November 12, 1989
By Tim Costello & Jeremy Brecher
The arena was a National Labor Relations Board election in Smyrna, Tennessee One contestant, representing multi-national capital, was the Nisson corporation. The other, representing the American labor movement, was the UAW. The result this June was a smashing defeat for the union.
This highly symbolic contest reveals the rise of a new, multinational capitalism and the declining power of organized labor in America. But it also suggests the obsolescence of the legal forms within which American workers are attempting to deal with a transformed economy. If the labor movement is to be reborn, it will have to rethink its relation to the edifice of American labor law.
Since the mid-1970’s, top union leaders have blamed their inability to organize new workers on current labor law. They have proposed labor law reform as a principal solution to the problems of the labor movement. Generally they have advocated technical changes which would make it easier for unions to win elections and first contracts. Some have gone further, calling for a “deregulation” that would repeal Federal labor laws altogether. AFL-CIO president Lane Kirkland says he would prefer “the law of the jungle” to today’s pro-business labor law.
Most of the existing proposals for labor law reform have one flaw: they presume that legal changes can save the labor movement in its present form. This is to severely underestimate the scale and to misread the causes of organized labor’s decline.
From a high of 34 percent of the workforce in 1956, union membership gradually decreased to 24 percent in 1980 and then plummeted to less than 17 percent today. Many now forecast that union membership will go below 10 percent. This institutional disappearing act is primarily due to forces‑from international competition to the downsizing of workplace to the rigidification of the labor movement itself which labor law reform can do little to reverse.
In the wake of the UAW’s defeat at Smyrna, Thomas Kochan of MIT commented, “This tells the unions they simply can’t organize workers who are competitively compensated and managed with state of the art personnel practices. The labor movement has been declining and will continue to decline if it doesn’t refine its role.”
While labor law reform in itself can’t solve the labor movement’s problems, it can become significant in the context of an effort to “refine” or rather transform its role. The present role of unions has been largely shaped by the structure of labor law and the way the labor movement has adapted to that structure. If the labor movement is to change its role, it will have to either ignore those structures or transform them.
Unions as Criminal Conspiracies
Lawyers view labor law as an arcane and somewhat mysterious field, based on its own principles which have developed independently of much of the rest of the law. There’s a reason. Labor law must adapt to the paradoxes of the wage labor relationship that characterizes capitalism. Legally, the worker is a free person, voluntarily agreeing to sell his or her capacity to labor to the employer. But in reality the worker is a powerless person who must sell that capacity in order to survive. And once the sale is made, the worker’s life activity is the property of the employer; the worker is stripped of normal freedom and is obliged to obey the boss. This used to be known as wage slavery; it remains the fundamental law of labor under capitalism.
But just as the capitalist economy has evolved, so has labor law. As American workers began organizing in response to the expansion of wage labor around the turn of the 19th century, their unions were prosecuted under common law doctrines as illegal conspiracies. The courts largely rejected the union argument that, even within the framework of capitalism, workers as sellers had a right to organize to bargain over the price of what they sold.
The American economy underwent dramatic changes in the second half of the 19th century from artisan-based production for local consumption to a system dominated by huge national corporations. Thousands of smaller companies were swallowed up by larger companies, particularly as legal impediments to the growth of corporations were swept aside by state legislators and the courts. As business historian Alfred Chandler put it: “Rarely in the history of the world has an institution grown to be so important and so pervasive in so short a time.”
While the economy had undergone a revolutionary change, the prevailing ideology and law did not-at least as it related to the labor movement. The courts allowed capitalists to organize themselves into corporations which were bestowed by law with the rights of single individuals, but opposed unions as interference with the “free, competitive” market. As Christopher Tomlins has written in The State and the Unions, “As their accommodation of the business corporation indicates, the opposition of legal institutions to private nonmarket regulation … had been crumbling since the Civil War. What the courts objected to, seemingly, was not the spread of organization per se, but the spread of labor organization in particular.”
The marginality of the unions in the new political system was assured “by the consistent hostility of American legal culture to virtually any form of labor organization. That hostility is conveniently symbolized in the familiar roll-call of early twentieth century Supreme Court decisions … condemning unions as an invasion of entrepreneurial rights and dismissing legislative attempts to endorse them as legitimate bargaining agencies.”
The burgeoning labor movement responded in a variety of ways. The unions of the American Federation of Labor (AFL) generally functioned as best they could within the existing framework of the law while trying to persuade courts and legislatures to allow workers to organize, strike, and boycott without legal interference. The Industrial Workers of the World (IWW) and other radical trade unionists organized mass strikes and other forms of direct action which, while illegal, were at times too powerful for the legal authorities to halt.
The gains made by organized labor, both in its conservative AFL form and its radical IWW form were essentially wiped out by the prosperity and the antiunion drives of the 1920s. By 1930 only 13 percent of the workforce was unionized‑just slightly less than today.
Slave Labor Act or Labor’s Magna Carta?
The Great Depression brought a multifaceted crisis to the institutions of American capitalism. Mass misery weakened popular acquiescence in business domination of government. Strikes, while almost always defeated, developed a bitter and violent character that raised the specter of class war. The context of labor law was transformed by a new ideology which recognized that competitive capitalism had been replaced by a new corporate order.
That ideology found expression in The Modern Corporation and Private Property by Adolph Berle and Gardner Means. Berle was one of Roosevelt’s original Brain Trust; newcomers to Washington were told this theoretical tome was the one book they had to read to participate in the New Published in 1932, it proclaimed the corporate revolution:
“It is the essence of revolutions of the more silent sort that they are unrecognized until they are far advanced. This was the case with the so‑called ‘Industrial revolution,’ and is the case with the corporate revolution through which we are at present passing.
“The translation of perhaps two thirds of the industrial wealth of the country from individual ownership to ownership by the large, publicly financed corporations vitally changes the lives of property owners, the lives of workers, and the methods of property tenure…(It) involves a new form of economic organization of society.
“Grown to tremendous proportions, there may be said to have evolved A ‘corporate system,’ as there once was a feudal system.”
This corporate system meant that the “hidden hand” of the market would no longer provide the public with beneficial outcomes. The state had to step in and see that the economy served public needs. And the power of corporate managers had to be made accountable to those they affected- including their workers. This doctrine provided the justification for the New Deal’s activism and laid the foundation for the system of labor law we know today.
The Roosevelt administration’s first attempt at dealing with the Depression was the National Industrial Recovery Act (NIRA). The Act called for a relaxation of antitrust laws to permit self‑regulated codes of fair practice in industry, including some price fixing; a public works program; and, under pressure from organized labor, “Section 7a,” a vaguely worded guarantee of the right of workers to organize and bargain.
Quite unexpectedly, the passage of Section 7(a) helped to trigger an enormous strike wave which began in 1933 and picked up steam through 1934. As has often been the case in American history, a dialectic between insurgency and reform was established. The reform of the NIRA encouraged the insurgency of an increasingly militant labor movement, which led to further legal reforms and the institutionalization of trade unions in the American economy.
With no real enforcement powers and few resources, the National Labor Board appointed to enforce section 7(a) rights under the NIRA proved unable to deal with the massive strike wave, Businesses soon learned they could ignore the Board with impunity. By 1934 Roosevelt effectively abandoned it.
At that point, Senator Robert Wagner and his staff began drafting the National Labor Relations Act (NLRA)- known as the Wagner Act. Wagner had a long interest in labor law dating from his days as a judge in New York. He had also been a member of the original NIRA Labor Board. Following the logic of The Modern Corporation and Private Property, Wagner believed that economic planning by the state, shifting power away from the corporations and toward regulative agencies, was necessary to maintain the vigor of American capitalism. “What we need is not a new economic order but greater precision and better organization of the existing order.”
The NLRA began with a declaration of policy proclaiming that the right to organize was necessary to calm industrial strife caused by management’s refusal to bargain, to increase wages to stimulate commerce, and to redress an imbalance between employers who are organized into corporations and employees who do not enjoy full freedom of organization. The Act established the framework in which the modem labor movement has developed.
The NLRA infringed on the traditional definition of the wage labor relationship by protecting certain basic civil liberties on the job. It guaranteed workers “the right to self-organization” and to “concerted action.” It prohibited employers from interfering with these rights in specified ways.
The Act also established a right of workers “to bargain collectively through representatives of their own choosing.” The necessary complement to this right was a “duty to bargain” on the part of management. The corporate overlords would have to sit down and negotiate with representatives of their vassals. Workers would select their representatives by a majority vote; the winner would be their exclusive representative.
The Act established a powerful National Labor Relations Board (NLRB) to oversee the rights it guaranteed. The NLRB determined the bargaining unit and ran elections to determine the bargaining agent. (It was just such an election that the UAW lost at Smyrna.)
Business, of course, was solidly opposed to the Act, particularly the majority rule, exclusive representation, and bargaining-unit determination clauses. Some argued for proportional representation as an alternative. The Act’s supporters countered that proportional representation would fragment the labor movement, impede organization, and in the long run might even defeat the purpose of the Act by causing industrial chaos.
Paradoxically, the Act was also opposed by a coalition of independent leftists, Communists, and civil libertarians organized around the ACLU. They feared the state intervention into the labor movement implied by the Act. And they argued against majority rule, charging that the Act was an attempt to contain the burgeoning class struggle by allowing established unions to gain control of the newly organized workers.
A debate ensued which foreshadowed the contradictions labor law reform faces today. ACLU head Roger Baldwin presciently wrote to Senator Wagner:
“The pressures on any government agency from employers are so constant and determined that it is far better to have no government intervention than to suffer the delusion that it will aid labor in the struggle for the rights to organize, bargain collectively, and strike.”
Wagner’s response was equally compelling: “Whether we will it or not, government in every country is going to be forced to play a more important role in every phase of economic life, and for that reason is seems to me more useful to attempt to direct the nature of that role rather than merely to state the truism that government is likely to be influenced by the forces in society that happen to be strongest. Certainly these forces cannot be checked by government self-limitation nor do I believe that governmental action in such matters over a decently long period of time serves to check the struggles that labor must carry on by extra-governmental means.”
Both sides of the argument proved correct. Government protection made it far easier to organize and the “duty to bargain” made it far harder for companies to refuse unions recognition. Union membership virtually tripled in the decade following passage of the Wagner Act. (The ACLU and almost all of the Left quickly became enthusiastic supporters of the Act.)
In the long run, however, Roger Baldwin’s dire predictions also proved true. NLRB and court decisions, plus the Taft-Hartley Act and other legislation, enormously eroded the rights that “labor’s Magna Carta” had seemed to establish. The basic civil liberties freedom of speech, assembly, and the like- that are necessary for the “right to self-organization” still do not exist today in the workplace. And the rights to strike, picket, boycott, and engage in other forms of concerted action have been so restricted that “equality of bargaining power” between labor and management has become a complete fiction. Today, the basic rights proclaimed in the MIRA are virtually a dead letter.
-Equally important, the labor movement itself has been shaped to the structures created by labor law. Bargaining units are determined by the NLRB; so unions have conformed to government-set demarcations. Early NLRB decisions favored industrial over craft units, strengthening the CIO and forcing the AFL to develop industrial union structures. But ultimately the definition of bargain units sharply divided white-and blue-collar workers within each company, discouraged joint bargaining among workers in different industries who worked for the same corporation, and required workers to organize in ways that restricted their potential bargain- power. Unions fitted their own structure to the bargaining units established by the NLRB.
-The NLRA, as interpreted by die courts, allowed unions to bargain over wages, hours, and working conditions but excluded them from decisions that affected “the entrepreneurial core” of the enterprise. Unions acquiesced in their exclusion from the basic decisions about jobs and investments.
-While previously unions had played a variety of roles, most of these atrophied while the one defined by the NLRA-serving as bargaining agent for a particular group of workers vis-a-vis their employer-became paramount. Unions gave little more than lip service to a role as representatives of all working people vis-a-vis employers as a whole, the government, and other institutions.
-The principle of “exclusive bargaining rights” gave a monopoly of power and patronage to a labor organization which, once recognized, did not have to compete with others for support. Such an organization could easily come to be controlled by a self-perpetuating political machine with a strong interest in getting along with management.
-Such machines found rank-and-file initiative nothing but a threat to their power and stability. It became standard practice for unions to oppose concerted action initiated by rank-and-file workers. Unions became, in effect, agents of the company for enforcing labor discipline. The courts maintained and the unions agreed that the union grievance procedure superseded and made unnecessary the forms of concerted action on the job seemingly protected by the language of the NLRA.
Today’s Reform Proposals
Economic structures are changing today at a pace which rivals the rise of the “corporate system.” National economies have become almost entirely permeable to internal economic forces. Enterprises have become global. At the same time, corporations are moving away from centralized organization and becoming “networks of profit centers.” Different branches of what is supposedly the same company may compete or treat each other as separate entities; supposedly competing companies may cooperate in joint ventures or act as if they are part of the same company. Business ideology declares war on the once-sacred demarcation between “workers” and “managers.”
In this environment, the labor movement will only survive if it restructures itself as radically as it did in the 1930s when it shifted from craft to industrial unionism. Labor law reform will only be meaningful if it coincides with and encourages the needed transformation of the labor movement itself.
There are two common approaches to labor law reform-reflecting anew the dilemma debated half-a-century ago by Robert Wagner and Roger Baldwin. One approach aims to restore the effectiveness of the Wagner Act by making it harder for management to use antiunion tactics, such as stalling elections and stonewalling on the bargaining of first contracts. Many such proposals were incorporated in the labor law reform legislation that was defeated in the mid-1970s. Stronger proposals draw on Canadian labor law, which provides for immediate representation elections and requires companies that fail to agree to a first contract to accept a contract imposed by arbitration. The other approach-most often expressed by top labor officials in fits of frustration-is simply to repeal Federal labor law altogether and pursue bargaining based on pure economic muscle.
Unfortunately, neither of these approaches addresses the real problems of American labor. Company stalling and other antiunion tactics do make it harder for unions to win elections, but they have only a marginal effect on what proportion of the workforce is organized and none on whether workers themselves want unions. Reforms in NLRA administration, while justifiable in their own right, are a diversion from addressing the real problems of the labor movement.
But the alternative reform proposal repealing Federal labor law and returning to “the law of the jungle”- would not liberate labor, but rather would return it to the pre-1930 status in which courts treated most expressions of labor militancy as conspiracy or crime. The right of workers to self-organization and concerted action, enshrined in Section 7 of the NLRA, was a genuine advance in civil liberties for workers. As Staughton Lynd has written, “The labor movement should think long and hard before abandoning this hard-won language.”
A “Workers Rights” Approach to Reform
PROPOSE, as a third alternative a new strategy based on expanding the basic rights of all workers, increasing thereby their bargaining power vis-a-vis employers, and at the same time modifying those NLRA administrative provisions that have encouraged bureaucratization in the labor movement.
This approach is based on a vision of a restructured labor movement which would serve, not primarily as representatives of particular groups of workers in bargaining with their immediate employer, but rather as advocates of the needs of all working people vis-a-vis all aspects of society.
Such a labor movement would aim to address the needs of the 83 percent of workers who are not in unions as much or more than the 17 percent who are. It would serve as their advocate in all areas of government and corporate policy. It would provide workers in any workplace resources and technical support to organize themselves and bargain with their employers-or with any other institution which affected their interests.
Within such a context, the objective of labor law reform would be to expand the powers of working people, rather than to increase the size of unions as an end in itself.
This approach would require a reorientation on the part of the labor movement. For example, when an ACLU task force recently proposed legislation to protect workers from B. being fired without “just cause,” some laborites feared such a plan would hurt the labor movement by giving nonunion workers rights now available only through unions. In the approach we are proposing, the labor movement would embrace such proposals- thereby redefining itself as champion of all workers.
To generate discussion, we propose the following three-point program:
1. ESTABLISH BASIC RIGHTS FOR ALL WORKERS. Section 7 of the NLRA ostensibly protects the rights to self-organization and concerted action for all workers. But in practice these rights have been interpreted away-often on the grounds that union representation eliminated the need for workers to have such rights either as individuals or as groups. The following proposals grow out of the tradition of Section 7, but they assume that workers should not lose their basic human rights simply because they accept a representative to bargain on their behalf.
A. Freedom of expression. No firing or other punishment of workers for exercising first amendment rights of speech and assembly.
B. Freedom of self-organization. Right of workers to form civil rights groups, environmental groups, shop committees, or any other kind of group they want and to demand that management recognize and bargain with them. (This of course infringes on the current right of unions to “exclusive representation”; to advocate it will show that the labor movement is serious about empowering ordinary workers, both inside and outside of unions.)
C. Right to concerted action. No firing or other punishment for workers who engage in direct action protests on the job. This protection to apply to all groups of workers, whether in unions or otherwise.
D. Freedom of information. Right of workers to information about business conditions, investment plans and other data affecting jobs and conditions. (While companies may complain that release of such information may aid competing companies requiring it for all companies nullifies this complaint.)
E. Media access. Other freedoms mean little if there is a monopoly of the channels of communication. Workers in situations like the Smyrna Nissan plant have been “captive audiences” for bombardments of company propaganda. Law should provide that media channels directed at employees should be available on a “public access” basis to all groups.
2. INCREASE THE BARGAINING POWER OF Au WORKERS. One of the stated objectives of the Wagner Act was to establish equality of bargaining power between workers and employers. Legal doctrine maintains this has been achieved via collective bargaining, but as labor lawyer and historian Katherine Stone ‘has argued this is a misleading fiction which is used to justify restrictions on workers rights. The above proposals will help restore a degree of power to both unionized and un-unionized workers. In addition, labor law reform should:
A. Restore the right to strike. This right has been so much eroded that most of the time workers live under a system of compulsory labor. In most instances it is illegal to strike without sanction of the union, during the life of a contract, or over issues that are supposedly part of the “entrepreneurial core” of the enterprise. Further (and in complete denial of the Norris-La Guardia Anti-Injunction Act of 1932), the courts now routinely grant injunctions forbidding strikes and strike-related activities. (Fines levied against the United Mine Workers for violating court orders this year exceed $23 million.) Protection of strikers against company, legal, and even union reprisal should be a central objective of labor law. (Unions can make a start on their own by rejecting contract provisions which deny workers the right to strike.)
B. Legalize labor solidarity. The TaftHartley Act and other legislation and court decisions have outlawed some of the most important means workers have for supporting each others’ struggles, such as sympathy strikes and boycotts. These restrictions have played an important role in fragmenting the labor movement and making each union an island unto itself. Their removal would both increase workers’ potential power and encourage a more solidarity-based form of unionism.
3. END UNION BARGAINING MONOPOLY As noted above, the principle of exclusive representation was established over the objection of civil libertarians and labor radicals who saw it as hindering dissent and reinforcing bureaucratism in the labor movement. A half-a-century of experience has proven them right. The time has come to call into question monopoly unionism and open a debate about union pluralism.
Union pluralism would not require abolition of the whole structure of existing labor law; a partial deregulation would suffice. The key might be a system of proportional rather than exclusive representation. When the NLRB runs an election for bargaining agent, each organization running might be certified for the proportion of the vote that it receives, rather than “winner-take-all representation. The bargaining agent under such a system would be a bargaining council composed of the various organizations in proportion to their voting strength. (This form of 11 works council” bargaining exists in many European countries; Poland’s Solidarity chose it after examining all the world’s labor laws.)
Like corporate deregulation, union deregulation would lead to a complex institutional restructuring. On the one hand, it would increase competition among unions, forcing them to strive to win the support of the rank-and-file. It would replace the present one-party system with the famous benefits of democratic competition.
At the same time, such deregulation might generate new forms of cooperation among unions. Joint bargaining councils might become the norm and the boundaries between different unions might become less significant. This would make it far easier for workers to group themselves for bargaining not just in craft or industrial units but for instance-with all the far-flung components of a multinational corporation or with all the employers of one region.
The results of such restructuring are not completely predictable. Unions might compete destructively against each other for members and dues; workers divided into different unions might be weakened relative to management; some existing unions might lose much of their membership. But the labor movement that emerged might well be better able than today’s craft and industrial unions to adapt to the new structures of business-multinational, networked, complex combinations of bureaucratic and market linkages.
While union officials who are primarily interested in drawing their salaries without the risk of workers choosing another representative will resist this kind of program, such deregulation holds the promise of creating a labor movement far more responsive to the needs of workers-and therefore far more likely to appeal to them successfully. The alternative to some such a transformation of the labor movement itself is an epoch of continuing decline.
Legal Reform and Direct Action
DOES ALL this mean that a labor law reform agenda should be the labor movement’s central response to its crisis? Certainly not.
It was the mass strikes of the early 1930s that first put labor law on the national agenda. It was the emergence of industrial union forms in the field that created the alternative to craft union models. The NLRA was far more radical than it otherwise would have been because it had to be drawn to accommodate these insurgent realities. The way to force labor law reform is for the labor movement to start re-forming itself and taking action that requires government and business to adapt to its challenge.
The UAW at Smyrna took the problem of high accident rates and made it an issue in the NLRB election. But the labor movement’s concern with Nissan workers’ health and safety need not be limited to election-time. Workers shouldn’t have to have a union contract to organize and take concerted action around safety or other issues. And the labor movement doesn’ t have to win an NLRB election to help them fight for their right to do so. Labor law reform that empowers workers to struggle for their own needs- can be part of that fight.