When an employer violates Section 8(a)(3) by acts of reprisal, the Board orders the employer to undo the unlawful action by restoring the employee retaliated to the position that he or she would have been in absent the illegality. In the case of a discriminatory discharge, the Board orders the employee reinstated with back pay. When an employer makes unlawful threats, the Board issues a cease-and-desist order and requires the employer to post a notice saying that it will not so violate employee rights in the future. Neither remedy is powerful or an effective deterrent. The reinstatement remedy is typically not issued until a year after the unlawful action takes place. If the case is appealed, it will be two years before actual reinstatement takes place. The posting and cease-and-desist remedy are essentially without cost for the employer. The most powerful remedy against employer unfair labor practices is the bargaining order, which may require the employer to bargain with a union that once had majority support but no longer does. The ground rules under which a bargaining order may issue were promulgated by the Supreme Court in 1969 by the Warren Court in NLRB v. Gissel Packing Co. In addition to the Sinclair case out of the First Circuit, discussed above, the Gissel case involved appeals by the Board from three decisions by the Fourth Circuit. In each case the Court had agreed with the Board that the employer had committed unfair labor practices in the run-up to a Board election, but it had rejected the Board’s order to bargain with the union. The Board had based its bargaining order on the fact that the union had obtained signed authorization cards from a majority of employees in the bargaining unit in

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which the election was to be held and that the employer’s unfair labor practice had effectively undermined its majority.50 The Fourth Circuit had not been willing to use the signed cards as a basis for a bargaining order on the grounds that they were not a reliable indicator of employee choice. It noted that signed cards are necessary to obtain a Board election and concluded that employees might well have been induced to sign cards to achieve an election. The Supreme Court in an opinion by Chief Justice Warren affirmed the right of the Board to issue bargaining orders based on a card majority.“If the Board finds that the possibility of erasing the effects of past practices and of ensuring a fair election . . . is slight and that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order, then such an order should issue.”51 The Court rejected the Fourth Circuit’s conclusion that cards are unreliable as a reflection of employee sentiment. And it concluded that an employer would in most cases have an adequate opportunity to express its views on unionization during the card-signing campaign. “Normally, however, the union will inform the employer of its organization drive early in order to subject the employer to the unfair labor practice provisions of the Act; the union must be able to show the employer’s awareness of the drive in order to prove that his contemporaneous conduct constituted unfair labor practices on which a bargaining order can be based if the drive is ultimately successful.”52 This is inaccurate. In fact, most union campaigns are kept secret until a significant majority of signed cards. However, employers typically find out about them earlier based on observations from supervisors or reports from antiunion employees. The Gissel formulation requires a finding that majority sentiment had once been expressed through the union’s obtaining a card majority, then an additional finding that the employer’s unfair labor practices precluded the holding of a fair election at any point in the immediate future. The Court’s language makes clear that the Board is required to decide not only whether the employer conduct in question had a coercive effect on the election campaign just completed but also the likelihood of its continued impact or recurrence in a subsequent

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rerun election. There is no database from which the Board may draw the conclusions that the Supreme Court asked for in Gissel.53 In general, the Board limits bargaining orders to cases in which serious and repeated unfair labor practices take place. If a bargaining order is issued, it is unlikely to lead to effective union representation for the employees covered. Bargaining orders are almost inevitably appealed, and several courts of appeals have shown a marked reluctance to affirm them, probably because they are always in opposition to currently expressed employee choice. And even if a bargaining order is affirmed, the process will take years, by which time support for the union will have largely evaporated. Unions that are the beneficiaries of bargaining orders do not have the ability to bargain effectively because they cannot credibly threaten to strike. As professor Weiler has explained, What can the union do with the bargaining order? Although the order requires the employers to sit down at the negotiating table and go through the motions of trying to reach an agreement, the governing principle of freedom of contract under the NLRA means that the employer is not required to consent to any significant changes in working conditions. The Board cannot direct the employer to make a reasonable contract offer. If a decent employment package is to be extracted from a recalcitrant employer, it must come through the efforts of the workers themselves.54 The result, as one carefully done study shows, is that “the Gissel bargaining order does not lead to productive collective bargaining relationships that protect the rights of employees who were subject to serious unfair labor practices.”55 The net result of the rules governing union organizing has been to thwart most union campaigns, even though polls show that most employees in fact favor representation. Indeed, many of the most active organizing unions have sought to replace the Board’s election process with efforts to persuade or force employers to sign neutrality agreements by which they promise not to oppose union organizing

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efforts and promise to recognize unions that sign up a majority of employees in an agreed-upon unit. But campaigns to force neutrality agreements tend to be long, costly, and contentious. They frequently create legal problems and often fail. Why have the rules governing access and information turned out to be so effective, while rules limiting employer speech and conduct have been largely meaningless even when backed by the bargaining order? In part the failure of the bargaining order has its roots in the law of collective bargaining, under which unions can be effective only if they are in a position to strike effectively. Another important difference is that the rules on access give power directly to the employer, while the rules limiting employer conduct and the bargaining order remedy give power to the Board and not to the union or the employees, as would have been the case, for example, had the Court held that union organizers had the right to reply to employer captive audience speeches. The Board is at best a cumbersome vehicle for promoting employee rights. Its processes are too slow and its rules are applied inconsistently based on its changing political makeup. Its inability to make persuasive factual conclusions is bound to arouse the suspicion of reviewing courts. It is doubtful that the current court would affirm the Gissel decision either as to the narrow scope of employer speech or with respect to the Board’s ability to issue bargaining orders based on perceived threats. The current Court has proven solicitous of the constitutional rights of corporations with respect to speech, and as is discussed below, it has been especially concerned with the rights of union dissenters.56 In short, the advantage that employers have in resisting union organizing campaigns is most unlikely to be significantly reduced by the Court in the near future.

2 THE SUPREME COURT AND COLLECTIVE BARGAINING

Section 8(a)(5) of the NLRA requires an employer “to bargain collectively with the representatives of his employees.” The duty to bargain collectively encompasses two basic concepts, “good faith bargaining” and “exclusive representation.” Exclusive representation, which is examined in chapter 6, is the more significant element of the duty to bargain, but the concept of good faith has been a major challenge to the Court in regulating the relationship between unions and the law.

DEFINING GOOD FAITH

Section 8(d) of the NLRA states that the obligation to bargain requires the parties to “meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment.” The question implicit in the term “good faith” is what it requires beyond the obligations of Section 8(d). If the concept of good faith required employers to make reasonable proposals, the Board and the courts would be regularly involved in reviewing the employers’ bargaining positions to determine whether the employer was actually trying to reach agreement. It was clear from the legislative history of the Wagner Act, and affirmed in the TaftHartley amendments, that good faith did not require proposals and 35

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positions that the NLRB or the courts would find to be reasonable. The outcomes of the bargaining process were to be determined by the parties and not the Board or the courts. As Senator Walsh, chairman of the Senate Labor and Education Committee and one of Act’s key sponsors, famously stated, “[A]ll the bill proposes to do is to escort them to the door of the employer and say, ‘Here they are, the legal representatives of your employees.’ What happens behind those doors is not inquired into, and the bill does not seek to inquire into it.”1 The basic policy of permitting the parties to work out their own agreement has remained central to the Act. But that policy if followed to its logical extreme conflicts with the policy of promoting collective bargaining. It presents employers, particularly those faced with a newly selected union not in a position to strike effectively, an opportunity to reject all union proposals and refuse to make counterproposals. If the union cannot strike effectively and cannot negotiate an agreement, it is likely to become moribund and fade away. It has been recognized that the duty to bargain collectively requires something more than a willingness to meet and talk, something never easily articulated but perhaps best described as a willingness to come to an agreement that acknowledges the union’s role as exclusive representative of the employees.2 The nature of the bargaining process is such that it is almost impossible for the Board and courts to distinguish between tough bargaining and bargaining in bad faith. The task is particularly difficult in evaluating first contract negotiations. Initial bargaining sessions between an employer and a newly selected union are likely to consist mainly of employer rejections of union proposals on a broad range of issues such as job classifications, basic wages and overtime pay, the use of seniority in promotions, and layoffs. Typically the union will propose limiting discipline and discharge to situations in which just cause exists for their imposition. It will propose an elaborate grievance system for enforcing rights under the agreement. It will seek a system by which union dues are mandatory in non-right-to-work states, and in all locations it will seek to have dues automatically deducted from the paychecks of unit members. It will

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seek to have promotions, layoffs, and benefits significantly shaped by seniority. None of these proposals are likely to be pleasing to an employer, which in most cases comes to the table with two major proposals, a broad no-strike clause and a very broad managementrights clause that reclaims the right to act unilaterally with respect to the conduct of the business. Even employers willing to come to agreement are likely to seek to preserve as much of their previous discretionary power as possible, making negotiations difficult and often rancorous. When discussions are stalemated, as they often are, unions and their members are likely to conclude that the employer is bargaining in bad faith and is trying to avoid an agreement. But they rarely are in a position to effectively charge the employer with violating Section 8(a)(5). In NLRB v. American National Insurance Co.3 the Supreme Court rejected a Board finding that an employer violated its duty to bargain by insisting on a clause that gave management the “right to select and hire, to promote to a better position, to discharge, demote, or discipline for cause and to maintain discipline and efficiency of employees and to determine the schedules of work.” Citing the language of 8(d), which specifies that the obligation to bargain “does not compel either party to agree to a proposal or require the making of a concession,” the Court stated that “the Board may not, either directly or indirectly compel concessions or otherwise sit in judgment upon the substantive terms of collective bargaining agreements.”4 The courts of appeals, which have the primary responsibility for overseeing the obligation to bargain, have applied the Court’s admonition and given the employer wide leeway in bargaining. An employer that puts forward a proposal granting minor changes in the status quo may generally reject all union proposals while insisting on a broad no-strike pledge and a strong management-rights clause. Employer bargainers who are willing to meet regularly, explain the need for their proposals, and make minor concessions generally pass muster under the loose standards of the duty to bargain. As a result, an employer determined to avoid unionization andable to withstand a strike can use the process of bargaining for a first contract to rid itself of the union.5

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THE PROBLEM OF ENFORCEMENT

Employer bargainers who insist on contracts that contain no economic benefits and enshrine management discretion are on safe grounds. If the Board finds that they have not bargained in good faith, they can seek to have the Board’s decision overturned by a court of appeals with a good chance of winning. Even if the court of appeals were to agree with the Board, it would not be able to order the employer to accept a proposal more generous to the union and the employees. In H. K. Porter Co. v. NLRB,6 decided in 1970, the Court addressed the question of the Board’s power to remedy employer refusals to bargain in good faith. The Board in that case had found that the company had refused to agree to a dues checkoff for no reason but to avoid agreement. The union had agreed to the great majority of company proposals and had received no agreement in return. The company took the position that it was only engaging in hard bargaining. It also argued that even if its conduct amounted to a refusal to bargain, the only remedy available to the Board was a cease-and-desist order. The Court of Appeals for the District of Columbia addressed the issue of remedy twice. It first suggested that if the Board’s finding of unfair labor practice in the refusal to grant a dues checkoff was affirmed, the Board could seek a contempt order if the company continued to unreasonably refuse to grant it. In its second opinion, following a second finding of refusal to bargain, the court of appeals went further. Since the company had conceded that it had no business reason for refusing the checkoff, it would have been perfectly proper for the Board to order the company to grant one in return for a reasonable concession by the union on wages or insurance—the two issues besides checkoff that remained in dispute. Indeed, it is possible that in an appropriate case the Board could simply order the company to grant a checkoff. The Supreme Court reversed. It concluded that any specific remedy went beyond the Board’s power and was inconsistent with the policy of free collective bargaining enunciated in Section 8(d): “It would be anomalous indeed to hold that while Section 8(d) prohibits the Board from relying on a refusal to agree as the sole evidence of badfaith bargaining, the Act permits the Board to compel agreement in

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that same dispute.”7 Justice Black, who wrote the majority opinion, acknowledged at least indirectly that this conclusion left the duty to bargain without adequate legal enforcement. “It may well be true . . . that the present remedial powers of the Board are insufficiently broad to cope with important labor problems. But it is the job of Congress, not the Board or the courts, to decide when and if it is necessary to allow governmental review of proposals for collective-bargaining agreements.”8 Justice Douglas in dissent pointed out that Section 8(d) did not address the Board’s remedial power, which is broadly stated in Section 10 and “which specifically grants the Board the power to require anyone who violates the Act ‘to take such affirmative action . . . as will effectuate the policies of the Act.’ ”9 Justice Douglas’s dissent is accurate in pointing out that the language of the Act did not require the result adopted by the majority. In light of the strong policy specifically stated in Section 1 favoring the expansion of collective bargaining, the Court might well have confined Section 8(d) to the issue of defining good faith and not to the question of remedy. It might have pointed out that given the difficulty of establishing an unfair labor practice under Section 8(d), it was particularly important that the Board have adequate remedial power to correct violations of the law that amount to a repudiation of the Act’s basic policy “encouraging the practice and procedure of collective bargaining.”10 The reason for the Court’s failure to even consider the need to protect the integrity of the bargaining process remains unclear. There is a suggestion that the Court did not think of the collective bargaining process, or labor unions, as fragile and in need of protection. Justice Black intimated that the policies of the Act could adequately be achieved “leaving the results of the contest to the bargaining strengths of the parties.”11 That was a more understandable position in 1970, when a record number of private-sector workers were in unions, than it appears today, when the domain of collective bargaining is constantly shrinking. But even in 1970 someone knowledgeable about labor management relations might well have been concerned. The percentage of workers in unions had been dropping for a decade. Employers were fighting unions with greater sophistication and

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increasing success. Employer labor consultants had already developed the tactics that enabled companies to regularly overcome prounion majorities. The Court’s opinions in the American National Insurance and H. K. Porter cases have inevitably combined to significantly diminish the significance of the Board’s certification. In any situation in which a union is not in a position to strike effectively as soon as it is certified, it is at risk of being destroyed by the bargaining process. At last count, close to half of first contract negotiations fail to produce an agreement, and many others in which the unions make broad concessions produce very little change in the employer’s power.12

THE DUTY TO SUPPLY INFORMATION

A different result in H. K. Porter would have been entirely consistent with the Court’s previous decisions, several of which permitted the Board to evaluate an employer’s bargaining tactics and positions. In NLRB v. Truitt Manufacturing Co.,13 decided in 1956, the Supreme Court, enforcing an order by the NLRB, held that the duty to bargain required an employer to provide information to support its claim that it could not afford to pay the ten-cents-an-hour wage increase sought by the union. The Court of Appeals for the Fourth Circuit had refused to enforce the Board’s order. “To bargain in good faith does not mean that the bargainer must substantiate by proof statements made by him in the course of the bargaining. It means merely that he bargain with a sincere desire to reach in agreement.”14 It argued that such a requirement would place a heavy burden on employers that was inconsistent with the language of 8(d). The Supreme Court reversed, holding that refusal to substantiate the claim was in essence a refusal to bargain about wages: Good-faith bargaining necessarily requires that claims made by either bargainer should be honest claims. This is true about an asserted inability to pay an increase in wages. If such an argument is important enough to present in the give and take of bargaining, it is important enough to require some sort of proof

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of its accuracy. And it would certainly not be farfetched for a trier of fact to reach the conclusion that bargaining lacks good faith when an employer mechanically repeats a claim of inability to pay without making the slightest effort to substantiate the claim.15 The Court cited no authority for the statement that good faith bargaining necessarily requires honest claims. It did not specify the definition of good faith that supports this conclusion. Nor did it indicate what other types of claims by either party would require proof. Did the claims have to be central? Would a single statement trigger the need to provide proof? It was far from clear what actions by the employer would satisfy the requirement. The Court added to the confusion when it stated that not all claims of inability to pay would trigger the duty to provide proof, concluding unhelpfully that each case “must turn upon its particular facts.”16 Given the Court’s failure to define good faith and its failure to define when substantiating evidence is needed, one can understand Archibald Cox’s uncharacteristically peevish comment that “Mr. Justice Black, who wrote for the Court, evaded every issue.”17 The Court weakened the impact of its Truitt decision in Detroit Edison v. NLRB,18 decided more than twenty years later. In that case the Court rejected the NLRB’s conclusion that the union was entitled to certain materials in order to properly support the interests of its members in the arbitration process. The case involved employee aptitude tests used by the employer in assigning jobs. The Board held that the employer violated Section 8(a)(5) of the Act by refusing to provide the union with copies of the tests, the test papers of the applicants, and the actual test scores made by each employee, stating, “As the bargaining agent of the employees involved, it is the Union which is entitled to information which is necessary to its role as bargaining agent in the administration of the collective-bargaining agreement. We have found that the information requested by the Union here may be of value to the Union in fulfilling its responsibility to the employees.”19 The Board’s order put restrictions on the union’s use of the material in the interests of keeping the material confidential. The Court

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of Appeals for the Sixth Circuit affirmed the Board’s order, concluding that the value of the material for the collective bargaining process outweighed the employer’s interest in keeping the materials from the union. The Supreme Court reversed on the grounds that the Board did not properly take into account the employer’s need to keep the information in question confidential. After noting the value of employment tests, the Court stated,“Test secrecy is concededly critical to the validity of any such program, and confidentiality is undeniably important to the examinees. The underlying question is whether the Board’s order, enforced without modification by the Court of Appeals, adequately accommodated these concerns.”20 The Court concluded that it did not. It rejected the adequacy of the Board’s restrictions on the union’s use of the materials, which it stated would be “only as effective as the sanctions available to enforce them. In this instance, there is substantial doubt whether the Union would be subject to a contempt citation were it to ignore the restrictions.”21 Justice White in dissent argued that the Board could well assume that the union as a responsible agent would abide by the Board’s restrictions: “The Board placed no reliance on contempt sanctions when it directed release, and there is scant reason for rejecting the Board’s judgment that sanctions of that sort are unnecessary. The Board, in my view, had forceful and independent grounds for concluding that the Union would respect the confidentiality of the materials and take due precautions against inadvertent exposure.”22 The Court’s opinion in the Detroit Edison case did not significantly affect the process of arbitration and grievance settlement in unionized enterprises. The factual basis was unique, and most union requests for information in arbitration are dealt with without going to the Board or courts. Today the issue of what information a union is entitled to in grievance representation is likely to be resolved by informal agreement or by a decision of the arbitrator. What is noteworthy about Detroit Edison is the Court’s suspicion of the union’s ability or willingness to act in a responsible manner. A similar suspicion pervades many of the Court’s decisions on bargaining. The Court’s opinion was significantly out of touch with developments in labor relations and collective bargaining. The seventies was a period in which unions

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felt secure and were eager to demonstrate their sense of responsibility and loyalty to the companies with whom they bargained.

THE MANDATORY-PERMISSIVE DISTINCTION

The Court also affirmed significant government regulation of the bargaining process in NLRB v. Wooster Division of Borg-Warner.23 The case grew out of negotiations between the UAW and the Borg Warner Company during which company negotiators insisted that the agreement contain a “ballot” clause calling for a prestrike secret vote of those employees (union and nonunion) as to the employer’s last offer. The union negotiators strenuously and consistently rejected the proposal. To avoid an impasse that would lead to a strike the union finally signed the agreement with the strike clause in it and then filed an unfair labor practice charge against the company. The union argued that the duty to bargain was violated because the proposal that the company insisted on did not come within the statutory term “rates of pay, wages, . . . or other conditions of employment.” The union’s position was sustained by the Board and affirmed by the Supreme Court. Justice Burton, who wrote the majority opinion, stated, The company’s good faith has met the requirements of the statute as to the subjects of mandatory bargaining. But that good faith does not license the employer to refuse to enter into agreements on the ground that they do not include some proposal which is not a mandatory subject of bargaining. We agree with the Board that such conduct is, in substance, a refusal to bargain about the subjects that are within the scope of mandatory bargaining. This does not mean that bargaining is to be confined to the statutory subjects. Each of the two controversial clauses is lawful in itself. Each would be enforceable if agreed to by the unions. But it does not follow that, because the company may propose these clauses, it can lawfully insist upon them as a condition to any agreement.24

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It has been recognized law, since this decision, that neither party can bargain to impasse in support of “permissive” clauses—those dealing with matters outside the statutory term “wages, hours, and other terms and conditions of employment.” Clauses within the statutory limits are “mandatory” topics for bargaining. Either party violates its duty to bargain by refusing to discuss a mandatory topic. The Court gives only one reason for its conclusion, which is that insistence upon a permissive term “is, in substance, a refusal to bargain about the subjects that are within the scope of mandatory bargaining.” How so? As Archibald Cox noted at the time, “The major premise is given to us as an oracular pronouncement. No precedents sustain it; no reasons are suggested. There is no discussion of the probable impact upon collective bargaining practices or evolution of the national labor policy.”25 The distinction was obviously and basically inconsistent with the process of free collective bargaining unregulated by the government, so powerfully articulated by Senator Walsh. The lack of justification and analysis that Cox noted almost certainly has its roots once again in the Court’s lack of knowledge or understanding concerning the process of collective bargaining. It would be difficult to find a statement more inconsistent with that process than the philosophically confusing statement by the Court (quoting the Board) that insisting on a permissive term is in essence a refusal to bargain about the mandatory terms. The Borg Warner case is a particularly poor one for such a conclusion, since the parties not only discussed, argued, and compromised their positions on the mandatory topics but actually came to agreement. In fact, in collective bargaining when one party is strongly committed to a permissive proposal, it generally sweetens or softens its position with respect to mandatory topics in order to obtain agreement. Thus insisting on a permissive topic is intimately connected to bargaining on mandatory topics. It is likely that Borg Warner made concessions in order to obtain the conditional agreement that finally resulted. Although the distinction is often ignored or bypassed by experienced negotiators, it has had a serious and controversial impact on national labor policy in a variety of ways. Most significantly it has increased Board and court involvement in the bargaining process.

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Setting out the boundaries of each area is difficult. As a Harvard Law School note observes, efforts to delineate a clear line between mandatory and permissive topics fail “because they amount only to the best guess or most well-intentioned wish of courts or commentators as to which bargaining topics employers and unions value most.”26 The most controversial aspect of the mandatory-permissive distinction has been its use with regard to basic decisions concerning the way the enterprise functions. The first Supreme Court decision that first dealt directly with this problem was Fibreboard Paper Products v. NLRB.27 In that case management decided to subcontract out its maintenance work and refused to bargain with the union over its decision. The Board decided that the company’s “failure to negotiate with [the Union] concerning its decision to subcontract its maintenance work constituted a violation of Section 8(a)(5) of the Act.”28 The Supreme Court affirmed by a 5–3 vote. Justice Warren writing for the majority based his opinion on both the language and policy of the Act: The subject matter of the present dispute is well within the literal meaning of the phrase “terms and conditions of employment.” A stipulation as to the contracting out of work performed by members of the bargaining unit might appropriately be called a “condition of employment.” The words even more plainly cover termination of employment. . . . To hold, as the Board has done, that contracting out is a mandatory subject of collective bargaining would promote the fundamental purpose of the Act by bringing a problem of vital concern to labor and management within the framework established by Congress as most conducive to industrial peace.29 Three of the Justices joined in a separate, this-case-only concurrence, rejecting the broad reach of Justice Warren’s language: Only a narrower concept of “conditions of employment” will serve the statutory purpose of delineating a limited category of issues which are subject to the duty to bargain collectively. Seeking

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to effect this purpose, at least seven circuits have interpreted the statutory language to exclude various kinds of management decisions from the scope of the duty to bargain. . . . Nothing the Court holds today should be understood as imposing a duty to bargain collectively regarding such managerial decisions, which lie at the core of entrepreneurial control.30 It was the views of the concurrence and the desire to protect “the core of entrepreneurial control” from the obligation to bargain that shaped the Court’s next important decision on the subject of mandatory bargaining, First National Maintenance Corp v. NLRB,31 in which the Court held that an employer could close part of its business without bargaining with the union. The opinion was clearly an effort to limit the requirement of mandatory bargaining in favor of what the Court saw as the economic efficiency likely to result from bestowing a significant degree of unilateral control to management at a crucial time. Congress has limited the mandate or duty to bargain to matters of “wages, hours, and other terms and conditions of employment.” . . . Nonetheless, in establishing what issues must be submitted to the process of bargaining, Congress had no expectation that the elected union representative would become an equal partner in the running of the business enterprise in which the union’s members are employed. Despite the deliberate open-endedness of the statutory language, there is an undeniable limit to the subjects about which bargaining must take place.32 The paragraph is typical of the Court at its worst on issues of labor relations. The first sentence erroneously attributes the limitation on bargaining developed by the Court in the Borg Warner case to Congress. While the second sentence is almost certainly true, it is misleading, since requiring an employer to bargain before acting hardly establishes the union as an equal or indeed a junior partner. Nor is there any evidence that Congress was concerned with limiting the

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areas of collective bargaining. Certainly Senator Walsh’s statement suggests that the limitation of bargaining was for the parties, not the Court, to decide. The third sentence, too, is an indication of analytic sleight of hand. The word “undeniable” is one of those words frequently used by the Court when there is no authority to support its conclusion: in this case that there are matters within the statutory language that are outside the duty to bargain. The next paragraph is equally troubling: Management must be free from the constraints of the bargaining process to the extent essential for the running of a profitable business. It also must have some degree of certainty beforehand as to when it may proceed to reach decisions without fear of later evaluations labeling its conduct an unfair labor practice. . . . In view of an employer’s need for unencumbered decisionmaking, bargaining over management decisions that have a substantial impact on the continued availability of employment should be required only if the benefit, for labor-management relations and the collective-bargaining process, outweighs the burden placed on the conduct of the business.33 What authority supports the policy that management must be free of the constraints of collective bargaining when the Court determines that there is a possibility that bargaining might make a business unprofitable? The Act itself states only that the economy will work best if bargaining is expanded. Without support from statutory language or history, the Court has created a new exemption to the words of the NLRA rooted in market economics and its own doubts about the value of collective bargaining about issues involving capital decisions. In cases of major management decisions it creates a legal standard that requires courts to engage in a balancing process to weigh “the benefit to the collective bargaining process” against the “burden placed on the conduct of the business”—as though judges, the vast majority of whom have never engaged in collective bargaining or run a business, are capable of measuring the competing interests by virtue of their legal acumen.34

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Both the Board and the courts of appeals have struggled in their efforts to find a way of articulating the line between Fibreboard and First National Maintenance. The problem vindicates the concerns expressed by Professor Cox about the Borg Warner decision and the effort to create a bargaining priority for the parties by judicial fiat. As a perceptive note in the Harvard Law Review published after the First National Maintenance decision pointed out, The mandatory/permissive dichotomy’s primary problem is that it distorts the bargaining process by allowing the Board and the courts to determine the scope of bargaining. In addition, its application diminishes creativity in bargaining relationships and encourages subterfuge in the negotiating process. . . . [C]ompared to the negotiating parties, the Board and the courts are ill-equipped to decide which subjects are necessary components of a collective bargaining agreement. Composed entirely of attorneys, the Board’s knowledge of industrial relations in general is inevitably incomplete; this short-coming is only magnified when it deals with the peculiar needs of each workplace environment. Furthermore, the judges who review the decisions of the Board usually have even less experience in industrial relations.35 Another case in which the mandatory-permissive distinction was used by the Court to limit collective bargaining was Chemical Workers, Local 1 v. Pittsburgh Plate Glass Corp.36 In that case the Supreme Court rejected the Board’s conclusion that changing benefits for retired employees was a mandatory topic. The Court rested its conclusion on the grounds that retired employees are not in the bargaining unit and they are not employees for the purposes of the Act. Although the opinion purported to rest almost entirely on the plain meaning of the statutory language, the Court’s disclaimer of responsibility for the result it reached on the grounds that it was merely following the dictate of Congress rings hollow. The Court, with no violence to the statutory language, could have accepted the Board’s position that the benefits of retired employees are a matter of significant and

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legitimate concern to current employees. In his opinion, Justice Brennan acknowledged that this approach had been previously employed to hold that a union could bargain about the wages and working conditions of people to be hired in the future. The relationship between retirees and current employees might easily have been considered of vital interest to current employees. The type of pension benefit that is acceptable to existing employees, particularly older ones, might turn on the employees’ perception of the union’s willingness and ability to represent and protect them against unexpected change. In addition, current workers typically know, care about, and identify with retirees. They feel that it is the union’s role to continue to look after their interest when they have retired. Such feelings of continuing allegiance are central to the concept of worker solidarity, which is the basis of unionism. Justice Brennan, however, chose to treat the argument based on continuing interest as though it were an actuarial point about the advantages or disadvantages of grouping, and he dismissed the relationship as “speculative and insubstantial at best.”37 Although its language is technical, the Court’s rejection of the Board’s position must ultimately rest upon its conclusions, stated mainly in a footnote, that collective bargaining is not a good method for protecting the rights of retired employees and that unions cannot be trusted to live up to their rhetoric or their basic commitment to working-class solidarity.

THE COURT’S SUSPICION OF COLLECTIVE BARGAINING

The Court’s decision in Pittsburgh Plate Glass, like that in First National Maintenance and Detroit Edison, reveals the Court’s distrust of the collective bargaining process and its assumption that unions will behave irresponsibly. Why did the Court come to view the collective bargaining process less as a valuable aspect of economic policy and more as a threat to economic efficiency and fairness? It is not as though collective bargaining, as it developed in the aftermath of World War II, failed to achieve the positive results that the Act’s framers anticipated. As foreseen by the Act’s creators, collective bargaining

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helped employees to achieve greater power, wealth, and dignity. The widespread use of seniority in collective bargaining provided a shield against arbitrary decision making in granting benefits and allocating hardship. It provided necessary support for the almost universal provision in collective agreements limiting the employer’s right to discharge and discipline to “just cause.” Seniority provides a balance to employer discretion. It gives credence to the powerful concept that employees, through their work, develop a legally enforceable claim to their jobs and that most management decisions affecting significant employee interests must be based on legitimate objective standards. Through bargained-for pensions and supplemental benefits, employees under collective agreements are provided protection for their old age and a cushion against unemployment. Collective bargaining has given American unions a visible, significant presence on the shop floor. It has brought them great resources, political power, and economic leverage. For many employers, this system, while limiting control and raising labor costs, has provided stability in industrial relations. It has reduced quit rates and encouraged the development of reasonable rules uniformly applied. It has thereby helped to create a sense of common enterprise, which is positively associated with greater productivity and efficiency. Through collective bargaining, labor and management have developed a unique, broadly based private system of dispute resolution, culminating in arbitration, the success of which has been widely acknowledged and hailed by the Court. It is not easy to explain the paradox of a successful system viewed with increasing suspicion and even hostility by the Court. One must start with the recognition that the problems dealt with, as well as the techniques and methods of collective bargaining, are all foreign to the experience of most judges. They have little personal knowledge of industrial relations to fall back on. It is the reflection of collective bargaining derived from cases, scholarly writings, and media depictions that furnish the court’s conception of the process. There are a variety of reasons why all of these portray a distorted view of the process. When the system works well, there is no need or purpose for legal action. Indeed, one of the goals of collective bargaining is that it should take place largely unsupervised by the government and outside the

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courts. Cases are most likely to arise when collective bargaining does not work well. Reporters and newscasters, too, are trained to focus on the newsworthy, which usually means disruptions, conflicts, betrayal, and calamity. Scholarly studies and analyses offer the best hope of providing a balanced picture that will correct the inevitable misconceptions derived from cases and media, and there is much valuable information about collective bargaining to be derived from scholarly journals, particularly in the area of industrial relations. But these are rarely looked to. The Court has often looked to legal scholarship, but legal scholarship has its own biases, fashions, and temptations, many of which are currently unfavorable to collective bargaining. This is a particularly poor time to expect legal scholarship to correct the Court’s misperceptions. The current emphasis is on theory, elegance, paradigms, and mathematical models. Behind these sophisticated paraphernalia the faces of workers are often hidden and their problems ignored. Collective bargaining has been evaluated, by law and economics scholars, in terms of its conformity with the postulates of economic analysis, and it has been found wanting as a distortion of the market. The law and economics movements may yet provide valuable insights about labor law. Thus far, the writing has been simplistic, evaluating existing institutions from the perspective of laissez faire analysis, making the same arguments that the opponents of the Wagner Act made and that the framers of most modern labor legislation rejected. Reflections of the often inaccurate public and scholarly images of collective bargaining are common in the Court’s decisions. For example, the Pittsburgh Plate Glass decision may be most understandable as a response to well-publicized instances of misuse of pension funds by the Teamsters. The Court’s opinions reveal a basic misunderstanding of the value and nature of collective bargaining, a misunderstanding that has shaped the Court’s attitudes toward all aspects of labor law.

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3 THE SUPREME COURT AND THE RIGHT TO STRIKE

It was understood by the Act’s framers that in the absence of governmental power to set agreements, coercion for settlement of bargaining disputes was to come from the strike and its potential to harm both sides. Employers would make concessions to avoid open conflict with their workers and maintain productivity. Unions would similarly make concessions to avoid loss of work and pay for its members. The key role of the strike in the labor relations system contemplated by the Act made the law surrounding its use of great significance. To what extent did the policy of nongovernmental involvement proclaimed by Senator Walsh permit employers to make strikes costly for those who lead, join, or support them? There was no doubt that some limitations on employer actions during a strike were imposed by Sections 8(1) and (3). Not only was the right to strike broadly affirmed in Section 7’s declaration of a “right to engage in concerted activity for purposes of collective bargaining and . . . other mutual aid and protection,” but Section 13 added that “nothing in the Act should be interpreted to interfere with or impede or diminish in any way the right to strike.” Section 8(1) made it unlawful for an employer to “interfere” with the rights guaranteed by Section 7. And Section 8(3) made it unlawful to discriminate against workers to discourage union activity. It was generally understood that it would not be legitimate for employers to discharge or threaten to discharge union leaders unless 52

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they gave in to the employer’s bargaining positions. But significant questions remained: Could an employer continue production during a strike using replacement workers? And could it keep them on after the strike ended and refuse to reinstate some or all of the strikers?

THE MACKAY DICTUM

Although the question of the status of replacement workers was raised in the legislative history of the Wagner Act, it was not answered.1 In 1938 Justice Roberts addressed the issue on behalf of the Court in NLRB v. Mackay Radio.2 His dictum in that case concerning employer rights is still recognized as an accurate statement of the law although it was inconsistent with the holding of the case, with the Court’s subsequent decisions construing the term “discrimination” under the NLRA. The Mackay Radio case arose out of failed negotiations for a labor agreement between Local 3 of the American Radio Telegraphists’ Association (CARTA) and Mackay Radio. When Mackay rejected its bargaining proposals, the union called a strike. The company continued to operate during the strike and to continue operations transferred workers from other facilities to San Francisco, then the company’s chief West Coast facility. The strike did not receive the support that its leaders had expected, and after a disappointing weekend, it was called off and Local 3’s members applied for reinstatement. The company denied reinstatement to four of the former strikers. All four had played important roles in organizing the union, all had held leadership positions in Local 3, and all had figured prominently in the strike. The union filed charges against Mackay Radio protesting the company’s refusal to reinstate the four, and the Board’s regional office in San Francisco issued a complaint alleging that the company’s refusal to reinstate them constituted violations of Sections 8(1) and (3) of the Act. A complaint in the matter was issued. Several weeks later, on February 20, 1936, the Board issued its decision affirming the complaint. Its discussion of the rights of the strikers to reinstatement was brief. It found that the employer, “by refusing to reinstate to employment

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[the four union activists], . . . did discriminate in regard to tenure of employment and has there by discouraged membership in the labor organization known as American Radio Telegraphists’ Association, San Francisco Local No. 3.” Although the Board did not discuss the meaning of the term “discrimination” more broadly, it did at one point state the issue as whether “these four operators were refused reinstatement because of their union membership and activity. . . . The respondent denies this allegation and states that the men were refused reinstatement solely because at the times they applied there were no vacancies existing in the HB operating room.” The Board devoted the great majority of its opinion to demonstrating that the four who were denied reinstatement were singled out from other former strikers because of their leadership in the union. It declined to address the issue of whether denial of reinstatement to strikers generally in order to keep on replacement workers constituted discrimination. The Board ordered the company to “offer to the four workers full reinstatement, respectively, to their former positions, without prejudice to any rights and privileges previously enjoyed,” and it ordered the company to “make whole” the four. Soon after issuing its opinion, the Board filed a petition for enforcement of its order with the Ninth Circuit, which denied enforcement by a two-to-one vote. The Board promptly appealed to the Supreme Court, which upheld the Board’s conclusion that the four workers were discriminated against because they were denied reinstatement as a result of their leadership in the union: “The Board found, and we cannot say that its finding is unsupported, that, . . . the action taken by respondent, was with the purpose to discriminate against those most active in the union. There is evidence to support these findings.”3 In the course of its opinion the Court went out of its way to make clear that what was illegal in the company’s action was distinguishing among the strikers on the basis of union activity. It announced that the company would have been within its rights had it chosen some other method for determining which employees were to be denied reinstatement. In his opinion upholding the Board’s conclusion, Justice Roberts addressed, by way of dictum, the general issue

THE SUPREME COURT AND THE RIGHT TO STRIKE

of the employer’s right to hire permanent replacement workers. His statement on this issue has survived for over seventy-five years as the “Mackay doctrine”: Although Section 13 of the act, provides, ‘Nothing in this Act (chapter) shall be construed so as to interfere with or impede or diminish in any way the right to strike,’ it does not follow that an employer, guilty of no act denounced by the statute, has lost the right to protect and continue his business by supplying places left vacant by strikers. And he is not bound to discharge those hired to fill the places of strikers, upon the election of the latter to resume their employment in order to create places for them.4 The Mackay doctrine as thus enunciated seems to have arisen wholly formed from the policy preferences of Justice Roberts and his colleagues. It had no roots in the language of Section 8(3) or in the legislative history of the Act, neither of which is discussed. And it is inconsistent with subsequent Supreme Court opinions interpreting the concept of discrimination. It is also the case that the Mackay doctrine and the Mackay holding are in direct conflict. The holding is that it is illegal to decide which employees are entitled to work after a strike on the basis of union activity. But the dictum insists that the employer may give employment preference to those who work during a strike over those who strike, which is precisely the same result, penalizing union activity that was outlawed by the holding. Despite its contradiction and inconsistency with Section 13’s special recognition of the right to strike,“in 1938 commentary focused on the holding and not the dictum.” The result “was heralded as a great victory for the National Labor Relations Board,” whose general counsel described it as “gratifying.” The Court’s opinion was hailed by the union’s president, Mervyn Rathborne, who did not distinguish between the holding and the dictum. “The first piece critical of Mackay did not appear until 1941, three years after the decision was announced. It would remain the sole critical piece for some time. Serious and sustained criticism of the Mackay rule did not appear in the literature until the 1960s.”5

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Nor were the Mackay decision and dictum followed by a significant number of management efforts to defeat strikes through the hiring of permanent replacements. It was many years before management lawyers felt comfortable advising their clients to hire permanent replacements. As Thomas Kohler and I pointed out, It was not as if unions lacked effective techniques for making the hiring of permanent replacements costly. In basic industries unions were strong and both sides understood that they would become stronger. This gave employers a strong motive for avoiding a no-holds-barred battle. The Act did not prevent unions from coming to the support of each other. Hiring permanent replacements not only meant the loss of top quality union workers but it was likely to prolong and spread the scope of a strike. It was also bound to lead to at least minor acts of violence and prolonged antipathy from those not replaced.6 Even with the benefit of hindsight, it is impossible to know what led the Court to go out of its way to announce that the hiring of permanent replacements was consistent with the Act. Was the Court concerned with protecting the basic right of an employer to hire whom it pleased? That seems unlikely since the policy of protecting employee union activity from employer economic power had already been accepted by the Court and was the basis for the actual holding in the Mackay case. It seems more likely that the Court’s statement was based on the perceived need for fair ground rules to govern the rights of the parties in a strike situation. Mackay was issued during a time of steadily increasing union power membership and solidarity. The Court might well have thought it necessary for employers to have the power to hire permanent replacements in order to balance the strike power of unions. Perhaps they speculated that the ability to hire temporary replacements would be too expensive and too uncertain to permit employers to bargain effectively with unions. If so, in light of the decreasing power of the strike weapon, the Court’s dictum has turned out to be another example of an important labor law doctrine based on an erroneous factual assumption.

THE SUPREME COURT AND THE RIGHT TO STRIKE

THE COURT’S FAILURE TO RECONSIDER THE MACKAY DOCTRINE

It has been nearly eighty years since Mackay was decided. Times have changed significantly. The strike weapon has been in decline for many years. Yet the Court, despite many opportunities, has never reconsidered the validity or social utility of the Mackay dictum or whether it is consistent with the law as it developed. The Court has never explained why favoring replacements over strikers is not a pernicious form of discrimination that discourages union membership in violation of Section 8(a)(3).7 It certainly violates the policy of the section, which was enunciated by Justice Reed in Radio Union Officers v. NLRB:8 “The policy of the Act is to insulate employees’ jobs from their organizational rights. Thus §§8(a)(3) and 8(b)(2) were designed to allow employees to freely exercise their right to join unions, be good, bad, or indifferent members, or abstain from joining any union without imperiling their livelihood.” Justice Reed also made clear that membership includes “participation in union activities.”9 It is difficult to imagine a statement more inconsistent with that policy than the Mackay dictum. A 1963 case that contained many of the same conceptual issues as Mackay and presented the Court the opportunity to reconsider and refine the law of permanent replacements was NLRB v. Erie Resistor Corp.10 In that case the company and union failed in efforts to negotiate a new collective bargaining agreement, and the union called a strike when the previous agreement expired. What happened thereafter was set forth by Justice White. The company, under intense competition . . . decided to continue production operations. . . . On May 3, however, the company notified the union members that it intended to begin hiring replacements and that strikers would retain their jobs until replaced. . . . Replacements were told that they would not be laid off or discharged at the end of the strike. . . . On May 28, the company informed the union that it had decided to award 20 years’ additional seniority both to replacements and to strikers

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who returned to work, which would be available only for credit against future layoffs.11 The employer argued that its action came within the ambit of the Mackay doctrine since it was motivated by the desire to continue and protect its business. The employer cited not only Mackay but other decisions holding that Section 8(a)(3) was not violated so long as an employer was motivated by legitimate business considerations. The Board rejected these arguments. It claimed that the grant of super-seniority went beyond what was sanctioned by Mackay and that Respondent’s super-seniority policy—on its face discriminatory against those who continued to strike—clearly discouraged strike activities and union membership of employees. Such was the inevitable result of a preference granted for all time to those who did not join the Union’s strike activities. Where discrimination is so patent, and its consequences so inescapable and demonstrable, we do not think the General Counsel need prove that Respondent subjectively “intended” such a result.12 The Court of Appeals for the Third Circuit refused to enforce. It agreed that the employer’s conduct discriminated against strikers, but it insisted that application of Section 8(a)(3) required something more; “the discriminatory conduct of an employer is not unlawful in the absence of an illegal motive.” And in the absence of a finding that the employer was motivated by the desire to discourage union membership and activity, it held that the employer’s action came squarely under the Mackay doctrine. “We are of the opinion that inherent in the right of an employer to replace strikers during a strike is the concomitant right to adopt a preferential seniority policy which will assure the replacements some form of tenure, provided the policy is adopted SOLELY to protect and continue the business of the employer.”13 The Supreme Court disagreed with the Third Circuit both as to the necessity to show improper motive and on the implications of Mackay for super-seniority. The Court said that in drawing a line between strikers and other employees in a matter calculated to penalize those

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who engaged in protected activity, the company had violated Section 8(a)(3) of the Act. The Court justified the conclusion with two lines of mutually supportive reasoning. First, Justice White, writing for the majority, stated that the necessary intent can be conclusively established by the fact that an employer deliberately took action that it knew would disadvantage workers based on union activity or membership. “The employer may counter by claiming that his actions were taken in the pursuit of legitimate business ends and that his dominant purpose was not to discriminate or to invade union rights but to accomplish business objectives acceptable under the Act. Nevertheless, his conduct does speak for itself. . . . [W]hatever the claimed overriding justification may be, it carries with it unavoidable consequences which the employer not only foresaw but which he must have intended.”14 Justice White pointed out, as several commentators have noted, that conclusively implying motive from action and consequence is in reality the same as holding that improper motive is not necessary.15 “The Board’s role and that of the courts is . . . in reality the far more delicate task, . . . of balancing in the light of the Act and its policy the intended consequences upon employee rights against the business ends to be served by the employer’s conduct.” And the Court accepted the Board’s judgment, that the employer’s conduct was unacceptable since “to excuse such conduct would greatly diminish, if not destroy, the right to strike guaranteed by the Act, and would run directly counter to the guarantees of Sections 8(a)(1) and (3) that employees shall not be discriminated against for engaging in protected concerted activities.”16 Justice White listed the features of super-seniority that made its use unlawful: (1) Super-seniority affects the tenure of all strikers whereas permanent replacement, proper under Mackay, affects only those who are, in actuality, replaced. It is one thing to say that a striker is subject to loss of his job at the strike’s end but quite another to hold that in addition to the threat of replacement, all strikers will at best return to their jobs with

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(2)

(3)

(4)

(5)

seniority inferior to that of the replacements and of those who left the strike. A super-seniority award necessarily operates to the detriment of those who participated in the strike as compared to nonstrikers. Super-seniority made available to striking bargaining unit employees as well as to new employees is in effect offering individual benefits to the strikers to induce them to abandon the strike. Extending the benefits of super-seniority to striking bargaining unit employees as well as to new replacements deals a crippling blow to the strike effort. At one stroke, those with low seniority have the opportunity to obtain the job security which ordinarily only long years of service can bring, while conversely, the accumulated seniority of older employees is seriously diluted. . . . Super-seniority renders future bargaining difficult, if not impossible, for the collective bargaining representative. Unlike the replacement granted in Mackay which ceases to be an issue once the strike is over, the plan here creates a cleavage in the plant continuing long after the strike is ended. . . . This breach is reemphasized with each subsequent layoff and stands as an ever-present reminder of the dangers connected with striking and with union activities in general.17

All these features of super-seniority also apply to the hiring of permanent replacements. For example, Justice White’s eloquent description in point five of the continuing divisions between strikers and replacements describes the almost inevitable post-strike situation in any large facility where former strikers and replacement workers are required to work together.18 Justice White claimed to discern a difference between permanent replacement and super-seniority with respect to job security and tenure. Super-seniority affects the tenure of all strikers, whereas permanent replacement, proper under Mackay, affects only those who are,

THE SUPREME COURT AND THE RIGHT TO STRIKE

in actuality, replaced. The meaning of this sentence is far from clear. Permanent replacement means that the person so hired cannot be bumped by a returning striker with more seniority. So in effect any returning strikers will at best return to their jobs with seniority inferior to that of the replacements and of those who left the strike. To justify the obvious conflict between Mackay and the decision in Erie Resistor, Justice White claimed that the two were significantly different in terms of their impact on the right to strike: It may be, as the Court of Appeals said, that “such a replacement policy is obviously discriminatory and may tend to discourage union membership.” But Mackay did not deal with superseniority, with its effects upon all strikers, whether replaced or not, or with its powerful impact upon a strike itself. Because the employer’s interest must be deemed to outweigh the damage to concerted activities caused by permanently replacing strikers does not mean it also outweighs the far greater encroachment resulting from super-seniority. . . . We have no intention of questioning the continuing vitality of the Mackay rule, but we are not prepared to extend it to the situation we have here.19 The claim that super-seniority is a “far greater encroachment” on the right to strike than permanent replacement is the only unconvincing part of an otherwise excellent persuasive opinion. The fact is that some form of super-seniority is implicit in permanent replacement and that the worst impact on the right to strike is on those who never return to work and never feel the effect of super-seniority because they have no job. It is difficult to believe that Justice White did not realize that in making the case against super-seniority he was simultaneously making the case for the illegality of permanent replacements. That realization probably explains why he felt it necessary to add that he was not questioning the Mackay doctrine in his opinion. Erie Resistor gave promise that the Court might reconsider the Mackay doctrine and recognize that it was inconsistent with the basic policy of the NLRA to protect the right to strike. But the promise of Erie

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Resistor was dashed by the Supreme Court’s decision in Transworld Airlines v. Independent Federation of Flight Attendants.20 In that case, which arose under the Railway Labor Act,21 the Court dealt with the rights of senior employees to replace either new employees hired as strike replacements or union members who continued to work or returned to work (crossovers). Both the Supreme Court and the court of appeals assumed that NLRA precedent was binding. The court of appeals held that the senior employees could replace the crossovers, who, it argued, were to be treated the same as those replacements granted super-seniority by Erie Resistor: Our review of the law supports our conclusion that the crossovers do not acquire the status of permanent replacements. In NLRB v. Erie Resistor, the Supreme Court upheld the NLRB’s decision that an award of super-seniority to permanent replacements and cross-overs unlawfully discriminated against those who engaged in union activity. Although TWA has not awarded super-seniority to the employees who worked during the strike, several of the concerns voiced by the Court in Erie Resistor are applicable to the status of the cross-overs here. The Court disapproved of super-seniority because the award operated to the detriment of strikers as compared to non-strikers; it in effect offered an inducement to abandon the strike; and it created a long-term division among the workforce. Although an award of super-seniority brings these concerns into a sharper focus than does the conferring of permanent replacement status to cross-overs, these concerns are nonetheless present. Awarding the cross-overs permanent replacement status differentiates employees on the basis of their union activity, induces employees to abandon the strike and is likely to create longterm conflict and division within the workforce of those working together under the union security clause.22 The Supreme Court’s opinion by Justice O’Connor held that the strikers had no reinstatement rights to claim their lost jobs against

THE SUPREME COURT AND THE RIGHT TO STRIKE

either crossovers or replacement workers. Although the case was brought under the Railway Labor Act, Justice O’Connor looked to the Court’s NLRA jurisprudence in analyzing the rights of the parties. On the basis of NLRA precedent, she concluded that an employer had the right to assure both replacement workers and crossovers that their jobs would not be lost to more senior strikers when the strike ended. The employees who struck gambled their jobs in so doing and those who stayed or crossed over were simply wise enough to reject the gamble. We see no reason why those employees who chose not to gamble on the success of the strike should suffer the consequences when the gamble proves unsuccessful. Requiring junior crossovers, who cannot themselves displace the newly hired permanent replacements, and “who rank lowest in seniority,” to be displaced by more senior full-term strikers is precisely to visit the consequences of the lost gamble on those who refused to take the gamble. . . . [N]othing in the NLRA or the federal common law we have developed under that statute requires such a result.23 Justice O’Connor’s opinion is more consistent than that of the appeals court in treating crossovers as strike replacements. This reasoning would be understood by strikers, who frequently refer to the replacements as “scabs” and the crossovers as “super scabs.” And the result makes sense if one accepts the metaphor of striking employees as gamblers laying their jobs on the casino table of collective bargaining in hopes of economic gain. Justice O’Connor stated that nothing in the development of the NLRA contradicts this notion, and she cited Erie Resistor as supportive of her cavalier equation of a strike with a gamble of the worker’s job. Justice Brennan in dissent focused on the holding in Mackay. “The employer may not engage in discrimination among its employees— whether at the precertification stage, the bargaining stage, or during or after a strike—on the basis of their degree of involvement in protected union activity such as a strike.”24

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Justice O’Connor’s statement that “nothing in the NLRA or the federal common law we have developed under that statute requires such a result” was sustainable only by ignoring the Court’s carefully developed jurisprudence with respect to the interpretation of Section 8(a)(3). One of the Court’s most significant and regularly cited decisions on the meaning of Section 8(a)(3) is NLRB v. Great Dane Trailers.25 The Great Dane case arose out of a strike called over a new contract. Many of the striking employees demanded vacation pay allegedly owed them under the terms of the expired contract. The company denied the request on the ground that the contract had expired. It did, however, as a matter of company policy, grant vacation pay to nonstrikers and strikers who returned to work prior to being replaced. The Board found that the company’s action violated Sections 8(a)(1) and 8(a)(3) because it, in effect, punished striking employees for engaging in protected activity. The court of appeals denied enforcement on the grounds that “there are insufficient facts shown by the record to support an inference of unlawful motivation.” It suggested that the employer might have acted from legitimate motives, such as the desire to reduce expenses or the desire to encourage longer tenure. The Supreme Court reversed. Purporting to distill the essence of its previous opinions dealing with Section 8(a)(3), the Court announced “several principles of controlling importance.” First, if it can reasonably be concluded that the employer’s discriminatory conduct was “inherently destructive” of important employee rights, no proof of an antiunion motivation is needed, and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is “comparatively slight,” an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justification.26 Applying the Great Dane standard to the conduct involved in the TWA case would seem to require a finding of violation. Justice O’Connor did not cite Great Dane. She did cite NLRB v. Fleetwood

THE SUPREME COURT AND THE RIGHT TO STRIKE

Trailer Co.,27 in which the Court found a violation by an employer for refusing to hire former strikers for open positions. Purporting to apply the Great Dane standards to the rehiring of strikers, the Court in Fleetwood Trailer stated that unless the employer who refuses to reinstate strikers can show that his action was due to “legitimate and substantial business justifications,” he is guilty of an unfair labor practice. The burden of proving justification is on the employer. It is the primary responsibility of the Board and not of the courts “to strike the proper balance between the asserted business justifications and the invasion of employee rights in light of the Act and its policy.”28 But the Court excluded the issue of striker replacement from the balancing test of Section 8(a)(3) on the grounds that it had already been established that the balancing test when permanent replacements are hired always favors the employer’s action. Citing the Mackay case, the Court stated that in some situations, “legitimate and substantial business justifications” for refusing to reinstate striking employees who engaged in an economic strike have been recognized. One is when the jobs claimed by the strikers are occupied by workers hired as permanent replacements during the strike in order to continue operations. The suggestion that the Mackay dictum reflects a balancing of employer business justification with employee rights under the Act is obviously fictitious. As noted earlier the Court in Mackay made no effort to justify its dictum. And its actual holding points in the other direction—namely, that an employer may not base reinstatement rights on participation in union activity. The sad fact is that despite numerous opportunities, this profoundly important doctrine has never been subject to analysis in terms of either the language or policy of the Act. The Erie Resistor case was such an opportunity, and the Court analyzed the issue before it in exemplary fashion. But it specifically declined to consider the Mackay doctrine in similar fashion. It is a remarkable violation of the Court’s responsibility that it has permitted the dictum of a long-ago decision to cost the jobs of thousands of workers without ever engaging in a direct analysis of its validity under the law as developed.

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THE IMPACT OF THE MACKAY DOCTRINE ON COLLECTIVE BARGAINING

The potential of the Mackay doctrine to defeat strikes and eliminate unions remained largely unused by employers until the 1980s, when companies began to toughen their negotiating positions, to risk or provoke strikes for the opportunity to hire permanent replacement workers.29 One example of increasingly aggressive use by large companies of the Mackay doctrine occurred in the strike by paperworkers at the Androscoggin Mill, in Jay, Maine, against the International Paper Company (IP). The strike began in 1988 and ended in 1989 after all the strikers had been permanently replaced. Because of the hiring of permanent replacements, the lives of the strikers and the nature of the community were permanently altered for the worse. Jay had once been a remarkable community of well-paid, skilled workers, loyal to the company, for whom many generations had worked, proud of their skill and of the quality of the product they produced. By the midnineties, when I interviewed workers and town officials, Jay was a scene of economic and personal devastation. The strike had divided families and engendered a cycle of anger directed at the company, the law, and the national leadership of the union. The strikers had behaved throughout as the law contemplated. The process by which they chose to strike rather than accept the company’s terms was a democratic one, involving meetings, discussions, and widespread participation by its members. All of the many former strikers with whom I spoke stated unequivocally that even if they had had serious disagreements with the union (and some did), they would have felt morally bound to honor a strike called with the support of the necessary two-thirds of the employees. No other course was morally acceptable to the great majority of paperworkers at the Androscoggin Mill. Each would have benefited if the union had won the strike. Each felt bound by ties of family, loyalty, history, and mutual commitment to the others in the group. In short, they behaved as loyal members of the group that was entrusted by law with their claims and aspirations as well as those of their fellow employees. The public policy of the Act that encourages employees to participate in the process of collective bargaining through the union cannot

THE SUPREME COURT AND THE RIGHT TO STRIKE

be adequately justified absent a corresponding policy of free choice that insulates the employees’ jobs from their union activity—a policy that the Court clearly enunciated and that is clearly inconsistent with the Mackay doctrine. To establish a system under which employees are encouraged to work through their unions and yet to simultaneously permit the employer to eliminate their jobs when they do so is both manifestly unfair and inconsistent with the policy of free choice that is at the heart of the Act. The Mackay doctrine visits upon the employees the most harmful consequences of failed negotiations. Yet in almost every case, the major cause of failure lies elsewhere. Bitter strikes that are not caused by an employer strategy aimed at busting a union always reflect negotiating errors and failures to compromise by both company and union officials. This was certainly true of the strike against IP by the paperworkers at the Androscoggin Mill. The company, according to its own supervisors, did a poor job of selling the employees and the union on the general need for the concessions it sought at the bargaining table. The company chose to raise at negotiations issues such as eliminating the Christmas shutdown that it knew would antagonize the employees. The fact that the company chose to give bonuses to its executives at the same time that it was seeking concessions from the employees could at best be described as insensitive. It is likely that IP was seeking to rid itself of the union, which it did when the replacement workers were eligible to vote on the issue of representation. Officials and representatives of the international union also made a series of tactical blunders, starting with the failure to line up key locals to support the strike. Despite their labor relations failures, the officers of both the company and the international union remained well ensconced in posh offices at the end of the strike, while the employees—those whose actions were least blameworthy—lost their jobs and sacrificed their decent middle-class lifestyle. No one who witnessed the destruction of the Jay community and the change from profound loyalty to hatred of International Paper that ensued can view the Mackay doctrine as benign in any way. IP was earning record profits before it provoked the strike and initiated a program that its former CEO later recognized as a “mistake that cost the company over a billion dollars.”

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In addition to its impact on strikers and their union, the Mackay doctrine is inconsistent with the policy of promoting collective bargaining because it offers employers a powerful argument against unionization. Employers at the direction of their labor consultants regularly take advantage of the opportunity presented by the doctrine. In almost every union representation campaign, employers make a version of the following argument: “If the union wins the election I am required to bargain with it, which I will do. But I am not required to accept unreasonable proposals, which this union regularly makes. I will bargain hard and refuse to compromise. The only way the union can attempt to change my mind is by dragging you out on strike. If the union strikes, I have the right to permanently replace all the strikers. And in a strike situation I will exercise my rights.” Several leading union organizers have told me that they consider this the most powerful argument in the employer’s arsenal.

4 THE COURT AND THE PROTECTED STATUS OF ECONOMIC PRESSURE

Section 7 of the NLRA sets forth in broad language the right of workers to act in concert for a broad variety of purposes, including the rights to “self-organization, form join or assist labor organizations, bargain collectively . . . and to engage in other concerted activity for the purpose . . . of mutual aid or protection.” By virtue of Section 8(a)(1), any interference by employers with the exercise of Section 7 rights is an unfair labor practice. However, neither section has been enforced by the Court in accordance with the breadth of its language or the reach of its policy. The Supreme Court has limited the applications of Section 7 by adding qualifications to its language, and it has held in a variety of situations that employers may not take action harmful to employees who engage in Section 7 conduct without violating Section 8.

INTERMITTENT WORK STOPPAGES

The exclusion of peaceful joint actions in support of collective bargaining from the protection of Section 7 has been a constant example of judicial policymaking, often with no basis in either the language or policies of the Act and sometimes based on what appear to be glaring misreadings of the statutory scheme. The first case in which the Court 69

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held lawful but unorthodox economic pressure unprotected was UAW v. Wisconsin Employment Relations Board (Briggs & Stratton),1 decided in 1949. In that case, in support of its bargaining demands, the union called a series of intermittent work stoppages in the guise of union meetings to disrupt the employer’s production and delivery schedule. The Court held that such activity was unprotected by Section 7. Distinguishing this conduct from a total strike, the Court held that it constituted an improper bargaining weapon. The conclusion of impropriety was supported by three considerations: (1) it is unfair to draw pay from an employer while applying economic pressure against it; (2) such conduct is much more effective than a total strike because the employer is helpless to protect itself against the tactic; and (3) the employer was not given adequate notice of how it could respond to prevent or stop the activity. The argument based on unfairness introduces a concept not found in the Act itself and difficult to measure in the context of a labor dispute. By what scale is the use of intermittent work stops less fair or legitimate than hiring permanent replacement workers? It is a concept that the Court subsequently held irrelevant to the reach of Section 7 in the context of employee protest outside collective bargaining.2 Nor is the employer helpless to respond. Since 1965 it has been clear that the employer can lock out the bargaining unit,3 denying the employees pay and approximating the conditions of a strike, which the Court suggested, with no basis in fact, would be preferable for employers. And if the employer chooses to continue operations, it can surely dock the employees’ pay to make up for lost time and productivity. As to the tactic being more effective than a strike, one wonders how the Court could know which tactic was more effective. There is no body of data to support that conclusion, and it is far from self-evident. From a union’s point of view, intermittent work stoppages as a bargaining tactic have significant disadvantages that may help account for their infrequent use. First, they are harder to control because the behavior requested of the employees is more complex than that involved in total strikes; traditional labor sympathies are not as easily invoked. Second, sporadic activity by its nature involves more frequent emotional and physical start-up costs than does a total strike.

THE COURT AND THE PROTECTED STATUS OF ECONOMIC PRESSURE

In addition, partial strikes generally put less pressure than total strikes on an employer to reach agreements because most of the work is in fact being done. And they are rarely of any length. In short, if such tactics harass the employer, they are just as likely to harass and confuse the employees, and the emotional and practical ambiguities are likely to make any such tactic less desirable to the union than a total strike. Moreover, employers generally know or can easily learn what actions on their part will end the union’s pressure. Subsequent Supreme Court opinions have left the Section 7 status of intermittent work stoppages, and other forms of partial strike, unclear. The case that first suggested a different approach to partial strikes was the Supreme Court’s NLRB v. Insurance Agents’ International Union4 decision. In that case, the Board held that the use of intermittent pressure tactics by the union violated its duty to bargain in good faith. The Supreme Court reversed, stating that the “use of economic pressure . . . is of itself not at all inconsistent with the duty of bargaining in good faith. . . . The Board’s approach in this case . . . must be taken as proceeding from an erroneous view of collective bargaining.”5 While the Court was willing to “agree arguendo” that the activity was unprotected by virtue of the “decision in the Briggs & Stratton case,” it stated,“We see no indication here that Congress has put it to the Board to define through its processes what economic sanctions might be permitted negotiating parties in an ‘ideal’ or ‘balanced’ state of collective bargaining.”6 In applying Section 7, the Court has often stated that activity undertaken by the union is to be viewed as protected unless it is “unlawful, violent or in breach of contract” or “indefensible.”7 The meaning of the term “indefensible” is far from clear. But in its Insurance Agents opinion the Court itself made clear that intermittent work stoppages are not indefensible.“The presence of economic weapons in reserve, and their actual exercise on occasion by the parties, is part and parcel of the system that the Wagner and Taft-Hartley Acts have recognized.”8 It is difficult to argue that activities that are “part and parcel” can also be “indefensible” for purposes of collective bargaining under Section 7. In subsequent decisions the Court applied the rationale of Insurance Agents to remove restrictions on employer responses to union

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activity in bargaining situations. American Ship Building Co. v. NLRB9 held that an employer may legally lock out employees in support of a bargaining position. Prior to this decision lockouts had been recognized as legally permissible only in “defensive” situations. In a companion case, the Court also held that at least in certain circumstances an employer may enhance the effect of a lockout by hiring temporary replacements.10 Thus, far from being helpless, an employer has powerful weapons, short of outright discharge, available to counter partial strike activity. In Lodge 76, Machinists v. Wisconsin Employment Relations Commission,11 the Court seemed to recognize that its treatment of intermittent work stoppages in the Briggs Stratton case was outdated, and it suggested that the Board reconsider the issue. In that case, during negotiations for a new agreement, the union members engaged in a concerted refusal to work overtime. The employer filed an unfair labor practice charge, alleging that the union’s action was a violation of its duty to bargain. The Board dismissed the charge on the basis of the Insurance Agents decision. The employer then filed a complaint with the Wisconsin Employment Relations Commission, which asserted jurisdiction based on that part of the Supreme Court’s decision in the Briggs Stratton case, which announced that states could regulate conduct that was neither protected nor prohibited by the NLRA. The commission entered a cease-and-desist order against the union. The Supreme Court overruled Briggs & Stratton on the issue of federal preemption, and it came within a whisker of doing the same with respect to the protected status of partial strikes. In his majority opinion in Lodge 76, Justice Brennan stated that “neither states nor the Board” was given power “to define what economic sanctions might be permitted negotiating parties.” To do so, he argued, would be tantamount to “denying to one party to an economic contest a weapon that Congress meant him to have available.” The majority opinion also pointed out that the Court’s earlier lockout decisions undercut any argument based on the employers’ vulnerability: “[E]ven were the activity presented in the instant case ‘protected’ activity within the meaning of Section 7, economic weapons were available to counter the union’s refusal to work overtime.”

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In apparent recognition of the inconsistency between its reasoning and the characterization of the conduct in question as totally unprotected, the Court invited the NLRB to reconsider the question.“It may be that case-by-case adjudication by the federal Board will ultimately result in the conclusion that some partial strike activities such as the concerted ban on overtime in the instant case, are ‘protected’ activities within the meaning of Section 7, although not so protected as to preclude the use of available countervailing economic weapons by the employer.”12 The status of partial strikes is an issue of continuing importance. Unions are increasingly fearful of utilizing traditional strikes because of the employer’s ability to hire permanent replacements who will take the jobs of the union workers and who are likely to decertify the union, after the former strikers lose the right to vote, in an NLRB election. Intermittent, low-level strikes provide a less clear opportunity for an employer to permanently replace and hence, if deemed protected, would provide unions a chance to apply economic pressure without running as much risk of permanent replacement and decertification.13 In some situations it might be easier to get employees to participate in brief actions than to strike, which, even without the hiring of permanent replacements, would force union workers to sacrifice the full amount of their wages for an unknown period. Unions remain fearful of using partial strikes because of uncertainty about the law. It is an issue that the Court should address directly.

DISLOYALTY AND CAUSE

Another case seemingly inconsistent with the Court’s approach to collective bargaining as spelled out in its Insurance Agents and American Ship opinions is NLRB v. Local No. 1229 I.B.E.W. (Jefferson Standard).14 The case arose in the context of bargaining negotiations between the Jefferson Standard Radio Station and the union. On their own time a group of technicians, not on strike, distributed leaflets that attacked the quality of the company’s broadcast operations. The employer discharged these employees, and the Board sustained the discharge on

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the ground that the conduct was “indefensible.” The Court of Appeals for the District of Columbia Circuit in an opinion by Judge Bazelon reversed, stating that so long as the object was legitimate and the means lawful, the Board could not declare the conduct in question to be unprotected. Protection under Sec. 7 of the Act, then, is withdrawn only from those concerted activities which contravene either (a) specific provisions or basic policies of the Act or of related federal statutes, or (b) specific rules of other federal or local law that is not incompatible with the Board’s governing statute. The Supreme Court has indicated that “(t)he conduct thus protected is lawful conduct.” And Judge Learned Hand, in a case involving a union publication which severely criticized the employer’s business dealings, said: “(S)o long as the ‘activity” is not unlawful, we can see no justification for making it the occasion for a discharge.15 The Supreme Court reversed the court of appeals, on the grounds that the conduct involved was disloyal, that disloyalty constitutes “cause,” and that therefore the conduct was unprotected. The Court noted that Section 10(c) of the Taft-Hartley Act expressly provides that “No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.” The majority opinion concluded, “There is no more elemental cause for discharge of an employee than disloyalty to his employer. . . . Congress, while safeguarding, in § 7, the right of employees to engage in ‘concerted activities for the purpose of collective bargaining or other mutual aid or protection,’ did not weaken the underlying contractual bonds and loyalties of employer and employee.”16 The conclusion that Congress did not change the traditional contractual relations of employers and employees when it enacted Section 7 and 8 manages to miss the whole point of the Act. Section 7 gave broad new powers, never recognized under common law, to employees, and Section 8 provided broad limits on traditional

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employer power. Any picket line is bound to contain signs that in another time would have been labeled disloyal. As Judge Easterbrook pointed out in Trompler Inc. v. NLRB,17 “Don’t all strikes show ‘disloyalty’?” Surely any strike or protest would have been legitimate grounds for discharge under traditional contractual relations. Indeed, the employer did not need legitimate grounds under the traditional “contractual bonds and loyalties” that were law prior to the NLRA. The Supreme Court later rejected the position that “cause” operates as a limitation on Section 7 in the context of concerted protest. In NLRB v. Washington Aluminum Co.,18 seven employees were discharged after they left work without permission, in violation of a company rule, to protest the extreme cold in the machine shop. The cold condition was due to a faulty furnace that had already been repaired by the time they left work. The discharged workers had not demanded or requested specific action by the employer. The Board found their conduct protected by Section 7 and ordered the workers reinstated. The Court of Appeals for the Fourth Circuit denied enforcement.19 In his majority opinion Judge Boreman stressed the relationship between Section 7 and collective bargaining and between collective bargaining and industrial peace. To hold that those engaging in a strike had an unfettered right to refuse not only to discuss their grievances but even to name them would, far from promoting the peaceful settlement of labor disputes, inject a judicially fashioned element of chaos into the field of labor relations. The purpose of the act was not to guarantee to employees the right to do as they please but to guarantee to them the right of collective bargaining for the purpose of preserving industrial peace. Under these circumstances, we conclude that the discharges were not, in any sense, discriminatory and were not without justification; also, by reason of their failure to present a grievance to the company, the employees were not engaging in a protected activity since they were not acting in concert for their mutual aid or protection in withholding their services.20

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The Supreme Court reversed, stating, “We cannot agree that employees necessarily lose their right to engage in concerted activities under § 7 merely because they do not present a specific demand upon their employer to remedy a condition they find objectionable. The language of § 7 is broad enough to protect concerted activities whether they take place before, after, or at the same time such a demand is made.”21 The Court also rejected the argument that the employees were discharged for cause because they violated a reasonable company rule. Holding the activity protected, the Court stated, “Section 10(c) of the Act does authorize an employer to discharge employees for “cause” and our cases have long recognized this right on the part of an employer. But this, of course, cannot mean that an employer is at liberty to punish a man by discharging him for engaging in concerted activities which § 7 of the Act protects.”22 It distinguished the Jefferson Standard decision by concluding that the activity of the employees in the case before it was not indefensible: “Nor can they be brought under this Court’s more recent pronouncement which denied the protection of § 7 to activities characterized as ‘indefensible’ because they were there found to show a disloyalty to the workers’ employer which this Court deemed unnecessary to carry on the workers’ legitimate concerted activities. The activities of these seven employees cannot be classified as ‘indefensible’ by any recognized standard of conduct.”23 The Court without directly saying so drew a distinction between indefensible and unwise employee conduct. “The fact that the company was already making every effort to repair the furnace and bring heat into the shop that morning does not change the nature of the controversy that caused the walkout. At the very most, that fact might tend to indicate that the conduct of the men in leaving was unnecessary and unwise.”24 The Supreme Court also read Section 7 broadly to protect the refusal by an employee to follow orders in NLRB v. City Disposal Systems.25 In that case employee James Brown was discharged when he “refused to drive a truck that he honestly and reasonably believed to be unsafe.” The company had a collective bargaining agreement with the union that provided, “Employer shall not require employees to take out . . .

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any vehicle that is not in safe operating condition.” The employee did not refer to the contract in refusing. The Court in upholding the Board’s conclusion that the refusal was concerted activity relied heavily on the existence and terms of the collective agreement, stating that “when an employee invokes a right grounded in the collective agreement he does not stand alone. Instead he brings to bear on his employer the power and resolve of all his fellow employees.”26 This despite the fact that the employee did not mention them or the agreement at the time of refusal and that the union refused to process a grievance on his behalf. Given the fictitious nature of the Court’s invocation of group action, it would be possible to draw a similar picture of group involvement in almost any individual protest. The logic of the opinion suggests that individual protests that might be of benefit to employees generally are to be treated as concerted activity protected by Section 7. However, it is not at all clear that subsequent cases have yet established such a principle. The Court’s opinions in Washington Aluminum and City Disposal display a generous interpretation of Section 7 rights when individual protest is involved. The Court in Washington Aluminum suggested that its refusal to consider the wisdom or reasonableness of the protesters’ actions was based on the fact that their actions were not made in support of collective bargaining: The seven employees here were part of a small group of employees who were wholly unorganized. They had no bargaining representative and, in fact, no representative of any kind to present their grievances to their employer. Under these circumstances, they had to speak for themselves as best they could. . . . Having no bargaining representative and no established procedure by which they could take full advantage of their unanimity of opinion in negotiations with the company, the men took the most direct course to let the company know that they wanted a warmer place in which to work.27 Jefferson Standard and the cases dealing with partial strikes display a much more grudging interpretation when union economic pressure

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is used in support of collective bargaining. Yet as the Fourth Circuit pointed out in its opinion in Washington Aluminum, it is collective bargaining that the Act seeks to foster and strikes in support of collective bargaining that were at the heart of Section 7 as initially proposed. The law is currently confused as to the relationship between union-sponsored concerted activity in support of collective bargaining and concerted activity by employees acting on their own. If the type of activity held protected by Section 7 in the Washington Aluminum case were to be engaged in by union members in support of specific collective bargaining demands, it is not at all clear that their tactics would be held protected by Section 7. Indeed, it seems quite possible that the current Court if it addressed the issue would find the conduct indefensible because the harm to the employer was not justified by specific demands.

REFUSALS TO CROSS A PICKET LINE

The NLRB Public Information website deals with the right of workers to honor a picket line and contains a statement that is both confusing and a warning to any employee or union that might look to it for advice: Whether an employee who honors another union’s picket line is protected by the National Labor Relations Act can be a complicated issue. While under the Act employees have the protected right to engage in strikes, including sympathy strikes, there are potential factors that may deprive them of that protection. . . . Any conclusion as to whether such factors apply in a particular situation would require consideration of additional information. Each situation is unique and must be decided on its own basis.28 Confusion in this area was inevitable after the Supreme Court’s decision in NLRB v. Rockaway News Supply Co.29 In that case, an employee was discharged for refusing to cross a picket line. The Board held the

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activity protected and the discharge illegal. The Board equated the refusal to cross the picket line with an economic strike and sought to apply the distinction between discharge and replacement. Since the employee had been told that he was “fired” at a time when no replacement had been hired, the Board concluded that he had been illegally “discharged” and ordered reinstatement. The court of appeals refused enforcement of the Board’s order,30 and the Supreme Court affirmed the court of appeals.31 The court of appeals rejected the Board’s effort to decide the case by applying the Mackay doctrine to the issue as best it could. Instead the court applied the distinction between working time and nonworking time as applied to rules governing union solicitation. The right to assist a union of which one is not a member by refusing to cross its picket line is certainly of no higher dignity or importance to the individual than the right to ask his fellow workers in his own plant to join with him in the union of which he is a member in concerted activities which will directly protect or aid in promoting their common interests. We think that the former is subject to the same limitations as the latter. In other words an employee is of course free to exercise his right to refuse to cross a picket line when he is on his own time and his discharge for so doing would doubtless be a violation of Section 8(a)(1). But he is not free to exercise the right during his working time in violation of his employer’s working rules by refusing to perform that part of his regular duties which requires him to cross the picket line. . . . To hold otherwise would be to permit an employee unilaterally to dictate the terms of his employment which it is well settled he may not do.32 The court’s application of the law dealing with union solicitation to the refusal to cross picket lines is far from convincing. In Republic Aviation v. NLRB33 the Supreme Court adopted a rule concerning the right of employees to solicit union membership that had been developed by the Board to accommodate both employer and union interests. It held that employers could not prohibit union solicitation

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on company property during nonworking time. But it is not possible to draw a similar accommodation with respect to concerted refusals to cross picket lines. If employer rules concerning work were to supersede worker rights to concerted activity, an employer could use such a rule to bar strikes. That the Board looked to the law governing strikes rather than the law dealing with union solicitation for guidance with respect to the status of refusals to cross picket lines seems eminently reasonable. Both strikes and the honoring of picket lines involve refusals to do assigned work in order to make common cause with other workers. The obligation to make pickups and deliveries does not occur in nonworking time. In its decisions in both the Washington Aluminum and City Disposal cases the Supreme Court held conduct in violation of company work rules to be protected. The Supreme Court affirmed the Rockaway decision of the court of appeals, whose ridicule of the Board’s reasoning Justice Jackson supported: The Court of Appeals said “We cannot follow the Board’s reasoning.” Nor can we. The distinction between discharge and replacement in this context seems to us as unrealistic and unfounded in law as the Court of Appeals found it. This application of the distinction is not sanctioned by National Labor Relations Board v. Mackay. It is not based on any difference in effect upon the employee. And there is no finding that he was not replaced either by a new employee or by transfer of duties to some nonobjecting employee, as would appear necessary if the respondent were to maintain the operation. Substantive rights and duties in the field of labor-management do not depend on verbal ritual reminiscent of medieval real property law.34 It is true that the distinction between discharge and permanent replacement in this context seems to be a matter of the law treating two similar events differently, but that distinction came from the Mackay case and the Court’s opinion, in which it simultaneously held that denying workers reinstatement based on union activity was illegal and that permanent replacement was permissible. Nor did Justice

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Jackson, whose opinions are generally models of clarity, explain how the Board was to craft rules concerning picket line refusals. The Court’s opinion rejects the distinction between discharge and replacement but did not directly address the protected status of refusals to cross picket lines. When the Board, after some seesawing, concluded once again that refusal to cross a lawful picket line was protected, it simultaneously rejected the tests previously employed to distinguish between discharge and replacement. In its opinion in Redwing Carriers,35 the Board, obviously seeking to conform to the Court’s language in Rockaway News Supply Co., stated, [W]e are convinced that substance, rather than form, should be controlling. That is, where it is clear from the record that the employer acted only to preserve efficient operation of his business, and terminated the services of the employees only so it could immediately or within a short period thereafter replace them with others willing to perform the scheduled work, we can see no reason for reaching different results solely on the basis of the precise words, i.e., replacement or discharge, used by the employer, or the chronological order in which the employer terminated and replaced the employees in question.36 The significance of this language depends upon the nature of the evidence necessary for an employer to demonstrate that he “acted only to preserve the efficient operation of his business.” The Board’s language suggests that it meant to cast a burden upon employers to demonstrate that they acted solely for economic motives. It would be difficult for an employer to “clearly” establish purity of motive in the face of the ambiguous factual record that is generally presented in such a case. And Board opinions have varied in determining whether a discharge for refusal to cross a picket line is unlawful retaliation or a legitimate business decision. The fault in this instance lies less with the Board than with the Court and the need to harmonize Mackay with Rockaway News. The result of this confusion along with the weakening of the Teamsters Union has been a compromise by union drivers who make

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pickups and deliveries. They do not cross picket lines, but they permit management officials of the employer to drive their trucks across the line. Because picket lines today rarely prevent pickups and deliveries, it is almost never the case that strikes can be won by maintaining a strong picket line. Strikes are more likely to be lost than won at a picket line. Winning strikes today generally requires the ability to apply pressure away from the line.37 THE EMPLOYER’S ABILITY TO PUNISH EMPLOYEES FOR ENGAGING IN PROTECTED ACTIVITY Lockouts

The fact that union activity is protected by Section 7 does not render an employer helpless in responding. Far from it. The Mackay doctrine, as already shown, can inflict massive retaliation on strikers. And as was perhaps inevitable, the Mackay decision has led to the practical ability of employers to discharge workers who honor picket lines at another employer’s premises. Even the very action that the Act was meant to encourage—collective bargaining—is vulnerable to powerful employer retaliation in the form of a lockout, which prevents employees from working at their jobs or receiving pay, in order to pressure them to accept the employers’ bargaining proposals. In American Ship Building Co. v. NLRB,38 the Supreme Court rejected a finding by the NLRB that an employer lockout in support of its bargaining position “coerced employees in the exercise of their bargaining rights in violation of Section 8(a)(1) of the Act, and discriminated against its employees within the meaning of Section 8(a)(3) of the Act.” The case arose from a difficult and sometimes rancorous negotiation, which the Board and the Courts concluded was at impasse. In the midst of the negotiation, the employer sent the employees a notice that read,“Because of the labor dispute which has been unresolved since August 1, 1961, you are laid off until further notice.” The NLRB had previously acknowledged the right of an employer to lockout if it had reason to fear a particularly harmful strike might

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occur. But the union at American Ship had insisted that it had no intention of striking. Here, it appears that the Unions made every effort to convey to the Respondent their intention not to strike; and they also gave assurances that if a strike were called, any work brought into Respondent’s yard before the strike would be completed. The Unions further offered to extend the existing contract for 6 months, or indefinitely, until contract terms were reached; in either case, the no-strike clause was to remain in effect during the negotiations. Accordingly, we conclude that Respondent, by curtailing its operations at the South Chicago yard with the consequent layoff of the employees, coerced employees in the exercise of their bargaining rights in violation of Section 8(a)(1) of the Act, and discriminated against its employees within the meaning of Section 8(a)(3) of the Act.39 The Board’s analysis was shallow. It made no effort to explain why this case should not be decided in accordance with the Supreme Court’s statement in its Insurance Agents decision that the use of economic weapons by the parties was “part and parcel of the system of collective bargaining contemplated by the Act.” The Court’s opinion written by Justice Stewart was also analytically disappointing. Justice Stewart began by insisting that the employer had no objection to dealing with its employees through the union. “It is therefore inaccurate to say that the employer’s intention was to destroy or frustrate the process of collective bargaining. What can be said is that it intended to resist the demands made of it in the negotiations and to secure modification of these demands. We cannot see that this intention is in any way inconsistent with the employees’ rights to bargain collectively.”40 The opinion portrays a defensively postured employer resisting the demands of an aggressive union. But it requires a narrow focus to ignore the pressure on employees and the fear that might follow the employer’s message that “Because of the labor dispute . . . you are laid

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off until further notice.” The employer’s statement did not state or even imply that when the issue was resolved, the employees would be rehired. The message to employees undoubtedly conveyed—as it was apparently intended to—that insisting on their collective bargaining positions was a dangerous business whether or not they struck. The simple fact is that the employees were retaliated against because they engaged in collective bargaining, the very behavior the NLRA seeks to encourage. Another disappointing feature of the Court’s opinion was its insistence that only employer action intended to discourage union membership violates Section 8(a)(3). The Court’s analysis begins by comparing the case before it to a case of discriminatory discharge. Thus when the employer discharges a union leader who has broken shop rules, the problem posed is to determine whether the employer has acted purely in disinterested defense of shop discipline or has sought to damage employee organization. It is likely that the discharge will naturally tend to discourage union membership in both cases, because of the loss of union leadership and the employees’ suspicion of the employer’s true intention.41 In fact the situations are markedly different because in the discriminatory discharge case the employer denied that it was responding to union activity, while in American Ship Building it announced it. Although the Court acknowledged that in some cases it was not necessary to inquire into motive, it described those cases as ones in which the motive was made evident by the nature of the employer’s conduct. “Thus where many have broken a shop rule, but only union leaders have been discharged, the Board need not listen too long to the plea that shop discipline was simply being enforced. . . . But this lockout does not fall into that category of cases arising under § 8(a)(3) in which the Board may truncate its inquiry into employer motivation.”42 Although Justice Stewart cited Erie Resistor, his opinion does not acknowledge that an 8(a)(3) violation may be established by demonstrating that the employer was responding to protected activity in

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a way likely to discourage union membership or activity. The obvious purpose of the lockout in fact was to punish employees for supporting the bargaining position of the union. If the employer were successful, his action would discourage the workers from insisting on their bargaining demands, which comes within the definition of union membership as defined by the Court in earlier cases. Shutdowns

Another area in which the Court has given employers great leeway in responding to union activity is in shutting down facilities to avoid recognizing a union. The leading case is Textile Workers Union v. Darlington Manufacturing Co.43 In that case, immediately after the employees of Darlington Manufacturing Company voted for union representation, the stockholders voted to dissolve the corporation. Darlington discontinued operations in November and sold the plant machinery at auction on December 12, 1956. Darlington had been part of a series of clothing mills owned and operated by Deering Millikan. The relationship of the various entities was described by Justice Harlan in his opinion. “Darlington Manufacturing Company was a South Carolina corporation operating one textile mill. A majority of Darlington’s stock was held by Deering Milliken, a New York ‘selling house’ marketing textiles produced by others. Deering Milliken in turn was controlled by Roger Milliken, president of Darlington, and by other members of the Milliken family.”44 The NLRB found that the Milliken family, through Deering Milliken, operated seventeen textile manufacturers, including Darlington, whose products were manufactured in twenty-seven different mills but were marketed through Deering Milliken. The Board found that Darlington thereby violated Section 8(a)(3). The Board ordered Darlington to refrain from such activities, to offer reinstatement to the employees if it ever resumed operations, and to provide “backpay until the discharged employees are able to obtain substantially equivalent employment.” The Board also found that Darlington “occupied a single employer status with [another respondent], Deering Milliken and its affiliated corporations.” A separate order was directed to Deering Milliken making it liable for

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backpay to the same extent as Darlington and ordering it to offer the discharged employees positions at other locations to the extent they were available. The Fifth Circuit, sitting en banc, denied enforcement. The Supreme Court remanded the case to determine whether Darlington was a single employer. Justice Harlan’s opinion was quite favorable to both Darlington and Deering Millikan. It stated that if Darlington should be regarded as a single employer, it was privileged to go out of business even if “the liquidation [was] motivated by vindictiveness towards the union.”45 But the Court concluded that the closing down of the Darlington Plant might constitute an unfair labor practice if Deering Millikin were the employer. It announced a three-step test for determining whether a plant closing violates Section 8(a)(3): If the persons exercising control over a plant that is being closed for anti-union reasons (1) have an interest in another business, whether or not affiliated with or engaged in the same line of commercial activity as the closed plant, of sufficient substantiality to give promise of their reaping a benefit from the discouragement of unionization in that business; (2) act to close their plant with the purpose of producing such a result; and (3) occupy a relationship to the other business which makes it realistically foreseeable that its employees will fear that such business will also be closed down if they persist in organizational activities, we think that an unfair labor practice has been made out.46 The case was returned to the court of appeals to consider whether Darlington was a single employer under the newly established test. Justice Harlan found the case easy if Darlington were to be treated as a single employer. As he stated, “A proposition that a single businessman cannot choose to go out of business if he wants to would represent . . . a startling innovation.” He concluded that an employer has “the absolute right to terminate his entire business for any reason he pleases.”47 Yet the conclusion that an employer should not be forced to stay in business against its will does not require the further conclusion that

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closing down is outside the scope of the Act. It means only that the Board is precluded from applying certain remedies, such as an order to reopen, to correct the violation. The Board did not order Darlington to reopen but only to compensate its employees for their losses. Most remarkably, Justice Harlan concluded that a complete shutdown, even if undertaken “by spite against the union,” does not contravene the policies of the Act. One of the purposes of the Labor Relations Act is to prohibit the discriminatory use of economic weapons in an effort to obtain future benefits. The discriminatory lockout designed to destroy a union, like a “runaway shop,” is a lever which has been used to discourage collective employee activities in the future. But a complete liquidation of a business yields no such future benefit for the employer, if the termination is bona fide. It may be motivated more by spite against the union than by business reasons, but it is not the type of discrimination which is prohibited by the Act. The personal satisfaction that such an employer may derive from standing on his beliefs and the mere possibility that other employers will follow his example are surely too remote to be considered dangers at which the labor statutes were aimed.48 Justice Harlan’s reasoning excludes from the determination of illegality the impact of the company’s actions on the rights of the employees whose jobs were lost. The employees of Darlington lost their jobs because they joined and voted for the union. The policy of insulating an employee’s job rights from his decision whether to join a union is directly contravened whether or not the employer seeks future gain. The employer acted because it did not accept the policy of free choice expressed in the Act. It is cold comfort to the employees to know that the employer was not seeking personal gain but was motivated only by spite and opposition to statutory rights. The impact upon other employees may be remote, as Justice Harlan stated, but the impact upon the employees involved was direct, total, and precisely the sort of danger “at which the labor statutes were directed.”

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The Court’s surprising failure to consider the interests of the employees directly affected also shaped its approach to the problem of a partial closing. The test announced by the Court requires the Board to examine the employer’s motives to determine whether it was acting solely out of anger toward employees who had voted for the union or whether it was motivated by a desire to chill unionism in other plants. If the former, there is no violation; in the latter case there may be. There is even less reason for such an approach in the case of a partial shutdown than in the case of a complete shutdown by a single employer. The element of cost to the employer that is only partially closing down is much less since it remains in business and is able to use the capital made available from closing down one part to expand the others. Whatever the employer’s motive, there is likely to be some coercive effect on employees in other parts of the business. But the Court requires more than the mere likelihood of coercion: it also requires that the coercion be intended. In addition, Justice Harlan’s analytic scheme is unrealistic. It presupposes that the Board is capable of sifting motives to determine whether the employer’s state of mind was directed to the particular employees affected or to the employees at other plants. It is unlikely that the employer made such a distinction and even more unlikely that the Board could determine whether it did or not. What joins together the Court’s treatment of lockouts and that of plant closings is its great solicitude for the rights of employers and its inability to see the matter from the perspective of the employees directly involved. As this chapter shows, the promise to workers contained in Sections 7 and 8 that they can join together for mutual aid has been regularly denied by the Court and for little reason. The Court has created exceptions to the language and policy of Section 7 based largely on its own vision of orderly labor relations. And it has regularly permitted employers to discharge, discipline, and coerce employees whose actions come within the language and policy of Section 7. Once again traditional notions of employer rights have shaped the Court’s interpretation of basic statutory labor rights.

5 THE SUPREME COURT, UNION PICKETING, AND BOYCOTTS

Reducing the range and power of the strike weapon was the main objective of the Taft-Hartley Act and a major goal of the LandrumGriffin amendments to the NLRA. The Taft-Hartley Act, passed in the aftermath of the post–World War II strike flurry, added to the NLRA a new Subsection 8(b), which created a series of union unfair labor practices. The most important of these was Section 8(b)(4), which was intended to prohibit secondary strikes and picketing—union actions directed against employers doing business with those employers that the union was bargaining with or seeking to organize. Section 8(b)(4) does not refer specifically to, nor does it define,“secondary” activity. The drafters of Section 8(b)(4) sought to capture the essence of secondary activity through the breadth of its language, which prohibits the use of certain broadly described tactics to achieve broadly defined objectives. The proscribed tactics are “(i) to engage in, or to induce . . . any person . . . to engage in a strike or a refusal in the course of his employment to use . . . or work on any goods . . . or to perform any services; and (ii) to threaten, coerce, or restrain any person engaged in commerce.” Section (i) refers to strikes, soliciting strikes, or refusals to work; Section (ii) is less clear as to the tactics it covers, but as its legislative history makes clear, it was primarily meant to include union picketing at the premises of an employer selling the goods of 89

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a struck employer. Union activity that came within the language of Section (8)(b)(4)(i) or (ii) was made unlawful if it was done for the purposes of “forcing or requiring . . . any employer or other person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person.”1 Out of concern for the First Amendment, Section 8(b)(4) includes a proviso permitting “publicity, other than picketing, for the purpose of truthfully advising the public including consumers and members of a labor organization that a product or products are produced by an employer with whom the labor organization has a primary dispute . . . as long as such publicity does not have an effect of inducing any individual employed by any person . . . to refuse to pick up, deliver, or transport any goods or not to perform any services.” The Landrum-Griffin amendments tightened the restrictions on secondary pressure and created a new subsection 8(b)(7) that largely outlawed picketing for recognition or as an organizing tactic. Because both Taft-Hartley and Landrum-Griffin made peaceful picketing for legitimate purposes unlawful, they raised significant constitutional issues that the Supreme Court has never addressed in a careful manner. Although the Court has on several occasions validated portions of both sections, its opinions in labor cases are inconsistent with its developing First Amendment jurisprudence in other areas.

PICKETING, BOYCOTTS, AND FREEDOM OF SPEECH

It was recognized by commentators soon after passage of the TaftHartley Act that the Act’s prohibition in Section 8(b)(4) of peaceful actions to induce a consumer boycott of the products of a struck employer raises constitutional issues.2 If customers have a right to refuse to patronize stores or businesses because they disapprove of their labor policies, isn’t using speech to urge customers to exercise their rights and refrain from patronizing constitutionally protected? And is peaceful picketing not a form of speech protected by the First Amendment? Thus, with the passage of the Taft-Hartley Act, the

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question was raised whether peaceful union picketing could be constitutionally equated with actions that “threaten, coerce, or restrain.” The constitutional status of labor picketing had been a matter of public debate for many years before the Supreme Court first dealt with the issue in the 1940 case Thornhill v. Alabama.3 In that case the Supreme Court overturned the conviction of a labor organizer named Byron Thornhill under an Alabama statute stating that “any person . . . who pickets the place of business of any other person for purpose of hindering, delaying, or interfering with or injuring any lawful business or enterprise of another shall be guilty of a misdemeanor.” In a powerful opinion by Justice Murphy, the Court declared that the right to picket was an aspect of the right of free speech: The dissemination of information concerning the facts of a labor dispute must be regarded as within that area of free discussion that is guaranteed by the Constitution. It is recognized now that satisfactory hours and wages and working conditions in industry and a bargaining position which makes these possible have an importance which is not less than the interests of those in the business or industry directly concerned. . . . It may be that effective exercise of the means of advancing public knowledge may persuade some of those reached to refrain from entering into advantageous relations with the business establishment which is the scene of the dispute. Every expression of opinion on matters that are important has the potentiality of inducing action in the interests of one rather than another group in society. But the group in power at any moment may not impose penal sanctions on peaceful and truthful discussion of matters of public interest merely on a showing that others may thereby be persuaded to take action inconsistent with its interests.4 Thornhill’s ringing equation of picketing and free speech was soon qualified by later decisions. The development of the law to permit the regulation of labor picketing was summarized by Justice Frankfurter in IBT Local 695 v. Vogt.5 In that case the Court upheld a state

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injunction against peaceful picketing of a gravel pit with signs reading, “The men on this job are not 100% affiliated with the AFL.” Lawyers for the union had argued that by virtue of the Court’s holding in the Thornhill case the picketing was constitutionally protected. Justice Frankfurter, writing for the Court, rejected this argument: Soon, however, the Court came to realize that the broad pronouncements, but not the specific holding, of Thornhill had to yield “to the impact of facts unforeseen,” or at least not sufficiently appreciated. . . . Cases reached the Court in which a State had designed a remedy to meet a specific situation or to accomplish a particular social policy. These cases made manifest that picketing, even though “peaceful,” involved more than just communication of ideas and could not be immune from all state regulation. “Picketing by an organized group is more than free speech, since it involves patrol of a particular locality and since the very presence of a picket line may induce action of one kind or another, quite irrespective of the nature of the ideas which are being disseminated.”6 The final sentence, explaining why picketing is more than free speech, was a quote from an earlier concurrence by Justice Douglas, who angrily dissented in the Vogt case, arguing that “whereas here there is no rioting, no mass picketing, no violence, no disorder, no fisticuffs, no coercion—indeed nothing but speech . . . [p]rinciples announced in Thornhill . . . should give . . . First Amendment protection.”7 The Vogt opinion seemed to rest in part on the conclusion that states have a legitimate interest in prohibiting picketing that is used to force employers to require employees to unionize whether they want to or not. The regulation of picketing directed at consumers by Section 8(b)(4)(ii) (B) has no such obviously desirable goal. True, it supports a policy against the spread of disputes, but that policy is always available in support of limitations on controversial speech and, as the cases discussed below demonstrate, has been regularly rejected as an independent justification for outlawing peaceful picketing.

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The first significant test of the constitutionality of the Section 8(b)(4)(ii) came in NLRB v. Fruit & Vegetable Packers & Warehousemen Local 70 (Tree Fruits).8 The case involved consumer picketing in support of a strike by Local 760 against Tree Fruits, an employer consortium with whom it bargained. Local 760 called for a consumer boycott of Washington State apples and commenced a program of picketing at the premises of Safeway stores in Seattle. The picketers were instructed not to picket at entrances reserved for employees but to limit their picketing to consumers. They were also “forbidden to request that the customers not patronize the store.”9 The picket signs were limited to appeals not to buy Washington State apples. The Board held that the picketing was not aimed at Safeway employees and therefore did not violate 8(b)(4)(i). However, it concluded that “by literal wording of the proviso [to Section 8(b)(4)] as well as through the interpretive gloss placed thereon by its drafters, consumer picketing in front of a secondary establishment is prohibited.” Such picketing “threaten[s], coerce[s], or restrain[s]” persons within the meaning of Section 8(b)(4)(ii). . . . The purpose of picketing the Safeway stores was to persuade consumers not to purchase nonunion Washington State apples. . . . The natural and foreseeable result of such picketing, if successful, would be to force or require Safeway to reduce or to discontinue altogether its purchases of such apples from the struck employers. . . . Accordingly, we find that the foregoing picketing violated Section 8(b)(4)(ii)(B) of the Act.”10 The Supreme Court reversed. It held that Congress did not evidence a clear purpose to outlaw peaceful consumer picketing directed solely against a specific product. It concluded that such picketing did not come under the language of Section 8(b)(4)(ii). Justice Brennan, who wrote the majority opinion, suggested that holding otherwise might violate the First Amendment: In the sensitive area of peaceful picketing Congress has dealt explicitly with isolated evils which experience has established flow from such. . . . Both the congressional policy and our adherence to this principle of interpretation reflect concern that a

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broad ban against peaceful picketing might collide with the guarantees of the First Amendment. We have examined the legislative history of the amendments to § 8(b)(4), and conclude that it does not reflect with the requisite clarity a congressional plan to proscribe all peaceful consumer picketing at secondary sites, and, particularly, any concern with peaceful picketing when it is limited, as here, to persuading Safeway customers not to buy Washington State apples when they traded in the Safeway stores.11 The majority thus concluded that product picketing of the type involved in the Tree Fruits case did not “threaten, coerce, or restrain” within the meaning of Section 8(b)(4)(ii). The clear inference of Justice Brennan’s majority opinion was that to hold otherwise would make the provision unconstitutional. Justice Black concurred with the result. His conclusion was based on the First Amendment, not statutory construction. Justice Harlan dissented on the basis of the statutory language and its legislative history. He concluded that “[n]othing in the statute lends support to the fine distinction which the Court draws between general and limited product picketing.”12 The constitutional issue that the Court dodged in the Tree Fruits case returned in NLRB v. Retail Employees Union Local 1001(Safeco).13 In that case, the union struck Safeco, a title insurance company, after bargaining to impasse. The union picketed at the premises of title companies “that derive over 90% of their gross incomes from the sale of Safeco insurance policies.” It urged customers to “support the strike by canceling their Safeco policies.” The NLRB found the picketing to be in violation of Section (b)(4)(ii)(B). The Court of Appeals for the District of Columbia refused to enforce the Board’s order, holding on the basis of the Tree Fruits decision that “the Union’s activity was lawful product picketing.” The Supreme Court reversed the court of appeals and affirmed the Board’s finding of violation. It distinguished the Tree Fruits case on the grounds that a product boycott in these circumstances was equivalent to a do-not-patronize request, stating that “the Union’s secondary appeal against the central product sold

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by the title companies in this case is “reasonably calculated to induce customers not to patronize the neutral parties at all.”14 The majority opinion by Justice Powell dealt summarily with the question of the status of peaceful picketing under the First Amendment: The Court of Appeals suggested that application of § 8(b)(4)(ii)(B) to the picketing in this case might violate the First Amendment. . . . We think not. Although the Court recognized in Tree Fruits that the Constitution might not permit “a broad ban against peaceful picketing,” the Court left no doubt that Congress may prohibit secondary picketing calculated “to persuade the customers of the secondary employer to cease trading with him in order to force him to cease dealing with, or to put pressure upon, the primary employer.”15 Justice Powell’s opinion did not explain its assumption that peaceful picketing can be treated as a form of coercion. Justice Blackmun found the Court’s treatment of the First Amendment issue inadequate but joined in the conclusion “only because I am reluctant to hold unconstitutional Congress’ striking of the delicate balance between union freedom of expression and the ability of neutral employers, employees, and consumers to remain free from coerced participation in industrial strife. My vote should not be read as foreclosing an opposite conclusion where another statutory ban on peaceful picketing, unsupported by equally substantial governmental interests, is at issue.”16 While Justice Blackmun’s discussion reveals his personal unease at treating picketing as something other than communication, he does not explain why Congress has the power to regulate speech in order to balance the interests of unions seeking support with the desire of employers not to be involved in the labor disputes of those with whom they do business. Justice Stevens wrote a separate opinion. He stated that the “constitutional issue, however, is not quite as easy as the plurality would make it seem because this is another situation in which regulation

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of the means of expression is predicated squarely on its content.” He agreed, however, with the conclusion that the “method or manner of expression . . . considered in context, justifies the particular restriction. . . . [P]icketing is a mixture of conduct and communication. In the labor context, it is the conduct element rather than the particular idea being expressed that often provides the most persuasive deterrent to third persons about to enter a business establishment.”17 Justice Stevens then quoted the language of Justice Douglas that was employed by Justice Frankfurter in the Vogt case to justify regulation of picketing, to Justice Douglas’s strong disagreement: “Picketing by an organized group is more than free speech, since it involves patrol of a particular locality and since the very presence of a picket line may induce action of one kind or another, quite irrespective of the nature of the ideas which are being disseminated. Hence those aspects of picketing make it the subject of restrictive regulation.”18 The meaning of the term “patrol” as thus used is far from clear. It is a term whose primary connotation is military, referring to a physical effort to seal off an area to prevent intrusion. But the Vogt case itself involved no such action. All it involved was union members with signs. Similar use of the word “patrol” to justify holding picketing illegal in situations in which nothing like patrol took place is a common feature of the regulation of peaceful labor picketing. Nor is it clear what is meant by the statement that “the very presence of a picket line may induce action of one kind or another, quite irrespective of the nature of the ideas which are being disseminated.” What action beyond crossing or not crossing is being referred to? Is this a subtle reference to possible violence? There was no violence resulting from the picketing in either Vogt or Safeco. Are we to assume that this is an attribute of picketing but not of union handbilling? And isn’t it true that many forms of public appeal have this attribute? Other forms of communication that are constitutionally protected—such as wearing an armband, refusing to salute the flag, holding a Ku Klux Klan rally, or picketing with signs that say “God hates fags”—may elicit a similar response. Yet all of these have been held constitutionally protected. Suppose a group of Catholic priests were asking people to bypass a pharmacy that sold birth-control items; would it not be true that

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the very nature of those seeking public support would affect people, regardless of the express content of their message? Would the possibility of such an effect make their conduct subject to regulation and prohibition? In International Longshoremen’s Association v. Allied International, Inc.,19 the union’s president, to protest the invasion of Afghanistan by the Soviet Union, ordered ILA members to stop handling cargoes arriving from or destined for Soviet ports. The Court had little problem with the regulation of what it found to be a secondary boycott even though there was an absence of picketing: “We have consistently rejected the claim that secondary picketing . . . is protected activity under the First Amendment. . . . It would seem even clearer that conduct designed not to communicate but to coerce merits still less consideration under the First Amendment.”20 But all political or socially motivated boycotts are intended to coerce. And in other contexts they have been recognized as an aspect of free speech, regularly employed by right-wing groups.21 Boycotts have been a staple of the religious right: The American Family Association (AFA) has been a long-time promoter of “traditional moral values” in the media, particularly television. AFA built its reputation on organizing boycotts against sponsors of TV shows with “anti-Christian” messages and ideas, or against companies it claims support the so-called “homosexual agenda” or marriage equality. A few of the hundreds of boycott targets on AFA’s list have included “Saturday Night Live,” “Roseanne,” “Nightline,” “NYPD Blue,” “Ellen,” and “Desperate Housewives.” A major target of AFA’s had been Disney and its subsidiaries; “Disney’s attack on America’s families has become so blatant, so intentional, so obvious, that American Family Association has called for a boycott of all Disney products until such time as this activity ceases.”22 There has been no effort to prohibit these boycotts, and no constitutional scholar I have asked believes it would be constitutional to do so.

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The constitutional questions left open and made confusing by the Safeco decision were amplified and made even more confusing in the Supreme Court’s unanimous opinion in NAACP v. Claiborne Hardware.23 The case arose out of a boycott of white-owned businesses by black residents of Claiborne County, Mississippi. The boycott was aimed not at the businesses but at public officials, seeking “the desegregation of all public schools and public facilities, the hiring of black policemen, public improvements in black residential areas, selection of blacks for jury duty, integration of bus stations so that blacks could use all facilities . . . and an end to verbal abuse by law enforcement officers.” Since those being picketed and boycotted were not the ones whose policies were being protested, the NAACP’s activities would have been clearly secondary had they been undertaken by a union. Nor was this a completely peaceful protest. Charles Evers, the field secretary of the NAACP, delivered a speech in which he stated that boycott violators would be “disciplined” by their own people and warned that the sheriff “could not sleep with boycott violators at night.” The Mississippi Supreme Court upheld a finding that the boycott was a tortious interference with the merchant’s right to do business, holding that “tactics used went beyond peaceful advocacy.” The Supreme Court reversed. Although the Court did not state explicitly whether the refusal to patronize was protected as “speech, assembly, association, and petition,” its discussion strongly suggests that the boycott itself was an aspect of the right of association. Moreover, the Court noted that the boycott was furthered by speech and by picketing, which, citing Thornhill, it described as being “ordinarily safeguarded by the First Amendment.” In delineating the state’s limited role, the Court found that Evers’s speeches were beyond the state’s power to regulate even though his comments included an implicit threat: “If that language had been followed by acts of violence, a substantial question would be presented whether Evers could be held liable.” Because no violence immediately followed Evers’s speech, however, the Court found it to be protected by a “profound national commitment” that “debate on public issues should be uninhibited, robust and wide open.” The opinion made

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clear that the First Amendment protection extended beyond the content of the message: “[S]trong and effective extemporaneous rhetoric cannot be nicely channeled in purely dulcet phrases. An advocate must be free to stimulate his audience with spontaneous and emotional appeals for unity and action in a common cause. When such appeals do not incite lawless action, they must be regarded as protected speech.”24 It is not at all clear why labor speech is analyzed so stringently. Why is the policy of robust debate so rarely mentioned and replaced instead by the “delicate balance,” the “laboratory,” the policy of “peacefully resolving disputes,” and the easy assumption of coercion? The majority opinion in Claiborne Hardware offers an explanation. In labor cases, the regulation of speech is permissible because of the “strong governmental interest in certain forms of economic regulation, even though such regulation may have an incidental effect on the rights of speech and association.” Thus, “secondary boycotts and picketing by labor unions may be prohibited.” Such activity is distinguishable from that found in cases like Claiborne Hardware: “While States have broad power to regulate economic activity, we do not find a comparable right to prohibit peaceful political activity such as that found in the boycott in this case. This Court has recognized that expression on public issues ‘has always rested on the highest rung of the hierarchy of First Amendment values.’”25 The distinction drawn between the economic activity involved in the labor cases and the political activity relating to public issues is analytically unsound, historically inaccurate, and culturally myopic. Of the boycotts addressed by the Court, the longshoremen’s boycott seems most clearly political because it lacked the intermediate goal of economic gain for the participants that was present in Claiborne Hardware. But, far from aiding the longshoremen’s constitutional claim, the Court viewed the lack of an intermediate goal as a factor justifying regulation: “[I]t is more rather than less objectionable that a national labor union has chosen to marshal against neutral parties the considerable powers derived . . . under the federal labor laws in aid of a random political objective far removed from what has traditionally been thought to be the realm of legitimate union activity.”26

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What distinguishes the retail store employees’ appeal to the public for support when picketing Safeco Title Insurance from the public issue that the Court recognized in the Claiborne Hardware boycott? Both cases involved appeals aimed at achieving immediate economic benefits for a limited group, and both appeals were ultimately premised on a broader goal of redistributing economic benefits: to blacks in one case, to labor in the other. To suggest that one goal is of greater public concern than the other is to view labor through the Court’s artificially created prism by which collective bargaining becomes dissociated from any broader, nobler, more enduring purpose. The Court in Claiborne Hardware characterized the boycott as including “elements of criminality and elements of majesty,” but there is no recognition of nobility for the longshoremen who risked losing their jobs to protest the Soviet invasion of Afghanistan. Rather, there is a tone of annoyance that the union butted into areas outside its legitimate interests. The Court seems to appreciate the ennobling features of racial protest but to view the protest of labor with unease. Yet what cause has been a greater source of human commitment, heroism, political agitation, or scholarly inquiry? What cause has been more often the subject of literature, meeting, song, and drama in all of history than the idea of working-class solidarity? Claiborne Hardware and International Longshoremen’s Association can be distinguished only by focusing on the immediate objective in one case and the long-range objective in the other. Moreover, the concept of coercion is treated differently in the two cases. In International Longshoremen’s Association coercion refers to the boycott itself; in Claiborne Hardware, it refers only to the manner in which people are enlisted. The opinion in International Longshoremen’s Association emphasizes the power that unions derive from the labor laws, but the Court did not explain why the system of labor regulation makes a union boycott less permissible. In Claiborne Hardware, the Court did not consider the possibility that the complex and comprehensive legislation aimed at combating racial discrimination made that boycott less worthy of protection.

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In First National Bank v. Belloti,27 the Court rejected the claim that a corporation’s First Amendment rights may be limited because corporations are creatures of the law. It concluded that the crucial variable in First Amendment analysis is the nature of the speech, not the speaker. If this analysis applies to corporations, which owe their very existence to statutes making them more economically advantageous than other forms of business, it certainly should apply to unions, which are sometimes protected but frequently restricted by legal doctrine. It might be argued that the special feature of labor law that makes restricting union speech legitimate is the doctrine of exclusivity, which allows a recognized union to speak for all employees in a bargaining unit. But current secondary boycott rules draw no distinction between incumbent and nonincumbent unions or between appeals to workers, which might gain strength from the doctrine of exclusivity, and appeals to customers, which do not. Moreover, the doctrine of exclusivity does not give a union the right to insist that its members participate in a boycott. Even if secondary activity is held to be within the First Amendment, such activity will not thereby be protected against employer response: employees who engage in it may be legally discharged. In 2011 the Supreme Court once again held nonunion picketing protected by the First Amendment in Snyder v. Phelps.28 The picketing protected was a form of hate speech uttered in the most appalling circumstances, as described by Justice Roberts, who wrote the majority opinion: “A jury held members of the Westboro Baptist Church liable for millions of dollars in damages for picketing near a soldier’s funeral service. The picket signs reflected the church’s view that the United States is overly tolerant of sin and that God kills American soldiers as punishment. The question presented is whether the First Amendment shields the church members from tort liability for their speech in this case.”29 In resolving this question, the Court did not even address the issue of whether picketing was subject to greater regulation than other forms of speech. It focused solely on the message delivered by the defendants.

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Whether the First Amendment prohibits holding Westboro liable for its speech in this case turns largely on whether that speech is of public or private concern. . . . “[S]peech on ‘matters of public concern’ . . . is ‘at the heart of the First Amendment’s protection.’”. . . The First Amendment reflects “a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open.” . . . “[S]peech on public issues occupies the highest rung of the hierarchy of First Amendment values, and is entitled to special protection.”. . . “‘[N]ot all speech is of equal First Amendment importance,’” however, and where matters of purely private significance are at issue, First Amendment protections are often less rigorous. . . . That is because restricting speech on purely private matters does not implicate the same constitutional concerns as limiting speech on matters of public interest.30 The Court seemed to have little trouble in concluding that the picketing was directed to matters of public concern. The “content” of Westboro’s signs plainly relates to broad issues of interest to society at large, rather than matters of “purely private concern.” The placards read “God Hates the USA/Thank God for 9/11,” “America is Doomed,” “Don’t Pray for the USA,” “Thank God for IEDs,” “Fag Troops,” “Semper Fi Fags,” “God Hates Fags,” “Maryland Taliban,” “Fags Doom Nations,” “Not Blessed Just Cursed,” “Thank God for Dead Soldiers,” “Pope in Hell,” “Priests Rape Boys,” “You’re Going to Hell,” and “God Hates You.” While these messages may fall short of refined social or political commentary, the issues they highlight—the political and moral conduct of the United States and its citizens, the fate of our Nation, homosexuality in the military, and scandals involving the Catholic clergy—are matters of public import. The signs certainly convey Westboro’s position on those issues, in a manner designed . . . to reach as broad a public audience as possible.31

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Justice Breyer, concurring, argued that there were times when a state could regulate picketing. But neither he nor the majority referred to labor cases. Westboro’s means of communicating its views consisted of picketing in a place where picketing was lawful and in compliance with all police directions. The picketing could not be seen or heard from the funeral ceremony itself. . . . To uphold the application of state law in these circumstances would punish Westboro for seeking to communicate its views on matters of public concern without proportionately advancing the State’s interest in protecting its citizens against severe emotional harm. Consequently, the First Amendment protects Westboro.32 Implicit in both the majority opinion and the concurrence is the conclusion that, given the public nature of the communication, the state could not simply ban it, and there is nothing in Justice Alito’s dissent that focuses upon the special nature of picketing. So if peaceful labor picketing is to be prohibited, it must be on the grounds that it does not concern a matter of public concern, in effect a refutation of Justice Murphy’s insistence in the Thornhill case that “dissemination of information concerning the facts of a labor dispute must be regarded as within that area of free discussion that is guaranteed by the Constitution.” The question of what rung on the ladder of free speech labor picketing rests was dealt with inferentially in Edward J. Debartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council.33 In that case, the union passed out handbills asking consumers to boycott a mall that the union alleged was being built by contractors paying substandard wages. The handbills stated,“PLEASE DON’T SHOP AT EAST LAKE SQUARE MALL PLEASE.” The FLA. GULF COAST BUILDING TRADES COUNCIL, AFL-CIO, is requesting that you do not shop at the stores in the East Lake Square Mall because of The Mall ownership’s contribution to substandard wages.

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The Wilson’s Department Store under construction on these premises is being built by contractors who pay substandard wages and fringe benefits. In the past, the Mall’s owner, The Edward J. DeBartolo Corporation, has supported labor and our local economy by insuring that the Mall and its stores be built by contractors who pay fair wages and fringe benefits. . . . CUT-RATE WAGES ARE NOT FAIR UNLESS MERCHANDISE PRICES ARE ALSO CUT-RATE. . . . IF YOU MUST ENTER THE MALL TO DO BUSINESS, please express to the store managers your concern over substandard wages and your support of our efforts.34 The Board had found a violation of Section 8(b)(4)(ii)(B). The Court strongly suggested that such a construction would place the section in conflict with the Constitution, a conflict that it avoided by holding that the leaflets did not threaten, coerce, or restrain, and therefore were outside the scope of 8(b)(4). The opinion makes clear that this interpretation of 8(b)(4)(ii) was based not on the language of the NLRA but on the Constitution: “In our view, interpreting 8(b)(4) as not reaching the handbilling involved in this case is not foreclosed either by the language of the Section or its legislative history. That construction makes unnecessary passing on the serious constitutional questions that would be raised by the Board’s understanding of the statute.”35 The Court did not directly address the question of whether similar considerations would lead it to conclude that peaceful picketing would similarly fall outside Section 8(b)(4)(ii), yet its discussion strongly suggests that it would. The handbilling was peaceful. No picketing or patrolling was involved. On its face, this was expressive activity arguing that substandard wages should be opposed by abstaining from shopping in a mall where such wages were paid. Had the union simply been leafletting the public generally, including those entering every shopping mall in town, pursuant to an annual educational effort against substandard pay, there is little doubt that

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legislative proscription of such leaflets would pose a substantial issue of validity under the First Amendment. The same may well be true in this case, although here the handbills called attention to a specific situation in the mall allegedly involving the payment of unacceptably low wages by a construction contractor. That a labor union is the leafletter and that a labor dispute was involved does not foreclose this analysis. We do not suggest that communications by labor unions are never of the commercial speech variety and thereby entitled to a lesser degree of constitutional protection. The handbills involved here, however, do not appear to be typical commercial speech such as advertising the price of a product or arguing its merits, for they pressed the benefits of unionism to the community and the dangers of inadequate wages to the economy and the standard of living of the populace. Of course, commercial speech itself is protected by the First Amendment.36 The strong suggestion of this paragraph is that the message on the leaflets was the expression of opinion on an issue of public concern. There is no obvious reason why peaceful picketing with the same signs should not be similarly protected, as the Court held in both Claiborne Hardware and Snyder v. Phelps. If the equation of picketing with speech that the Court has adopted in other contexts is applied in the labor context, the implications go beyond legalizing consumer picketing. The legality of Section 8(b)(i)(B) will also be in doubt and properly so. That section makes it “unlawful to induce or encourage any individual . . . to engage in a strike or a refusal in the course of their employment to use, manufacture, process, transport, or otherwise handle . . . goods, articles, materials, or commodities or to perform any service . . . where an object is to force one employer to cease doing business with another.” What this section outlaws is appealing to employees of one employer to make common cause with other employees in order to put economic pressure on an employer with whom the union has a primary dispute. Unless the court maintains an artificial distinction between labor rhetoric and political rhetoric, this prohibition is unconstitutional.

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To illustrate, consider a simple thought experiment based on the fact that Martin Luther King, Jr., a longtime union supporter, died supporting a strike by sanitation workers. Imagine that Dr. King had made a speech in which he urged supporters of the union to support the strike in every way, equating as he frequently did the fight for livable wages with the battle for equality. Suppose that he had urged those who supplied the sanitation department with trucks and other supplies not to do so until the strike ended. It seems clear from Claiborne Hardware that his comments would have been protected by the First Amendment. How would that be different from AFL-CIO president Richard Trumka’s urging workers for suppliers of Wal-Mart to refuse to handle products bound for Wal-Mart? And how would either of these be different from the situation in which Bill Meserve, president of Local 14 during its battle with International Paper Company, urged the truckers not to deliver wood to the Androscoggin mill? The short answer is that no legally significant difference exists. Section 8(b)(4) should be held unconstitutional as applied to peaceful picketing.37 The secondary boycott provisions of the NLRA are ineluctably contrary to the basic policy of the original Wagner Act, of “overcoming the inequality of bargaining power between employees . . . and employers who are organized in the corporate or other forms of ownership association,” achieving “equality of bargaining power between employers and employees,” a policy that has been reaffirmed in each amendment to the Act and that remains in Section 1 of the NLRA. Nor is there any confusion about the technique by which equality of bargaining power is to be achieved: “by encouraging the practice and procedure of collective bargaining.” The rights set forth in Section 7 to form, join, or assist unions to “bargain collectively” and to “engage in concerted activity” are essential to both collective bargaining and the concept of equality of bargaining power. What Taft-Hartley undertook through the secondary boycott provisions was to limit the protection of concerted activity to the employees of a single employer and in practice to the employees in a single bargaining unit. In preventing the spread of strikes to the employees of other employers and to a considerable extent to the customers of

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secondary employers, the Act in effect made a mockery of equality of bargaining power, especially when added to the fact that striking employees could be permanently replaced and that the definition of employee was significantly reduced. Large companies that bargain with individual subunits of their employees almost always have a great advantage in bargaining power.

SECTION 8(B)(7) AND THE CONSTITUTION

Section 8(b)(7), added by the Landrum-Griffin amendment, outlaws picketing for organizational purposes or to achieve recognition. The section singles out picketing for special treatment as an unfair labor practice even when the picketing is peaceful and has no element of coercion. It applies even when a majority union is seeking recognition that an employer may lawfully grant. It is regularly the case that when unions organize, employers are aware that they represent a majority of the employees. Generally, employers refuse recognition under such circumstances in anticipation of conducting an antiunion campaign and convincing the employees to vote no in an NLRB representation election. Unions have learned to their great disappointment that such campaigns are mostly successful even after the union has obtained a card majority. More and more unions seek to convince employers that it is in their interest to grant recognition without insisting on an election and conducting a campaign. Unions picketing to achieve that purpose have been held to violate 8(b)(7), but it would seem to be constitutionally protected as a combination of speech in the form of picketing and boycott activity by union supporters. If one reads a representative sample of cases in which unions have been held to violate Section 8(b)(7), very few are cases in which unions demand instant recognition regardless of the views of the employees that they seek to represent. Section 8(b)(7)(c) permits unions to engage in peaceful picketing for the purpose of “truthfully advising the public (including consumers) that an employer does not employ members of, or have a contract with, a labor organization, unless an

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effect of such picketing is to induce any individual employed by any other person in the course of his employment, not to pick up, deliver or transport any goods or not to perform any services.” Once again the question is raised: How can it be that picketing by a union seeking support from other workers can be made illegal and denied the protection of the First Amendment? To the extent that a union is using speech in the form of picketing to urge sympathizers to boycott a company until such time as the employees choose to designate the union as their bargaining representative, why is that not a legitimate use of speech and picketing? Does it not present the same constitutional issues as other forms of political boycott seeking to convince an enterprise to change policy with respect to such things as providing for abortion? In many 8(b)(7) cases, the object is not clear because the picket signs do not demand recognition. To assume an unlawful purpose to otherwise lawful speech is of doubtful constitutional legitimacy and undercuts the basic idea of the NLRA, that workers should be able to make common cause with each other. And a serious question of statutory interpretation arises with respect to organizational picketing. The Act outlaws picketing where its object is “forcing or requiring the employees of an employer to accept or select such labor organization as their collective bargaining representative.” But organizational picketing is generally undertaken these days to inspire employees to select the union. To automatically assume that picketing as an organizing device is an attempt to force or require, as the Board has sometimes done, is to ignore the words of the statute in favor of a conclusion that all recognitional picketing is coercive. Both the Board and the courts have applied Section 8(b)(7) to cases in which the picketing has none of the characteristics that, according to the Supreme Court, distinguish it from other forms of speech.38 Not only were 8(b)(7) violations found on the basis of picketing that had few of the elements of a traditional picket line, but in a variety of cases neither the Board nor the courts made any effort to determine if the union was actually seeking to force itself in some way on unwilling employees, or whether in fact it was seeking to win the allegiance of the employees involved.

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Since Section 8(b)(7) singles out one form of speech as illegal when undertaken for legitimate purposes, the case for its constitutionality is very difficult to make. The Court has not dealt with the issue of peaceful labor picketing since its opinion in Snyder v. Phelps permitting picketing by the Westboro Baptist Church. Surely unions should be held to have the same right as bigots to seek support.

6 EXCLUSIVITY AND THE DUTY OF FAIR REPRESENTATION

The NLRA provides that a properly selected union “shall be the exclusive representative of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.” The meaning and significance of this sentence have played a major role in development of labor law. And it has led to important and controversial doctrines regulating the relationship of the union to its members.

EXCLUSIVITY AND COLLECTIVE BARGAINING

Early in the Act’s history the Court used the concept of exclusivity to strengthen the bargaining process and the role of the union as the sole representative of the employees. In J. I. Case Co. v. NLRB,1 decided in 1944, the employer refused to bargain with a newly certified union as to matters covered in existing contracts with individual employees. It declared that it could not deal with the union “in any manner affecting rights and obligations under the individual contracts while they remained in effect.” The Court, in an opinion by Justice Jackson, firmly rejected the argument that individual contracts could be used to forestall or delay the obligation to bargain. 110

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Individual contracts . . . may not be availed of to defeat or delay the procedures prescribed by the National Labor Relations Act looking to collective bargaining, nor to exclude the contracting employee from a duly ascertained bargaining unit; nor may they be used to forestall bargaining or to limit or condition the terms of the collective agreement. . . . The very purpose of providing by statute for the collective agreement is to supersede the terms of separate agreements of employees with terms which reflect the strength and bargaining power and serve the welfare of the group. Its benefits and advantages are open to every employee of the represented unit, whatever the type or terms of his preexisting contract of employment.2 Justice Jackson conceded that under some circumstances individual employees might do better on their own, but he concluded that this possibility did not permit the individual to be severed from the unit. “But we find the mere possibility that such agreements might be made no ground for holding generally that individual contracts may survive or surmount collective ones. The practice and philosophy of collective bargaining looks with suspicion on such individual advantages.”3 Shortly after the J. I. Case decision the Court further defined the reach of the doctrine of exclusivity in Medo Photo Supply Co. v. NLRB,4 in which it held that once a union has been certified, an employer commits an unfair labor practice if it negotiates with employees other than those designated by the union. The employer had granted benefits in private meetings sought by a group of employees represented by the union. The Court held that both meeting with them and granting them benefits violated the principle of exclusivity: [I]t is a violation of the essential principle of collective bargaining and an infringement of the Act for the employer to disregard the bargaining representative by negotiating with individual employees, whether a majority or a majority, with respect to wages, hours and working conditions. . . . Bargaining carried on by the employer directly with the employees, whether a

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minority or majority, who have not revoked their designation of a bargaining agent, would be subversive of the mode of collective bargaining which the statute has ordained. . . . Quite apart from the Board’s finding of an unfair labor practice in petitioner’s direct negotiations with its employees when they had not revoked their designation of the union, there can be no question but that it was likewise an unfair labor practice for petitioner, in response to the offer of its employees, to induce them by the grant of wage increases, to leave the union.5 While Justice Jackson’s opinion in the J. I. Case decision did not say so clearly, a necessary implication was that an employer could make no changes in wages, hours, or conditions of employment without first bargaining with the union directly. The Board had consistently so interpreted the law, and its interpretation was confirmed by the Supreme Court in NLRB v. Katz.6 The employer in that case, while negotiating for a new contract without notifying the union, granted merit increases to some of its employees. The Board found a violation of the duty to bargain. A panel of the Court of Appeals for the Second Circuit, by divided vote, refused to enforce, stressing the importance of the employer’s attitude at the bargaining table, under existing precedent, to a finding of bad faith. The Supreme Court in an opinion by Justice Brennan rejected the Second Circuit’s position: “We hold that an employer’s unilateral change in conditions of employment is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) much as does a flat refusal.”7 Thus the Court’s early opinions dealing with exclusivity placed the union between the employer and any changes it desired to make with respect to the statutory term “rates of pay, wages, hours of employment, or other conditions of employment.”8 The holding in the Medo Supply case inferentially raised the question of the status of employee efforts, unconnected to the union, to persuade the employer to take or not take action. In one of my earlier scholarly efforts I took the position that “[i]n order to prevent the employer from being faced with economic pressure to which he cannot lawfully yield, it follows that economic pressure in support of

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separate bargaining demands should be unprotected.” Similar reasoning suggests that efforts to engage in bargaining separate from the union should be unprotected.9 My position, though logical, seemed to some advocates of civil rights an approach that would endanger needed efforts to protect the interests of minority workers at a time when unions often seemed antagonistic to needed changes. The issue came before the Supreme Court in Emporium Capwell v. Western Addition Community Organization.10 In that case, a group of minority employees attempted to force their employer to deal with them separately from the union over steps to erase the vestiges of past discrimination. The employer fired them for the intemperate nature of their protests. The District of Columbia Court of Appeals held that the action of the protesters was protected by Section 7 because of the importance of combating employment discrimination. “Where, as here, both the subject matter of the concerted activity and the right to engage in such activity are safeguarded by legislation, we feel such concerted activity cannot be treated identically with other concerted activity which is not so safeguarded for the purpose of determining whether it so violated Section 9(a) as to lose Section 7 protection.”11 The Supreme Court, in an opinion by Justice Marshall, reversed, holding that the employees’ actions were not protected because they sought to bypass the union. He insisted that efforts to bargain with the employer by independent groups hindered rather than aided the cause of equal employment actions by individuals: In establishing a regime of majority rule, Congress sought to secure to all members of the unit the benefits of their collective strength and bargaining power. . . . It is far from clear that separate bargaining is necessary to help eliminate discrimination. Indeed, as the facts of this litigation demonstrate, the proposed remedy might have just the opposite effect. . . . Having divided themselves, the minority employees will not be in position to advance their cause unless it be by recourse seriatim to economic coercion, which can only have the effect of further dividing them along racial or other lines. Nor is the situation materially different where, as apparently happened here,

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self-designated representatives purport to speak for all groups that might consider themselves to be victims of discrimination.12 The opinion has been criticized as giving too much authority to the union. Had there been no union, the actions by the minority workers would likely have been protected by Section 7. Many liberals found it inconsistent with the basic purposes of the Act to hold that the presence of a union should reduce the rights of workers.13 But it makes sense if one accepts, as I do, Justice Marshall’s obvious assumption that dividing the union is likely to be more of a threat to equality than is union indifference or hostility. The holding is consistent with the Act’s focus on collective bargaining and with Justice Marshall’s long battle for integration.

EXCLUSIVITY AND THE DUTY OF FAIR REPRESENTATION

Historically unions have played a mixed role in the battle for equality. Back in the era of segregation, some unions, particularly railway worker unions, were openly discriminatory. In the landmark case of Steele v. Louisville & Nashville Railroad Co.,14 the Supreme Court dealt with the obligation owed by an incumbent union to members of the bargaining unit generally and minority workers particularly. The Act itself contains no limits on the extent to which an incumbent union can take action contrary to the interests of those it represents, but the Court decreed that a union’s power to negotiate on behalf of all employees it represents is limited by a duty of fair representation. The facts of the case were stark. Black workers were excluded from the union that represented them. In bargaining with the employer, the union insisted upon proposals that would eliminate the jobs of black firemen and replace them with white workers. The Court stated that this action violated the limits on exclusivity that Congress intended and that the Constitution required: Congress has seen fit to clothe the bargaining representative with powers comparable to those possessed by a legislative body both

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to create and restrict the rights of those whom it represents . . . but it has also imposed on the representative a corresponding duty. We hold that the language of the Act to which we have referred, read in the light of the purposes of the Act, expresses the aim of Congress to impose on the bargaining representative of a craft or class of employees the duty to exercise fairly the power conferred upon it in behalf of all those for whom it acts, without hostile discrimination against them.15 The Court did not define the duty of fair representation except in general terms. It stated that in negotiating collective agreements the union could not single out minority workers for ill treatment but was required to “represent non-union or minority union members of the craft without hostile discrimination, fairly, impartially, and in good faith.”16 The Brotherhood of Railworkers, which remained all white, did not give up its efforts to benefit white workers at the expense of blacks. The effort was unrelenting and continuous. It gave the Court the motivation and opportunity to define and expand the duty of fair representation. In Brotherhood of Railroad Trainmen v. Howard17 the Court expanded the duty to cover workers not in the bargaining unit represented by the union. The facts as set forth by Justice Black were once again a stark example of economic racism. The union, by threatening to strike, forced the Frisco to agree to discharge the colored “train porters” and fill their jobs with white men who, under the agreement, would do less work but get more pay. . . . . . . These facts showed that the Negro train porters had for a great many years served the Railroad with loyalty, integrity and efficiency; that “train porters” do all the work of brakemen; that the Government administrator of railroads during World War I had classified them as brakemen and had required that they be paid just like white brakemen; that when the railroads went back to their owners, they redesignated these colored brakemen as “train porters,” “left their duties untouched,” and forced them

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to accept wages far below those of white “brakemen” who were Brotherhood members; that for more than a quarter of a century the Brotherhood and other exclusively white rail unions had continually carried on a program of aggressive hostility to employment of Negroes for train, engine and yard service; that the agreement of March 7, 1946, here under attack, provides that train porters shall no longer do any work “generally recognized as brakeman’s duties”; that while this agreement did not in express words compel discharge of “train porters,” the economic unsoundness of keeping them after transfer of their “brakemen” functions made complete abolition of the “train porter” group inevitable; that two days after “the Carriers, reluctantly, and as a result of the strike threats” signed the agreement, they notified train porters that “Under this agreement we will, effective April 1, 1946, discontinue all train porter positions.”18 Justice Black made short shrift of the argument that the union did not owe a duty to the porters because they were not members of the unit represented by the brotherhood. “Since the Brotherhood has discriminated against ‘train porters’ instead of minority members of its own ‘craft,’ it is argued that the Brotherhood owed no duty at all to refrain from using its statutory bargaining power so as to abolish the jobs of the colored porters and drive them from the railroads. We think this argument is unsound and that the opinion in the Steele case points to a breach of statutory duty by this Brotherhood.”19 Five years later in Conley v. Gibson20 the Court, overruling a claim that the case did not belong in federal court, applied the doctrine in a case involving the failure of a railway local to challenge, under the existing contract, the discharge of black workers. In its battle with the railroad union and other whites-only unions, the Court performed a necessary service that softened the potential for harm otherwise present in the concept of exclusivity. This was not an issue that required an understanding of labor unions or industrial relations for the Court to play a valuable role. It required a sense of fairness, determination, and an ability to forge new doctrine from the statutory design—all attributes that the Court displayed.

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The one case during the first two decades of the duty of fair representation’s (DFR’s) existence that did not involve race was Ford Motor Company v. Huffman.21 The case was brought by workers who protested the grant of seniority to new employees for preemployment military service. Justice Burton, who wrote for a unanimous court, underlined the relationship between the duty and those in the bargaining unit: “The bargaining representative . . . is responsible to, and owes complete loyalty to, the interests of all whom it represents.” Nevertheless, he concluded that International, as a collective-bargaining representative, had discretion to accept provisions that might not be in the interests of all employees in the unit. “The complete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion.”22 Justice Burton did not spell out how the duty to the members of the bargaining unit squared with giving seniority for preemployment service to those who were neither current or former members of the bargaining unit when the grant of seniority was given. The Court simply announced that the duty applied to both the veterans with and those without prior employment by Ford. The Court did not address the question of when the duty arose with respect to those without prior experience at Ford. But as a matter of public policy it would be difficult to reject the Court’s conclusion that the “public policy and fairness inherent in crediting employees with time spent in military service in time of war or national emergency is . . . clear.”23 The need for the DFR was evident. The government gave unions power to act for all the employees in the bargaining unit. The power to frame bargaining proposals was also a power to discriminate, favoring some groups of employees over others. It was not possible to follow Senator Walsh’s vision of collective bargaining taking place without intervention by the government so long as powerful unions committed to white supremacy remained a part of the labor movement. But the need for the duty of fair representation to prevent discrimination against minorities and women has since largely disappeared in the wake of Title VII24 and major changes in the labor

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movement, which for a combination of practical and idealistic reasons has become a strong supporter of the rights of minority workers. As stated by Professor Malin, “Initially, the Court developed the DFR to provide a politically acceptable civil rights remedy for unionmanagement racial discrimination. Title VII of the 1964 Civil Rights Act eliminated the need for using the DFR in that way.”25 Because of changing attitudes combined with the civil rights laws, unions today rarely if ever discriminate against minorities in their bargaining positions. Even union leaders who retain vestiges of bigotry have come to understand that they need women and minorities if they are to organize and strike effectively. This is particularly true of unions that represent large numbers of minority workers such as SEIU and UNITE HERE. Not only are the leaders of both unions aware of the need to appeal to women and minorities, but they are themselves a diverse group, the key members of which are deeply committed to the cause of equality.

THE DUTY OF FAIR REPRESENTATION AND SENIORITY

The Court has wisely rejected calls for using the duty to oversee union procedures and priorities in the bargaining process generally. Fashioning collective bargaining proposals involves setting priorities and selecting employees for favorable treatment. And the bargaining process would be significantly impaired if bargaining positions were subject to court supervision. An example of the Court’s refusal to expand the DFR to regulate negotiations is its decision in Humphrey v. Moore.26 The case involved the question of how to deal with formerly separate seniority lists on the merger or acquisition of one unionrepresented enterprise by another. This is a circumstance almost certain to lead to bad feelings and often to litigation. Employees of the acquiring firm resent the idea that their seniority rights might become subordinate to employees who never even worked for their employer. Those acquired inevitably fear the prospect that the acquisition or merger will fail to acknowledge their previous work. In Humphrey v. Moore one carrier acquired another. The local union supported an

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agreement whereby the newly acquired drivers were granted seniority only from the time they began working for the acquiring company. The newly acquired drivers protested the new seniority arrangement that did not recognize their previous seniority. The Supreme Court upheld the agreement. It instructed the lower courts to permit the union considerable discretion in such situations: But we are not ready to find a breach of the collective bargaining agent’s duty of fair representation in taking a good faith position contrary to that of some individuals whom it represents nor in supporting the position of one group of employees against that of another. Inevitably differences arise in the manner and degree to which the terms of any negotiated agreement affect individual employees and classes of employees. The mere existence of such differences does not make them invalid. The complete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion.27 The Court has done well to leave the issue of merging seniority lists to be settled by unions and employers. At one time it was urged by supporters of minority rights that seniority, the use of which was protected in the Civil Rights Act, was the enemy of historically discriminated-against minority workers and women. Some commentators have pointed out that the regular use of seniority runs the risk of enshrining the effects of past discrimination as illustrated by the statement, once common among minority workers (sometimes still heard), “Last to be hired, first to be fired.” It was certainly true in many instances before and in the early days after the passage of the 1964 Civil Rights Act that the seniority provision of the Act allowed white male workers to extend their privileged status. But seniority is not the enemy of minority and women workers. Once workers are hired, seniority becomes a form of protection for everyone, including women and minority employees. The use of seniority replaces the concept

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that all benefits and advantages come from and can be undone by the employer. It is a policy that does not require members to play up to union authorities. It is an advantage that will eventually be earned by all employees who remain on a job. And it acknowledges a powerful antimarket principle—that workers earn entitlements to jobs and benefits by their labor.

THE DUTY OF FAIR REPRESENTATION AND GRIEVANCE HANDLING

The case that established the basic ground rules for evaluating duty of fair representation claims in grievance handling was Vaca v. Sipes,28 decided in 1967. The case was brought by an employee, Benjamin Owens, who was discharged by Swift Packing on the grounds that his high blood pressure and medical history made him unqualified to do the work he was assigned. The union filed a grievance on his behalf but refused to take the case to arbitration after having him examined by a physician agreed upon by Owens, who found him unable to work. While the grievance remained open, another physician sent a letter to the company and union declaring Owens healthy enough to work. The union executive committee, which under the agreement could control the grievance, decided not to submit the case to arbitration. Owen sued the union in state court for failing to take his case to arbitration, alleging that the refusal was arbitrary and capricious. The case was tried by a jury that found for the plaintiff. In instructing the jury, the judge stated that the jury should find for plaintif f “if Swift had wrongfully discharged Owens and if the Union had ‘arbitrarily . . . and without just cause or excuse . . . refused’ to press Owens’s grievance to arbitration.” Punitive damages could also be awarded, the trial judge charged, if the union’s conduct was “willful, wanton and malicious.” The jury found for plaintiff. The verdict was then set aside by the trial judge on the grounds that the matter was in the exclusive jurisdiction of the NLRB. This ruling was affirmed on appeal but was ultimately overturned by the state supreme court, which applied state law under which it concluded it was proper for a jury to find a wrongful refusal by the union to bring the case to arbitration. The state court opinion

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contained an elaborate discussion of preemption but no discussion of the state law to be applied to union actions in grievance handling. After determining that the matter was not preempted by the NLRA, the state court without discussion of the duty violated by the union reinstated the jury verdict. The Supreme Court reversed in an opinion by Justice White, which established the basic ground rules for handling DFR cases growing out of union grievance handling. As to the law to be applied, Justice White concluded that “it is obvious that Owens’s complaint alleged a breach by the Union of a duty grounded in federal statutes, and that federal law therefore governs his cause of action.”29 With respect to the issue of forum, the union argued that since the Board had recently held that breaches of the DFR were unfair labor practices, the Board had primary jurisdiction, and neither state nor federal courts could hear the case in the first instance. Justice White rejected this argument largely on the grounds that the DFR had been developed by the courts and that the Board had no experience with or expertise in analyzing union grievance handling that was tangential to the Board’s central concerns. He pointed out that, unlike the Board, a court could hear both the DFR claim and the underlying breach of contract claim in a single action. He noted that historically the courts had regulated the grievance system and concluded that there was no suggestion that Congress meant to take this jurisdiction from the courts when it passed the Taft-Hartley Act. Thus he concluded that an individual employee had the option to either go to the NLRB or bring a suit under Section 301 of the NLRA to remedy breaches of the DFR—but only after exhausting the contractually mandated process for handling grievances. Justice White acknowledged the right of the union to claim control of the grievance under the collective bargaining agreement.“Since the employee’s claim is based upon breach of the collective bargaining agreement, he is bound by terms of that agreement which govern the manner in which contractual rights may be enforced.”30 With respect to the employee’s ability to challenge in court an unsatisfactory outcome, Justice White endorsed two possible claims: first,“when the conduct of the employer amounts to a repudiation of

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those contractual procedures”; second and more significantly, in cases like Vaca itself. Another situation when the employee may seek judicial enforcement of his contractual rights arises, if, as is true here, the union has sole power under the contract to invoke the higher stages of the grievance procedure, and if, as is alleged here, the employeeplaintiff has been prevented from exhausting his contractual remedies by the union’s wrongful refusal to process the grievance. It is true that the employer in such a situation may have done nothing to prevent exhaustion of the exclusive contractual remedies to which he agreed in the collective bargaining agreement. But the employer has committed a wrongful discharge in breach of that agreement, a breach which could be remedied through the grievance process to the employee-plaintiff ’s benefit were it not for the union’s breach of its statutory duty of fair representation.31 In terms of the standard to be applied, Justice White stated that it was not sufficient, as the Missouri court believed, for the employee to demonstrate that he or she had a good case under the contract. “A breach of the statutory duty of fair representation occurs only when a union’s conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith.”32 The meaning of none of these terms is totally clear, but in particular the concept of “arbitrary” can be expanded or contracted fairly easily on a case-by-case basis. Does it require a careful examination of the validity of the claim before it is abandoned or perhaps traded off ? In addition to that formulation, Justice White described the duty in a variety of slightly different forms. At one point he described the duty as “a statutory obligation to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct.”33 Would hostility be permitted toward those who scabbed, crossed a picket line, or otherwise violated union policy? Was it arbitrary to automatically reject complaints by junior employees rejected

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for promotion by the choice of someone with greater seniority? At another point in the opinion, Justice White announced that “a union may not arbitrarily ignore a meritorious grievance or process it in perfunctory fashion.”34 Vaca v. Sipes granted protesting employees the choice of bringing the union’s breach of the duty to the NLRB, which would be less costly, or going to court, which is more efficient but more costly: We may assume for present purposes that such a breach of duty by the union is an unfair labor practice, as the NLRB and the Fifth Circuit have held. The employee’s suit against the employer, however, remains a § 301 suit, and the jurisdiction of the courts is no more destroyed by the fact that the employee, as part and parcel of his § 301 action, finds it necessary to prove an unfair labor practice by the union, than it is by the fact that the suit may involve an unfair labor practice by the employer himself. The court is free to determine whether the employee is barred by the actions of his union representative, and, if not, to proceed with the case. And if, to facilitate his case, the employee joins the union as a defendant, the situation is not substantially changed. The action is still a § 301 suit.35 In one of the most significant parts of the case, Justice White denied employees the right to either demand arbitration or bring suit on their own: If the individual employee could compel arbitration of his grievance regardless of its merit, the settlement machinery provided by the contract would be substantially undermined, thus destroying the employer’s confidence in the union’s authority and returning the individual grievant to the vagaries of independent and unsystematic negotiation. Moreover, under such a rule, a significantly greater number of grievances would proceed to arbitration. This would greatly increase the cost of the grievance machinery and could so overburden the arbitration process as to prevent it from functioning successfully. . . . It

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can well be doubted whether the parties to collective bargaining agreements would long continue to provide for detailed grievance and arbitration procedures . . . if their power to settle the majority of grievances short of the costlier and more timeconsuming steps was limited by a rule permitting the grievant unilaterally to invoke arbitration.36 Although some criticized the opinion for granting too much power to the union to settle grievances, it was one of the Court’s more persuasive labor opinions, one which seemed based on an understanding of labor management relations. For example, Justice White recognized that grievance systems can operate effectively only if the union is able to make reasonable choices about which grievances to pursue and which to settle. Justice White was undoubtedly helped to understand the nature of the grievance system through the brief and an oral argument submitted by the union’s chief counsel, David Feller, a noted attorney at the time and later an esteemed labor law professor at Berkeley, who six years later published a classic article, “A General Theory of the Collective Bargaining Agreement.”37 As was true of the later article, the union brief in Vaca stressed the value of the system of dealing with grievances under the system of mutual negotiation that takes place prior to arbitration: Such a grievance procedure can only work if the vast majority of grievances are settled at one of the preliminary steps. If both parties adhere adamantly to their initial positions, regardless of the merits of the case, and insist that all grievances be arbitrated, the procedure would simply break down, to the disadvantage of all of the employees. Thus, the union’s role in the handling of grievances is not merely to prosecute individual claims regardless of their merits, but also to protect the interests of all employees by screening grievances, dropping frivolous ones, and compromising doubtful ones.38 The most troublesome aspect of the opinion is that in its description of the duty, using terms like “arbitrary” and “perfunctory” and

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requiring the union “to serve the interests of all members without hostility or discrimination toward any,” the Court seemed to license the lower courts to impose on union officials a duty of care comparable to that owed by lawyers to their clients. There was no way that the courts that were to apply the duty could come to understand what was a legitimate and what perfunctory investigation by a union steward or business agent. Not surprisingly, the standard of “perfunctory handling” has produced confusion. As noted by Professor Malin,“[T]he lower courts’ DFR opinions can be grouped into four basic approaches: intentional misconduct, rational explanation, gross negligence and a functional approach used by the Ninth Circuit. None of these approaches provide a workable general DFR standard in grievance handling.”39 Inevitably also the Court was called upon to clarify its meaning. In United Steel Workers v. Rawson40 the Court, in another opinion by Justice White, returned to the issue of responsibility of an incumbent union under the duty of fair representation. The case grew out of a mine disaster in which ninety-one miners were killed. Survivors brought a suit in Idaho state court alleging negligence by the union in performing its duty under the contract. The state supreme court had sought to apply state law to the situation. The U.S. Supreme Court rejected the application of state law: The Court has made clear that § 301 is a potent source of federal labor law. . . . State courts must apply federal law in deciding those claims. . . . Indeed any state-law cause of action for violation of collective-bargaining agreements is entirely displaced by federal law under § 301. . . . It would not appear difficult to apply these principles to the instant case. Respondents alleged in their complaint that the Union was negligent in its role as “enforcer of an agreement negotiated between [sic ] [the Union] on behalf of the deceased miners.”. . . The only possible interpretation of these pleadings, we believe, is that the duty on which respondents relied as the basis of their tort suit was one allegedly assumed by the Union in the collective-bargaining agreement.41

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The Court concluded that the union did not expand its duty of fair representation by agreeing to a joint safety committee. “The courts have in general assumed that mere negligence, even in the enforcement of a collective-bargaining agreement, would not state a claim for breach of the duty of fair representation, and we endorse that view today.”42 This was a sensible result in a very difficult and delicate situation. In general the development of the duty of fair representation in grievance handling and negotiation has been one of the Court’s few successes in setting labor law standards.

THE DUTY OF FAIR REPRESENTATION AND UNION DUES

Both the NLRA and Railway Labor Act provide that provisions requiring employees “as a condition of employment” to pay union dues and initiation fees (known as union security provisions) are not unlawful discrimination. As provided in Section 8(a)(3) of the NLRA, such clauses, when included in a collective bargaining agreement, may require as a condition of employment “membership therein on or after the thirtieth day following the beginning of such employment.” The reason behind permitting such clauses was that since all employees in the unit receive the benefits of collective bargaining, it is fair that they pay for it. The provision does not apply “if membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and initiation fees uniformly required.”43 In IAM v. Street,44 decided in 1961, the Court held that the union could not use money acquired under union security clauses for political purposes, which purposes, the Court said, were not sufficiently related to collective bargaining: “It is not a use which helps defray the expenses of the negotiation or administration of collective agreements, or the expenses entailed in the adjustment of grievances and disputes. In other words, it is a use which falls clearly outside the reasons advanced by the unions and accepted by Congress. [The statutory language granting union security] is to be construed to deny the unions, over an employee’s

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objection, the power to use his exacted funds to support political causes which he opposes.”45 As a remedy, Justice Brennan, who wrote the majority opinion, suggested “restitution to each individual employee of that portion of his money which the union expended, despite his notification, for the political causes to which he had advised the union he was opposed.”46 Justice Brennan insisted that only those who informed the union of their opposition were entitled to recover. Justice Frankfurter wrote a sharp dissent, pointing out among other things that the line between collective bargaining and political activity was not sharply defined and not even examined at trial: The statutory provision cannot be meaningfully construed except against the background and presupposition of what is loosely called political activity of American trade unions in general and railroad unions in particular—activity indissolubly relating to the immediate economic and social concerns that are the raison d’etre of unions. It would be pedantic heavily to document this familiar truth of industrial history and commonplace of trade-union life. To write the history of the Brotherhoods, the United Mine Workers, the Steel Workers, the Amalgamated Clothing Workers, the International Ladies Garment Workers, the United Auto Workers, and leave out their socalled political activities and expenditures for them, would be sheer mutilation.47 In CWA v. Beck,48 the Court extended the activities that required reimbursement to include any activity not directly related to collective bargaining. Utilizing the duty of fair representation, the Court upheld the nonmembers’ objection to utilizing their dues for anything unrelated to direct negotiation with their employer. Specifically, respondents alleged that “the union’s expenditure of their fees on activities such as organizing the employees of other employers, lobbying for labor legislation, and participating in social, charitable, and political events violated petitioners’ duty of fair representation.”

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Justice Brennan began by noting that the union had been chosen by “a majority of the employees of American Telephone and Telegraph Company as their exclusive bargaining representative. As such, the union is empowered to bargain collectively with the employer on behalf of all employees in the bargaining unit over wages, hours, and other terms and conditions of employment, § 9(a).” But he went on to point out that this “broad authority, however, is tempered by the union’s statutory obligation to serve the interests of all members without hostility or discrimination toward any.” His opinion concluded that the proviso to Section 8(a)(3) and the companion Section of the RLA “authorizes the exaction of only those fees and dues necessary to performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues.” Taken as a whole, § 8(a)(3) permits an employer and a union to enter into an agreement requiring all employees to become union members as a condition of continued employment, but the “membership” that may be so required has been “whittled down to its financial core.” The statutory question presented in this case, then, is whether this “financial core” includes the obligation to support union activities beyond those germane to collective bargaining, contract administration, and grievance adjustment. We think it does not. . . . Congress authorized compulsory unionism only to the extent necessary to ensure that those who enjoy union negotiated benefits contribute to their cost.49 Other than its restatement of the free-rider theme, the Court engages in remarkably little analysis of how in the face of silence by Congress about how unions may spend the money collected under union security clauses, the Court could divine a policy limiting the expenditure to the costs of the immediate bargaining process between the union and its employer. There are two remarkable factual assumptions that the Court doesn’t bother to defend but that are crucial to its conclusion. First

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is that although nonmembers benefit from contract negotiation and grievance handling, they do not benefit from union actions aimed at organizing the employees of other employers or lobbying for favorable legislation. Indeed, if they are forced to pay for such activities, they will be unfairly harmed. The second unexamined assumption is that these activities are not “germane to collective bargaining.” These assumptions are erroneous. In collective bargaining, employers invariably point to the compensation for the workers of his competitors. The employer argues that not only does the existing market establish the appropriate rate for labor but that for it to substantially depart from that market will place it at a competitive disadvantage. Where that argument has not been available, unions have profited. When the Teamsters had a high percentage of the trucking industry organized, they were a bargaining juggernaut. In my study of the hotel workers’ union, one of the most apparent facts was that the best contracts were obtained where union density was high, in places like Las Vegas, San Francisco, New York, and Los Angeles.50 In addition, higher union density inevitably increases the potency of the strike weapon. Where unions have more members, there is bound to be more pressure to avoid and settle strikes. More membership increases resources, union presence, and the number of potential supporters. It increases the depth of the picket line and decreases the number of those who are willing to cross. Participation in social and charitable events increases the number of union supporters, which increases the union’s ability to strike, which affects the outcomes of bargaining. Surely the Court is in no position to deny that series of conclusions, as a factual matter, although given its elevated status in the legal process, it can make up facts to suit its conclusions. It is remarkable that a doctrine developed to protect minorities from blatant discrimination has been twisted to overcome the clear language of the statute. Why is there a violation of the DFR when there is no discrimination, no evidence of bad faith—in other words, no effort to harm the dissenters or even to prevent them from expressing their views—only a desire to have all employees who will benefit from the unions’ efforts pay on the same basis? This system can hardly

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be described as arbitrary without disregarding the normal meaning of words. The Supreme Court had the chance to reconsider its erroneous conclusion that organizing efforts were not “germane” to collective bargaining in Ellis v. BRAC.51 The Ninth Circuit addressed the issue directly and sensibly concluded that “[m]aximum organization of an industry benefits employees and units already organized. A union is considerably strengthened if it eliminates competition from nonunion employers and a stronger union is unquestionably a more effective collective bargaining agent. Successful organizing efforts thus can strengthen the union’s position at the collective bargaining table immeasurably.”52 The Supreme Court rejected this position. “Using dues exacted from an objecting employee to recruit members among workers outside the bargaining unit can afford only the most attenuated benefits to collective bargaining on behalf of the dues payer, . . . and therefore is a far cry from the free-rider problem with which Congress was concerned.”53 Once again the Court displayed its ignorance of labor relations and its propensity to attribute to Congress its most tenuous and unfounded conclusions.

UNION DUES AND THE FIRST AMENDMENT

The voluminous litigation and numerous Supreme Court decisions over the right of unions to charge nonmembers for the cost of their activities have been significantly funded and shaped by the National Right to Work Legal Foundation. The foundation takes the position that requiring workers to pay for activities of which they disapprove violates their First Amendment right. The Court has never accepted this position, but it has treated it with respect, particularly with regard to public employees. First Amendment concerns have shaped the Court’s manifest effort not to charge dissenting workers for any but the most immediate collective bargaining costs. The Court so intimated in its opinion upholding a union security agreement in Railway Employees’ Department v. Hanson54 “If ‘assessments’ are in

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fact imposed for purposes not germane to collective bargaining, a different problem would be presented.”55 The First Amendment issue with regard to public employees was dealt with directly by the Court in Abood v. Detroit Board of Education.56 In an opinion by Justice Stewart the Court once again upheld the constitutionality of limited union security agreements. “A union-shop arrangement has been thought to distribute fairly the cost of these activities among those who benefit, and it counteracts the incentive that employees might otherwise have to become ‘free riders’ to refuse to contribute to the union while obtaining benefits of union representation that necessarily accrue to all.”57 The Court in Abood agreed that “[t]o compel employees financially to support their collective-bargaining representative has an impact upon their First Amendment interests.”58 But it concluded that the values of exclusivity legitimated it for purposes of collective bargaining. And it rejected the argument that “a public employee has a weightier First Amendment interest than a private employee in not being compelled to contribute to the costs of exclusive union representation.”59 Justice Stewart took the position that “[p]ublic employees are not basically different from private employees; on the whole, they have the same sort of skills, the same needs, and seek the same advantages.”60 But without overruling Abood, the current activist Court has reopened the question of the constitutionality of union security agreements for public employees and perhaps for all employees. In Knox v. SEIU,61 the Court gave substantial deference to the First Amendment claims of dissenting union members. The case involved an attempt to raise the agency fee of dissenters along with everyone else and to combat legislative proposals that would harm the union and reduce the funds available for state employees.62 Because the SEIU required nonmembers to opt out of payment for specific purposes, the Court declared the system invalid. In a long opinion hailing the importance of the right of free speech and pointing out the dangers of forced association, Justice Alito gave warning that the existing compromise that permitted agency fees in the public sector was of doubtful legality for the current Court:

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The compulsory fees constitute a form of compelled speech and association that imposes a “significant impingement on First Amendment rights.” Our cases to date have tolerated this “impingement,” and we do not revisit today whether the Court’s former cases have given adequate recognition to the critical First Amendment rights at stake. “The primary purpose” of permitting unions to collect fees from nonmembers, we have said, is “to prevent nonmembers from free-riding on the union’s efforts, sharing the employment benefits obtained by the union’s collective bargaining without sharing the costs incurred.” Such free-rider arguments, however, are generally insufficient to overcome First Amendment objections.63 The fragile state of agency fee arrangements in the public sector and possibly in the private sector was further emphasized in Harris v. Quinn.64 The case involved a fair-share agency fee system agreed to by the state and a unit of personal assistants represented by the SEIU.65 The Seventh Circuit Court of Appeals upheld the arrangement, relying mainly on the Abood decision. The Supreme Court reversed, holding that the agency fee system violated the First Amendment. Justice Alito’s opinion did not directly overrule Abood, but he essentially rendered it worthless as precedent. Justice Alito led off by quoting his own language in Knox that “preventing nonmembers from free-riding on the union’s efforts” is a rationale “generally insufficient to overcome First Amendment objections,” He went on to explain some of the Abood opinions many flaws. Abood is “something of an anomaly. The Abood Court’s analysis is questionable on several grounds. . . . And the Court fundamentally misunderstood Hanson’s narrow holding, which upheld the authorization, not imposition, of an agency fee. The Abood Court also failed to appreciate the distinction between core union speech in the public sector and core union speech in the private sector, as well as the conceptual difficulty in publicsector cases of distinguishing union expenditures for collective

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bargaining from those designed for political purposes. Nor does the Abood Court seem to have anticipated the administrative problems that would result in attempting to classify union expenditures as either chargeable or nonchargeable, or the practical problems that would arise from the heavy burden facing objecting nonmembers wishing to challenge the union’s actions. Finally, the Abood Court’s critical “labor peace” analysis rests on the unsupported empirical assumption that exclusive representation in the public sector depends on the right to collect an agency fee from nonmembers.66 The questionable assumptions in Justice Alito’s opinion are as numerous as those he purports to discover in Abood. For example, he assumes but does not explain that there is some basic difference between “core union speech in the public sector and core union speech in the private sector.” He also seems to assume that “the conceptual difficulty in public-sector cases of distinguishing union expenditures for collective bargaining from those designed for political purposes” does not exist with respect to private-sector expenditures. After sharply criticizing Abood, Justice Alito argues that its rationale, such as it is, does not apply in the case of personal assistants: “PAs are much different from public employees. Unlike full-fledged public employees, PAs are almost entirely answerable to the customers and not to the State, do not enjoy most of the rights and benefits that inure to state employees, and are not indemnified by the State for claims against them arising from actions taken during the course of their employment. Even the scope of collective bargaining on their behalf is sharply limited.”67 Justice Alito does not spell out why these facts make it unfair for nonmembers to pay their share of the cost incurred by SEIU in obtaining significant benefits for the employees in the unit. Justice Alito also seeks to distinguish the two situations on the grounds that the State compels the union to promote and protect the interests of nonmembers in “negotiating and administering collective-bargaining agreements and representing the interests of employees in settling disputes and processing grievances.”68 But although the techniques may be different, it is surely true that the union is not permitted under its duty of fair representation

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to seek legislation or other benefits to the advantage of its members over nonmembers. Justice Alito then analyses whether the benefits obtained by the union justify the limits on free speech that he discerns in the fairshare arrangement. Respondents also maintain that the agency-fee provision promotes the welfare of personal assistants and thus contributes to the success of the Rehabilitation Program. As a result of unionization, they claim, the wages and benefits of personal assistants have been substantially improved; orientation and training programs, background checks, and a program to deal with lost and erroneous paychecks have been instituted; and a procedure was established to resolve grievances arising under the collectivebargaining agreement (but apparently not grievances relating to a Service Plan or actions taken by a customer). The thrust of these arguments is that the union has been an effective advocate for personal assistants in the State of Illinois, and we will assume that this is correct. But in order to pass exacting scrutiny, more must be shown. The agency-fee provision cannot be sustained unless the cited benefits for personal assistants could not have been achieved if the union had been required to depend for funding on the dues paid by those personal assistants who chose to join. No such showing has been made.69 The burden of proof that he places on the SEIU to justify the agency fee arrangement could not have been met in any of the cases in which the Court permitted an agency fee, thus casting doubts upon the legality of all agency fee arrangements in the public or even private sector. Why should the fact that health providers’ standard of living improved markedly not be enough to demonstrate that the system as developed fulfilled the legislative purpose that established it? Why is it necessary to “pass exacting scrutiny” and prove what would have happened under different hypothetical situations (a virtual impossibility)? Justice Alito uses a standard applied to state efforts

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that restrict speech. But the dissenters under the fair-share agreement have not lost any of their rights to disagree and criticize the union. Justice Kagan wrote a strong dissent in which Justices Ginsburg, Breyer, and Sotomayor joined. She pointed out that the fair-share practice came squarely under the reasoning of the Abood case, the correctness of which she strongly affirmed. Abood is not, as the majority at one point describes it, “something of an anomaly,” allowing uncommon interference with individuals’ expressive activities. Rather, the lines it draws and the balance it strikes reflect the way courts generally evaluate claims that a condition of public employment violates the First Amendment. Our decisions have long afforded government entities broad latitude to manage their workforces, even when that affects speech they could not regulate in other contexts. Abood is of a piece with all those decisions: While protecting an employee’s most significant expression, that decision also enables the government to advance its interests in operating effectively—by bargaining, if it so chooses, with a single employee representative and preventing free riding on that union’s efforts.70 As she points out, Justice Alito’s effort to distinguish the Abood decision is specious and halfhearted at best. To this reader, it appears evident that Justice Alito was less interested in distinguishing Abood than in providing the language and reasoning to overrule it and to cast in doubt all agency fee arrangements as inconsistent with the First Amendment. If the Court so holds, as now appears likely, it would significantly undermine the concept of exclusivity. The Court’s treatment of issues arising from the concept of exclusivity shows the Court at its best and at its worst. In creating and developing the duty of fair representation with regard to bargaining and grievance handling, the Court added a necessary qualification to the union role as exclusive representative. But it has applied the doctrine carefully, leaving wide discretion to unions. For the most part the Court has recognized that the realities of collective bargaining,

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together with antidiscrimination laws, are adequate to protect the interests of minorities, women, and dissenters. In its constant whittling away of the union security proviso to Section 8(a)(3) the current Court has needlessly added expense and deprived unions of financial support. The Court sees those who object to paying union dues as workers of conscience. The great majority of their colleagues see them as free riders. The financial justification for requiring everyone to pay dues is that everyone benefits in wages and benefits from union representation, and therefore all should pay for it. The Court has transformed a simple economic requirement of pay for benefit into an overriding issue of free speech. It is remarkable the sins that the Court has been able to commit in the name of freedom of speech, from Citizens United 71 to Harris v. Quinn. A worker has a right to oppose unionization, but why should the increased benefits derived from collective bargaining not be reduced by the cost of obtaining it?

7 THE COURT AND THE DEFINITION OF “EMPLOYEE” UNDER THE NLRA

The fairness and the effectiveness of our labor law system are significantly related to its coverage. Coverage is important on a national level. It helps to determine the strength of the labor movement. Coverage is also key to union strength at a single facility because if all, or nearly all, employees capable of doing a job are within a bargaining unit, they are in a position to strike effectively.

DEFINING “EMPLOYEE” UNDER THE WAGNER ACT

The NLRA grants rights solely to “employees.” Thus the definition of the term has been a key factor in the Act’s effectiveness. Employers seeking to escape the NLRA’s provisions regularly claim that many of those who perform work for them are not really employees but fall into some other category such as “independent contractor,” or that they are supervisors and thus come under the definition of “employer.”1 Independent contractors do not have a legal right to strike. Their contracts can be terminated with impunity, and they bargain alone. One of the increasingly important trends in the Court’s construction of the NLRA has been the narrowing of the category of workers deemed employees.

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The framers of the Wagner Act defined the term “employee,” inclusively but not very helpfully, as “any employee and shall not be limited to the employees of a particular employer.”2 Although this definition suggested a desire for the term to be interpreted broadly, it did not help to distinguish employees from other categories such as independent contractor or employers. The Act also defined “employer” broadly to include “any person acting in the interest of an employer.”3 It seems likely that this definition was made so broad to avoid problems of agency. But the breadth of the definition provided a potential basis for excluding many from the definition of “employee.” Given the importance of the issue and the Wagner Act’s unhelpful definition, it is not surprising that the definition of “employee” was one of the first NLRA issues addressed by the Supreme Court. The first major case, NLRB v. Hearst Publications,4 involved the status of newsboys who sold papers for the Hearst Corporation. The Board determined that because of their economic dependence upon Hearst, newsboys were employees. Hearst was ordered by the NLRB to bargain with a union selected by newsboys in a Board-conducted election. The Ninth Circuit Court of Appeals refused to enforce the Board’s order.5 It concluded that the term “employee” was to be interpreted in accordance with common-law standards, under which it held the newsboys were independent contractors and not employees. The Supreme Court, in an opinion by Justice Rutledge, reversed the court of appeals and agreed with the NLRB: “The newsboys’ compensation consists in the difference between the prices at which they sell the papers and the prices they pay for them. The former are fixed by the publishers and the latter are fixed either by the publishers or, in the case of the News, by the district manager. Further . . .‘substantial control’ of the newsboys’ total ‘take home’ can be effected through the ability to designate their sales areas and the power to determine the number of papers allocated to each.”6 Justice Rutledge rejected the Ninth Circuit’s conclusion that the NLRA incorporated common-law standards in defining “employee”: The Wagner Act is federal legislation, administered by a national agency, intended to solve a national problem on a national

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scale. . . . Consequently, so far as the meaning of “employee” in this statute is concerned, the federal law must prevail no matter what name is given to the interest or right by state law. Congress was not seeking to solve the nationally harassing problems with which the statute deals by solutions only partially effective. It rather sought to find a broad solution, one that would bring industrial peace by substituting, so far as its power could reach, the rights of workers to self-organization and collective bargaining.7 Justice Rutledge also reaffirmed the key role of the Board in determining coverage under the Act: “Everyday experience in the administration of the statute gives it familiarity with the circumstances and backgrounds of employment relationships in various industries, with the abilities and needs of the workers for self-organization and collective action.”8 This opinion shows the New Deal Court at its best, demonstrating concern for the economically dependent and supporting the basic policies of the national act. A short time later, in Packard v. NLRB,9 the Court dealt with the more difficult issue of the right of foremen to organize and bargain under the Act. By a five-to-four vote the Court approved the Board’s conclusion that foremen were included under the Act’s definition of “employees” and therefore had the right to bargain collectively. The majority opinion was written by Justice Jackson, who rejected the company’s contention that since foremen were covered by the Act’s definition of “employer,” they could not be employees: The privileges and benefits of the Act are conferred upon employees, and § 2(3) of the Act, so far as relevant, provides “The term ‘employee’ shall include any employee.”. . . The point that these foremen are employees both in the most technical sense at common law as well as in common acceptance of the term, is too obvious to be labored. The Company, however, turns to the Act’s definition of employer, which it contends reads foremen out of the employee class and into the class of

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employers. Section 2(2) reads: “The term ‘employer’ includes any person acting in the interest of an employer, directly or indirectly. . . .” The context of the Act, we think, leaves no room for a construction of this section to deny the organizational privilege to employees because they act in the interest of an employer. Every employee, from the very fact of employment in the master’s business, is required to act in his interest. He owes to the employer faithful performance of service in his interest, the protection of the employer’s property in his custody or control.10 With respect to the foremen’s inclusion in the definition of “employer,” Justice Jackson argued that this was done in order to “render employers responsible in labor practices for acts of any persons performed in their interests.”11 Writing for the dissenters, Justice Douglas argued that under Justice Jackson’s approach even top officers were employees. Jackson responded that the Board in its discretion could draw the appropriate distinction. As these two case demonstrate, the Court in the Wagner Act period interpreted “employee” to include those workers who fit within the Act’s policies and were not specifically excluded by its language.

DEFINING “EMPLOYEE” AFTER TAFT-HARTLEY

The Taft-Hartley Act significantly reduced the NLRA’s coverage by providing that the term “employee” “shall not include any individual having the status of an independent contractor or any individual employed as a supervisor.” The two exemptions together have served to exclude millions of workers from the Act’s coverage and to reduce the membership and power of unions. The Supreme Court has further reduced the Act’s coverage by adding, without reference to the language of the statute, an exclusion for employees denominated as managers. The Supervisory Exclusion

Taft-Hartley defined the term “supervisor” as “any individual having authority, in the interest of the employer, to hire, transfer, suspend,

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lay off, recall, promote, discharge, assign, reward, discipline other employees, or responsibly to direct them or to adjust their grievances, or effectively to recommend such action if in connection with the foregoing the exercise of such authority is not merely routine or clerical nature, but requires independent judgment.” The definition is broad enough to cover any worker whose job involves directing or instructing those with whom he works, including many who do not think of themselves, and are not thought of by others, as part of management. And the definition’s scope is expanded further by going beyond those with the ability to take action and including those with the ability “effectively to recommend such action.” It takes little legal training to recognize in this language the enormous potential for confusion and disagreement.12 To add to the difficulties of interpretation, the Act also contains an overlapping definition of “professional employees,” who are covered by the Act, employees engaged in work “involving the consistent exercise of discretion and judgment.”13 The statutory definition of “supervisor” is broad enough to cover almost all professional employees and most skilled senior workers because both groups typically “direct” other workers. As a result, the definition of “supervisor” has been a linguistic Trojan horse that has frequently prevented people who work side by side for similar salaries and benefits from joining together to improve their status. This separation inevitably weakens the strike weapon. In the vast majority of strikes, floor-level supervisors—sometimes secretly, sometimes openly—support the union. They do so partly because of the inevitable bond of solidarity that joins those who regularly work together for a common goal and partly out of selfinterest, since their compensation is inevitably affected by the benefits negotiated for the rank-and-file workers. However, since they are not employees for purposes of the NLRA, supervisors are not protected from discharge for union activity. They may not defend workers or aid strikers without fear of discharge. During a strike situation in which the enterprise continues, operations supervisors are generally required to perform work that would otherwise be done by strikers and to train replacement workers. In union parlance, they are forced to act as scabs and to train scabs.

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When I studied the long, bitter strike by paperworkers in Jay, Maine, against the International Paper Company, I learned that the role of the supervisors was crucial to the company’s ability to continue operating and a source of incalculable pain both to the floorlevel supervisors themselves and to the strikers, many of whom were longtime coworkers, friends, and family. The results were emotional chaos, misunderstanding, the termination of friendships, and the division of families. The parish priest, Father McKenna, told me that the sense of betrayal by strikers toward the supervisors who trained their replacements was “the theme that was so emotionally damaging for the strikers to deal with.” The situation was equally intolerable for the supervisors, including those who supported the company’s bargaining positions. As one such supervisor told me, “I couldn’t sleep, I found myself crying a lot. . . . Very few events in my life have had an impact on me the way that labor strike did.” In the interest of balancing the definitions of supervisors and professional employees, the Board has from time to time sought to introduce policy-driven qualifications to the broad definition of “supervisors.” The Supreme Court has thus far rejected efforts to weaken the statutory language. In NLRB v. Health Care & Retirement Corp. of America,14 the Supreme Court overruled a decision by the Board holding that nurses who gave directions to less skilled workers concerning patient care were not supervisors. The Board justified its conclusion on the grounds that the “exercise of professional judgment incidental to the treatment of patients, is not authority exercised in the interest of the employer.” The Board argued that this interpretation was necessary “because professional employees (including registered nurses) are not excluded from coverage under the Act.” The employer argued that “[t]here is simply no basis in the language of the statute to conclude that direction given to aides in the interest of nursing home residents, pursuant to professional norms, is not ‘in the interest of the employer.’” The majority of the Supreme Court agreed. Writing for the Court, Justice Kennedy stated, The Board has created a false dichotomy—in this case, a dichotomy between acts taken in connection with patient care and acts

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taken in the interest of the employer. That dichotomy makes no sense. Patient care is the business of a nursing home, and it follows that attending to the needs of the nursing home patients, who are the employer’s customers, is in the interest of the employer. . . . We thus see no basis for the Board’s blanket assertion that supervisory authority exercised in connection with patient care is somehow not in the interest of the employer.15 Linguistically, the majority’s conclusion was unassailable. The Board must have realized this, but since the language of the exclusion and the policy of the Act are in conflict, it chose to apply a definition more consistent with the goals of the Act. It is difficult to find an approach more consistent with the statutory policy of delegating interpretation of the Act to a specialized agency. The Court also justified its definition of “supervisor” on the grounds that it prevented divided loyalty. “Nursing home owners may want to implement policies to ensure that patients receive the best possible care despite potential adverse reaction from employees working under the nurses’ direction. If so, the statute gives nursing home owners the ability to insist on the undivided loyalty of its nurses notwithstanding the Board’s impression that there is no danger of divided loyalty.”16 To the extent this explanation is comprehensible, it would appear to provide a barrier to unionization in almost all situations. Reading the Act to encourage employee loyalty is a constant theme of the Court’s interpretation of the statute. It is almost always inconsistent with the Act’s stated goal of encouraging the process of collective bargaining. It is mostly, as in this case, based on an unsustainable vision of reality: the Court assumes that it is the owners who are most committed to quality patient care and that its efforts to achieve this worthy goal must be supported by giving them essentially uncontrolled discretion to fire nurses who oppose these laudable goals. I have encountered no one acquainted with the reality of health care facilities and their relationship to nurses who accepts the Court’s description. Far more often, it is organized nurses who fight to improve nursing ratios and patient care.

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Four Justices dissented. The dissenting opinion, by Justice Ginsburg, focused on the role of the Board and the basic policies of the Act: The NLRB has recognized and endeavored to cope with the tension between the Act’s exclusion of supervisors and its inclusion of professional employees. To harmonize the two prescriptions, the Board has properly focused on the policies that motivated Congress to exclude supervisors. . . . The NLRB’s “patient care analysis” is not a rudderless rule for nurses, but an application of the approach the Board has pursued in other contexts. The Board has employed the distinction between authority arising from professional knowledge, on one hand, and authority encompassing front-line management prerogatives, on the other.17 The conflicting approaches in this case are inherent in the contradiction between the statutory definition of “supervisor” and the policy of the Act. Those Justices who have only limited enthusiasm for the policies of encouraging collective bargaining and protecting concerted activity will inevitably focus on the broad language of the statutory exclusions. In NLRB v. Kentucky River,18 the Court once more overruled the Board’s efforts to limit the breadth of the supervisory exemption. The Board had held that a group of nurses who exercised minor authority over attendants were not supervisors because their role was limited and involved no more than ordinary professional judgment. Speaking for the five-member majority of the Court, Justice Scalia carefully parsed the broad language of the supervisory exemption and found that ordinary professional judgment met the Act’s requirement of “independent judgment.” The Court’s opinion offered no policy-based reason why nurses should not be treated as “professional employees” covered by the Act other than the fact that it might lead to placing too many employees under the limited protections of the NLRA. Four Justices dissented. The dissenting opinion, by Justice Stevens, was critical of the narrow linguistic limits imposed by the majority on the Board. “The term “independent judgment” is indisputably

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ambiguous, and it is settled law that the NLRB’s interpretation of ambiguous language in the National Labor Relations Act is entitled to deference. . . . Such deference is particularly appropriate when the statutory ambiguity is compounded by the use of one ambiguous term—‘independent judgment’—to modify another, equally ambiguous term—namely, ‘responsibly to direct.’”19 The potential danger to the policies of the Act contained in the Court’s literal approach to the definition of supervisor was made manifest when the Bush Board in NLRB in Oakwood Health Care Inc.20 adopted the linguistic emphasis of the Kentucky River opinion to conclude that “charge nurses” were supervisors. The function of charge nurses was described by the Board as follows: “Charge nurses assign other RNs, licensed practical nurses (LPNs), nursing assistants, technicians, and paramedics to patients.” In all cases, this minor supervisory role was only a fraction of the charge nurses’ function. The decision to exclude the charge nurses was by a three-to-two vote. The Board majority focused on the language of the statute and ignored the fact that it had thereby removed much, perhaps most, of the nursing profession from the scope of the act. The majority said that its function was to interpret language, not to consider policy in applying statutory definitions: “We begin our analysis with a first principle of statutory interpretation that ‘in all cases involving statutory construction, our starting point must be the language employed in Congress . . . and we assume that the legislative purpose is expressed by the ordinary meaning of the words used.’ . . . We eschew a results-driven approach.”21 The dissenters focused on the majority’s refusal to consider the consequences of its ruling: “Today’s decision threatens to create a new class of workers under Federal labor law: workers who have neither the genuine prerogatives of management, nor the statutory rights of ordinary employees. . . . That category . . . by 2012 could number almost 34 million, accounting for 23.3 percent of the work force.”22 Independent Contractors

The legislative history makes clear that the exclusion of independent contractors was intended as congressional rejection of the Court’s

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reasoning in the Hearst case, but it did not specify what standard was to be used. Were the Board and the courts to base their decisions solely on the common-law right-of-control test, or could they take into account economic reality? As the Court pointed out in the Hearst decision, the common-law test was developed to determine whether vicarious liability was appropriate and not with a view to which workers were entitled to the protection of social legislation. In the immediate aftermath of the Taft-Hartley amendment, Archibald Cox urged the Court not to abandon the commonsense approach applied in the Hearst decision: [T]he correct interpretation of the amendment is uncertain. It may be read as a command to follow the decisions in the law of agency, whence the term “independent contractor” was derived. Support for this view can be found in the conference report criticizing the Hearst case for holding that “the ordinary tests of agency could be ignored by the Board.”. . . There is good reason to believe, however, that the amendment should be interpreted simply as a cautionary measure, reflecting a belief that the courts and Board had gone too far in treating small businessmen as employees, and directing them to draw the line more closely about those whose status is clearly that of employees, but without importing the technical agency concepts developed to meet a quite different problem.23 A mechanical adoption of right to control would enable employers to so construct their workforce as to deny many economically dependent workers the right to unionize. When the Board or a reviewing court focuses on control over how the job is to be done, it provides the employer with a basis for contending that subordinates in a variety of occupations, such as truck and taxi drivers and salespeople who work without immediate supervision outside the confines of an employer-owned facility, are independent contractors. In circumstances where there is a gross imbalance in economic power, the employer can declare workers independent contractors, give them a degree of independence in how they perform their jobs,

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and then create a formal work contract for the services with the same employee that obligates the employee to perform in a manner satisfactory to the employer while minimizing the employer’s own responsibilities. Independent contractors do not have the protection of any of the labor statutes. They are excluded from both the NLRA and the Fair Labor Standards Act. The gap between the rights of employees and those of independent contractors can be huge and almost always to the disadvantage of the “independent contractor.” For example, truck drivers as employees are typically provided with a company vehicle, but as independent contractors drivers are often required to buy or lease the truck from the company. The terms of the lease or purchase may be highly disadvantageous. In cases of agreement to purchase, drivers are likely to remain liable for the remaining cost of the truck when the relationship is terminated. They may be under contract to work a certain amount each month and agree to pay fines for failure to perform in accordance with their agreement. In addition, the ability to establish workers as independent contractors permits employers to weaken bargaining units and to establish a cadre of workers contractually bound to continue providing services during a strike. Moreover, the breadth and vagueness of the concept permits the employer to regularly challenge bargaining units proposed by unions and thereby to delay elections. The potential havoc implicit in the statutory definition is illustrated by the Board’s decision in Shamrock Dairy.24 The employer had recognized Teamster Local 310 as the bargaining representative of its employees from 1937 until July 1955, when it realized the potential benefits to it of shifting the status of its truck drivers from employees to independent contractors. The nature of the transformation is set forth in the Board opinion: Prior to July 1955, all the Respondent’s truck drivers . . . were admittedly employees covered by the 1953 contract with the Union. . . . . . . [A]bout the middle of July 1955, without notice to the union the Respondent instituted the so-called independent distributorship plan under which the milk routes and the trucks would be sold to the individual drivers who would receive as

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earnings the difference between the price charged to them for the product and the price at which they sold it to their customers. . . . The driver agreed that he would not sell any such products outside his territory and that he would not sell the product of any person other than the Respondent within that territory. The driver further agreed to furnish, operate, and maintain his own truck, and to insure the truck for property damage and public liability in certain amounts, the insurance policies to be approved in advance by the Respondent. If the truck broke down and the driver elected not to use a relief truck belonging to the Respondent, the agreement provided in that event that the driver could not use any other vehicle without the Respondent’s approval.25 Both the Board and the court of appeals upheld this new arrangement, applying a myopic version of the right-of-control test. The case empowered employers in certain industries such as trucking and selling to transform their relationship with their workers in a manner favorable to themselves and thereby to eliminate or prevent unionization.26 The Supreme Court took a more realistic approach to the problem when it addressed the definition of “employee” soon after passage of the Taft-Hartley amendments in NLRB v. United Insurance.27 The case involved the status under the Act of an insurance company’s “debit agents.” The company in that case refused to bargain with a unit of insurance agents certified by the Board, claiming that they were not employees under the Act. The court of appeals refused to enforce the Board’s order to bargain. On review, the Supreme Court reversed the court of appeals and upheld the Board’s order. The Court’s opinion written by Justice Black acknowledged that the statutory definition written into the Taft-Hartley Act constituted a rejection of the Hearst opinion: Initially this Court held in N.L.R.B. v. Hearst Publications . . . that “whether . . . the term ‘employee’ includes (particular) workers . . . must be answered primarily from the history, terms and purposes of the legislation.”

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Thus the standard was one of economic and policy considerations within the labor field. Congressional reaction to this construction of the Act was adverse. . . . The obvious purpose of this amendment was to have the Board and the courts apply general agency principles in distinguishing between employees and independent contractors.28 But the Court pointed out that there is no easy common-law test to distinguish between employees and supervisors: “[T]here is no shorthand formula or magic phrase that can be applied to find the answer, but all of the incidents of the relationship must be assessed and weighed. There are innumerable situations which arise in the common law where it is difficult to say whether a particular individual is an employee or an independent contractor.”29 And the Court, in fact, much as it did in the Hearst case, examined the realities of the working relationship to determine that the Board had properly concluded that the insurance agents in question were employees. New agents are hired by district managers, after interviews; they need have no prior experience and are assigned to a district office under the supervision of an assistant district manager. . . . The company compensates the agents as agreed to in the “Agent’s Commission Plan” under which the agent retains 20% of his weekly premium collections on industrial insurance and 10% from holders of ordinary life, and 50% of the first year’s premiums on new ordinary life insurance sold by him. . . . The agent is also supplied with a company “Rate Book,” which the agent is expected to follow, containing detailed instructions on how to perform many of his duties. An agent must turn in his collected premiums to the district office once a week and also file a weekly report.30 Although the Court purported to be applying common-law principles, it cited no common-law authority. And it instructed the lower courts to accept Board findings that were not clearly in conflict with the statutory language: “The Board’s determination was a judgment

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made after a hearing with witnesses and oral argument had been held and on the basis of written briefs. Such a determination should not be set aside just because a court would, as an original matter, decide the case the other way.”31 But Justice Black and his colleagues are unfortunately long gone from the scene, and courts of appeals decisions dealing with the independent contractor exemption offer little positive assurance. For the most part over the intervening years, the Board has followed the approach set for it in United Insurance, which has helped to provide some protection for otherwise vulnerable workers who perform their services out of the presence of supervisors. The Supreme Court has not revisited the issue in recent years, but its treatment of the supervisory exclusion and its creation of a broad exclusion for those it deems managers suggest that it is unlikely that the Court would approach the issue in the same realistic way today. The Managerial Exemption

Broad as the definition of “supervisor” is, the Court early on undertook to enlarge it, in NLRB v. Bell Aerospace,32 by creating a new category of excluded employees—managers, whom it defined broadly as those employees who “formulate and effectuate management policies by expressing and making operative the decisions of their employer.”33 In the Bell Aerospace case, the Court held that the Board erred in determining that the company’s buyers, although managerial employees, were not supervisors and were entitled to unionize and bargain collectively. The buyers were not major executives of the company. The Court described their duties as follows: The purchasing and procurement department receives requisition orders from other departments at the plant and is responsible for purchasing all of the company’s needs from outside suppliers. Some items are standardized and may be purchased “off the shelf ” from various distributors and suppliers. Other items must be made to the company’s specifications, and the requisition orders may be accompanied by detailed blueprints and other technical plans. Requisitions often designate a

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particular vendor, and in some instances the buyer must obtain approval before selecting a different one. Where no vendor is specified, the buyer is free to choose one.34 The Supreme Court held that to the extent the buyers were managerial employees they were outside the definition of employees and not entitled to unionize. The Court’s opinion does not explain the basis for separating managerial from other employees, nor does it provide a useful standard for determining which employees are in fact managerial. After a brief and confusing tour through the legislative history and past treatment of managerial employees, the Court concluded that the “legislative history strongly suggests that there also were other employees, much higher in the managerial structure, who were likewise regarded as so clearly outside the Act that no specific exclusionary provision was thought necessary. . . . We think the inference is plain that ‘managerial employees’ were paramount among this impliedly excluded group.” The Court warned that following the Board’s current definition of “employee,” which covered managerial employees who did not have a labor relations role,“would have far-reaching results. . . . A wide range of executives would be included. A major company, for example, may have scores of executive officers who formulate and effectuate management policies, yet have no supervisory responsibility or identifiable conflict of interest in labor relations. If Congress intended the unionization of such executives, it most certainly would have made its design plain.”35 The last sentence turns statutory interpretation on its head, since if Congress had meant to exclude managerial workers, it could have said so. The Court’s opinion does not explain the special danger that including buyers in a union would pose for employers. Nor does it justify equating managerial employees with executives. Nor does it cite any data or otherwise provide a basis for its vision of “scores of executive officers who . . . have no supervisory responsibility.” As almost anyone who has ever worked for a large enterprise has learned, important executive officers regularly come with staffs and assistants. And it is difficult to imagine anyone high up in a business structure who would

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not have at least the ability to “effectively recommend” to another executive that they “hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, discipline” a lower-level employee. Since all employees may be said to have responsibility to “effectuate and make operative” managerial decisions, the broad, amorphous definition of “managerial employees” went well beyond the concept of high-status executives and seemed to cover almost any group of employees, particularly those whose work involved a degree of discretion. The broad definition of “supervisors” together with the equally engulfing definition of “managerial employees” has eliminated many workers from the definition of “employee” and has the potential to deny coverage to even more. The exclusion is a direct assault on the concept of concerted worker power in support of a slightly hidden policy of promoting managerial solidarity. The policy of excluding key workers from the definition of “employee” in support of a broad vision of implied managerial prerogative was expanded in NLRB v. Yeshiva University.36 In that case, the Supreme Court held that the Yeshiva faculty members, as a group, were managerial employees and did not have the right to unionize under the NLRA. The Court indicated plainly that its conclusion that faculty members were not employees applied not only to Yeshiva but to “mature educational institutions” generally. “Yeshiva and like universities must rely on their faculties to participate in the making and implementation of their policies. The consequent large measure of independence enjoyed by faculty members can only increase the danger that divided loyalty will lead to those harms that the Board traditionally has sought to prevent.”37 The Court did not identify the harms, nor did it discuss the meaning of divided loyalty in an academic setting. To whom did faculty members owe loyalty that might be endangered by unionizing? In a private business, one can identify the owners and managers to whom such a duty may be said to exist. But the great duty that unites faculty regardless of institution is to enlarge the world of information, to find and transmit facts, to pursue ideas and develop theories about how the universe and society function. Their primary obligation is to pursue the truth in teaching and research, sometimes by themselves and sometimes in collaboration

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with other scholars and teachers. How would unionizing endanger this solemn obligation? What data there are suggest that unionized faculties seek to use the bargaining process, among other purposes, to strengthen their ability to perform these basic functions.38 Perhaps the Court was concerned that union solidarity would take precedence over the professorial commitments to teaching and research, that unionized professors would seek to maximize union support rather than academic excellence in the hiring process, that they would favor academic alliances only with other unionized faculties. If the Justices believed that unionization would lead to the replacement of academic values with those of union solidarity, they do not understand the prevailing mind-set of the overwhelming majority of academics, including those who favor unionization. Faculties unionize in significant part to advance academic values. To the extent that unionization increases the power of faculties in negotiating with administrators and boards of trustees in regard to hiring and promotion, it is far more likely to increase the salience of academic values than to diminish it. One great lure for faculty members at almost every level is the desire for recognition and prestige—both personal and institutional. It is a force far more likely to motivate than any abstract desire to further the cause of unions. Would they vote against qualified faculty candidates on the basis of attitudes toward unionization? Hardly, since that is crucial to their own professional careers and reputations. That worry, too, reflects a total misunderstanding of professorial self-interest. Indeed, what makes unionization of interest to faculty is two things: the possibility of personal financial gains and the hope for greater professorial voice. It seems that what the Court was worried about was having faculty play a greater role in the operation of universities. It is the Court that has, probably inadvertently, set itself in opposition to academic values. The opinion in the Yeshiva case showed a marked lack of understanding of the concept of “faculty governance” and of the attitudes that might lead faculty to unionize. Faculty members may serve on important committees, but those committees rarely, if ever, give faculty control over their own wages or many aspects of working conditions, such as hours of teaching and vacations. Second, many

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universities contain elaborate structures of faculty governance but limit final decision-making authority to full-time administrators. The Yeshiva decision, which was decided by a sharply divided Court (five to four), is fundamentally at odds with the basic national policy of free choice with respect to unionization. Most commentators have been critical of the opinion, pointing out that the Court ignored the extent to which faculty members are vulnerable to arbitrary decisions by university administrators. The special approach undoubtedly reflects the Court’s conclusion that traditional collective bargaining is particularly inappropriate for academic institutions. This does not mean, however, that the Yeshiva approach will be so limited. Although the Board has thus far only rarely applied Yeshiva outside the academic context, a wide range of professional workers are at risk of being characterized as nonemployees—and thus as managers, supervisors, or “associates”—and could thus be deprived of the protections of the labor law. In FHP Inc.,39 for example, the Board found a group of physicians to be managers because the governance system of the hospital in which they worked included committees of physicians that played a role in determining some aspects of health-care policy. The concept of employer-established committees replacing unionization was at one time clearly rejected under the NLRA as a technique for thwarting employee choice, but Yeshiva offers a dangerous precedent for its reemergence. In today’s climate, the possibility of using committees so that nonprofessional but skilled workers are deemed to be managers should not be discounted, especially for those workers without a history of collective bargaining. The Court, without seeking to penetrate reality beyond a surface application of vague general concepts, has assumed the task of deciding where the need for loyalty trumps the right to unionize. The importance of employee loyalty is a standard with no discernible boundaries and near universal applicability. It applies to rank-and-file employees as well as to those regularly understood to be management. Union Organizers

The issue of divided loyalty and the definition of “employee” came before the Court in another guise in NLRB v. Town & Country Electric

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Co.40 In that case the question was whether union organizers and members of the IBEW, both of whom the union encouraged to apply for positions to help organize the employer, were employees. The Eighth Circuit held that union members and organizers paid by the union were not employees and could be denied employment by the employer because of their work for the union: We infer that “Congress intended to describe the conventional master-servant relationship as understood by common-law agency doctrine.”. . . . . . The two union organizers, however, were not typical applicants. They were not in search of a job; they already had one. . . . When a union official applies for a position only to further the union’s interests, we believe that an inherent conflict of interest exists. . . . Accordingly, we find that the two full-time paid union organizers were not employees under the Act.41 Additionally, the court of appeals found that ordinary union members who applied at the urging of the union were not employees entitled to the Act’s protection because they were compensated in part by the union and because they were subject to Local 292’s job salting organizing resolution. “Pursuant to this resolution, Local 292 members may work for nonunion employers only if they work for organizational purposes.” The moral obligation to the union, according to the Eighth Circuit, was enough to remove them from the Act’s coverage. Fidelity to the principles and goals of one’s chosen labor organization is to be expected and is of course protected by the Act. On the other hand, traditional common-law principles governing the establishment of the employer-employee relationship should not be jettisoned in an effort to broaden the protections of the Act beyond those which it was intended to provide. . . . Accordingly, we hold that Town & Country committed no unfair labor practice in refusing to interview the two union organizers and the other union members.42

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The Supreme Court reversed unanimously on the issue of whether the rejected union organizers and members were employees. Its decision rested in significant part on the leeway given to the Board to interpret the terms of the Act and in part because of the “broad language of the Act itself—language that is broad enough to include those company workers whom a union also pays for organizing.”43 The Court also agreed with the Board that the Eighth Circuit’s conclusion lacked adequate support in the common-law definition of “employees.” Despite the Court’s unanimity with respect to the definition of “employee,” its opinion suggests disagreement with respect to the ability of employers to refuse to hire or even to discharge union planted organizers (who are generally referred to as “salts”) applying for or holding jobs in their facility. On the one hand the opinion by Justice Breyer suggests that they are entitled to the same protection as other employees or applicants: “The Board’s broad, literal interpretation of the word ‘employee’ is consistent with several of the Act’s purposes, such as protecting ‘the right of employees to organize for mutual aid without employer interference,’ and ‘encouraging and protecting the collective-bargaining process.’” But later in the opinion Justice Breyer seemed to back away from the practical implications of the Court’s decision by suggesting a variety of ways in which the company might protect itself from the issue of divided loyalty: Further, the law offers alternative remedies for Town & Country’s concerns, short of excluding paid or unpaid union organizers from all protection under the Act. For example, a company disturbed by legal but undesirable activity, such as quitting without notice, can offer its employees fixed-term contracts, rather than hiring them “at will” as in the case before us; or it can negotiate with its workers for a notice period. A company faced with unlawful (or possibly unlawful) activity can discipline or dismiss the worker, file a complaint with the Board, or notify law enforcement authorities. This is not to say that the law treats paid union organizers like other company employees in every labor law context. For in-

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stance, the Board states that, at least sometimes, a paid organizer may not share a sufficient “community of interest” with other employees (as to wages, hours, and working conditions) to warrant inclusion in the same bargaining unit. We need not decide this matter. Nor do we express any view about any of the other matters such as whether or not Town & Country’s conduct (in refusing to interview, or to retain, “employees” who were on the union’s payroll) amounted to an unfair labor practice. We hold only that the Board’s construction of the word “employee” is lawful; that term does not exclude paid union organizers.44 The court did not explain how the contractual provision that it suggested would protect a company against acts of disloyalty by union organizers or other members who placed their primary allegiance in the union.45 The Court ordered the case “remanded for further proceedings consistent with this opinion.” What outcome the Court contemplated as “consistent with this opinion” is far from clear. On remand the Eighth Circuit did not take up the ambiguity in the Board’s opinion. It concluded that the workers denied interviews and the one union member hired and fired were victims of discrimination, and it enforced the Board’s order requiring the company to change practice and post notices to that effect. In the Town & Country opinion the Court did not mention its Yeshiva decision, in which it simply declared an entire profession outside the definition of “employee” on the basis of nebulous loyalty concerns unsupported by any statutory language. These two approaches to the definition of “employee” and the concept of loyalty seem manifestly inconsistent. Comparing Yeshiva and Town & Country, one realizes how differently the Court can approach the question of statutory construction depending upon the issue and the makeup of the Court. In Yeshiva, the Court ignored the Board, the common law, and the statutory definition of “employee” to make its decision on the basis of a deep misunderstanding of the role of faculty in a modern university. In Town & Country, the Court stressed the importance of the Board and purported to apply the definition of “employee” based on a close reading of the statute and the common law.

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It is not easy to reconcile the two opinions. Perhaps the real distinction is one of class. Professors are not employees but managers simply because they seem so to the Court, while the electricians involved in the Town & Country decision looked like workers and therefore employees to the Court. The decision has not had major significance in union organizing. To the extent that unions seek to organize through planted organizers, they continue to do so without notifying the employer. To the extent that employers learn about the effort, they continue to reject or discharge the proposed employees for purportedly non-union-related reasons. Overall, the Supreme Court’s decisions with respect to the Act’s coverage have multiplied the number of workers separated from their fellows by application of the definition of “employee.” In part this result is attributable to the carefully constructed, employer-supportive, language used in the Taft-Hartley Act. In part also the cases reflect the prevailing concern by the Supreme Court to protect employers from the damage of disloyal employees, a policy directly contrary to the basic policy of the Wagner Act to permit employees to act in concert, a policy still officially part of the NLRA. In addition, the law has been interpreted by the Court on the basis of factual assumptions that the Court has made no effort to verify. Thus the Court suggested that preventing nurses from unionizing would improve patient care because it would permit owners “to implement policies to ensure that patients receive the best possible care despite potential adverse reaction from employees.” The Court’s concern is very likely backwards. Unionized nurses have regularly sought to improve patient care, in particular by regularly seeking to limit the ratio of patients to nurses, over the objections of owners. In Bell Aerospace, the Court based the need for the managerial exemption on its vision of large corporations with scores of executive officers “who formulate and effectuate management policies, yet have no supervisory responsibility or identifiable conflict of interest in labor relations.” Similarly, when the Court, in its Town & Country opinion, claimed that union organizers should be treated as employees for purposes of the Act, it assured employers that they could

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adequately defend their interests by offering their employees fixedterm contracts, rather than hiring them “at will . . . or [they] can negotiate with [their] workers for a notice period.” These disturbing opinions are symptomatic of the major problem that comes with judicial sovereignty. Sound decisions require an understanding of the factual context in which they will be applied. But the Court has no easy or even acceptable way to learn how its opinions are likely to play out in reality. It is forced to make uneducated factual assumptions. And because they come from the Supreme Court, these assumptions become the operative facts of law.

8 THE SUPREME COURT AND ARBITRATION

After World War II, with collective bargaining thriving, it became standard practice for the parties to include in their negotiated agreements provision for a grievance system culminating in arbitration. That practice is still in force where collective bargaining takes place. Most grievance systems in collective agreements provide for a series of negotiating steps between union and management, aimed at resolving disputes amicably. If the parties are unable to settle the dispute, they agree to submit the issue to a neutral arbitrator, whose decision they agree to accept. Arbitrators are selected by the parties. Some are agreed to in advance; others are selected from lists of arbitrators submitted by a private group such as the American Arbitration Association or a public entity such as the Federal Mediation and Conciliation Service. Before a decision is rendered, the arbitrator typically will conduct an adjudicatory hearing in which the facts relevant to the grievance are litigated. At the hearing both union and employer will be represented by a professional, who may be a lawyer, a labor relations specialist, or a union business agent. Posthearing briefs are common. The arbitration award is usually accompanied by a written opinion in which the arbitrator will explain his or her reasoning and generally cite opinions of other arbitrators and arbitral doctrine. 160

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The grievance system had significant advantages for both labor and management. Disputes were quickly resolved without resort to strikes or litigation. Although arbitration provisions spread widely in the aftermath of World War II, their legal significance remained unclear during the 1940s and 1950s. In 1955, Dean Harry Shulman of the Yale Law School, who was also the permanent umpire under the collective bargaining agreement between Ford Motor Company and the UAW, delivered the prestigious Holmes Lecture at Harvard Law School. He chose for his topic labor arbitration. Shulman pointed out that labor arbitration was private system of justice with its own unique features that distinguished it from court litigation. He stressed the private nature of the process, noting that the arbitrator “is not a public tribunal imposed upon the parties by superior authority which the parties are obliged to accept. He is rather part of a system of self-government created by and confined to the parties. He serves their pleasure only, to administer the rule of law established by their collective agreement.” As the result of this feature, arbitration is more flexible and less rule-bound, “because the arbitrator is a creature of the parties, and not bound by adherence to precedents, legal doctrine, or the rule of law, he has wider latitude than a judge [and] . . . [i]n the last analysis, what is sought is a wise judgment.”1 Shulman praised the private nature of the process and concluded by urging the courts to leave the process to the parties: “When it works fairly well, it does not need the sanction of the law of contracts or the law of arbitration. It is only when the system breaks down completely that the courts’ aid in these respects is invoked. But the courts cannot, by occasional sporadic decision, restore the parties’ continuing relationship.”2 In 1960, the Supreme Court addressed the legal status of arbitration in three cases brought by the Steelworkers Union that became known as the “Steelworkers Trilogy.” Justice Douglas wrote all the opinions. Two of the cases involved the promise to arbitrate, and one the

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enforceability of an arbitrator’s award. All were decided for the union, and each put the weight of the law behind the arbitration process. In United Steelworkers v. Warrior and Gulf Navigation Co.,3 Justice Douglas ordered the lower courts to enforce the promise to arbitrate and to find it freely. “An order to arbitrate the particular grievance shall not be denied unless it can be said with positive assurance that the arbitration agreement is not susceptible to an interpretation that covers the asserted dispute.” In United Steelworkers v. Enterprise Wheel & Car Co.4 the Court also instructed the lower courts to routinely enforce the arbitrator’s award. “The refusal of courts to review the merits of an arbitration award is the proper approach.” Relying heavily on Dean Shulman’s article, although ignoring his plea to leave the process private, Justice Douglas stressed the industrial relations expertise of arbitrators, along with the apparent success of the process, as reasons for making both the promise to arbitrate and arbitral decisions enforceable by the courts. In the Warrior and Gulf opinion he described the advantages of arbitration as the Court understood them: The labor arbitrator is usually chosen because of the parties’ confidence in his knowledge of the common law of the shop and their trust in his personal judgment to bring to bear considerations which are not expressed in the contract as criteria for judgment. The parties expect that his judgment of a particular grievance will reflect not only what the contract says but, insofar as the collective bargaining agreement permits, such factors as the effect upon productivity of a particular result, its consequence to the morale of the shop judgment whether tensions will be heightened or diminished. The ablest judge cannot be expected to bring the same experience and competence to bear upon the determination of a grievance, because he cannot be similarly informed.5 In the aftermath of the Trilogy, the Court reinforced its basic holdings in a series of cases requiring arbitration and directing the lower courts to enforce arbitral awards even if they disagreed with the

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arbitrator’s award. The standard articulated in the Enterprise Wheel & Car Co. case, that the award “is legitimate only so long as it draws its essence from the collective bargaining agreement,”6 was ambiguous enough to permit significant review, but the Supreme Court made clear in subsequent cases that virtually any reference to the agreement sufficed. The Court’s lack of knowledge of labor relations was once again demonstrated by its opinions in the Trilogy. It was clear that not only Justice Douglas but the Justices generally assumed that Shulman’s description of the process was descriptive of the process generally. But in fact Shulman’s experience was atypical. As a permanent umpire, Shulman had an opportunity to learn about the auto industry in general and the Ford Motor Company in particular. However, most arbitrators do not have the same opportunity to become familiar with the parties and their unique understandings and practices. Most arbitrators are chosen for particular cases by companies and unions in a wide variety of industries, and they may know little if anything about the common law of the plant or the state of its labor relations. Arbitrators come from many different backgrounds. Most are not experts in labor relations. They rarely come from the ranks of either unions or management. Additionally, they rarely have experience working at the jobs about which they are deciding. Academic experience or work as a neutral party with the National Labor Relations Board or some other decision-making agency is common, but these backgrounds do not provide knowledge of the day-to-day realities of labor relations. Such experience is, in fact, quite similar to the experience of judges before they serve on the bench. Nor is the Trilogy accurate with respect to the attitudes of the parties toward the process. They—management in particular—are in the vast majority of cases looking not for wise counsel but for contract interpretation based on the language of their agreement. As Bernard Meltzer, a distinguished arbitrator and academic, noted in the aftermath of the Trilogy, “Management, although cognizant of the values of arbitration, is fearful of activistic arbitration which may exceed the leeway for interpretation and create new obligations under the guise of enforcing old ones.”7

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In its opinion in United Steelworkers v. American Manufacturing Co.8 (one of the Trilogy cases), the Court announced that lower courts should read arbitration clauses as mirror images of the no-strike clauses contained in the agreement. “There is no exception in the nostrike clause and none, therefore, should be read into the grievance [sic, arbitration?] clause, since one is the quid pro quo for the other.” This conclusion has been treated ever since by the Supreme Court as a statement of established fact, although no one familiar with collective bargaining believes that it is true. As Professor Meltzer pointed out, “[T]he assumption that an arbitration clause and a no-strike clause are traded one for the other . . . ignores that each of these clauses is merely one element of a total negotiating package.”9 The lack of symmetry between the two clauses in terms of negotiation should be apparent to anyone familiar with collective bargaining agreements, since typically the no-strike clause is the only promise made by the union in exchange for a series of promises made by management. Despite its blatant inaccuracy, the quid pro quo assumption has remained a jurisprudentially established truth. In Local 174, Teamsters v. Lucas Flour Co.10 the Court held that a clause in a collective agreement providing for the settlement of disputes through arbitration should, as a matter of federal law, be construed as a promise by the union not to strike over issues subject to arbitration, even where the contract did not contain a no-strike clause. The Court rested its holding primarily on the grounds that “a contrary view would be completely at odds with the basic policy of national labor legislation to promote the arbitral process as a substitute for economic warfare.” In determining that the agreement must be read to conform to national labor policy, the Court ignored the understanding of the parties, and the fact that collective bargaining agreements inevitably reflect comparative economic strength. The reason the agreement in the Lucas Flour case did not contain a no-strike clause was that the Teamsters, who back in the day often dictated the collective agreement to be signed, refused to include one—and had the economic power to insist on their chosen language. The Court’s decision demonstrates its willingness to use an essentially intention-defeating construction of agreements in order to pursue its newly adopted policy

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of encouraging the use of arbitration rather than strikes for settling disputes about the interpretation of agreements. Thus the private consensual nature of the process, emphasized by Dean Shulman, was ignored in pursuit of a policy ostensibly based on the private ordering that derived from it. The new policy favoring arbitration was also the basis for the Court’s decision to reverse itself and hold that the Norris-LaGuardia Act did not prohibit injunctions against strikes in breach of a nostrike clause whenever the underlying issue that led to the strike was subject to arbitration. The Court declared that its earlier opinion applying the anti-injunction provisions of the Norris-LaGuardia Act represented “a significant departure from our otherwise consistent emphasis upon congressional policy to promote the peaceful settlement of labor disputes through arbitration.”11 The basis on which the Court discerned a “congressional policy” favoring arbitration is not clear. The congressional enactment that was the basis for the Trilogy was Section 301 of the NLRA, which makes no mention of arbitration and instead provides for lawsuits based on violations of collective bargaining agreements.12 The Court justified its conclusion on the basis of “the devastating implications for the enforceability of arbitration agreements and their accompanying nostrike obligations if equitable remedies were not available.” It stated, “As we have previously indicated, a no-strike obligation, express or implied, is the quid pro quo for an undertaking by the employer to submit grievance disputes to the process of arbitration. Any incentive for employers to enter into such an arrangement is necessarily dissipated if the principal and most expeditious method by which the no-strike obligation can be enforced is eliminated.”13 The Court’s reasoning is once again backward. It seems apparent that an employer denied a no-strike clause would almost always seek a broad arbitration clause to give the union an avenue other than strikes for pursuing its complaint. Few arbitrators recognized themselves in Justice Douglas’s Trilogy description.14 Several pointed out that arbitrators mostly knew little or nothing about the parties, their negotiating history, or the “common law of the shop when they were selected

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to arbitrate a particular grievance.”15 The sharpest disagreement with Justice Douglas’s portrait of arbitration came from Judge Paul Hays of the Second Circuit Court of Appeals, himself an experienced arbitrator and a distinguished labor law professor at Columbia Law School. In 1965 he delivered the Storrs Lecture at Yale Law School. It was entitled “Labor Arbitration: A Dissenting View.”16 Judge Hays argued “that there is no authority to support the view of arbitration adopted in the Steelworkers case.” He pointed out, as did most commentators “that far from having an intimate knowledge of the common law of the plant and the state of industrial relations, the arbitrator is likely to be a stranger to the parties and to the controversy.” He was also critical of the process by which arbitrators are selected, which, he noted accurately, is likely to involve considerations other than competence. Judge Hays argued that the parties in fact choose not on the basis of their confidence in the judgment of the arbitrator but because “their private intelligence indicates that the arbitrator will decide the issue in a way favorable to them.” My frequent conversations about arbitration with company lawyers and union officials bear this out. The most controversial of Judge Hays’s criticisms had to do with the impact of the selection process on the performance of arbitrators. In order to be regularly selected, an arbitrator must be acceptable to both sides. Judge Hays argued that arbitrators often decide cases and write opinions with a view to not unduly offending either labor or management so as to maintain their acceptability with both instead of deciding with the necessary judicial impartiality. This criticism is often made by management-side labor lawyers and union officials who complain that too many arbitrators tend to “split the baby down the middle,” giving a little bit to each side in order to maintain acceptability. Judge Hays also claimed that many arbitrators are not well qualified. Like Dean Shulman, he urged that judicial enforcement of arbitral decisions be denied. He suggested that if either of the parties refuses to comply with a decision, courts should be willing to hear the case de novo. If special expertise in labor matters is thought desirable, he suggested a system of industrial courts.17

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Many of the Court’s early post-Trilogy opinions dealt with the relationship between the duty to bargain and the obligation to arbitrate. In John Wiley & Sons, Inc. v. Livingston,18 the Supreme Court reasserted the policy of the Trilogy favoring arbitrability despite the merger of the employer with another. In that case, the employer, Interscience Publishers, Inc., which was a party to a collective bargaining agreement, was absorbed by a larger, nonunion employer, John Wiley & Sons, Inc. The sales agreement did not contain a provision making the collective bargaining agreement binding on the successors of Interscience. Although John Wiley was not a party to the collective bargaining agreement, the Court found that it was bound by the arbitration provisions. The decision was based on “the central role of arbitration in effectuating national labor policy”: It would derogate from the “federal policy of settling disputes by arbitration, if a change in the corporate structure or ownership of a business enterprise had the automatic consequence of removing a duty to arbitrate previously established”; this is so as much in cases like the present, where the contracting employer disappears into another by merger, as in those in which one owner replaces another but the business entity remains the same.19 The Court admitted that it had in this context abandoned traditional contract notions: While the principles of law governing ordinary contracts would not bind to a contract an unconsenting successor to a contracting party, a collective bargaining agreement is not an ordinary contract. Therefore, although the duty to arbitrate, as we have said . . . must be founded on a contract, the impressive policy considerations favoring arbitration are not wholly overborne by the fact that Wiley did not sign the contract being construed.20 Once again what the Court had hailed as a private system of justice established and administered by the parties became a mandatory

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obligation imposed on a party that never agreed to use it. The holding was a broad one, although the Court recognized that there might be circumstances “in which the lack of any substantial continuity of identity in the business enterprise before and after a change would make a duty to arbitrate something imposed from without, not reasonably to be found in the particular bargaining agreement and the act of the parties involved.”21 In Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union,22 the Court held that the duty to arbitrate survived both the closing of the enterprise and the termination of the agreement. The Nolde decision makes clear something that was implicit in John Wiley, that the obligation to arbitrate might continue even where the agreement had expired. The Court in Nolde stated that so long as the dispute concerned construction of the expired contract, the “presumption favoring arbitrality” continued unless “negated expressly or by clear implication.”23 The Court, by separating out the arbitration clause from the contract, inevitably raised but did not answer questions about the scope of the arbitrator’s authority and the standards to be used. Does the arbitrator have the authority to determine that certain obligations that arose under the now-expired agreement are binding on the successor even though the basic agreement is not? If so, does he or she have authority to rule that the successorship clause normally contained in collective agreements applies? And by what standards does an arbitrator, whose authority is typically limited to “interpreting” the agreement, pick and choose among the clauses? If the arbitrator does not apply the agreement, does he or she determine which working standards must remain in force prior to bargaining to impasse under the doctrine of exclusivity? One difficulty in answering any of these questions is that the arbitrator’s expertise, experience, and authority are all centered on interpreting the agreement, which is the one task that is apparently unavailable since there is no agreement to interpret. The successorship cases, with all their complex changes and qualifications, reveal how invested the court had become in extending the policy favoring arbitration that it had developed on its own and regularly attributed to Congress. It is noteworthy that over a short

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period of time—roughly ten years—the Court dealt with the relatively unimportant policy of postcontract arbitral rights in four opinions and decided no cases on the far more significant issues of union organizing. It is also noteworthy that the Court was willing to ignore the policy of free collective bargaining to remedy refusals to arbitrate, something it was unwilling to do to remedy refusals to bargain in good faith. The most significant post-Trilogy development of the policy favoring arbitration concerned the use of arbitration to determine statutory rights in addition to contract rights. Grievances under collective agreements will often be based on facts that could also be the basis of a legal claim. Most commonly they may implicate issues under the NLRA or the laws prohibiting discrimination based on race or gender. The arbitrator’s decision in such cases will typically involve a conclusion that the law has or has not been violated. If an arbitrator finds that discipline or discharge of an employee did not constitute unlawful discrimination, should that conclusion be binding on the EEOC and the courts? In the early days immediately after the Trilogy, with the passage of the 1964 Civil Rights Act, arbitrators in print and at meetings of the National Academy of Arbitrators24 debated the question of what their role was when the contract and the law seemed to be in conflict. Many different points of view were expressed. Most arbitrators took the position that since arbitrators were hired to interpret contracts and since their expertise often did not include legal interpretation, they should avoid the law and interpret the agreement. Professor Meltzer stated the majority view of arbitrators, adding a note of appropriate modesty to the Court’s fulsome praise of arbitral competence: There is, moreover, no reason to credit arbitrators with any competence, let alone any special expertise, with respect to the law, as distinguished from the agreement. A good many arbitrators lack any legal training at all, and even lawyer-arbitrators do not necessarily hold themselves out as knowledgeable about the broad range of statutory and administrative materials that may be relevant in labor. . . . Arbitrators should in general accord . . . respect

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to the agreement that is the source of their authority and should leave to the courts or other official tribunals the determination of whether the agreement contravenes a higher law. Otherwise, arbitrators would be deciding issues that go beyond not only the submission agreement but also arbitral competence. Arbitrators would, moreover, be doing so within a procedural framework different from that applicable to official tribunals. The limited judicial review appropriate for arbitral interpretations of the agreement would be wholly inappropriate.25 The Court seemed to be paying attention. In Alexander v. Gardner Denver,26 its first opinion on the impact of arbitrator decisions on legal rights, the Supreme Court held that an arbitral opinion holding that an employee was not discriminated against was not binding on the Courts and that the grievant could file suit under Title VII. The Court, like Professor Meltzer and most academic arbitrators, stressed the fact that arbitrators were not hired to interpret the law and that the arbitral process was not well suited for this purpose. Justice Powell, who authored the opinion, stressed the limited nature of the arbitrator’s jurisdiction. As the proctor of the bargain, the arbitrator’s task is to effectuate the intent of the parties. His source of authority is the collectivebargaining agreement, and he must interpret and apply that agreement in accordance with the “industrial common law of the shop” and the various needs and desires of the parties. The arbitrator, however, has no general authority to invoke public laws that conflict with the bargain between the parties: Moreover, the fact finding process in arbitration usually is not equivalent to judicial fact finding. The record of the arbitration proceedings is not as complete; the usual rules of evidence do not apply; and rights and procedures common to civil trials, are often severely limited or unavailable.27 The Court applied this same reasoning to a case raising Fair Labor Standards Act issues in Barentine v. Arkansas-Best Freight

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System.28 Writing for the Court, Justice Brennan pointed out that arbitration was not a good vehicle for determining statutory rights: Because the arbitrator is required to effectuate the intent of the parties, rather than to enforce the statute, he may issue a ruling that is inimical to the public policies underlying the FLSA, thus depriving an employee of protected statutory rights. Furthermore, not only are arbitral procedures less protective of individual statutory rights than are judicial procedures, but also arbitrators very often are powerless to grant the aggrieved employees as broad a range of relief.29

THE INCREASING SCOPE OF THE FEDERAL ARBITRATION ACT

While the policy favoring arbitration under collective agreements was being developed under Section 301, largely with the approval of both labor and management, a complementary policy favoring arbitration clauses in commercial and employment contracts was announced and applied in a variety of circumstances under the authority of the Federal Arbitration Act (FAA).30 Congress passed the FAA in 1925. It provides that arbitration clauses “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” The Act was not immediately controversial and was rarely used in litigation; by 1959, thirty-four years after its passage, it had been cited only five times in state court cases. For a long time it was thought to be a procedural rule for federal courts and not binding upon state courts. But in the 1980s a series of Supreme Court cases gave the FAA increasing force, holding it to be substantive in creating a federal policy favoring arbitration that was binding on state courts and overrode inconsistent state legislation. The broad new policy was enforced in an employment context in Perry v. Thomas.31 Thomas brought suit in California Superior Court against his former employer, alleging breach of contract and related causes of action arising from a dispute over commissions on securities sales. The defendant sought a stay pending arbitration on the

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basis of a provision in a form signed by Thomas in connection with his employment application, whereby he agreed to arbitrate any dispute with his employer. Thomas opposed arbitration on the ground that his suit was authorized by California Labor Code Section 229, which provided that wage collection actions could be maintained without regard to the existence of any private agreement to arbitrate. The Supreme Court held that the California Code provision was invalidated by the FAA. The Federal Arbitration Act . . . embodies Congress’ intent to provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause. Its general applicability reflects that “[t]he preeminent concern of Congress in passing the Act was to enforce private agreements into which parties had entered. . . . We have accordingly held that these agreements must be “rigorously enforce[d].” . . . This clear federal policy places § 2 of the Act in unmistakable conflict with California’s § 229 requirement that litigants be provided a judicial forum for resolving wage disputes. Therefore, under the Supremacy Clause, the state statute must give way.32 In Mitsubishi Motors v. Soler Chrysler–Plymouth, Inc.,33 Justice Blackmun announced that the Court would look with favor on agreements to arbitrate claims of violation of federal rights generally, whether contained in collective agreements or individual contracts. “The old judicial hostility to arbitration” has been steadily eroded. . . . The erosion intensified in our most recent decisions upholding agreements to arbitrate federal claims. . . . [Q]uestions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration. By agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits . . . to their resolution in an arbitral, rather than a judicial, forum . . . and we are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the

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development of arbitration as an alternative means of dispute resolution.34 While the Court sought to combine its treatment of labor arbitration and its broad interpretation of the FAA as part of a single pro-arbitration policy, in fact the two areas are fundamentally different. The labor arbitration system is designed to give equal voice and authority to management and unions. They jointly bargain for and agree to the terms of the agreement that is the authoritative source on which the arbitrator rules. They play equal roles in selecting the arbitrator, and the economics of the process ensures that arbitrators will attempt to please both sides. The process requires of arbitrators only a basic understanding of the collective bargaining process. From its earliest days, labor arbitrators were selected from a pool of decision makers familiar with collective bargaining whose credentials suggested neutrality between labor and management. In FAA arbitrations, the process is typically loaded in favor of employers and large corporations. It is they who draw up the document authorizing arbitration, and they can structure the process in ways that give them advantages. There is little assurance that the arbitrators will be knowledgeable about the issues on which they will rule. Nevertheless, the Supreme Court quickly enforced agreements to replace adjudication and special agency jurisdiction with arbitration in complex areas of federal law. Agreements to arbitrate were upheld under the SEC, civil RICO, and antitrust laws. In none of these cases did the Court seriously address the issue of arbitral competence. It was merely assumed as an aspect of the federal policy favoring arbitration. In Gilmer v. Interstate Johnson Lane Corp.,35 the Court upheld under the FAA a clause mandating arbitration of an age discrimination claim. The clause was contained in the standard job application composed by the company and signed by the plaintiff in order for him to be considered for employment. Attaching a promise to arbitrate under terms proposed by the employer has become a standard part of formal employment contracts in the nonunion private sector.

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Justice White brushed aside the claim that enforcing the arbitration clause undercut the plaintiff ’s statutory rights under the Age Discrimination in Employment Act (ADEA): There is no inconsistency between the important social policies furthered by the ADEA[36] and enforcing agreements to arbitrate age discrimination claims. While arbitration focuses on specific disputes between the parties involved, so does judicial resolution of claims, yet both can further broader social purposes. Various other laws, including . . . securities laws and the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), are designed to advance important public policies, but claims under them are appropriate for arbitration. Gilmer’s challenges to the adequacy of arbitration procedures are insufficient to preclude arbitration. This Court declines to indulge his speculation that the parties and the arbitral body will not retain competent, conscientious, and impartial arbitrators, especially when both the NYSE rules and the FAA protect against biased panels.37 Gilmer also argued that “there often will be unequal bargaining power between employers and employees.” But Justice White quickly disposed of this argument. “Mere inequality in bargaining power, however, is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context.”38 The use of the word “never” makes the statement difficult to object to. But in the labor context it should be a major factor with statutes such as the FLSA, the antidiscrimination acts, and the NLRA, all of which are meant to overcome bargaining inequality. It is true that the labor arbitration system has been a significant success. It fosters quick and mutually acceptable dispute resolution. It is a system that permits workers to challenge managerial decisions supported by an advocate. But the success of labor arbitration is significantly based on its being part of the collective bargaining process. Arbitration as the product of employer dictate or of judicial policy is unlikely to have the same elements of fairness.

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ARBITRATION OF COMPLEX LEGAL ISSUES

In the aftermath of Gilmer, employers generally began to include arbitration clauses in employment contracts. Many of the clauses insisted that the employee bring his complaint to arbitration on an individual and not a class basis. Putting the burden on individual workers to finance their own claim threatened to severely limit the enforcement of employee rights under discrimination statutes and the Fair Labor Standard Act. Several perceptive commentators saw this new embrace of mandated arbitration as a threat to basic employee rights. Professor Joseph Grodin (an experienced arbitrator and judge) argued that mandatory arbitration clauses should not be held legal in employment contracts. He pointed out that “problems of institutional bias are likely to persist even in the face of standard procedures for arbitral selection,” and that “adopting meaningful and enforceable standards with respect to such matters as arbitral selection and discovery is likely to prove awkward for courts without guidance through legislation or administrative rule making.”39 The Supreme Court, however, continued to expand the scope of arbitration and the reach of the FAA. In 14 Penn Plaza v. Pyett,40 the Court held that the union could in a collective bargaining agreement require an employee to arbitrate an age discrimination claim: The NLRA provided the Union and the RAB with statutory authority to collectively bargain for arbitration of workplace discrimination claims, and Congress did not terminate that authority with respect to federal age-discrimination claims in the ADEA. Accordingly, there is no legal basis for the Court to strike down the arbitration clause in this CBA, . . . which clearly and unmistakably requires respondents to arbitrate the agediscrimination claims at issue in this appeal. Congress has chosen to allow arbitration of ADEA claims. The Judiciary must respect that choice.41 While declining to overrule Alexander v. Gardner Denver, Justice Thomas, speaking for the Court, limited its scope and took issue with

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its suspicion of arbitration as a vehicle for enforcing statutory rights. “The Gardner-Denver line of cases included broad dicta that were highly critical of the use of arbitration for the vindication of statutory antidiscrimination rights. That skepticism, however, rested on a misconceived view of arbitration that this Court has since abandoned.”42 Justice Thomas refuted the Court’s statements in Gardner Denver that arbitration was a poor forum for the effectuation of statutory rights by simply declaring that the conclusion had been rejected and pointing to other cases in which the Court had, with no evidence, assumed the competence of arbitrators to deal with statutory claims. He further argued that “Gardner-Denver mistakenly suggested” that certain features of arbitration made it a forum “well suited to the resolution of contractual disputes,” but “a comparatively inappropriate forum for the final resolution of rights created by Title VII.”43 He concluded that “[t]hese misconceptions have been corrected.” For example, the Court has “recognized that arbitral tribunals are readily capable of handling the factual and legal complexities of antitrust claims, notwithstanding the absence of judicial instruction and supervision” and that “there is no reason to assume at the outset that arbitrators will not follow the law.”44 It is noteworthy that, while arbitrators were expressing unease with the use of arbitration to enforce statutory rights and their own competence to deal with complex factual and legal issues, the Supreme Court simply assumed arbitral competence and approved clauses requiring parties to arbitrate statutory claims. Nor has the Court addressed the issue of arbitral self-interest as a limiting factor. Once again the Court has created a “judicial fact,” that is, the ability of arbitration and arbitrators to deal effectively with legal issues. The fact is established by citation to other cases that stated the same but with almost no analysis. It is almost impossible to find empirical support for this general conclusion, and the claim is singularly lacking from discussions at the meetings of the National Academy of Arbitration, where the issue of how to address questions of law in handling grievances has been vigorously debated. Despite the Court’s newly found confidence in arbitration to vindicate legal rights, the fact is that arbitration is generally a poor forum

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for dealing with difficult legal issues, far inferior to agency or court adjudication, which it supplants, even assuming an impartial, legally competent arbitrator. Arbitrators in the great majority of cases do not have the staff or the time to explore difficult issues. There are no established rules of procedure and no established precedent by which decisions may be predicted. As one plaintiff ’s FLSA lawyer told me, “We have had thirty arbitrations in the past year and thirty different rules of procedure”—in short, no rule of law. Agencies have lawyers specifically trained in the intricacies of the law they are established to enforce. They have established procedures, as do judges, who have clerks to help them research difficult issues. Arbitrators are often pressed for time and often dealing with unfamiliar issues. And taking the time to explore a difficult or complex issue will raise the costs of the arbitration, which in turn might affect the arbitrator’s acceptability to the party or parties who pay the arbitrator’s fee. Arbitrators’ decisions are not subject to review even when the arbitrator misstates the law. This is true because, as the Court stated in its Enterprise decision dealing with the enforcement of arbitral awards, “The refusal of courts to review the merits of an arbitration award is the proper approach.” The position of an employee with respect to arbitration is in stark contrast to his or her position with regard to an agency such as the NLRB. The agency will inform the employee whether he or she has a case. If the issue is complex, it will be considered by specialists. If there are factual issues, the agency will investigate. If the case goes to hearing, the agency will provide a lawyer. If the agency supports the employee, it will handle an appeal. All of this is at no cost to the worker.

ARBITRATION AND ADHESION CLAUSES

One of the most troublesome aspects of the Court’s routine acceptance of arbitration clauses is its willingness to permit employers to include class action waivers and other self-serving conditions in arbitration clauses. Clauses requiring employees to bring cases before

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arbitrators on an individual basis have the potential to prevent the enforcement of statutory rights and to undo the basic structure of our labor laws developed during the 1930s when Congress passed the National Labor Relations Act, the Norris-LaGuardia Act, and the Fair Labor Standards Act. Both the NLRA and the Norris-LaGuardia Act were intended to give workers the power to act together to overcome the “inequality of bargaining power between employees who do not possess full freedom of association and employers who are organized in the corporate and other forms.” The first of these statutes, the Norris-LaGuardia Act, specified in Section 2 that workers should be free to engage in “concerted activities,” and Section 3 provided,“Any . . . promise in conflict with the public policy declared in Section 2 . . . shall not be enforceable.” Under the Fair Labor Standards Act (1938), employers are required to pay workers a set minimum wage and overtime for more than forty hours in a workweek. Each of these Depression-era statutes recognized that unfettered free enterprise could work contrary to the best interests of workers. Enforcement of the Fair Labor Standards Act for low-wage workers would be impossible without the mechanism of the class action because the sums involved would otherwise in most cases be so low as to preclude the worker from obtaining legal help.45 But the ability of FLSA plaintiffs in the future to band together to make the Act effective has been put into serious doubt by three Supreme Court decisions since 2000 dealing with the Federal Arbitration Act, which under the Court’s decisions has emerged as a jurisprudential juggernaut capable of overriding the policies of basic labor legislation. The first of these cases, Stolt-Nielsen S.A. v. AnimalFeeds International Corp.,46 involved the construction of a general arbitration clause that did not specifically mention class actions. A panel of arbitrators construed the clause to authorize a class-wide action. Its ruling was affirmed by the Court of Appeals for the Second Circuit but reversed by the Supreme Court, which somehow found a governing principle in the FAA: “A party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so. In this case, however, the arbitration panel imposed class arbitration even though the parties concurred that they had reached

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‘no agreement’ on that issue.” The Court did not return the case to the arbitrator for a more specific determination. It finally interpreted the agreement itself, concluding that “[t]here can be only one possible outcome on the facts before us”: “the parties” “cannot be compelled” to “participate in a class action.”47 The Court’s opinion took arbitration experts by surprise. For many years arbitrators had been encouraged by the Supreme Court to interpret both collective and adhesive agreements to reflect notions of fair play and administrative convenience. But in its Stolt-Nielsen opinion, the Court, applying a very different standard, was unwilling to accept an arbitrator’s interpretation of an agreement without specific contractual language authorizing class-wide relief. The opinion highlighted a tension present in the Enterprise opinion, the third of the Steelworkers Trilogy, which dealt with the enforcement of arbitral awards. In one paragraph the Court announced that “refusal of courts to review the merits of an arbitration award . . . is the proper approach. He is to bring his informed judgment to bear in order to reach a fair solution to a problem.” Following this approach would have justified accepting the arbitrator’s conclusion of the need for a class action. And it is this paragraph that has guided judicial review of arbitral decisions generally, by the Supreme Court and the courts of appeals, since the Trilogy. But the Court concludes the next paragraph by warning that the “award is legitimate only so long as it draws its essence from the collective bargaining agreement.” And Justice Alito concluded that the arbitration panel was not attempting to interpret the agreement but had instead imposed its own policy choice and thus exceeded its powers. The use of the essence doctrine might possibly have signaled a more stringent standard of review of arbitral decisions, although Justice Alito went out of his way to stress the breadth of the arbitrator’s normal discretion. It is probably the case that the decision primarily reflected the majority’s dislike of class actions. As Alan Scott Rau has stated, It would really be necessary to invest a good deal of time and effort before being able to identify cases—which in the end amount to a trivial number—in which the Supreme Court has

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been willing to mandate or approve the annulment of an arbitral award. (And before now these have been strictly outliers, grounded either on the lack of any agreement at all, or on some impropriety in the composition of the arbitral tribunal.) But then we come to Stolt-Nielsen: It can hardly be accidental that the spectre of class relief in arbitration is just about the only feature of the arbitration process that has been anathema to the business community—or that the rare decision restrictive of arbitral power is, wonder of wonders, one in which a businessoriented court has managed more or less to relieve it of any such anxiety.48 The Supreme Court’s dislike of class actions and its concern for the interests of business enterprises were revealed even more clearly in AT&T Mobility LLC v. Concepcion.49 In that case, the plaintiffs sued AT&T as part of a class action for fraud. The contract they had signed with AT&T provided that all disputes between the parties were to be arbitrated but that any claims must be brought in the parties’“individual capacit[ies], and not as . . . plaintiff[s] or class member[s] in any purported class or representative proceeding.” The contract was entered into in California. The federal district court in which the case was brought refused to enforce the arbitration clause on the grounds that it was unconscionable under California law. The Court of Appeals for the Ninth Circuit affirmed. Both the district court and the Ninth Circuit found the arbitration clause invalid under California law. Class action waivers in California are governed by the Discover Bank rule,50 according to which they are unconscionable when they are found in a consumer contract of adhesion in a setting in which disputes between the contracting parties predictably involve small amounts of damages, and when it is alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money The Supreme Court held that the California rule of unconscionability was preempted by the Federal Arbitration Act. Upholding a contract deemed unconscionable under California law required something of a stretch, even for Justice Scalia, who wrote

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the majority opinion, since the Arbitration Act provides that arbitration agreements may be unenforceable “upon such grounds as exist at law or in equity for the revocation of any contract.” Unconscionability would seem to be precisely the sort of rule that the Act permits states to apply. But the Court majority concluded that the California rule unduly conflicted with the fundamental policy of the Arbitration Act “to ensure the enforcement of arbitration agreements according to their terms.” “Requiring the availability of class-wide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.”51 Much of the majority opinion is devoted to demonstrating that classwide arbitration is an undesirable process and that most arbitrators are not competent to preside over a class action. Justice Scalia’s expressed concern with the problem of finding a competent arbitrator is a significant departure from other Court precedent and opinions that have brushed off concerns with arbitral competence in complex legal areas such as antitrust and employment discrimination and civil RICO. The Court’s opinion cites no evidence of incompetence, and the longer process in class arbitrations is compared only with bilateral arbitration—as the dissent pointed out—and not with class actions in court. The employer-drafted arbitration clauses that Justice Scalia vindicates are likely to be streamlined and efficient to the extent that they strip plaintiffs of procedural rights and allow corporations to craft procedures more to their liking. Justice Scalia does not discuss whether they are likely to achieve justice for consumers or workers or whether they utterly restrict the remedial schemes that Congress or state statutes intended. The lower court opinions that Justice Scalia overruled in the Concepcion case permitted class actions presided over by a judge and not by an arbitrator. He does not address the similarities and differences between the two. Most of the problems that he associates with arbitral class actions are also problems when a judge presides, which suggests that his opposition is to class actions, however they are adjudicated. Employers aware of the decision are busy creating clauses limiting class actions and resort to government agencies and imposing other requirements on the arbitration process.

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To those concerned with the rights of employees, the opinion is deeply disturbing. Justice Scalia states the purpose of the Arbitration Act as “to ensure the enforcement of arbitration agreements according to their terms.” This formulation enshrines employer dictates as supreme and strikes any counterbalancing state-limiting doctrine such as unconscionability, which under Section 2 of the FAA had previously been applicable. Thus, even rules that come within the terms of Section 2’s “grounds as exist at law or in equity for the revocation of any contract” are almost certain to be inconsistent with the arbitration clauses yet to be written by corporations in increasingly potent adhesive contracts, set free by this opinion. Justice Scalia read the Arbitration Act as a sanctification of adhesion contracts, which he regularly attributes to “the parties” even though one party had no voice in its framing. Although the Discover rule was limited to adhesion contracts, Justice Scalia pointed out that “the times in which consumer contracts were anything other than adhesive are long past.”52 Apparently Justice Scalia considers the ubiquity of adhesion contracts as a reason for permitting sellers and undoubtedly employers to tailor them to their own desires. But their ubiquity should more be looked at as a reason to limit the ability of the framer to push the limits of its bargaining power. By treating contracts of adhesion as representing the desire of “the parties” and by interpreting the Arbitration Act to insist on following their terms—no matter what policies Congress or state legislatures have enacted—Justice Scalia has made a broad grant of power to employers, the limits of which remain unknown. The Concepcion decision suggests that any employer-imposed procedures will be enforced as expressing the will of “the parties.” Currently companies lace arbitration agreements with clauses that shorten statutes of limitation, limit remedies, bar joinder, and set fees for the complainant. There is no suggestion of a limiting principle anywhere in Concepcion. Potential limits on the reach of the Concepcion decision can be found in both the NLRA and the Norris-LaGuardia anti-injunction act. Section 7 of the NLRA states that employees “have the right . . . to engage in . . . concerted activity for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) of the Act

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makes it an unfair labor practice for an employer to “interfere with, restrain, or coerce employee in the exercise of the rights guaranteed under Section 7.” Section 3 of the Norris-LaGuardia Act provides that any promise inconsistent with the right to engage in “concerted activity for the purpose of collective bargaining or other mutual aid . . . is hereby declared to be contrary to the public policy of the United States shall not be enforceable in any court of the United States.” In D. R. Horton Inc.,53 the Board, in a persuasive, carefully written opinion, held that requiring workers to sign class waivers as a condition of employment was a violation of Section 8(a)(1) of the NLRA. The Board began by pointing out that combining for purposes of resolving common grievances was protected activity under Section 7. It is well settled that “mutual aid or protection” includes employees’ efforts to “improve terms and conditions of employment or otherwise improve their lot as employees through . . . resort to arbitration.” The Board opinion noted that the Supreme Court had so stated. “No one doubts that the processing of a grievance in such a manner is concerted activity within the meaning of § 7.” Thus, “employees who join together to bring employment-related claims on a class-wide or collective basis in court or before an arbitrator are exercising rights protected by Section 7 of the NLRA.” The Board went on to state something that seems abundantly obvious: employees are both more likely to assert their legal rights and also more likely to do so effectively if they can do so collectively. And it concluded that requiring employees to give up the right to bring class actions violates the NLRA: These forms of collective efforts to redress workplace wrongs or improve workplace conditions are at the core of what Congress intended to protect by adopting the broad language of Section 7. Such conduct is not peripheral but central to the Act’s purposes. After all, if the Respondent’s employees struck in order to induce the Respondent to comply with the FLSA, that form of concerted activity would clearly have been protected. . . . To hold otherwise, the Supreme Court recognized in Eastex, “could

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‘frustrate the policy of the Act to protect the right of workers to act together to better their working conditions.’”54 There is very little in the opinion that does not follow directly from the central purposes of the National Labor Relations Act. And surely if there is a conflict between the NLRA and the FAA, the NLRA must prevail. It was passed after the FAA and was understood to establish basic labor relations policy for the nation, while the FAA, for many years obscure and ignored, had the limited goal of overcoming judicial hostility to arbitration. Historically, the role of the Board in determining the scope and meaning of Section 7 was central. As stated by Justice Frankfurter, “It is essential to the administration of the Act that these determinations [the reach of Section 7] be left in the first instance to the National Labor Relations Board.”55 Yet the Court of Appeals for the Fifth Circuit refused to enforce the Board’s decision in the Horton case.56 It argued that the Board focused too exclusively on the policies of the NLRA and failed to give adequate recognition to the equally important policy of the Federal Arbitration Act: The Federal Arbitration Act (“FAA”) has equal importance in our review. Case law under the FAA points us in a different direction than the course taken by the Board. As an initial matter, arbitration has been deemed not to deny a party any statutory right. Courts repeatedly have rejected litigants’ attempts to assert a statutory right that cannot be effectively vindicated through arbitration. To be clear, the Board did not say otherwise. It said the NLRA invalidates any bar to class arbitrations.57 The court concluded that the Board’s conclusion that the Arbitration Act had to yield to the policies of the NLRA was no different from the Discover Bank rule that the Supreme Court rejected in the Concepcion case. The NLRA did not seek to overturn or limit the FAA. “‘The Board has not been commissioned to effectuate the policies of the Labor Relations Act so single-mindedly that it may wholly ignore other and equally important Congressional objectives.’”58

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A detailed analysis of Concepcion leads to the conclusion that the Board’s rule does not fit within the FAA’s saving clause. . . . Like the statute in Concepcion, the Board’s interpretation prohibits class-action waivers. While the Board’s interpretation is facially neutral—requiring only that employees have access to collective procedures in an arbitral or judicial forum—the effect of this interpretation is to disfavor arbitration.59 The court opinion by Judge Southwick did not address the conflict between the FAA and the Norris-LaGuardia Act except to note that the latter was “outside the Board’s interpretive ambit” and that the Board’s reasoning was “unpersuasive.” Thus the Fifth Circuit opinion finds the policy of permitting employers to insist on arbitration clauses in their own favor to be of equal or greater legal significance than the central tenet of the NLRA that employees should be able to engage in concerted activity. Judge Southwick’s opinion carefully tracks the reasoning of the Concepcion opinion, and it is in line with other circuit court opinions. However, its conclusion and its reasoning are ultimately difficult to understand except as the creation of a new labor policy through the unlikely vehicle of a 1925 statute that was intended to be of limited application. Judge Southwick concludes that the FAA and the NLRA as interpreted by the Board are in tension. And since the Board’s interpretation does not fall within the FAA’s “saving clause,” and because the NLRA does not contain a congressional command exempting the statute from application of the FAA, the mutual arbitration agreement at issue in the case, must be enforced according to its terms. The conclusion that the NLRA must yield to the general policies of the FAA when it comes to defining the rights of employees is ultimately absurd. The NLRA has been the main vehicle for defining the rights of workers for over eighty years. Its passage and its amendments were major legislative accomplishments and understood to define public policy with regard to the rights of workers. Its basic premise was the right of workers to join collectively to achieve and enforce their rights. Any effort by employers to interfere with that

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general right was, according to the words of the statute, an unfair labor practice. The FAA was, by contrast, understood to be a procedural action to overcome the general reluctance of federal courts to enforce arbitration agreements. It was not at any point understood to alter the rights of workers. It is true that the Board, following the lead of the Supreme Court in the Steelworkers Trilogy, has recognized a national policy favoring arbitration of labor disputes. But that is a policy developed outside of the FAA and in recognition of the fact that in many industries management and labor have created a system that benefits both and in which both are essentially equal in voice and power. To the extent the Court might otherwise read the policy of the Federal Arbitration Act to permit waivers of the right to take joint action, that interpretation should yield to the public policy set forth in the two basic labor statutes protecting the right of workers to act together. In the field of industrial relations, the policy of the FAA to permit the parties to frame their own agreement can be expressed by permitting unions and employers to frame their own rules for the arbitration of agreements. It does not require the legitimation of the waiver of basic rights as a condition of employment. Despite the power of the Board’s reasoning in the Horton case, Judge Southwick correctly pointed out that “every one of our sister circuits to consider the issue has either suggested or expressly stated that they would not defer to the NLRB’s rationale, and held arbitration agreements containing class waivers enforceable.”60 District courts have done the same. Both circuit and district courts have applied the rule that in case of conflict, the FAA as interpreted must govern unless the competing statutes specifically state otherwise, which neither the NLRA, the Norris-LaGuardia Act, nor the FLSA does. As stated by Judge John J. Tharp, Jr., “Courts that do follow In re D.R. Horton fail to account for the fact that the FAA was reenacted after the NLRA. (‘Congress . . . reenacted the [FAA] in 1947— after passing the Norris-LaGuardia Act and reenacting the NLRA.’). Accordingly, this Court rejects the argument that an arbitration clause that waives FLSA collective litigation rights is void as a matter of law for violating the NLRA.”61

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In American Express v. Italian Colors Restaurant,62 the Court rejected a decision by the Second Circuit finding that a class-action waiver provision contained in a mandatory arbitration clause in a card acceptance agreement was unenforceable.63 The majority opinion by Justice Scalia affirmed the analytic scheme followed by the majority of courts in the aftermath of the Concepcion decision. This text [the FAA] reflects the overarching principle that arbitration is a matter of contract. And consistent with that text, courts must “rigorously enforce” arbitration agreements according to their terms, including terms that “specify with whom [the parties] choose to arbitrate their disputes,” and “the rules under which that arbitration will be conducted.” That holds true for claims that allege a violation of a federal statute, unless the FAA’s mandate has been “overridden by a contrary congressional command.”64 Thus the law dealing with the arbitration of labor rights as it has developed reveals the ability of the Supreme Court to shape the law according to its own vision of reality and its own underlying values. The Court’s vision is of a world in which arbitrators are capable of dealing with all legal issues, employing all procedures except class actions. It is a reality in which labor statutes that specifically reject the market and that prohibit employers from interfering with the right of employees to act together is made subordinate to a statute that was rarely applied for three decades and that does not purport to establish any policy other than the enforceability of arbitration agreements not otherwise unlawful or contrary to public policy. Justice Scalia has chosen to read the statute as having an “overarching principle” that the drafter may impose any terms it wishes, a policy shrewdly misstated by Justices Scalia and Alito with regard to class actions as the ability of the drafters of arbitration clauses to “specify with whom [the parties] choose to arbitrate their disputes.” Ignoring the misuse of the third-person plural (since employers alone determine on the use of arbitration under adhesion contracts), the issue is not the ability of the employer or corporation to choose

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with whom to arbitrate but its ability to use arbitration to deny workers and others the processes spelled out in statutes enacted for their benefit. The power of contract to overrule statutory rights harks back to an earlier era and reflects a new, unstated but powerfully effective policy of permitting the market through contract to govern labor relations. This new market-driven policy will be hailed by many of Justice Scalia’s former colleagues at the University of Chicago. It has been rightly deplored by those who believe in unions and collective action for workers.

CONCLUSION

The promise of the NLRA was to replace the contract-based labor market with collective bargaining as the mechanism for setting wages and working conditions. The change was not to happen automatically but was to follow upon the unionization of employees nationwide under the auspices of the NLRA. Widespread unionization was anticipated by both major companies and national unions. It was not uncommon for companies to voluntarily recognize the least militant of the unions competing for the allegiance of its employees. By the mid-1960s the vision of labor relations that had animated the framers of the NLRA seemed to be becoming reality. Collective bargaining had taken root in most major industries. It had achieved high wages and decent working conditions for millions of workers, and its results indirectly affected the wages of millions more, as nonunion employers paid a premium to remain nonunion. Collective agreements improved wages and benefits for employees. They also almost invariably included no-strike pledges by the union. Thus both sides had a motive to maintain their relationship once the initial agreement ended. The realization that once undertaken, collective bargaining was likely to be a long-term process gave the parties an incentive to work together, to seek long-term solutions to common problems. The most innovative and lasting of these solutions was the institution of labor arbitration, which replaced 189

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strikes, conflict, and formal litigation with a system of private rules and specially selected judges. Its successes were recognized by courts and scholars. The perceived success of labor arbitration encouraged many institutions, including universities, government agencies, and nonunion employers, to establish similar systems of private dispute resolution. Today, as a result of the loss of union jobs and the failure to organize in expanding areas, only a small percentage of workers are unionized, most in the public sector. Collective bargaining is no longer the bulwark against economic inequality or the source of creative approaches to dispute resolution that it once was. The NLRB, the agency created to effectuate the policies of the Act, has come to play an increasingly minor role in shaping the relations between employers, workers, and unions. Its actions are monitored by hostile politicians, and its decisions are regularly overturned by the courts. Many factors have played a role in the demise of the labor movement, including management hostility, poor leadership, globalization, and structural changes in the labor market. Decisions by the Supreme Court have also played a significant role in reducing the power of organized labor and undercutting the policies of the NLRA. To promote collective bargaining, Court opinions should be consistent with four basic guidelines: 1. Promote and protect the right of workers to organize for the purposes of collective bargaining. 2. Prevent employers from using their economic power to inhibit free choice by workers. 3. Leave the parties free to negotiate their own agreements. 4. Recognize and protect the right to strike.

In most of its key opinions, as I have previously shown, the Court has ignored these guidelines and has instead applied rules limiting the ability of workers to unionize and bargain collectively: rules that stem from, and move toward, the traditional labor market—the ancient law of master and servant.

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The process of rendering the NLRA ineffective began in the early days of the Wagner Act, when the Court, by way of dictum, declared that not only could employers hire replacement workers to do the work of strikers, but they were entitled to give employment rights superior to those of strikers, without regard to seniority or business needs. While the Court did not justify its dictum, its announcement made clear that it was opposed to granting workers the full range of powers inherent in the broad language and sweeping policies of the NLRA. What is most distressing is that the Court has regularly reaffirmed this dictum without examining either the need for it or how it can be reconciled with the oft-stated policy of insulating job rights from union activity. The Court has also played a major role in helping employers to resist union organizing efforts. In its 1965 opinion in NLRB v Babcock and Wilcox,1 the Court artificially separated the right of employees to join unions from the union’s ability to persuade them to do so. Then in its 1992 opinion in Lechmere, Inc. v. NLRB,2 the Court extended this distinction when it rejected the Board’s effort to balance “the degree of impairment of the Section 7 right [to organize] if access should be denied against the degree of impairment of the private property right if access should be granted.” Curiously, the Court’s current great concern for free speech and open discussion of important ideas has made only a limited appearance in labor law. It has been applied with increasing vigor to protect antiunion employees from having to contribute to the cost of the benefits they receive because of collective bargaining. But the Court has thus far failed to extend the free speech concerns that it has extended to corporations and bigots to union boycotts and recognition picketing. Indeed, despite ample precedent for treating picketing as a form of free speech in other contexts, the Court has continued to describe picketing as a coercive activity when employed by unions to appeal either to customers or to other workers for support. To further limit union economic power, the Court has narrowed the broad language of Section 7 by excluding from its coverage peaceful tactics that the Court, with no basis in the statutory language,

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decides is “disloyal” or “indefensible”—concepts that are inconsistent with the language of Section 7 and that do not appear in the NLRA. Nowhere is the Court’s limited factual competence more apparent than in its opinions structuring the law’s relationship to arbitration. The Court’s initial effort to put the law behind the successful system of dispute resolution, developed through collective bargaining, seemed a positive development. But it was apparent from the first opinions that the Court misunderstood the nature of the process, the expertise of arbitrators, and the goals and understandings of the parties. The Court’s untutored enthusiasm for the process inevitably led to its transformation from a system of private ordering to a system by which basic rights were adjudicated through an inferior process. And the Court soon used its support for the process into a reason for limiting the right to strike.3 Most worrisome has been the Court’s unquestioning support of private contracts of adhesion under the Federal Arbitration Act. It seems likely that in a wide variety of situations employers will be permitted to use standard form contracts to limit employee rights and access to courts and agencies.4 In previous research I have helped to document the negative impact of Court decisions on the right of workers to unionize and the right to strike. In the 1970s together with Professors Goldberg, Brett, and a team of students, I interviewed workers prior to and immediately after hotly contested NLRB elections. We were able to show how the Court’s rules concerning access aided employers to resist unionization. Across thirty-one elections we measured employee familiarity with the rival campaigns. We discovered that because they could conduct captive audience meetings and keep the union off their premises, employers had a measurable advantage in conveying their message to the employees, an advantage that led employees to vote against union representation. As we reported, In sum, when the employer can hold campaign meetings on working time and premises and the union cannot, the union is at a substantial disadvantage in achieving meaningful communication with employees, even when all other means of campaigning are taken into account. This disadvantage explains

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why company voters are less familiar than union voters with the union campaign; it also explains why union voters are as familiar with the company campaign as company voters. . . . [W]hen an employer uses company time and premises for antiunion campaigning and the union must campaign off company premises, the union is at a substantial disadvantage in communicating with the voters.5 Discussions with union organizers in recent years have convinced me that employers take greater advantage of their right to conduct “captive audience” meetings now than they did when we conducted our study. And they have learned to frame their arguments in terms of the Court’s decisions in other areas, such as the right to strike. For example, a common argument of employers is that “If I am forced to bargain with the union, I will resist making concessions. The union will be forced to take you out on strike, in which case I will have the right to permanently replace you.” The employer’s advantages have rendered the Board’s representation processes incapable of adequately measuring employee desire for unionization. In addition, the weakness of the duty to bargain and the absence of meaningful remedies mean that employers can frequently rid themselves of a union by simply refusing to come to an agreement. As one Steelworker organizer told me, “If you are successful, and you do win the election, then they will say anything to drag negotiations out for more than a year. In that year’s time, a lot of the folks that wanted the union are gonna get dissatisfied because they haven’t got a contract yet and quit the union, and then you can’t do anything.” The law provides no remedy for a union faced with an employer that is unwilling to sign an acceptable agreement. Successful contracts are achieved when employers are fearful of a strike. The effectiveness of collective bargaining is inevitably linked to the state of the strike weapon. But in most negotiations, the strike weapon is no longer the effective threat it once was. During the early years of the NLRA, although employers had the legal right to permanently replace striking workers, it was not a power frequently employed.6 Many reasons accounted for its disuse.

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Few employers wanted to retrain a new workforce. Like unions, many were disdainful of the work ethic of replacement workers. Many wanted to avoid dividing the workforce between strikers and “scabs.” And many wanted to avoid prolonged battle with a national union and its allies. Employers were aware that unions raised labor costs, but many understood that when relations were good, they also improved productivity and quality. However, in the late seventies and throughout the 1980s, many important companies changed the focus of their labor relations policy and adopted a strongly antiunion, low-wage strategy. The reasons for this are varied. Some were concerned that a high-wage, high-quality strategy was no longer economically feasible because of increased foreign competition. Many became convinced by the steadily proliferating apostles of market economics that unions improperly distorted the workings of the labor market. Some came to believe that in the age of the computer, experienced skilled workers were less crucial to success, and some lamentably and inevitably came to believe that it was executives who virtually on their own made enterprises profitable. In any case, resistance to unions and unionism grew more common and more fashionable among U.S. executives. A similar change was notable among management lawyers, fewer and fewer of whom claimed expertise based on their ability to work amicably with unions and more and more of whom claimed the ability to resist and defeat organized labor. Simultaneously, organized labor grew weaker in a variety of significant ways. Many of the manufacturing jobs in unionized industries were shipped abroad. Efforts to organize were increasingly resisted and defeated. As unions grew weaker, top executives, urged on by their labor relations advisers, began to see aggressive, no-quarter collective bargaining, possibly ending in strikes, as a technique by which management could regain some of the power it had earlier ceded to unions. The methodology of the new approach was simple. When a collective bargaining agreement expired, management would go on the offensive, demanding wage cuts and the power to make unilateral decisions with respect to matters previously covered by the agreement. If the union accepted management’s proposals, its power and the allegiance of its members would be severely reduced.

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If the union struck, the company would hire permanent replacements who would help it to win the strike and who would eventually, supported by disheartened former strikers, vote to decertify the union. True, such bargaining might be deemed in bad faith, but for reasons discussed earlier, there was little danger that the NLRB or the courts would interfere. In the 1990s I conducted a study of a strike by Local 14 of the Paperworkers Union, which represented workers at International Paper’s Androscoggin Mill in Jay, Maine, against the International Paper Company. The strike was in response to a series of demands for concessions made during a time of record profits—demands that no self-respecting union could accept. Almost immediately after the strike began, IP began hiring permanent replacements to take the jobs of the strikers. The workers at Jay conducted a powerful comprehensive and effective campaign, described by the online publication Mainebiz years later as follows: The strikers proved to be remarkably well-organized, dividing almost immediately into committees focused on everything from food supply to media outreach. Over the next several months, Local 14 would lead massive marches in Jay and around the country against IP, generate public and union support through a roving caravan of union members (including the burgeoning public speaker Samson), and launch an all-out war in the courts and press against IP’s environmental record.7 The union also held emotional meetings every Wednesday night that brought in speakers and supporters from all over the country and ended with the townspeople linking arms and singing “Solidarity Forever.” But after seventeen months of living on strike pay and watching replacement workers being driven across the picket line waving their paychecks, the strikers were forced to give up. Their capitulation was urged by the national union’s leadership, which could no longer afford to pay the small but crucial strike benefits ($55 per week) that it had previously paid to the workers.

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Although workers throughout Maine hailed the solidarity and toughness of the strikers, the loss of the strike made all of Maine’s unions reluctant to strike. According to Mainebiz, “Modern Maine labor leaders agree that unions around the state more often conceded to their companies’ demands after the Jay strike and other debilitating union losses.”8 A similar dynamic occurred at other locations in which management’s aggressive bargaining tactics were followed by strikes and the hiring of permanent replacements.9 As a result of the increased use of permanent replacements, the strike weapon is rarely used today, and unions often accept concessions rather than strike. In sum, the Supreme Court has played a major role in transforming the National Labor Relations Act from a law meant to empower workers to a law that helps to sustain the power of employers. When the law was first enacted, its drafters apparently assumed that the Court would be instructed in the realities of labor relations by the newly established NLRB and its presumed expertise. That has failed to happen, in part because the expertise of the Board is largely fictional. The Board has done little to acquire significant understanding; its doctrines have been relentlessly legalistic, its vision of employee behavior patronizing, and its opinions often more shaped by politics than by commitment to the goals of the Act. But even if its expertise were genuine, the Board’s opinions and policies would necessarily remain subordinate to the courts that review its opinions. For those who, like me, believe that a strong, democratic labor movement is the hallmark of decent society, the question has become, Is there any way that the law can be made once again supportive of the Act’s original goals? If the Democrats win the presidency and majorities in both houses of Congress in 2016, can we anticipate the gradual creation of a new, more liberal Supreme Court that would be able to undo the antiunion precedent of its predecessors? There is little reason to be optimistic. For example, even a more liberal Court, which is still years away at best, is unlikely to overturn the Mackay doctrine. The long existence of the doctrine, its acceptance by Court after Court, and the fact that it has survived attempts to

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overturn it by amendment all will make it a ward of stare decisis, safe from even liberal courts. It is also true that a liberal Court and a strongly prounion Court are not necessarily the same. Liberals more and more focus on other issues—among them, the environment, the rights of immigrants, and racial diversity. In this day and age, liberal judges are unlikely to see the U.S. labor movement as their primary cause. Nor is there much chance in the near future of the Court’s overturning the Lechmere decision to permit union organizers effective access to company premises. The Babcock & Wilcox decision dates back roughly sixty years; any amendment would likely be minor in view of the doctrine’s long life without amendment. And if the Court were to tamper with the rules of access, it seems most unlikely that it would undertake to give the union equal opportunity to meet with and address the company’s employees on company property during working hours. The employer would inevitably continue to have an advantage in delivering its message to the employees because of its traditional property rights. No doubt unions will continue to press for favorable legislation, and a Democratic president and Congress are likely to be sympathetic to their claims, which, for what it is worth, are likely to be supported by labor law scholars. Nevertheless, precedent from legislative efforts in previous terms where both the president and the Congress were Democratic makes clear that overturning basic antiunion precedents would be highly controversial and bitterly opposed by wealthy political patrons of both parties. Significant change will require a long, hard struggle and a president willing to make the issue a top priority. Organized labor has regularly proposed legislation to overcome both the hostility of the Court and the worst features of antilabor legislation. Labor’s activity has been constant but unsuccessful. Each time the Democrats have come to power in Congress, unions have made a major effort to amend the labor laws. Each time dating back to the 1948 effort to repeal Taft-Hartley, they have failed. It is not clear how valuable any of the union-supported legislation would have been if enacted. All the measures employed broad language, and none

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would have been immune to the Court’s ability to neuter and transform prounion legislation. I have reluctantly come to the conclusion that significant labor law reform is more likely to follow from than to cause a resurgence of the labor movement. I have argued elsewhere that restoring labor’s power requires that it once again take on the attributes of a people’s movement. Many in organized labor agree. They are working to achieve that result. May success crown their efforts.

NOTES

INTRODUCTION

1. 145 Mass. 111 (1842). The case arose when the Bootmakers Union compelled an employer to discharge an employee named Home for failing to pay a fine. The union had threatened that unless Home was discharged, the five members of the union would “walk out.” Home brought criminal charges against the union. In accordance with existing precedent, Hunt and other officials of the union were indicted, tried, and convicted for conspiracy in restraint of trade. Shaw made a step-by-step refutation of the conspiracy doctrine. He first concluded that the basic goal of the Bootmakers was legitimate. He then found that the means used were legitimate. “We cannot perceive, that it is criminal for men to agree together to exercise their own acknowledged rights, in such a manner as best to subserve their own interests.”Id. at 130. Having found both the union’s goal and its method lawful, the conclusion followed “that as the object would be lawful, and the means not unlawful, such an agreement could not be pronounced a criminal conspiracy.”Id. 2. “So a strike to get rid of a foreman because some of the employees disliked him; to compel an employer to pay a fine imposed by the union for breach of some promise; to compel an employer to hire more help than he wanted; to obtain the reinstatement of a discharged employee; to secure the discharge of nonunion employees; these and numerous other purposes have been held illegal.” Felix Frankfurter and Nathan Greene, The Labor Injunction 24(1930). 3. The ruling on a temporary injunction was made on the basis of affidavits presented by the employer. Often the defendant did not get to present evidence until a later hearing. Failure to obey an injunction was contempt of court punishable by imprisonment or harsh damages. 4. 158 U.S. 564 (1985). 5. Id. at 583. 199

200 NOTES TO PAGES 3–9

6. Id. at 595. 7. Id. at 598. 8. 208 U.S. 274 (1908). 9. The Sherman Act, 15 U.S.C. § 15, provided for injunctions to remedy violations and also specified that anyone injured by a violation could obtain damages up to three times the amount of the injury. 10. Loewe, 208 U.S. at 295. 11. 208 U.S. 161 (1908). 12. By which workers were required to promise not to join unions. 13. 208 U.S. at 174. 14. 245 U.S. 229 (1916). 15. Id. at 257. 16. 15 U.S.C. §§ 6, 20. 17. 254 U.S. 443 (1921). 18. Id. at 471. 19. Id. at 477. 20. 29 U.S.C. § 101. 21. Schecter Poultry Corp. v. United States, 295 U.S. 495 (1935). 22. NLRB v. Jones & Laughlin Steel Co., 301 U.S. 1 (1957). 23. National Labor Relations Act, ch. 372, 49 Stat. 449 (1958) (codified as amended at 29 U.S.C. §§ 151–169). 24. Free choice with respect to collective bargaining was established by Section 9(a) of the Act as a majoritarian rather than an individual concept. It has from the start provided that“[r]epresentatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes shall be the exclusive representatives of all the employees in such unit.” 25. Section 8(3) contained an important exception to the policy of preventing an employer from taking actions that supported unions by excluding from its coverage “an agreement with a labor organization . . . to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in section 9(a).” 26. San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244 (1959). 27. Mark Rahman, “Taft-Hartley and the Need for a Labor Party,” Socialist Appeal, November 14, 2011. 28. 61 U.S. Stat. 136 (1947). 29. Defined in Section 2(11)as “any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” 30. Joseph Shister, The Impact of the Taft-Hartley Act on Union Strength and Collective Bargaining, 11 Indus. & Lab. Rel. Rev. 339 (1957–1958). 31. Id. at 340. The inferences here drawn point to the conclusion that union growth would have been significantly greater during the past ten years if there

NOTES TO PAGES 10–17 201

had been no Taft-Hartley. How much greater cannot be said with any kind of quantitative precision, but greater enough to spell a meaningful difference in the size of the labor movement. 32. Benjamin Aaron, Amending the Taft-Hartley Act: A Decade of Frustration, 11 Indus. & Lab. Rel. Rev. 327, 330 (1957–1958). 33. Joseph Shade, The Problem of Union Corruption and the Labor-Management Reporting and Disclosure Act, 38 Tex. L. Rev. 468, 468–69 (1959–1960). 34. The resulting push for legislation to promote union democracy was bipartisan and included many Democrats who supported unions generally. Among them was Senator John Kennedy, who introduced legislation to regulate internal union affairs that was drafted in significant part by Harvard’s labor law professor Archibald Cox, a noted supporter of unions and collective bargaining. 35. Officially the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 519 (1959), the main goal of which was to mandate something akin to political democracy in the internal workings of labor unions. 36. In 1976 the Carter administration, led by Secretary of Labor Ray Marshall, proposed a major reform bill that would have added expanded labor rights and increased penalties for employer unfair labor practices. In the 1990s unions and their allies supported a bill to outlaw the hiring of permanent replacements to take the jobs of striking workers. In 2010 unions supported a bill to permit them to bypass the Board’s representation election process in securing recognition. 37. See Julius Getman and Stephen Goldberg, The Myth of Labor Board Expertise, 39 U. Chi. L. Rev. 681 (1972). 38. Most studies find that after controlling for individual, job, and labor market characteristics, the wages of union workers are in the range of 10 percent to 30 percent higher than the wages of nonunion workers. The wage premium is generally greater for less skilled, less educated, and younger workers and larger for private- than for public-sector workers. Union members generally receive better or more generous fringe benefits than similar nonunion workers. Job tenure tends to be greater and quit rates lower among unionized workers. Gerald Mayer, Union Membership Trends in the United States (2004). 39. The parties accepted arbitrator awards with such regularity that for many years the legal status of the award was not clear. 40. See Sumner H. Slichter, James J. Healy, and E. Robert Livernash, The Impact of Collective Bargaining on Management 627, 653 (1960).

1 THE COURT AND UNION ORGANIZING

1. NLRB v. Gissel Packing Co., 395 U.S. 575, 594 (1969). 2. 324 U.S. 793 (1945). 3. 351 U.S. 105 (1956). 4. More than 90 percent of the employees drove to work, and the parking lot in question was “reached only by a driveway 100 yards long which is entirely on company property excepting for a public right-of-way that extends 31 feet from

202 NOTES TO PAGES 17–21

the metal of the highway to the plant’s property.”Id. at 107. On the basis of these facts the Board found it practically impossible for union organizers to distribute leaflets safely to employees in cars as they entered or left the lot. 5. Id. at 112. 6. Id. at 113. 7. Id. at 112. 8. 357 U.S. 357 (1958). 9. Id. at 364. 10. 156 NLRB 1236, 1239 (1966). 11. 394 U.S. 759 (1969). 12. Id. at 767. 13. See Getman et al. v. NLRB, 450 F.2d 670 (D.C. Cir. 1971). 14. 291 NLRB 11(1988). 15. Id. at 14. 16. 295 NLRB 94 (1988). 17. The company was required to post a notice stating,“WE WILL NOT prohibit representatives of Local 919, United Food and Commercial Workers, AFLCIO (the Union) or any other labor organization, from distributing union literature to our employees in the parking lot adjacent to our store in Newington, Connecticut, nor will we attempt to cause them to be removed fromour parking lot for attempting to do so.”Id. at 94. 18. Lechmere, Inc. v. NLRB, 914 F.2d 313, 318 (1st Cir. 1990). 19. 502 U.S. 527 (1992). 20. Id. at 538. 21. Id. at 535. 22. Id. at 535, 540. 23. For example, in Sparks Nugget, Inc. v. NLRB, 968 F.2d 991 (9th Cir. 1992), Sparks and its union bargained for a new contract, but Sparks refused to concede on any of its demands; the collective bargaining process failed. Four months later, nonemployee union representatives picketed and distributed handbills. They were removed from the premises. Sparks was charged with unlawfully refusing to bargain in good faith with the union, in violation of Subsections 8(a)(5) and (1) of the NLRA, and with improperly barring the union from picketing and handbilling on its premises, in violation of Section 8(a)(1). The NLRB found Sparks had violated both sections of the Act. The court of appeals found that Sparks had violated Subsections 8(a)(5) and (1) of the NLRB. Looking at the totality of the parties’ conduct, Sparks’s “failure to compromise, the proposal of a contract that gave management total control of wages, seniority, and work rules, and the unwillingness to schedule long meetings, support the inference of bad faith.”Id. at 995. The court, however, did not find that Sparks had violated Section 8(a)(1) by excluding nonemployee organizers from distributing literature to customers on its property. The court relied onLechmere, Inc. v. NLRB, holding that “by its plain terms . . . the NLRA confers rights only on employees, not on unions or their non-employee organizers.”Id. at 995.

NOTES TO PAGES 21–25 203

24. Julius Getman, Stephen Goldberg, and Jeanne Herman, Union Representation Elections: Law and Reality 156–57 (1976). 25. As Tom Woodruff, a longtime SEIU organizer and Change to Win Federation official, explained to me during a telephone interview in 2010,“I actually did a little slide show at a presentation. I said now we’re getting ready to elect a president for 2008. Let’s assume this. Candidate A has a list of all the voters, names and addresses, Social Security numbers, everything about them, has it years in advance of the election. Candidate B gets a list thirty days before the election and half the addresses are wrong. Candidate A gets to appear in all the debates, but gets to decide when the debate is, gets to make an opening statement and a closing statement, and there are no questions allowed. And Candidate B can’t even appear in the debate.” 26. Wyman, 394 U.S. at 767. 27. Years ago when I taught at Yale, a small group of secretaries asked my advice on two questions: Should they unionize, and if so, which was the better union, the UAW or the Hotel and Restaurant Workers (HERE)? Yes to the first, I told them, and no doubt they would do better with the UAW. A few months later I asked about their decision. Yes to unionization, but they had decided to go with HERE. When I asked why, they told me that they preferred HERE’s organizers because they listened and did not lecture them as the UAW organizers did. They were right. 28. Section 8(a)(1)’s range is so great and its language so broad that a violation of any of the other subsections also violates Section 8(a)(1); it incorporates all the rights against employers. However, Congress added four other subsections to make clear that a variety of actions, once considered a basic right of employers, were no longer legal. 29. The Act did not impose limits on the right to strike. It was argued that existing criminal laws were adequate for this purpose. 30. 314 U.S. 469 (1941). 31. Id. at 476–77 (quoting International Ass’n of Machinists v. NLRB, 311 U.S. 72, 78 (1940)). 32. Id. at 479. 33. See Thomas Christiansen, Free Speech, Propaganda and the National Labor Relations Act, 38 N.Y.U. L. Rev. 243 (1967). The practice of regularly finding elements of coercion in employer statements was given further support by the prestige and eloquence of Judge Learned Hand, who addressed the issue in NLRB v. Federbush Co., 121 F.2d 954, 957 (2d Cir. 1941): Words are not pebbles in alien juxtaposition; they have only a communal existence; and not only does the meaning of each interpenetrate the other, but all in their aggregate take their purport from the setting in which they are used, of which the relation between the speaker and the hearer is perhaps the most important. What to an outsider will be no more than the vigorous presentation of a conviction, to an employee may be the manifestation of a determination which it is not safe to thwart. 34. 395 U.S. 575 (1969).

204 NOTES TO PAGES 25–34

35. 397 F.2d 157 (1st Cir. 1968). 36. Gissel, 395 U.S. at 588. 37. Id. at 617. 38. Id. at 618. 39. Quoting Sinclair, 397 F.2d at 160. 40. Gissel, 395 U.S. at 620. 41. Id. at 617. See also Hunt Oil Co., 157 NLRB 282 (1966); Don Swart Trucking Co., 154 NLRB 1345 (1965). 42. The answers we received about card signing almost exactly matched the records of the union organizer whom we interviewed. There were a variety of other checks as well. It is notable that 45 percent of the employees told us that they voted union, which was the exact percentage of union votes in the elections we studied. 43. As discussed below, the Supreme Court has held that employers have great discretion with regard to actual plant closing. An employer may go out of business altogether in retaliation for a union vote or make substantial changes in the way it conducts business without even discussing the decision with the union. To refer to these rights during an organizational campaign would almost surely be an unfair labor practice. Thus the Court assumes employee ignorance that it is unlawful to correct. 44. A study done by students in my seminar on the Supreme Court and unions in 2014 found that citations to Gissel have become increasingly rare even in speech cases and that the circuit courts of appeals apply their own standards to the evaluation of speech, a conclusion illustrated by Judge Posner’s opinion in NLRB v. Village IX Inc., 723 F.2d 1360 (7th Cir. 1983). 45. 375 U.S. 405 (1964). 46. Id. at 409. 47. 414 U.S. 270 (1973). 48. Id. at 281. 49. Some of the language of Savair suggests that even an unconditional waiver would be improper. That conclusion might have a major impact on union campaigns because most unions currently do not require dues or initiation fees until the union wins the election and a contract is signed. The Board, however, held that such general waivers are not covered by Savair; its holding has been upheld on appeal. See NLRB v. Wabash Transfer Co., 509 F.2d 647 (8th Cir. 1975). 50. The cards designated the union as bargaining representative for the employee whose signature was affixed to the card. 51. Gissel, 395 U.S. at 615 52. Id. at 603. 53. Julius Getman and Stephen Goldberg, The Myth of Labor Board Expertise, 39 U. Chi. L. Rev. 681 (1972). 54. Paul Weiler, Promises to Keep: Securing Workers’ Rights to Self-Organization under the NLRA, 96 Harv. L. Rev. 1769 (1983). 55. Terry A. Bethel and Catherine Melfi, The Failure of Gissel Bargaining Orders, 14 Hofstra Lab. & Emp. L. J. 421 (1997). 56. Another area in which the Court has found that important employer rights trump employees’ right to unionize is that of retaliatory plant closing. The

NOTES TO PAGES 36–44 205

leading case is Textile Workers Union v. Darlington Manufacturing Co., 380 U.S. 363 (1965), which is discussed in chapter 4.

2 THE SUPREME COURT AND COLLECTIVE BARGAINING

1. 79 Cong. Rec. 7660 (1935). 2. For a powerful discussion of the early ebb and flow of decisions in terms of Senator Walsh’s metaphor see Archibald Cox, The Duty to Bargain in Good Faith, 71 Harv. L. Rev. 1401 (1958). While the Taft-Hartley amendments created a matching obligation on unions to bargain collectively, the duty on the employer, not the union, is the obligation that has bite. Unions exist largely for the purpose of bargaining and reaching agreement. 3. 343 U.S. 395 (1952). 4. Id. at 404. 5. The Supreme Court has not addressed the issue. And it would be virtually impossible to come up with a formulation that would inform the parties or the courts of appeals of how favorable to itself an employer can be and still conform to the duty to bargain. Part of the problem is that the bargaining process itself invites both sides to stress their determination to hold fast to their proposals even if they are willing eventually to make changes under pressure. 6. 397 U.S. 99 (1970). 7. Id. at 108. 8. Id. at 109. 9. Id. at 110 (Douglas, J., dissenting). 10. Id. 11. Id. at 110. 12. See Catherine Fisk and Adam Pulver, First Contract Arbitration and the Employee Free Choice Act, 70 La. L. Rev. 1 (2009). In recent years efforts to amend the Act to require compulsory arbitration of first contract failures to agree have been regularly made and regularly failed of enactment. 13. 351 U.S. 149 (1956). 14. 224 F.2d 869, 874 (1955). 15. 351 U.S. at 153. 16. Id. 17. Cox, Duty to Bargain, 71 Harv. L. Rev at 1432. 18. 440 U.S. 30 (1979). 19. 218 NLRB 1024, 1024 (1975). 20. 440 U.S. at 204. 21. Id. at 315. 22. Id. at 322 (White, J., dissenting). 23. 356 U.S. 342 (1958). 24. Id. at 349. 25. Archibald Cox, The Labor Decisions of the Supreme Court at the October Term 1957, 44 Va. L. Rev. 1057, 1068 (1958).

206 NOTES TO PAGES 45–57

26. Note, Major Operational Decisions and Free Collective Bargaining: Eliminating the Mandatory/Permissive Distinction, 102 Harv. L. Rev 1971, 1982 (1989). 27. 379 U.S. 203 (1964). 28. Id. at 208. 29. Id. at 211. 30. Id. at 223 (Stewart, J., Douglas, J., and Harlan, J., concurring). 31. 452 U.S. 666 (1981). 32. Id. at 676. 33. Id. at 678–79. 34. Although the opinion seems to conclude that in virtually all cases an employer may unilaterally decide to close down part of its operation, it simultaneously concluded that an employer must bargain in a timely fashion about the effects of its decision. If “meaningful time” means before the decision is irrevocably made, then unions may be in a position to defend themselves against the broad language of the opinion. See Thomas C. Kohler, Distinctions without Differences: Effects Bargaining in Light of First National Maintenance, 5 Berkeley J. Emp. & Lab. L. 402 (1983). 35. Note, Major Operational Decisions, 102 Harv. L. Rev. at 1982. 36. 404 U.S. 157 (1971). 37. Id. at 180.

3 THE SUPREME COURT AND THE RIGHT TO STRIKE

1. In accordance with common-law precedent, the Act provided that replaced strikers remained employees. At one point Senator Wagner had included a provision in an earlier version denying replacement workers the status of employee under the Act. This provision was widely criticized for many reasons, and no substitute was provided for in the final Wagner Act. See Julius G. Getman and Thomas C. Kohler, “The Story of NLRB v. Mackay Radio & Telegraph Co.: The High Cost of Solidarity,” in Labor Law Stories 22, 23 (2005). 2. 304 U.S. 333 (1938). 3. Id. at 347. The Court concluded first that the “strikers remained employees under Section 2(3) of the act, 29 U.S.C.A. § 152(3), which provides: ‘The term ‘employee’ shall include * * * any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment * * *.’ Within this definition the strikers remained employees for the purpose of the act and were protected against the unfair labor practices denounced by it.” Id. at 345. 4. Id. at 345–46. 5. Getman and Kohler, “The Story of NLRB,” at 14. 6. Id. at 45. 7. The successor to Section 8(3) enacted in the Taft-Hartley Act with no relevant changes from Section 8(3). 8. 347 U.S. 17, 40 (1954). 9. Id. at 40.

NOTES TO PAGES 57–74 207

10. 373 U.S. 221 (1963). 11. Id. at 223. 12. 132 NLRB 621, 630 (1961). 13. 303 F.2d 359, 364 (1962). 14. 373 U.S. at 228. 15. See, e.g., Julius Getman, Section 8(a)(3) of the NLRA and the Effort to Insulate Free Employee Choice, 32 U. Chi. L. Rev. 735 (1966). 16. 373 U.S. at 229, 226. 17. Id. at 230–31. 18. Under the Board’s Laidlaw doctrine (enunciated in Laidlaw Corp., 171 NLRB 1366 [1968]) former strikers are entitled to hiring preference. 19. Erie Resistor, 373 U.S. at 232. 20. 489 U.S. 426 (1989). 21. Railway Labor Act, ch. 347, 44 Stat. 577 (codified as amended at 45 U.S.C. §§ 65 et seq.). 22. 819 F.2d 839, 844 (1987). 23. 489 U.S. at 438. 24. Id. at 445 (Brennan, J., dissenting). 25. 388 U.S. 26 (1967). 26. Id. at 34. 27. 389 U.S. 375 (1967). 28. Id. at 379 (quoting Great Dane Trailers, 388 U.S. at 33–34). 29. See Richard Walton, Joel Cutcher-Gershonfeld, and Robert McKersie, Strategic Negotiations: A Theory of Change in Labor-Management Relations(1994).

4 THE COURT AND THE PROTECTED STATUS OF ECONOMIC PRESSURE

1. 351. U.S. 266 (1949). 2. NLRB v. Washington Aluminum Co., 370 U.S. 9 (1962). 3. American Ship Building Co. v. NLRB, 380 U.S. 300 (1965). 4. 361 U.S. 477(1960). 5. Id. at 490–91. 6. Id. at 499–500. 7. Washington Aluminum, 37 U.S. 9. 8. Insurance Agents’International Union, 361 U.S. at 489. 9. 380 U.S. 300 (1965). 10. NLRB v. Brown, 30 U.S. 278 (1965). 11. 427 U.S. 132 (1976). 12. Id. at 499–500. 13. Craig Becker, “Better Than a Strike”: Protecting New Forms of Collective Work Stoppages under the National Labor Relations Act, 61 U. Chi. L. Rev. 351 (1994). The author is currently general counsel of AFL-CIO. 14. 346 U.S. 464 (1953). 15. 202 F.2d 186, 188 (1952). 16. 346 U.S. at 472–73.

208 NOTES TO PAGES 75–91

17. 338 F.3d 747, 753 (2003) (Easterbrook, J., concurring). 18. 370 U.S. 9 (1962). 19. 291 F.2d 869 (4th Cir. 1961). 20. Id. at 878. 21. 370 U.S. at 14. 22. Id. at 16–17. 23. Id. at 17. 24. Id. at 16. 25. 465 U.S. 822 (1984). 26. Id. at 832. 27. 370 U.S. at 15. 28. http://www.nlrb.gov. 29. 345 U.S. 71 (1953). 30. 197 F.2d 111 (2d Cir. 1952). 31. 345 U.S. 71. 32. 197 F.2d at 113–14. 33. 324 U.S. 793 (1945). 34. Rockaway, 345 U.S. at 75. 35. 137 NLRB 1545 (1962). 36. Id. at 1547. 37. See generally Julius Getman, Restoring the Power of Unions: It Takes a Movement (2011). 38. 380 U.S. 300 (1965). 39. 142 N.L.R.B. 1362, 1364–65 (1963). 40. 380 U.S. at 309. 41. Id. at 311. 42. Id. at 312. 43. 380 U.S. 263 (1965). 44. Id. at 265. 45. Id. at 274. 46. Id. at 275–76. 47. Id. at 268. 48. Id. at 271–72. 5 THE SUPREME COURT, UNION PICKETING, AND BOYCOTTS

1. The other major improper purpose is a “forcing or requiring any employer to . . . enter into any agreement which is prohibited by Section 8(e).” Section 8(e) outlaws what are known as “hot cargo agreements,” by which an employer agrees to “cease or refrain . . . or to cease doing business with any other person.” 2. See Archibald Cox, Strikes, Picketing and the Constitution, 4 Vand. L. Rev. 574 (1951). 3. 310 U.S. 88 (1940). 4. Id. at 102–4. 5. 354 U.S. 284 (1957).

NOTES TO PAGES 92–108 209

6. Id. at 289 (quoting Bakery Drivers Local v. Wohl, 315 U.S. 769, 776 ((1942) (Douglas, J., concurring)). 7. Id. at 296 (Douglas, J., dissenting). 8. 377 U.S. 58 (1964). 9. Id. at 61. 10. 132 NLRB 1172, 1177–78 (1961). 11. 377 U.S. at 62. 12. Id. at 82 (Harlan, J., dissenting). 13. 447 U.S. 607 (1980). 14. Id. at 610. 15. Id. at 616 (quoting Tree Fruits, 377 U.S. at 63). 16. Id. at 617–18 (Blackmun, J., concurring). 17. Id. at 618–19 (Stevens, J., concurring). 18. Id. at 619 (Stevens, J., concurring). 19. 456 U.S. 212 (1982). 20. Id. at 226. 21. See Seth F. Kreimer, Sunlight, Secrets, and Scarlet Letters: The Tension between Privacy and Disclosure in Constitutional Law, 140 U. Pa. L. Rev. 1, 43–50 (1991). 22. Right Wing Watch (a project of People for the American Way), report on the American Family Association, www.rightwingwatch.org/content/americanfamily-association. 23. 458 U.S. 886 (1982). 24. Id. at 928. 25. Id. at 913. 26. International Longshoremen’s Association, 456 U.S. at 225–26 (quoting 640 F.2d 1368, 1378 (1st Cir. 1981)). 27. 435 U.S. 765 (1978). 28. 562 U.S. 443 (2011). 29. Id. at 447. 30. Id. at 452 (quoting several cases). 31. Id. at 455. 32. Id. at 462 (Breyer, J., concurring). 33. 485 U.S. 568 (1988). 34. Id. at 571 n.1. 35. Id. at 588. 36. Id. at 576. 37. Barbara Anderson, Secondary Boycotts and the First Amendment, 51 U. Chi. L. Rev. 811 (1984). 38. Lee Modjeska, Recognitional Picketing under the NLRA, 35 U. Fla. L. Rev. 633 (1983). As noted by Modjeska, In NLRB v. Local 182, Teamsters (Woodward Motors), union members placed signs in snowbanks and then waited in nearby cars until delivery trucks approached. The Board determined that these actions constituted picketing prohibited by Section 8(b)(7). In the action for enforcement of

210 NOTES TO PAGES 110–115

the Board’s order, the Second Circuit consulted a dictionary for the labor meaning of “picket.” The court found picketing to be walking or standing in front of a place of employment; movement by pickets was not necessary. . . . Later decisions demonstrate that patrolling without signs may constitute picketing. In Teamsters, Local688, the union passed out leaflets to persons entering the employer’s premises. The Board distinguished picketing from handbilling in the following manner: We recognize, of course, that there may be situations where, even though union agents do not patrol with signs, their very presence is intended to and does operate as a signal to induce action by those to whom the signal is given. It is this “signaling” which provokes responses without inquiry into the ideas disseminated and distinguishes picketing from other forms of communication and makes it subject to restrictive regulation. Id. at 637–38.

6 EXCLUSIVITY AND THE DUTY OF FAIR REPRESENTATION

1. 321 U.S. 332 (1944). 2. Id. at 338. 3. Id. 4. 321 U.S. 678 (1944). 5. Id. at 684–85. 6. 369 U.S. 736 (1962). 7. Id. at 743. 8. Another question implicit in the statutory definition concerned the ability of the parties to bargain about a subject not covered by 9(a). In NLRB v. Wooster Division of Borg Warner Co., 356 U.S. 342 (1958), discussed critically in chapter 2, the doctrine of exclusivity was used by the Court to draw a distinction between mandatory and permissive subjects of bargaining, holding that only proposals within the statutory definition of 9(a) “rates of pay, wages, hours of employment, or other conditions of employment “could be insisted upon to impasse. 9. Julius Getman, The Protection of Economic Pressure by Section 7 of the National Labor Relations Act, 115 U. Pa. L. Rev. 1195, 1243 (1967). 10. 420 U.S. 50 (1975). 11. Western Addition Community Organization v. NLRB, 485 F.2d 917, 927 (1973). 12. Emporium Capwell, 420 U.S. at 67–68. 13. See, e.g., Staughton Lynd, The Right to Engage in Concerted Activity afterUnion Recognition: A Study of Legislative History, 50 Ind. L.J. 720 (1974–1975). 14. 323 U.S. 192 (1944). 15. Id. at 202–3. 16. Id. at 204. Although the Steele case applied the duty of fair representation under the Railway Labor Act, the Court’s reasoning made clear that the duty applied equally under the NLRA. The Court so held without opinion in Syres v. Oil Workers International Union Local 23, 223 F.2d 739 (5th Cir. 1955).

NOTES TO PAGES 115–131 211

17. 343 U.S. 768 (1952). 18. Id. at 770–71. 19. Id. at 773. 20. 355 U.S. 41 (1957). 21. 345 U.S. 330 (1953). 22. Id. at 339. 23. Id. 24. 78 Stat. 253 (1964). 25. Martin Malin, The Supreme Court and the Duty of Fair Representation, 27 Harv. C.R.-C.L. L. Rev. 127, 128 (1992). 26. 375 U.S. 335 (1964). 27. Id. at 349. 28. 386 U.S. 171 (1967). 29. Id. at 177. 30. Id. at 184. 31. Id. at 185. 32. Id. at 190. 33. Id. at 177. 34. Id. at 191. 35. Id. at 186–87. 36. Id. at 191–92. 37. David E. Feller, A General Theory of the Collective Bargaining Agreement, 61 Cal. L. Rev. 663 (1973). 38. Brief of Petitioner-Appellant at 11–12, Vaca v. Spies, 386 U.S. 171 (1967). 39. Malin, The Supreme Court and the Duty of Fair Representation, 27 Harv. C.R.-C.L. L. Rev. at 136. 40. 495 U.S. 362 (1990). 41. Id. at 364–70. 42. Id. at 372–73. 43. By virtue of Section 14(b), states may prohibit such agreements through so-called right-to-work laws. 44. 367 U.S.740 (1961). 45. Id. at 768–69. 46. Id. at 775. 47. Id. at 801 (Frankfurter, J., dissenting). 48. 487 U.S. 735 (1988). 49. Id. at 745 to 746 (quoting 426 U.S. 407, 416 (1976)). 50. Julius Getman, Restoring the Power of Unions: It Takes a Movement (2011). 51. 466 U.S. 435 (1984). 52. 685 F.2d 1065, 1074 (9th Cir. 1982). 53. 466 U.S. at 452–53. 54. 351 U.S. 225 (1956). 55. Id. at 235. 56. 431 U.S. 209 (1977). 57. Id. at 221–22. 58. Id. at 222.

212 NOTES TO PAGES 131–138

59. Id. at 229. 60. Id. at 229–30. 61. 132 S. Ct. 2277 (2012). 62. While the case was pending, the SEIU offered a full rebate for all dissenters. The Supreme Court, however, refused SEIU’s claim that the case was now moot on the grounds that “a dismissal for mootness would permit a resumption of the challenged conduct as soon as the case is dismissed.” Id. at 2287. 63. Id. at 2289. 64. 134 S. Ct. 2618 (2014). 65. SEIU personal assistants are permitted to unionize under a state law that declares them to be “public employees” of the State of Illinois—but “[s]olely for the purposes of coverage under the Illinois Public Labor Relations Act.” 66. 134 S. Ct. at 2633–34. 67. Id. at 2621. 68. Id. at 2621–22. 69. Id. at 2640–41. 70. Id. at 2645 (Kagan, J., dissenting). 71. Citizens United v. Federal Election Comm’n, 558 U.S. 310 (2010).

7 THE COURT AND THE DEFINITION OF “EMPLOYEE” UNDER THE NLRA

1. The term is also important in determining those covered by the Fair Labor Standards Act (FLSA), ch. 491, 55 Stat. 756 (1938) (codified as 29 U.S.C. ch. 8, §§ 201–219), passed around the same time and meant to provide an economic floor for employees not represented by a union. 2. It specifically excluded from the definition any individual employed as an agricultural laborer or in the domestic service. The exclusion of agricultural employees is difficult to justify on policy grounds. It stems from the politics of the Senate during the mid-thirties. Farm-state senators and representatives demanded the exclusion as the price of voting for the Act. Since organized labor had not organized significantly among agricultural workers, it was willing to accept the exclusion. For purposes of the Act, it would seem that the categories of employer and employee were intended to be mutually exclusive even though the definition of “employer” is broad enough to include everyone who works for any business or concern, thus overlapping with the definition of “employees.” The only persons excluded are those who work for the United States or any State or political subdivision, those subject to the Railway Labor Act, and those employed by “any labor organization.” 3. The Act excluded only the United States, or any state or political subdivision thereof, or any person subject to the Railway Labor Act, as amended from time to time, or any labor organization (other than when acting as an employer), or anyone acting in the capacity or agent of such labor organization. 4. 322 U.S. 111 (1944). 5. 136 F.2d 608 (9th Cir. 1943). 6. 322 U. S. at 117.

NOTES TO PAGES 139–151 213

7. Id. at 126. 8. Id. at 130. 9. 330 U.S. 485 (1947). 10. Id. at 488–89. 11. Id. at 489. 12. Many years ago I asked William T. Little, the NLRB’s highly experienced and knowledgeable Indianapolis regional director, what legal issue he found most difficult to deal with. He responded without hesitation,“Determining whether someone is a supervisor or a ‘lead man.’” 13. Professional employees are eligible to unionize in separate units. 14. 511 U.S. 571 (1994). 15. Id. at 577–78. 16. Id. at 580. 17. Id. at 590–91 (Ginsburg, J., dissenting). 18. 532 U.S. 706 (2001). 19. Id. at 725–26 (Stevens, J., dissenting). 20. 348 NLRB 686 (2006). 21. Id. at 688. 22. Id. at 700. 23. Archibald Cox, Some Aspects of the Labor Management Relations Act, 1947, 61 Harv. L. Rev. 1, 6 (1947). 24. 119 NLRB 998 (1957). 25. Id. at 1002–3. The individual contracts also provided that the driver was to make deliveries in his territory on certain days and within such hours as the respondent designated. The driver agreed to be diligent at all times in promoting sales of the respondent’s products, to well and faithfully serve any and all retail customers for such products in his territory, and, in the case of retail drivers, any wholesale customers of the respondent in the territory that the respondent instructed the driver to serve. The contract also provided that in the event of accident, strike, or other emergency that interfered or threatened to interfere with distribution of the respondent’s products in the driver’s territory, the respondent, without notice, could take over the route, equipment, and business and operate it during the emergency. 26. It is not clear why this opportunity was not seized on by more employers in the trucking industry. One reason is probably the power of the Teamsters Union at the time and the prospect of a fierce battle waged outside the parameters of the law. 27. 390 U.S. 254 (1968). 28. Id. at 257. 29. Id. at 259. 30. Id. at 258. 31. Id. at 260. 32. 416 U.S. 267 (1974). 33. Id. at 288. 34. Id. at 269–70. 35. Id. at 289.

214 NOTES TO PAGES 152–166

36. 444 U.S. 672 (1980). 37. Id. at 689–90. 38. From 1986 to 1988 as president of the American Association of University Professors (AAUP), I read agreements and advised faculty associations involved in collective bargaining. One of the major aims of unionized faculty recorded in several agreements was to solidify the academic freedom of faculty. 39. 274 NLRB 1141 (1985). 40. 516 U.S. 85 (1995). 41. 34 F.3d 625, 628–29 (8th Cir. 1994) (quoting 112 S. Ct.1344, 1348 (1992)). 42. Id. at 629. 43. 516 U.S. at 90. 44. Id. at 97, 98. 45. Salting is used most in the construction industry, where for a variety of reasons loyalty to the union is likely to be greater than loyalty to the company.

8 THE SUPREME COURT AND ARBITRATION

1. Harry Shulman, Reason, Contract, and Law in Labor Relations, 68 Harv. L. Rev. 999, 1016 (1955). 2. Id. at 1024. 3. 363 U.S. 574, 582–83 (1960). 4. 363 U.S. 593, 596 (1960). 5. 363 U.S. at 582. 6. 363 U.S. at 597. 7. Bernard Meltzer, The Supreme Court Arbitrability and Collective Bargaining, 28 U. Chi. L. Rev. 464, 473 (1961). 8. 363 U.S. 564, 567 (1960). 9. Meltzer, Supreme Court Arbitrability, 28 Chi. L. Rev. at 477. 10. 369 U.S. 95 (1962). 11. Id. at 105. 12. “Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.” 29 U.S.C. § 185 (a). 13. Boys Markets, Inc. v. Retails Clerks Union, 398 U.S. 235, 247, 248 (1970). 14. Probably the gentlest disagreement came from the then professor and noted arbitrator Robin Fleming, who described the language quoted above as “a paragraph which caused many arbitrators to purchase new mirrors.” Robin Fleming, The Labor Arbitration Process 24 (1965). 15. Certainly arbitral ignorance and not special knowledge marked my own relationship to the parties by whom I was selected as an arbitrator. I have little doubt that my experience is more typical in this regard than Dean Shulman’s.

NOTES TO PAGES 166–178 215

16. An edited version of his lecture was printed as a book by Yale University Press. Paul Hays, Labor Arbitration: A Dissenting View 40–42 (1966). 17. Judge Hays’s book became the target of both angry and thoughtful criticism. The angry critics, largely experienced arbitrators, seemed to feel their impartiality and competence were under attack. Thoughtful critics pointed out that Judge Hays had little more empirical data or scholarly research to support his view of arbitration than Justice Douglas had to support his. 18. 376 U.S. 543 (1964). 19. Id. at 549. 20. Id. at 550. 21. Id. at 551. 22. 430 U.S. 243 (1977). 23. Id. at 255. In NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972), the Court announced that when a new employer took over a bargaining unit, the agreement itself did not survive the purchase. The Court distinguished the Wiley case on the grounds that continuing the agreement was not supported by any national policy comparable to the policy favoring arbitration upon which the Wiley decision was based. 24. An organization of experienced arbitrators. 25. Bernard Meltzer, Ruminations about Ideology, Law, and Labor Arbitration, 1967 meeting of National Academy of Arbitrators. 26. 415 U.S. 35 (1974). 27. Id. at 57–58. 28. 450 U.S. 728 (1981). 29. Id. at 744–45. 30. Federal Arbitration Act, 43 Stat. 883 (1925) (codified as amended at 9 U.S.C. §§1 et seq.). 31. 482 U.S. 483 (1987). 32. Id. at 490–91. 33. 473 U.S. 614 (1985). 34. Id. at 626–27. 35. 500 U.S. 20 (1991). 36. Age Discrimination in Employment Act of 1967, 81 Stat. 602 (codified as amended at 29 U.S.C. §§ 621 et seq.). 37. 500 U.S. at 30. 38. Id. at 33. 39. Joseph R. Grodin, Arbitration of Employment Discrimination Claims: Doctrine and Policy in the Wake of Gilmer, 14 Hofstra Lab. & Emp. L.J. 1, 52 (1996). 40. 556 U.S. 247 (2009). 41. Id. at 260. 42. Id. at 264. 43. Id. at 268. 44. Id. at 269. 45. For example, if an employee is cheated out of $2 per hour, that sum represents nearly one-third of a minimum wage earner’s yearly income. Yet few law-

216 NOTES TO PAGES 178–193

yers will bring a claim that might take $50,000 to $200,000 to litigate in federal court only to collect a few thousand dollars in damages. 46. 559 U.S. 662 (2010). 47. Id. at 677. 48. Alan Scott Rau, Arbitral Power and the Limits of Contract: The New Trilogy, 211 Am. Rev. Int’l Arb. 435, 485 (2011). 49. 131 S. Ct. 1740 (2011). 50. Discover Bank v. Superior Ct., 36 Cal. 4th 148 (2005). 51. Concepcion, 131 S. Ct. at 1748. Further, Justice Scalia argued that the California rule is indistinguishable from other rules that might more clearly be inconsistent with the FAA, such as one finding unconscionable “arbitration agreements that fail to provide for judicially monitored discovery” or one that disallows “agreements that fail to abide by the Federal Rules of Evidence.” Nor was the Discover Bank rule saved by the requirement that the damages be “predictably small.” Justice Scalia declared that the “requirement, however, is toothless and malleable.” Id. at 1747, 1750. 52. Id. at 1750. 53. 357 NLRB No. 184 (2012). 54. Id. at 14 (quoting 370 U.S. 9 at 14). 55. San Diego Unions v. Garmon, 359 U.S. 236, 244–45 (1959). 56. D. R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013). 57. Id. at 357. 58. Id. at 356 (quoting 316 U.S. 31, 47 (1942)). 59. Id. at 360. 60. Id. at 362. 61. Sylvester v. Wintrust Fin. Corp., 2013 U.S. Dist. LEXIS 140381 (N.D. Ill.). 62. 133 S. Ct. 2304 (2013). 63. In re American Express Merchants Litig., 54 F.3d 300 (2d Cir. 2009). 64. 133 S. Ct. at 2309 (quoting 482 U.S. 200 (1987)).

CONCLUSION

1. 351 U.S. 105 (1956). 2. 502 U.S. 527 (1992). 3. Julius Getman, Was Harry Shulman Right? The Development of Arbitration in LaborDisputes, 81 St. John’s L. Rev. 1 (2012). 4. Julius Getman and Dan Getman, Winning the FLSA Battle: How Corporations Use Arbitration Clauses to Avoid Judges, Juries, Plaintiffs, and Laws, 86 St. John’s L. Rev. 447 (2012). 5. Julius Getman, Stephen Goldberg, and Jeanne Herman, Union Representation Elections: Law and Reality 96 (1976). 6. During the 1960s and early 1970s, I frequently taught labor law classes to union members and leaders, as part of Indiana University’s labor education program. I can vividly recall a class that I taught to a large group of steelworkers from District 30. They refused to believe that they risked being permanently replaced

NOTES TO PAGES 195–196 217

if they went on strike. Didn’t they have “the right to strike”? And how was it that though they struck regularly, neither they nor their union brothers and sisters had ever been replaced? I doubt that this optimism concerning the strike weapon survives. The union is now smaller, weaker, and more vulnerable. 7. Mainebiz, http://www.mainebiz.biz/article/20070528/CURRENTEDITION/ 305289991/after-the-strike-|-in-june-1987-local-14-walked-out-of-internationalpaper’s-jay-mill-twenty-years-later-the-legacy-of-maine’s-most-notorious-laborfight-lives-on, May 28, 2007, last updated December 15, 2011. 8. Id. 9. Richard Walton, Joel Cutcher-Gershenfeld, and Robert McKersie, Strategic Negotiations: A Theory of Change in Labor-Management Relations (1994).

INDEX

14 Penn Plaza v. Pyett, 175 Aaron, Benjamin, 10 Abood v. Detroit Board of Education, 131, 132–33, 135 academic institutions, and collective bargaining, 152–54, 157 access: employer advantages in, 21–22, 30–31, 192–93, 197; rules governing, vs. rules limiting employer speech, 34; Supreme Court on, 16, 17–18, 20–21, 22, 30, 192–93 Adair v. United States, 4 adhesion contracts, 4–5, 182, 187–88, 192 age discrimination, arbitration in cases of, 173–74, 175 agricultural workers, NLRA and, 212 n2 Alexander v. Gardner Denver, 170, 175–76 Alito, Samuel: on arbitration, 179; on class action, 187; on nonunion picketing, 103; on union dues, 131–35 American Express v. Italian Colors Restaurant, 187 American Family Association (AFA), 97 American Manufacturing case, 164 American National Insurance case, 37, 40 American Railroad Union, 2 American Ship Building Co. v. NLRB, 72, 82–85

American Telephone and Telegraph Company, 128. See also AT&T Androscoggin Mill strike, 66–67, 106, 142, 195–96 arbitration: and adhesion contracts, 182, 187; and class action waivers, 177–88; collective bargaining and, 160–61, 167–68, 173, 174; expansion of scope of, 175–76; Federal Arbitration Act (FAA) and, 171–74; federal policy favoring, 171, 186; labor, success of, 174, 189–90; vs. NLRB, 177; shortcomings of, 176–77; Shulman on, 161, 165; successorship cases in, 167–68; Supreme Court on, 161–76, 178–82, 187 arbitrators: backgrounds of, 163, 165–66, 173; contractual vs. legal interpretation by, 169–70 AT&T Mobility LLC v. Concepcion, 180–82, 184–85, 187, 216 n51 Babcock & Wilcox case, 17–18, 19, 21, 191, 197 Barentine v. Arkansas–Best Freight System, 170–71 bargaining order, 31–33, 34 Bell Aerospace case, 150–51, 158

219

220 INDEX

benefits, employee: collective bargaining and, 48–49, 50; offer during representation election, Supreme Court on, 29–30 Black, Hugo, 8; on consumer boycotts, 94; on duty of fair representation, 115–16; on duty to bargain, 39, 41; on independent contractors, 148–50 “blackmail” picketing, 10 Blackmun, Harry: on arbitration, 172–73; on picketing, 95 Board. See National Labor Relations Board Bootmakers Union, 1, 199 n1 Boreman, Herbert Stephenson, 75 Borg-Warner case, 43–44, 46, 48, 210 n8 boycotts: as antitrust violation, 3; consumer, 90–95, 103–5; political or socially motivated, 96–103, 106; secondary, Taft-Hartley Act on, 9, 10–11. See also consumer boycotts; picketing; secondary strikes Brennan, William J.: on arbitration, 171; on collective bargaining, 49, 72; on consumer boycotts, 93–94; on duty to bargain, 112; on employer discrimination against employees, 63; on union dues, 127, 128 Brett, Jeanne M., 21, 27, 192 Brewer, David Josiah, 2–3 Breyer, Stephen: on nonunion picketing, 103; on union dues, 135; on union organizers, 156 Briggs & Stratton case, 70, 71, 72 Brotherhood of Railroad Trainmen v. Howard, 115–16 Brotherhood of Railworkers, 114–15 Brown, James, 76 Burton, Harold Hitz, 43, 117 cease-and-desist remedy, 31, 38 Chemical Workers, Local 1 v. Pittsburgh Plate Glass Corp., 48–49, 51 Citizens United case, 136 City Disposal case, 76–77, 80 Civil Rights Act: and labor arbitration, 169; seniority provision of, 119; Title VII of, 117–18

Claiborne Hardware case, 98–99, 100, 105, 106 class action: and enforcement of Fair Labor Standards Act, 178; NLRB on, 183–86; Supreme Court on, 178–82 class action waivers: arbitration clauses and, 177–88; Norris-LaGuardia Act on, 178, 183, 185 Clayton Act, 5 collective bargaining: in 1950s, 12–13; academic institutions and, 152–54, 157; and arbitration, 160–61, 173, 174; benefits of, 50; vs. contract-based labor market, 110–11, 189; duty to supply information in, 40–42; employer advantages in, 36–38, 68, 107; and employer retaliation, 82–83; and equality of bargaining power, 106–7; exclusive representation and, 110–14; free choice in, 7, 15, 200 n24; vs. individual bargaining, 110–14; initial sessions in, 36–37, 40; intermittent work stoppages in support of, 69–73; Mackay doctrine and, 66–68; mandatory vs. permissive subjects of, 43–49, 210 n8; misconceptions regarding, 50–51; New Deal Court’s support for, 16; organizing efforts and, 129–30; and political activity, 127; Supreme Court’s suspicion of, 14, 49–51, 100; Taft-Hartley Act on, 35–36, 205 n2; tough vs. bad faith, 36; union density and, 129. See also good faith bargaining Commonwealth v. Hunt, 1, 199 n1 Concepcion case, 180–82, 184–85, 187, 216 n51 Congress, prounion legislation by, 6–8; Supreme Court decisions and, 4–6 Conley v. Gibson, 116 consumer boycotts, 90–95, 103–5; freedom of speech and, 90, 93, 95; political vs. labor motivations for, 106; Supreme Court on, 91–94, 104–5 contracts: arbitration clause in, 172, 173, 175; individual, vs. collective bargaining, 110–11, 189; Supreme Court’s protection of, 4–5, 187, 188. See also employment contracts

INDEX 221

courts: and labor unions, 1–2; role of, NLRA on, 7–8 courts of appeal: on class action waivers, 184–85; on disloyalty and cause, 74, 75; duty to bargain and, 37, 38, 40; on employee, definition of, 138; on independent contractor exemption, 150; interpretations of NLRA, 11; on property rights vs. informed choice, 20; on refusal to cross picket line, 79 Cox, Archibald, ix, 41, 44, 48, 146 CWA v. Beck, 127–28 Darlington Manufacturing case, 85–87, 204 n56 Debs, Eugene V., 2 Deering case, 5–6 Detroit Edison v. NLRB, 41–42, 49 discharge: discriminatory, remedy for, 31; disloyalty and, 73–78; refusal to cross picket line and, 78–82; vs. replacement, 79, 80, 81; retaliatory, remedy for, 31; of supervisors, for union activity, 141 Discover Bank rule, 180, 182, 184, 216 n51 discrimination: age, arbitration in cases of, 173–74, 175; vs. duty of fair representation, 114–18; seniority and, 119 disloyalty, and discharge, 73–78 dispute resolution system. See grievance procedures domestic workers, NLRA and, 212 n2 Douglas, William O.: on duty to bargain, 39; on employee, definition of, 140; on freedom of speech and picketing, 92, 96; on labor arbitration, 161, 162, 163, 165, 166 D. R. Horton Inc. case, 183–86 Duple Printing Press Co. v. Deering, 5–6 duty of fair representation (DFR), 114–18, 135; and grievance handling, 120–26; laws governing, 210 n16; and seniority, 118–20; and union dues, 126–30 duty to bargain, 7, 35–37; enforcement problem in, 38–40, 193; and obligation to arbitrate, 167–68; wage increase as violation of, 112

Easterbrook, Frank H., 75 Edward J. Debartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council, 103–5 Ellis v. BRAC, 130 employee, definition of: independent contractors excluded from, 137, 145–50; managers excluded from, 150–54; supervisors excluded from, 140–45, 213 n12; Supreme Court on, 137–40, 148–50, 158–59; Taft-Hartley Act on, 9, 140, 158; union organizers excluded from, 154–59; Wagner Act on, 138–40, 212 n2 employees: free choice of, Wagner Act on, 7, 15, 200 n24; indefensible vs. unwise conduct of, 76; individual protest by, 76–78; informed choice of, vs. employer property rights, 16–22; public, union dues for, 130–32; strikers as, 206 n1, 206 n3. See also benefits; discharge; free choice; loyalty; wages employers: advantages in collective bargaining, 36–38, 68, 107; advantages in organizational communication, 18, 21–22, 30–31, 192–93, 197; antiunion campaigns of, 107; definition of, Wagner Act on, 138; in initial bargaining sessions, 36–37; Mackay doctrine and advantages for, 66–68; property rights of, vs. informed choice, 16–22; refusal to bargain in good faith, 38–39; retaliation tactics used by, 82–88; Supreme Court support for, 2–6, 16–17; unfair labor practices of, remedies for, 31–34; unfair labor practices of, Wagner Act on, 7, 23. See also freedom of speech, employer employment contracts: arbitration clause in, 172, 173, 175; class action waivers in, 183–86 employment tests, 41–42 Emporium Capwell v. Western Addition Community Organization, 113–14 Enterprise case, 162, 163, 177, 179 Erie Resistor case, 57–63, 65, 84 Evers, Charles, 98 Excelsior lists, 19 Excelsior Underwear Inc., 18–19

222 INDEX

Exchange Parts case, 29, 30 exclusive representation: and collective bargaining, 110–14; and duty of fair representation, 114–18, 135; NLRA on, 35, 110; and restrictions on union speech, 101; Supreme Court on, 110–18, 135 Fair Labor Standards Act, 147, 178 Federal Arbitration Act (FAA): and adhesion contracts, 192; increasing scope of, 171–75, 178–87; vs. NLRA, 184–86; vs. Norris-LaGuardia Act, 178, 183, 185 Feller, David, 124 FHP Inc. case, 154 Fibreboard Paper Products v. NLRB, 45–46, 48 First Amendment. See freedom of speech First National Bank v. Belloti, 101 First National Maintenance Corp. v. NLRB, 46–47, 48, 49 Fleetwood Trailer case, 64–65 Fleming, Robin, 214 n14 Ford Motor Company, 161, 163 Ford Motor Company v. Huffman, 117 Frankfurter, Felix, 1; on collective bargaining and political activity, 127; on National Labor Relations Board, 8, 11; on picketing, 91–92, 96; on property rights vs. informed choice, 18; on Section 7 of NLRA, 184 free choice, employee: vs. employer’s freedom of speech, 23–31; vs. freedom of contract, Supreme Court on, 4–5; vs. Mackay doctrine, 66–67; Wagner Act on, 7, 15, 200 n24 freedom of speech: commercial vs. labor, Supreme Court on, 101, 104–5; and consumer boycotts, 90, 91, 93, 95–96; employer, Constitution on, 16; employer, Taft-Hartley Act on, 9, 25; employer, vs. employee freedom of choice, 23–31; and labor picketing, 90, 93, 95–97, 103–5, 107–9; NLRA on, 90; and nonunion picketing, 101–3, 109; political vs. labor, 97, 98–99, 105–6; Supreme Court’s concern for, 136, 191;

Taft-Hartley Act on, 9, 25, 90; and union dues, 130–36 Gardner Denver case, 170, 175–76 Gilmer v. Interstate Johnson Lane Corp., 173–74 Ginsburg, Ruth Bader, 135, 144 Gissel case, 25–29, 31, 32–33, 34 Goldberg, Stephen B., 21, 27, 192 Gompers, Samuel, 5 good faith bargaining, 35–37, 41; duty to supply information in, 40–42; employer refusal to engage in, 38–39; mandatory vs. permissive subjects of, 43–49, 210 n8 Great Dane case, 64 Greene, Nathan, 1 grievance procedures: in collective agreements, 13, 160–61; duty of fair representation and, 120–26; duty to supply information in, 40–42 Grodin, Joseph, 175 Harlan, John Marshall, II: on benefit promises, 29; on consumer boycotts, 94; on plant closing, 85, 86, 87, 88 Harris v. Quinn, 132–35, 136 Hays, Paul, 166, 215 n17 Hearst Publications case, 138–39, 146, 148 Hitchman Coal v. Mitchell, 4–5 H. K. Porter Co. v. NLRB, 38, 40 Horton case, 183–86 Humphrey vs. Moore, 118–19 Hunt case, 1, 199 n1 IAM v. Street, 126–27 IBT Local 695 v. Vogt, 91–92, 96 independent contractors, 137, 145–50 individual bargaining, vs. collective bargaining, 110–14 individual protest: Section 7 rights and, 76–77; vs. union-sponsored activity, 77–78 injunctions, use in labor disputes, 2–3; Clayton Act on, 5; Norris-LaGuardia Act on, 6; Taft-Hartley Act on, 9 In re Debs, 2–3

INDEX 223

Insurance Agents case, 71, 72, 83 intermittent work stoppages, 69–73 International Brotherhood of Teamsters, 10–11, 129, 164 International Longshoremen’s Association v. Allied International, Inc., 97, 99, 100 International Paper Company, strike against, 66–67, 106, 142, 195–96 Jackson, Robert H., 8; on employee, definition of, 139–40; on refusal to cross picket line, 80–81 Jay, Maine, strike, 66–67, 106, 142, 195–96 Jean Country case, 19, 20 Jefferson Standard case, 73–74, 76, 77 J. I. Case Co. v. NLRB, 110–11, 112 John Wiley & Sons, Inc. v. Livingston, 167–68, 215 n23 Kagan, Elena, 135 Kennedy, Anthony, 142–43 Kennedy, John, 201 n34 Kentucky River case, 144–45 King, Martin Luther, Jr., 106 Knox v. SEIU, 131–32, 212 n62 Kohler, Thomas, 56 Labor-Management Reporting and Disclosure Act. See Landrum-Griffin Act labor unions: conspiracy doctrine regarding, 1, 199 n1; courts and, 1–2; duty of fair representation, 114–18; elections, NLRA on, 15–16; injunctions against, 2–3, 5, 6, 9; membership growth in 1930s-40s, 8; prospects for restoring power of, 197–98; Supreme Court opposition to, 2–6, 14, 16–17, 42; weakening of, factors responsible for, 9–10, 14, 190–96. See also exclusive representation; union density; union dues; union membership Landrum-Griffin Act, 10, 12, 16–17, 25, 201 n35; on picketing, 90, 107; on union unfair labor practices, 89, 90, 107 Lechmere, Inc. vs. NLRB, 20–21, 22, 28, 191, 197 Little, William T., 213 n12

Local 174, Teamsters v. Lucas Flour Co., 164 lockouts, 72, 82–85; vs. plant closing, 87 Lodge 76, Machinists v. Wisconsin Employment Relations Commission, 72–73 Loewe v. Lawlor, 3 loyalty, employee: appeals to, as employer tactic, 31; Supreme Court on, 143, 152, 154, 157. See also disloyalty Lucas Flour case, 164 Mackay doctrine, 55–56, 196–97; Board’s efforts to apply, 79; Court’s failure to reconsider, 57–65; and employer retaliation, 82; impact on collective bargaining, 66–68 Mackay Radio case, 53–55, 65, 80; vs. Erie Resistor case, 61; and Rockaway News case, 79, 80, 81 Malin, Martin, 118, 125 management-rights clause, 37 managerial exemption, 150–54 Marshall, Ray, 201 n36 Marshall, Thurgood, 113–14 McClellan, John, 10 Medo Photo Supply Co. v. NLRB, 111–12 Meltzer, Bernard, 163, 164, 169–70 mergers, and seniority lists, 118–19 Meserve, Bill, 106 Milliken, Roger, 85 minorities: seniority and, 119; union representation and, 113–18 Mitsubishi Motors v. Soler Chrysler–Plymouth, Inc., 172–73 Murphy, Frank, 8; on free speech and picketing, 91, 103; on free speech vs. coercion, 23–24 NAACP v. Claiborne Hardware, 98–99, 100, 105, 106 National Labor Relations Act (NLRA), 6, 7–8; ambiguities of, 11, 13; amendments to, 9–11, 16–17, 25, 89, 106–7; vs. class action waivers, 178; coverage of, 137; on duty of fair representation, 210 n16; on duty to bargain, 7, 35–37; on exclusive representation, 35, 110; vs. Federal Arbitration Act (FAA), 184–86; free

224 INDEX

National Labor Relations Act (continued) choice policy in, vs. Mackay doctrine, 66–67; independent contractors excluded from, 145–47; on organizational picketing, 107–9; promise of, 189; vs. property rights, 21; on right to strike, 52; on role of courts, 7–8; secondary boycott provisions of, 106–7; Section 2(3) of, 206 n3; Section 7 of, 7, 11, 15, 20, 23, 52, 69–73, 74, 76–78, 88, 182, 183, 184, 191–92; Section 8 of, 7, 23, 74–75; Section 8(1) of, 7, 23, 52; Section 8(3) of, 7, 23, 52, 55, 200n25; Section 8(a)(1) of, 69, 182–83, 203n28; Section 8(a)(3) of, 31, 126, 128; Section 8(a)(5) of, 35; Section 8(b) of, 9, 89; Section 8(b)(i)(B) of, 105; Section 8(b)(4) of, 11, 89–90, 92–93, 94, 95, 104, 106; Section 8(b)(7) of, 10, 90, 107–9; Section 8(c) of, 9, 16, 25, 26; Section 8(d) of, 35, 39; Section 8(e) of, 11, 208n1; Section 9 of, 8; Section 9(a) of, 200n24; Section 10 of, 39; Section 10(c) of, 74, 76; Section 13 of, 11, 52, 55; Section 301 of, 165, 171; supervisors excluded from, 140–41; Supreme Court interpretations of, 11, 13–14; Supreme Court’s role in weakening, 190–93, 196; on union dues, 126 National Labor Relations Board (NLRB), ix, 7–8; vs. arbitration, 177; on class action waivers, 183–86; on consumer boycotts, 93, 94; on denial of reinstatement to strikers, 53–54; on disloyalty and cause, 75; and duty of fair representation, 120, 121, 123; on employee, definition of, 138; on free speech vs. coercion, 23–24; on good faith bargaining, 38–39, 40, 42; on independent contractors, 147–50; on managerial employees, 151; on partial strikes, 73; on picketing, 209 n38; on plant closing in response to union activity, 85, 87; on property rights vs. informed choice, 16, 17, 18–20; on refusal to cross picket line, 78–81; remedial power of, 31–34, 38–39; role of, 15, 139; and supervisory exemption, efforts to limit, 142–45; weakness of, 11–12, 190, 196

National Recovery Act, 6 National Right to Work Legal Foundation, 130 neutrality agreements, 33–34 NLRB v. American National Insurance Co., 37, 40 NLRB v. Babcock & Wilcox, 17–18, 19, 21, 191, 197 NLRB v. Bell Aerospace, 150–51, 158 NLRB v. Burns International Security Services Inc., 215 n23 NLRB v. City Disposal Systems, 76–77, 80 NLRB v. Erie Resistor Corp., 57–63, 65, 84 NLRB v. Exchange Parts Co., 29, 30 NLRB v. Federbush Co., 203 n33 NLRB v. Fleetwood Trailer Co., 64–65 NLRB v. Fruit & Vegetable Packers & Warehousemen Local 760 (Tree Fruits), 93–94 NLRB v. Gissel Packing Co., 25–29, 31, 32–33, 34 NLRB v. Great Dane Trailers, 64 NLRB v. Health Care & Retirement Corp. of America, 142–44 NLRB v. Hearst Publications, 138–39, 146, 148 NLRB v. Insurance Agents’ International Union, 71, 72, 83 NLRB v. Katz, 112 NLRB v. Kentucky River, 144–45 NLRB v. Local 182, Teamsters (Woodward Motors), 209 n38 NLRB v. Local No. 1229 I.B.E.W. (Jefferson Standard), 73–74, 76, 77 NLRB v. Mackay Radio, 53–55, 61, 65, 80. See also Mackay doctrine NLRB v. Retail Employees Union Local 1001 (Safeco), 94–96, 98, 100 NLRB v. Rockaway News Supply Co., 78–81 NLRB v. Savair Manufacturing Co., 29–30, 204 n49 NLRB v. Sinclair Co., 25, 31 NLRB v. Town & Country Electric Co., 154–59 NLRB v. Truitt Manufacturing Co., 40–41 NLRB v. United Steel Workers of America (Nutone), 18 NLRB v. Village IX Inc., 204 n44

INDEX 225

NLRB v. Virginia Power, 23–24 NLRB v. Washington Aluminum Co., 75–76, 77, 78, 80 NLRB v. Wooster Division of Borg-Warner, 43–44, 46, 48, 210n8 NLRB v. Wyman-Gordon Co., 19, 22 NLRB v. Yeshiva University, 152–54, 157 Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, 168 Norris-LaGuardia Act, 6, 165; vs. class action waivers, 178, 183, 185 no-strike clause, arbitration clauses and, 164, 165 no-strike pledge, demands for, 37 Nutone case, 18 Oakwood Health Care Inc. case, 145 O’Connor, Sandra Day, 62–63, 64 Owens, Benjamin, 120 Packard v. NLRB, 139–40 partial shutdown, 88 partial strikes, 70–73, 77 pension benefits, collective bargaining and, 50; Supreme Court on, 48–49 Perry v. Thomas, 171–72 picketing: “blackmail,” 10; constitutional status of, debate on, 90–91, 95–96; consumer boycotts, 90–95, 103–5; freedom of speech and, 90, 93, 95–97, 103–5, 107–9; Landrum-Griffin Act on, 90, 107; NLRB on, 209 n38; nonunion, Supreme Court on, 101–3; organizational, NLRA on, 107–9; vs. political/socially motivated boycotts, 97–103; refusal to cross picket line, 78–82; Taft-Hartley Act on, 9, 89; union, Supreme Court on, 91–96, 104–5, 191 Pitney, Mahlon, 6 Pittsburgh Plate Glass case, 48–49, 51 plant closing, retaliatory, 85–88, 204 n56, 206 n34 political activity: and boycotts, 96–103, 106; and collective bargaining, 127 political speech, vs. labor speech, 97, 98–99 Posner, Richard, 204 n44 Powell, Lewis F., Jr.: on arbitration, 170; on secondary picketing, 95

professional employees: exclusion from labor protection, 154; Taft-Hartley Act on, 141 property rights, employer, 16; vs. employees’ informed choice, 16–22 public employees, union dues and First Amendment concerns, 130–32 racial discrimination, vs. duty of fair representation, 114–18 racial protest, vs. labor protest, 98–100 Radio Union Officers v. NLRB, 57 railroad worker unions, discrimination by, 114–16 Railway Employees’ Department v. Hanson, 130 Railway Labor Act, 6, 62, 126, 210 n16 Rathborne, Mervyn, 55 Rau, Alan Scott, 179 Redwing Carriers case, 81 Reed, Stanley Forman, 57 reinstatement remedy, 31 replacement workers: vs. discharge, 79, 80, 81; employer’s right to hire, Supreme Court on, 55–56, 65, 191; increased use of, 193–94; and ineffectiveness of strike weapon, 73, 195–96; permanent, Mackay doctrine and, 67, 68; rights of senior employees to replace, Supreme Court on, 62–64; super-seniority policy for, 57–61; supervisors required to train, 141–42; Wagner Act on, 53, 206 n1 Republic Aviation Corp v. NLRB, 16, 22, 79–80 retaliatory discharge, remedy for, 31 retaliatory plant closing, 85–88, 204 n56, 206 n34 retired employees: and collective bargaining, 48–49. See also pension benefits right to strike: Mackay doctrine and, 55–56; NLRA on, 52; super-seniority policy as violation of, 58–61 Roberts, John: and Mackay doctrine, 53, 54–55; on nonunion picketing, 101 Rockaway News Supply case, 78–81 Rutledge, Wiley Blount, 8, 138–39

226 INDEX

Safeco case, 94–96, 98, 100 Savair Manufacturing case, 29–30, 204 n49 Scalia, Antonin, 144; on arbitration, 180–82, 187, 216n51; and market-driven policy, 188 secondary strikes: vs. political or socially motivated boycotts, 97–103, 106; Supreme Court on, 91–96, 104; TaftHartley Act on, 9, 89–90, 106–7 SEIU: minority worker representation by, 118; union dues and First Amendment concerns, 131, 132, 212 n62 Selya, Bruce M., 20 seniority, 13, 50; duty of fair representation and, 118–20; mergers and, 118–19; super-seniority, 57–59 Shamrock Dairy case, 147 Shaw, Lemuel, 1, 199 n1 Sherman Antitrust Act, 3 Shulman, Harry, 161, 162, 163, 165, 166 shutdowns, retaliatory, 85–88, 204 n56, 206 n34 Sinclair case, 25, 31 Snyder v. Phelps, 101–3, 105, 109 Sotomayor, Sonia, 135 Southwick, Leslie H., 185, 186 Sparks Nugget, Inc. v. NLRB, 202 n23 Steele v. Louisville & Nashville Railroad Co., 114–15, 116, 210 n16 Steelworkers Trilogy, 161–66, 179, 186. See also specific cases under United Steelworkers Stevens, John Paul, 144 Stewart, Potter: on employer retaliation tactics, 83, 84; on picketing and freedom of speech, 95–96; on security agreements, 131 Stolt-Nielsen S.A. v. Animal Feeds International Corp., 178–80 strikes: as antitrust violations, 3; vs. arbitration, 165; denial of reinstatement after, 53–54; and disloyalty, 74–75; and employer retaliation tactics, 82–88; independent contractors during, 147; partial, Supreme Court on, 70–73, 77; reduced effectiveness of, 73, 193, 195–96; role in labor relations system, 52; supervisors during, 141–42; after World War II, 8–9. See also right to strike; secondary strikes

super-seniority policy, 57–59 supervisory exclusion, 140–45, 213 n12; Taft-Hartley Act and, 9, 140, 200 n29 Supreme Court: on access, 16, 17–18, 20–21, 22, 30, 192–93; acts of Congress weakened by, 4–6; on arbitration, 161–76, 178–82, 187; changing makeup of, 8, 14; on class action, 178–82; on collective bargaining, 49–51; on commercial vs. labor speech, 104–5; on disloyalty and cause, 74–78; on duty of fair representation, 114–18, 121–26, 135; on duty to bargain, 37, 38–39; elections of 2016 and, 196; on employee, definition of, 137–40, 148–50, 158–59; on employer retaliation tactics, 83–85; on exclusive representation, 110–18, 135; factual assumptions by, 152–53, 158–59; Federal Arbitration Act (FAA) and decisions of, 172, 178–87; First Amendment jurisprudence of, vs. NLRA interpretations, 90; on free speech vs. coercion, 23–30; on good faith bargaining, 40–49; on grievance handling, 121–26; hegemony over labor law and policy, 12; on independent contractors, 148–50; interpretations of NLRA, 11, 13–14, 190–93, 196; interpretations of Section 7 rights, 69–73, 76–78, 88; judicial arrogance of, 14; and labor movement’s demise, 190–93; on loyalty, employee, 143, 152, 154, 157; on managerial exemption, 150–54; on merging seniority lists, 118–19; opposition to unions and support for employers, 2–6, 14, 16–17, 42; on partial strikes, 70–73; on picketing, 91–96, 101–5, 191; on plant closing in response to union activity, 86–88; on political/ socially motivated boycotts, 98–103; on property rights vs. informed choice, 16, 17–18, 20–21, 22, 30; on replacement workers, 55–56, 62–64, 65, 191; on right to strike, 54–55; on secondary boycotts, 91–96, 104–5; on super-seniority policy, 58–61; on supervisors, 142–45; on union dues, 126–36; on union organizers, 156–59

INDEX 227

Swift Packing, 120 Syres v. Oil Workers International Union Local 23, 210 n16 Taft-Hartley Act, 9–10, 16–17, 25; on disloyalty and cause, 74; effort to repeal, 197; on employee, definition of, 9, 140, 158; on good faith bargaining, 35–36, 205 n2; on secondary boycotts, 9, 89–90, 106–7; on union unfair labor practices, 9, 89–90. See also National Labor Relations Act (NLRA) Teamsters. See International Brotherhood of Teamsters Textile Workers Union v. Darlington Manufacturing Co., 85–87, 204 n56 Tharp, John J., Jr., 186 Thomas, Clarence: on arbitration, 175–76; on property rights vs. informed choice, 20 Thornhill v. Alabama, 91, 92, 98, 103 Title VII, 117–18 Town & Country case, 154–59 Transworld Airlines v. Independent Federation of Flight Attendants, 62–64 Tree Fruits case, 93–94 Trompler Inc. v. NLRB, 75 Truitt Manufacturing case, 40–41 Truman, Harry S., 9 Trumka, Richard, 106 UAW v. Wisconsin Employment Relations Board (Briggs & Stratton), 70, 71, 72 union density, and collective bargaining, 129 union dues: duty of fair representation and, 126–30; First Amendment concerns regarding, 130–36; mandatory, 36; public employees and, 130–32 union membership: benefits of, 201 n38; growth in 1930s-40s, 8 unions. See labor unions United Auto Workers (UAW), 43, 161 United Hatters of America, 3 United Insurance case, 150 United Steelworkers v. American Manufacturing Co., 164

United Steelworkers v. Enterprise Wheel & Car Co., 162, 163, 177, 179 United Steel Workers v. Rawson, 125–26 United Steelworkers v. Warrior and Gulf Navigation Co., 162 UNITE HERE, 118 Vaca v. Sipes, 120–24 Virginia Power case, 23–24 Vogt case, 91–92, 96 wages: during representation campaign, 112; of union workers, 201 n38 Wagner, Robert F., 206 n1 Wagner Act, 7–8, 15; and definition of employee, 138–40, 212 n2; on duty to bargain, 7, 35; on equality of bargaining power, 106; on replacement workers, 53, 206 n1; Taft-Hartley Act compared to, 9. See also National Labor Relations Act (NLRA) Walsh, John, 36, 44, 47, 52, 117 Warren, Earl: on collective bargaining, 32, 45; on employer speech, 25, 26 Warrior and Gulf case, 162 Washington Aluminum case, 75–76, 77, 78, 80 Weiler, Paul, 33 Wells, Melvin, 27 Westboro Baptist Church, 101–3, 109 White, Byron: on arbitration, 174; on duty of fair representation, 121–25; on information release to union, 42; on replacement workers, 57–58; on superseniority policy, 59–61 Wilson, Woodrow, 5 women: seniority and, 119; union representation and, 118 Woodruff, Tom, 22, 203 n25 Woodward Motors case, 209 n38 World War II: arbitration after, 161; collective bargaining after, 49, 160; strikes after, 8–9, 89 Wyman-Gordon Co. case, 19, 22 Yeshiva University case, 152–54, 157