I. Introduction
Labor unions have long presented a conundrum for the principle of freedom of association in American history. In pursuit of their associative goals, unions must compromise the freedom of association of others—employers, nonunion workers, and consumers.Footnote 1 Yet most American historians maintain that the legal system has deprived workers of their freedom to form effective labor associations. A composite account goes something like this: Unions were outlawed as criminal conspiracies before 1842. Even after courts recognized their legal existence, their methods (strikes, picketing, boycotting) were useless because laissez-faire, “free-labor” formalism hid the overwhelming economic power of employers behind a façade of equality. Courts then subverted the Fourteenth Amendment from its purpose of protecting black civil rights and turned it into a shield for the property rights of big business. In the Gilded Age, courts fashioned the labor injunction to recriminalize unions. Worse still, when Congress enacted antitrust laws to curb big business, judges used them to crush organized labor. Judges also vitiated congressional and state acts to exempt unions from injunctions and antitrust laws. When Congress finally acted in the 1930s, either it did so primarily to dampen truly radical working-class activism, or the federal courts and administrators “deradicalized” congressional intent. In either case, national labor relations legislation ended up as a net loss for organized labor. Union power eroded after World War II and collapsed after 1980, largely due to political and legal disadvantages.Footnote 2
At least since the early twentieth century, American historiography has displayed an anticapitalist bias, especially in matters of labor relations.Footnote 3 A half-century ago, a historian of employer associations noted that students of labor relations “almost universally have had a bias in favor of the laborer or the trade union.”Footnote 4 So deep is this orientation that a recent and overtly “conservative” history observes that nineteenth-century “laborers were not free to bargain with business owners over wages and work conditions because government stacked the deck against them. Federal and state politicians outlawed union membership, issued court injunctions to halt strikes and cripple labor activism, and sent in federal and state troops to protect the interests of powerful businessmen.”Footnote 5
Legal history echoes these conclusions. Reflecting the influence of “critical legal studies,” legal academics assume that the ruling class wields law as an instrument of capitalist hegemony. In 2002, for example, the University of Pennsylvania Law School built a conference around the theme of the “essential role of law in reinforcing and rationalizing class distinctions in the twentieth century.” “Historically,” the conference description stated, “law and legal theory have shaped, maintained, and justified class hierarchies, as well as hidden them from political view.”Footnote 6 One prominent historian of labor law claims that unions have been “down by law,” with nineteenth-century courts keeping them in “semi-outlawry, suppressing peaceful boycotts and strikes.”Footnote 7 Indeed, even the standard textbook in American constitutional history observes: “Since the landmark case of Commonwealth v. Hunt in 1842 labor unions were held not to be illegal, but by the 1890s they might as well have been for all the restraints that courts had placed upon them.”Footnote 8
Though some scholars have dissented from this orthodox view, they have not made much of an impression on mainstream historiography.Footnote 9 This is unfortunate, and it is the argument of this essay that American law has never denied organized labor's freedom of association. Quite the contrary, unions have always enjoyed at least some favoritism in the law, which has provided the essential element to their success and power. Nonetheless, even during the heyday of union power (1930–1947), organized labor never succeeded in gaining all of the privileges that it sought, and, indeed, it has not made sufficient gains to stem its current (private-sector) decline back to historically normal levels. This essay will examine the legal standing of labor unions in three periods (discussed in Sections II through IV below). In the first period, American law liberated itself from old English common law principles of master-and-servant, and especially from the remnants of conspiracy doctrine, culminating in Commonwealth v. Hunt (1842). This liberated status was supplemented by the mid-nineteenth-century antislavery, free-labor doctrine, and during this period the nation's predominant labor organization (the American Federation of Labor) emerged. In the second period (from the 1870s to the 1930s), unions sought legal relief from developments in the law of labor relations (most markedly, the development of the labor injunction in equity), and also from federal antitrust statutes. Most especially, this period saw the major Progressive departure from the founding constitutional ideas of law and rights. The Progressive ideology culminated in the third, New Deal period, especially in the Norris-LaGuardia and National Labor Relations Acts. In this period, classical “freedom of association” finally gave way to a fundamentally different principle, the entitlement to collective bargaining. With law and the administrative state clearly on their side, unions made impressive gains, which provoked a reaction in the Taft-Hartley Act and other acts after 1947. However, though organized labor remained privileged, the state began to take back some of what it had given in the New Deal era, and market forces returned unions to roughly the place they had occupied at the beginning of the twentieth century.
II. Labor Combinations Before 1842
The Anglo-American common law imposed a variety of restrictions on laborers, recognizing a broad spectrum of rights and obligations between chattel slavery at one end and autonomy at the other. English law criminalized any kind of labor combination to raise wages, a restriction that went back at least as far as the Statute of Laborers, enacted in 1349 to prevent workers from taking advantage of the labor scarcity caused by the Black Death. As late as 1800, Parliament enacted an Anti-Combinations Act for similar ends.Footnote 10 English labor law—the law of “master and servant,” sometimes referred to as the “Tudor Industrial Code”—treated not just slaves but also apprentices and indentured servants as part of the family, household, or property of their employers, in order for employers to be able to control the labor supply and keep the poor working.Footnote 11 Guild members, in contrast, had a property right in certain trades, within legal limits.Footnote 12
American courts recognized the common law principle that conspiracies—concerted actions to achieve illegal ends, or using unlawful means to achieve lawful ends—could be criminally prosecuted. But colonial American restrictions were less effective, and the general movement in antebellum American law was to free the individual worker from medieval personal restraints.Footnote 13 In short, employment law followed the general transition “from status to contract” elaborated by Sir Henry Maine.Footnote 14 By one estimation, unions faced twenty-one labor-conspiracy prosecutions before 1842, losing fifteen.Footnote 15 No court condemned an American trade union as a criminal conspiracy per se, apart from questions of means employed to achieve their ends. Labor union attorneys often won acquittals when they could show that union members had not used coercive means, and those convicted received negligible punishments—small fines, and never any jail time.Footnote 16 “There is not a single case in which the courts in America held that a peaceful strike by a union for higher wages, standing alone, constituted a criminal conspiracy,” another study concludes.Footnote 17 However, factual and doctrinal questions are often difficult to discern in the records of these early cases.Footnote 18 In the earliest recorded labor-conspiracy case, the 1806 Philadelphia Cordwainers (shoemakers) case, the trial record revealed “some minor injuries and verbal threats” by the striking workers, but this was not part of the prosecutor's indictment or the jury verdict.Footnote 19 Another account notes that these early cases involved violence, but adds: “Nevertheless, striking laborers were inclined to think that it was their right.”Footnote 20
The great Massachusetts chief justice Lemuel Shaw put to rest any question about the legality of trade unions in the famous case of Commonwealth v. Hunt, decided in 1842. The Boston Journeymen Bootmakers' Society maintained a “closed shop” agreement with Isaac B. Wait, a master cordwainer, in which Wait agreed to employ no journeymen who were not members of the society. The society's members forced Wait to dismiss Jeremiah Horne, who then sought a criminal prosecution against the society. The trial court convicted the society of an illegal conspiracy. Shaw, on the Supreme Judicial Court, overturned the conviction. He held that, while Massachusetts had adopted the English common law of criminal conspiracy, “we cannot perceive that it is criminal for men to agree together to exercise their own acknowledged rights, in such manner as best to subserve their own interests.” While the prosecutors did not allege a “conspiracy or even an intention to raise their wages,” Shaw noted, “Such an agreement … would be perfectly justifiable,” unless it were accompanied by illegal means like “coercion, or duress, by force or fraud.” The chief justice noted “the established principle, that every free man … may work or not work, or work or refuse to work with any company or individual, at his own option, except so far as he is bound by contract.” A monopolistic combination's legality depended upon the means that it used to maintain its power. Unless it used illegal means, involving force or fraud, it was legal. Shaw concluded with an analogy to show how competition curtailed the ill effects of producer conspiracies. “Suppose a baker in a small village had the exclusive custom of his neighborhood, and was making large profits by the sale of his bread. Supposing a number of those neighbors, believing the price of his bread too high, should propose to him to reduce his prices, or if he did not, that they would introduce another baker; and on his refusal, such other baker should, under their encouragement, set up a rival establishment, and sell his bread at lower prices; the effect would be to diminish the profit of the former baker, and to the same extent to impoverish him. And it might be said and proved, that the purpose of the associates was to diminish his profits, and thus impoverish him, though the ultimate and laudable object of the combination was to reduce the cost of bread to themselves and their neighbors. The same thing may be said of all competition in every branch of trade and industry; and yet it is through that competition, that the best interests of trade and industry are promoted.”Footnote 21
For those expecting consistently antiunion bias in the law, the Hunt decision has posed something of a problem, especially since it came from Chief Justice Shaw, a “conservative,” natural-rights-respecting Whig. Reducing the decision to political motives and economic policy, Yale law professor Walter Nelles argued that Shaw and the Whigs were attempting to placate organized labor in order to win its support for protective tariffs.Footnote 22 Others have pointed out that Shaw offered Hunt as a small concession to organized labor to take some of the edge off of his more significant antiunion decision in the 1842 Farwell case, which established the “fellow servant rule” (holding that employers are not liable for injuries to workers if due to the negligence of other employees). Shaw's mere sop, though, could not disguise the fact that Hunt was “a perpetuation of that same [antilabor] bias skillfully reconstituted the more ably to serve the needs of an evolving capitalism.” Since it did not protect the means of labor combination (strikes, picketing, boycotts), Hunt left the door open to criminal conspiracy prosecution, which would “prove devastating in the late nineteenth century.”Footnote 23
These views of Hunt conform to the general view of the antebellum legal system as being manipulated by capitalists to secure economic benefits for themselves. In his pathbreaking 1977 book The Transformation of American Law, Harvard law professor Morton Horwitz purported to show how the common law of property, liability, and contract was altered by judges in order to shift the economic burden of industrialization onto small farmers and workers, “to force those injured by economic activities to bear the cost of the improvements.” Horwitz argues that nineteenth-century courts applied a “ruthless” conceptualism when it came to labor contracts, but not to other contracts, displaying their class bias.Footnote 24 As the standard constitutional history textbook puts it, “State courts in effect subsidized the development of the economy by fashioning legal doctrines and rules that shifted the cost of economic and technological change from the entrepreneur to the community.”Footnote 25
This thesis has undergone a thorough revision in the last generation. One study concludes that, far from subsidizing the rich, American judges consistently used the law to aid the weak and the poor. These judges were neither tools of rapacious capitalists nor engaged in a law-and-economics calculus of social utility. Rather, nineteenth-century jurists were “arguing earnestly over basic principles of law and justice,” in which religion figured more prominently than economics.Footnote 26 “Jurists seem ultimately to have been more concerned with inspiring what they thought of as morally and socially responsible behavior than economic efficiency, and these two ends were often not the same.”Footnote 27
In short, we have no reason to regard Hunt as anything more or less than a recognition of the status that labor unions had long enjoyed under the American common law. They were free to associate for lawful ends, including the raising of wages or reduction of hours or even, in Massachusetts, to establish a closed shop. Though these were combinations to reduce competition, to control the labor supply, or otherwise to extract resources from employers and consumers, workers were as free as any other economic associations to attempt to do so by lawful means—without force or fraud.
Leaders of the antebellum labor movement, however, regarded this formal legal equality and freedom to combine as a sham. They denigrated the individualistic “free-labor” philosophy of northern liberalism as a mask for “wage slavery.” Labor activists claimed that capitalism had produced what later generations would call the “inequality of bargaining power,” which actually left workers with no choice but to accept the terms that their employers offered. Indeed, the fear of potential competition from Southern slaves led many antebellum labor unionists to take an “anti-anti-slavery” stance, and sometimes an outright pro-slavery one. As one scholar notes, “even radical historians have not been able to show convincingly that the antebellum labor movement in the United States had much sympathy with the antislavery campaign.”Footnote 28 Abolitionists, for their part, tended to object to labor unions as contrary to individual liberty. “The liberating ideology of ‘free labor’ was as hostile toward unionism as it was toward enslavement,” one historian notes.Footnote 29 They continued this opposition into the postwar years. Abolitionist Frederick Douglass, for example, wrote an editorial titled “The Folly, Tyranny, and Wickedness of Labor Unions.”Footnote 30 Similarly, the liberal Independent spoke out against union violence in the great 1877 railroad strike. “Shall we, who have fought and conquered that we might forbid capital to rob and enforce labor, now allow labor to rob and enforce capital?”Footnote 31
Though historians have emphasized the “ambiguities” of the free-labor doctrine and express “surprise” at abolitionist suspicion of organized labor, in the late nineteenth century the individualist, voluntarist, contractual view articulated in the Hunt decision guided the operation of the American labor market.Footnote 32 But it took several decades for American unions to decide what they wanted to do with their freedom of association. The Civil War saw the rise of the first national labor unions, organized into the National Labor Union, which lasted until the depression of 1873. The Noble and Holy Order of the Knights of Labor established itself as the next major union federation, with over half a million members. It suffered a major blow when the Haymarket bombing of 1886 (in which a bomb set off at an anarchist protest killed several Chicago police officers) discredited the whole labor movement. These organizations were “reform” union federations, more interested in abolishing the wage-labor system than in securing a greater economic share for workers, and tended to move into partisan political activity. By the late nineteenth century, these organizations gave way to the trade unionism of the American Federation of Labor (AFL).Footnote 33
One of the chief disputes between reform and trade unionists was over the use of the strike. The reformers disdained it as a usually ineffective tactic that at best treated the symptoms rather than the disease itself. As one historian observes, the reformers “did not understand what the trade unions of the 1880s were beginning to realize, namely that often only the potential or actual use of coercion would compel employers to negotiate with their employees.”Footnote 34 Here was the rub: the use of coercion against employers and nonstriking workers was more than an exercise of freedom of association; it abridged the freedom of association of employers and nonstrikers. The public was unwilling to extend this freedom to coerce to unions. The use of violence and intimidation is what brought an end to almost all strikes. “With few exceptions,” one study notes, “labor violence in the United States arose in specific situations, usually during a labor dispute. The precipitating causes have been attempts by pickets and sympathizers to prevent a plant on strike from being reopened by strikebreakers, or attempts of company guards, police, or even National Guardsmen to prevent such interference.”Footnote 35 Such strike violence became increasingly widespread in the late nineteenth century, beginning with the great railroad strike of 1877.
Scholars have tended to ignore the issue of union violence, or to attribute it to employer provocation or to the coercion inherent in apparently nonviolent capitalism; or they have regarded the whole issue as a subjective matter of class perspective. One scholar claims, for example, that judicial notice of union violence “can only partly be explained by the reality of labor violence which at times existed outside the courtroom,” much of which was “a response to direct acts of violence against workers by employers, their agents, police, militia, and federal troops, as well as to the more diffuse structural violence of the workplace.” According to this scholar, one's evaluation of violence “depends on the facts and one's own social vision.”Footnote 36 But the fact remained that “[w]hile employer obduracy might lead to rejection of [union] recognition, such conduct was legally permissible. Had workers passively accepted such decisions, the level of violence in American labor disputes would have been reduced.”Footnote 37 But strikers continued to behave as if they were free to use force, as if their “right to organize and to strike was meaningless if the strikers' jobs were taken by strikebreakers.”Footnote 38 As Henry George told Pope Leo XIII in 1891, “Labor associations can do nothing to raise wages but by force…. Those who tell you of trades unions bent on raising wages by moral suasion alone are like those who would tell you of tigers who live on oranges.”Footnote 39
In response to increased labor organization in the late nineteenth century, employers formed their own associations to resist such coercion.Footnote 40 They benefited from several legal developments: the labor injunction, the Interstate Commerce Act (1887), and the Sherman Antitrust Act (1890). These devices, labor historians claim, reduced unions to “semi-outlawry” and were part of the general Gilded Age judicial antipathy to socioeconomic reform often called “laissez-faire jurisprudence” in the “Lochner era.”Footnote 41 However, this general view of pre–New Deal jurisprudence has undergone a major revision in the last generation. The old Progressive view that there was “a veritable slaughter of legislation in the name of liberty of contract on the state court level” has been overturned, and we are coming to realize that “the hidden truth about the judges of ‘substantive due process’ is that they used that weapon very rarely.”Footnote 42 A similar revision is in order with regard to labor law in particular. In short, “Gilded Age” law was no more a weapon of class warfare than antebellum law had been.
III. The Search for Privilege
Unionists remained liable for criminal conspiracy after the Hunt decision if their ends or means were unlawful—indeed, there were more conspiracy prosecutions in the second half of the nineteenth century than in the first.Footnote 43 But such prosecutions could not end most strikes, and few were instituted after 1880. Instead, employers began to seek injunctions against strikes in the 1870s. Courts of equity issued injunctions in situations where ordinary common law courts were inadequate. If someone faced immediate and irreparable harm, and could not prevent it by normal criminal or civil procedure, he could ask a judge (originally a “chancellor”) for a writ of injunction to prevent the harm. If faced with a strike, an employer could not sue a union, since unions were almost never incorporated; nor could he wait to sue each individual union member. The local criminal justice forces were often unwilling or unable to protect the employer against strikers. Chancellors could issue temporary restraining orders quickly (which could be made permanent after a hearing), without hearing defendant testimony, and without jury consideration.
Scholars repeatedly point out that courts enjoined even “peaceful picketing,” but rarely point out that judges almost never enjoined picketing that began peacefully.Footnote 44 Sylvester Petro has shown that violence, intimidation, and coercion were involved in every case in which a federal or state court issued an injunction. Even after picketing received Supreme Court protection as “free speech,” the Court allowed injunctions of picketing conducted in an atmosphere of violence.Footnote 45 Admittedly, intimidation could be defined loosely, and employers might provoke violence in order to gain an injunction or state intervention. But there was more than enough evidence and history of overt union lawlessness to support most claims of coercion. Moreover, injunctions were only as good as the agents who enforced them. They were often ignored and failed to stop determined strikes.Footnote 46 “If anything, the courts bent over backwards to protect the rights of unionists and in some states such as New York the courts granted the unions special privileges and immunities that were not available to other organizations,” one study concludes. “Far from abusing their equity power, the courts used those powers with care so as to protect the rights of union members as well as employers and non-union employees.”Footnote 47
Other public policies in the late nineteenth century compounded organized labor's inability to control much of the labor market. It may be said that late-nineteenth-century public policy—rather than the era's jurisprudence—was biased against labor. For while the government attempted to maintain a free and competitive labor market (at least for adult white males), it used government power for a range of purposes that did more for capital than for labor. The railroad industry, the sector first beset by violent labor uprisings, was largely the product of federal assistance. A host of American manufacturers were protected from foreign competition by the imposition of tariffs, while there were virtually no restrictions on European immigration, thus increasing the labor supply and depressing wages. At the same time, organized labor supported the protective tariff, in the belief that higher prices permitted employers to pay higher wages. Most important, the United States remained short on labor; few employers had “monopsony” (single-purchaser) power to dictate wages.Footnote 48 And while organized labor did lead the charge to curtail Asian immigration, it was ambivalent about restricting European sources. Federal banking policy also aided capital accumulation. However, the federal and state judiciary, using such doctrines as “liberty of contract” and “substantive due process,” attempted to maintain a neutral, competitive attitude toward business and labor alike.Footnote 49
The Sherman Antitrust Act of 1890 also brought more government power to bear against unions. The act prohibited “every contract, combination … or conspiracy” in restraint of interstate commerce. The Sherman Act reintroduced the idea that conspiracy per se was punishable, apart from the means and ends pursued. Although there was some dispute about whether Congress intended to apply the law to labor as well as to producer combinations, it seems most likely that it did.Footnote 50 Historians usually regard it as ironic, if not insidious, that an act aimed at the steel and oil trusts ended up being applied to labor unions. However, Herbert Hovenkamp notes that the courts, “far from being aligned with big business … applied the same stricter standards to business and labor alike, although the consequences for labor were far more devastating.” The Sherman Act, he says, turned out to be “a savage weapon against labor combinations.”Footnote 51 The law ended up promoting what Hovenkamp calls “one of the most embarrassing failures of classical economics: its notion that combinations of capital and combinations of labor should be treated in exactly the same way.”Footnote 52 However, it is more likely that the situation that prevailed from Hunt until the Sherman Act—which allowed conspiracies but made their agreements unenforceable—was probably the wisest and most just.Footnote 53 Indeed, as Hovenkamp points out, once the U.S. Supreme Court introduced the “rule of reason,” holding that some combinations in restraint of trade might be “reasonable” and beneficial to the public, it did no good for unions, whose combinations never benefited the public.Footnote 54 Antitrust law might have benefited unions if they could have found a way to use it against more efficient worker-competitors. (This is essentially what a picket line tries to do.) They would have had to make a case that employers and efficient workers (whom they tended to call “cheap” workers) were engaged in a combination in restraint of trade. Antitrust law has most often been used by small, less efficient firms against larger, more efficient rivals, and there is at least some evidence that the framers of the Sherman Act sought to protect small, inefficient competitors.Footnote 55 But to make such a case in the labor market would have been entirely too far-fetched.
The combination of national power to regulate interstate commerce, the antitrust laws, and the injunction put an end to the Pullman strike in 1894. When employees of the Pullman Palace Car Company began a strike, Eugene V. Debs's American Railway Union supported them by refusing to handle any Pullman cars. This action is known as a “secondary boycott,” in which employers who had no dispute with their own employees faced strike activity because of those employees' support for another union. The federal courts issued injunctions prohibiting interference in the conduct of the railroads' business. When Debs and other union officers violated the injunction, they were jailed for contempt of court. The Supreme Court upheld President Grover Cleveland's resolute efforts, as the Court put it in the 1895 Debs decision, “to brush away all obstructions to the freedom of interstate commerce or the transportation of the mails.”Footnote 56 While the Democratic Party took up organized labor's condemnation of “government by injunction” in the 1896 presidential election, the Republicans won an overwhelming victory.Footnote 57 And while criticism of the judiciary as unfairly hostile to unions persisted, the public reaction to such complaints was markedly tepid. The populist-progressive-union campaign against the judiciary reflected, as a recent history puts it, “a muted fury.”Footnote 58
After the Pullman strike, unions continued to pursue legislative assistance. It is a hearty myth in American labor history that, in contrast to the nineteenth-century reform-utopian unionists, the AFL was strictly “voluntarist”—apolitical, distrustful of the state, and limited to pure-and-simple, bread-and-butter, wages-and-hours “business unionism.” In fact, the AFL sought numerous legislative enactments at the local, state, and federal levels. These included restrictions on all Asian and European “pauper” immigration, health and safety legislation that would limit competition from nonunion members, and occupational licensing that unions could control. Above all, the AFL sought special exemptions from injunctions and the antitrust laws.Footnote 59
Legislative ambivalence characterized the first major piece of federal labor law, the Erdman Act of 1898. Intended to prevent nationally disruptive railway strikes like that of 1894, section 10 of the act made it a crime for employers (at least those engaged in interstate commerce) to make contracts with employees in which the employee agreed “not to become or remain a member of any labor corporation, association, or organization.” Such agreements were known as “yellow-dog contracts.” The Erdman Act further forbade employers to “unjustly discriminate against any employee” on account of union activity.Footnote 60 The Supreme Court struck down this section of the act ten years later. The Fifth Amendment's guarantee that Congress could not deprive any person of “liberty, or property, without due process of law” prohibited such a statute. Justice John Marshall Harlan wrote, “An employer has the same right to prescribe terms on which he will employ one to labor as an employee has to prescribe those on which he will sell his labor, and any legislation which disturbs this equality is an arbitrary and unjustifiable interference with liberty of contract.”Footnote 61 This decision is usually depicted as the first of many pieces of laissez-faire judicial activism that foiled the democratic achievement of the labor movement. In fact, unionists were divided and never satisfied with the Erdman Act. The railroad brotherhoods supported it, but the AFL opposed it. The act's provision for government arbitration seemed to limit the right to strike and offended the federation's “voluntarist” principles. Union leader Samuel Gompers denounced it as “destructive of the best interests of labor, ruinous to the liberties of our people,” threatening to create “an autocracy or an empire on the one side and a class of slaves or serfs on the other.” The AFL dropped its opposition to the Erdman Act after street railway workers and seamen were exempted from it. The act typified the ambivalent attitude in Congress about organized labor, and signified a willingness to leave contentious policy questions to the courts to decide.Footnote 62
The Supreme Court also explicitly applied the Sherman Antitrust Act to labor unions in 1908 (something it had done only implicitly in the earlier Debs case). The 1908 decision, Loewe v. Lawlor, arose out of a case in which the United Hatters Union, in collusion with hat manufacturers, called a strike against the Loewe Company in Danbury, Connecticut. Although Dietrich Loewe's own workers had no complaints against him, some of those he employed were not union members. Thus, “even though Loewe, with tears in his eyes, begged [United Hatters members] to stay, they left rather than be blacklisted by the union and barred from the industry.”Footnote 63 The union also began a nationwide boycott of Loewe's hats. Like the Pullman strike, this was a secondary boycott. An ordinary or primary strike was difficult enough when it involved more than employees quitting and interfered with the employer's ability to carry on his business and with replacement workers' right to work. In a secondary boycott, striker A in dispute with employer B tries to cut off anyone else from doing business with B. Thus, employer C (for example), who had no quarrel with A, suffers for his relations with B. The ultimate extension of the secondary boycott was the syndicalist “general strike,” in which any dispute between workers and employers would prompt all workers to quit work and bring about a fundamental reordering of the economy. Several general strike attempts occurred in England (1926), Canada (1919), and Spain (1919); the United States experienced general strikes in several cities in 1919 and 1934. State law on the secondary boycott was unclear. The Supreme Court held that this kind of strike was actionable under the Sherman Act—open to criminal prosecution as a misdemeanor, to an injunction sought by a U.S. attorney, or, as in the Loewe case, to a civil suit with treble-damage liability.Footnote 64
Although Loewe won money damages from union members, the effect of the Loewe decision on union power was rather limited. It only “deprived organized labor of a particular type of organizing strategy, the distributor-targeted secondary boycott, effective only in industries in which manufacturers sold their goods through independent distributors to a largely working-class clientele.”Footnote 65 However, the decision coincided with the high-profile prosecution of Samuel Gompers and other AFL leaders for contempt of court when they violated an injunction in the 1906 Buck's Stove boycott. Buck's Stove and Range Company had secured an injunction against an AFL boycott, and then won a criminal contempt case against Gompers when the AFL newspaper, The American Federationist, continued to publicize the boycott. The Supreme Court overturned the criminal conviction in 1911, and then overturned a subsequent conviction for civil contempt in 1914 because the statute of limitations had expired.Footnote 66
Unions would also not suffer from the Loewe decision because they were seldom legal entities, and thus could seldom be sued in court. Loewe had to sue and recover damages from dozens of individual members of the union, which was both tedious for him (he was bankrupt by the time he collected a judgment, almost a decade after the Supreme Court decision) and unfair for the individual union members (who were often unaware of what their union had conspired to do). The Supreme Court straightened out this anomaly, and again extended the labor reach of the commerce clause, in the 1920s. When the Coronado Coal Company attempted to operate its mines with nonunion labor, the United Mine Workers (UMW) responded with threats and violence against replacement workers and the owners, ultimately committing several murders and flooding and dynamiting the mines. In 1922, the Supreme Court held that the UMW, though unincorporated, could be sued under federal antitrust laws; however, the Court denied that the union's activity had enough of an effect on interstate commerce to be covered by the antitrust laws.Footnote 67 In a second suit, the company was able to convince the Court that the strike did affect interstate commerce and won a judgment against the union.Footnote 68
Loewe and Buck's Stove pushed the AFL into closer cooperation with the Democratic Party in the union's effort to win exemption from injunctions and antitrust law. The AFL claimed victory when Congress passed the Clayton Antitrust Act in 1914. The sections relevant to organized labor held that “the labor of a human being is not a commodity or article of commerce,” and that the law did not “forbid or restrain individual members of such organizations [i.e., unions] from lawfully carrying out the legitimate objects thereof” (section 6). The act also prohibited federal courts from issuing injunctions “in any case between an employer and employees … unless necessary to prevent irreparable injury to property, or to a property right”; nor could the courts prohibit “peaceful” strikes or boycotts (section 20).Footnote 69 This language was broad and evasive enough to allow both employers and labor organizations to claim victory. Gompers called it “the greatest measure of humanitarian legislation in the world's history” and “the industrial Magna Carta upon which the working people will rear their construction of industrial freedom.”Footnote 70 In fact, “Congress delegated the decision about organized labor's status under the antitrust laws to the courts.”Footnote 71 Employers, and eventually the courts, believed that the new act did nothing more than give statutory expression to the law as it stood, and unions continued to be liable under antitrust law and to injunctions. Moreover, the Clayton Act now allowed private parties, rather than just U.S. attorneys, to seek injunctions, so unions were in fact in worse shape than before the act. As one historian notes, “Never did an act backfire so badly.”Footnote 72 Congress had again deferred to the courts, which really had no choice but to make an independent policy judgment.Footnote 73
Organized labor gained much more from the national mobilization of World War I than it had from earlier legislative efforts. The AFL's traditional reluctance to seek state power to promote union goals—its oft-mischaracterized “voluntarism”—was swept away by the prounion government policy of the Great War.Footnote 74 The war saw a major step forward in the union ideal of “industrial democracy.” Unions claimed that, since the nation was fighting against the autocracy of the German Empire, it ought to curtail the despotic power of American employers by compelling them to bargain with organized labor.Footnote 75 Shortly after the Clayton Act, Congress enacted the La Follette Seamen Act (1915) to promote organization among sailors. More dramatically, the railroad brotherhoods threatened a strike that would cripple defense mobilization and “virtually extorted Congress” into enacting an eight-hour-day law for railroad labor.Footnote 76 Squeezed by government policies that raised their labor costs, capped their shipping rates, and made it difficult to raise or borrow capital, the industry was overwhelmed by the demands that national mobilization placed on it, and the federal government took control of the railroads under the terms of the 1916 Army Appropriations Act.Footnote 77 Though restored to private ownership in 1920, the railroads were highly regulated in a government-enforced cartel system. Railway labor legislation served as a model or rehearsal for New Deal labor legislation.Footnote 78 Indeed, the whole World War I experience of national economic regulation was a training period for many New Dealers. The War Industries Board coordinated national industrial production in a way that New Dealers tried to repeat in the National Industrial Recovery Act; Army camps served as a model for the Civilian Conservation Corps; government munitions production projects presaged the Tennessee Valley Authority; the U.S. Housing Corporation adumbrated the Federal Housing Administration. In short, the command economy of “war socialism” showed Progressives that the American people would give government extraordinary powers in extraordinary circumstances. The National War Labor Board served as the model for New Deal labor policy. Though it had no official power to compel unionization, the board had significant influence on labor-management relations; its mediation and conciliation efforts helped to increase union membership to over five million by the time of the armistice.Footnote 79
When Washington ended its wartime support, unions lost most of their wartime gains. Employers and government retained the antiunion legal devices that they possessed before the war. Hundreds of injunctions were issued to break the 1922 railway shopmen's strike, for example, a conflict that produced 1,500 cases of assault, fifty-one cases of dynamiting, and sixty-five kidnappings.Footnote 80 The Supreme Court continued to uphold traditional protections for employers and nonunion workers against unions. In 1917, it upheld the yellow-dog contract, in which workers agreed not to join a union as a condition in the employment contract. Employers were thus able to seek injunctions to prevent union attempts to organize their workers, since such efforts were unlawful inducements to breach a contract.Footnote 81 Shortly after the war, the Court held that a state law prohibiting the issuing of injunctions in labor disputes violated the Fourteenth Amendment's protection of property, as well as the amendment's guarantee of the equal protection of the law.Footnote 82 The same year, it construed the Clayton Act's labor provisions very strictly: secondary boycotts were not lawful, and therefore not protected by section 6 of the act; section 20, proscribing the issuing of injunctions, did not apply to secondary activity, either.Footnote 83 The Court also held unions to a strict standard when evaluating whether strike activity was “peaceful,” and permitted injunctions against intimidating activity.Footnote 84 It also stretched its standard of what affected interstate commerce in a way that made it easier to apply federal antitrust laws to strikes.Footnote 85
While these cases reinforced the impression of a judicial double standard against organized labor, an unrestrained interpretation of Congress's commerce power ultimately provided the basis for an array of union privileges in the 1930s and 1940s. At the same time, the judiciary was becoming more sympathetic to union goals, as it moved from nineteenth-century liberalism to Progressive-era “corporate liberalism.”Footnote 86 American business and political leaders began to think that labor unions, if they behaved in a peaceful, lawful, orderly fashion, could be legitimate parties in the political economy, and these leaders tried to encourage “responsible unionism.”Footnote 87 Even Chief Justice William Howard Taft, often depicted as typifying the antiunion reaction of the 1920s, referred to the strike as “a lawful instrument in a lawful economic struggle or competition between employer and employees as to the share or division between them of the joint product of labor and capital,” and remarked that “the day of the industrial autocrats is passing and should pass.”Footnote 88 Congress enacted a new Railway Labor Act in 1926, one which guaranteed the right to join a union.Footnote 89 Many employers (other than interstate railroad operators), though still able to use yellow-dog contracts and other legal devices to thwart unions, moved away from strident opposition and toward more sophisticated “industrial relations” systems. The most prominent of these was the employee representation plan or “company union.”Footnote 90 The courts, employers, and voters retained their Progressive-era ambivalence about labor unions through the 1920s, during which organized labor reverted to roughly its prewar share of the American labor force.Footnote 91
IV. “Full” Freedom of Association
The Great Depression finally swept away the principal obstacles to organized labor and produced a wave of prounion legislation. The surge began after the Democrats won control of Congress in 1930 and at last passed an effective anti-injunction act. The Norris-LaGuardia Act of 1932 recognized organized labor's argument that employer and employee were not on equal bargaining terms, and that “the individual unorganized worker is commonly helpless to exercise actual liberty of contract”; therefore “it is necessary that he have full freedom of association.”Footnote 92 Since government policy had aided capital through the corporate form of organization, it now ought to balance the scales by promoting union organization. The act made yellow-dog contracts unenforceable, and prohibited federal courts from issuing injunctions in labor disputes absent actual fraud or violence. It protected “giving publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising, speaking, patrolling, or by any other method not involving fraud or violence.”Footnote 93 It also tightened the procedural requirements for gaining an injunction to stop fraud and violence. Although the act did not mention antitrust laws, it did declare that no federal court could hold that “any persons participating in a labor dispute constitute or are engaged in an unlawful combination or conspiracy.”Footnote 94 Many states enacted their own versions of the act, and labor injunctions dropped off substantially.Footnote 95
These provisions might have satisfied the AFL of 1900, but organized labor now sought greater government promotion of unionization.Footnote 96 President Franklin D. Roosevelt displayed a Progressive-era ambivalence about organized labor, but made the promotion of collective bargaining part of his comprehensive plan for industrial recovery and reform, the National Industrial Recovery Act (NIRA) of 1933. This was a fantastically ambitious scheme in which Congress allowed American industries to devise their own “codes of fair competition,” essentially an invitation to establish enforceable cartels.Footnote 97 Section 7(a) of the act endeavored to promote labor cartels. It stated:
Every code of fair competition shall contain the following conditions: (1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; (2) that no employee and no one seeking employment shall be required as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing.Footnote 98
Though it failed on the whole, the NIRA encouraged and inspired union organizers. The federal government had gone beyond merely exempting unions from laws and judicial processes that restrained other persons and organizations; it was now lending its power to the promotion of unions. It was the common phrase of the day that “President Roosevelt wants you to join a union.” The Depression itself had not increased militancy among American workers—it followed the historical pattern that depressions usually weaken unions.Footnote 99 The NIRA, though, induced a significant “strike wave” in 1934, as organizers battled with company unions or other employer attempts to maintain the open shop. The Supreme Court finally held the act unconstitutional in 1935, but Congress adopted a more far-reaching version of section 7(a) later that year.
The National Labor Relations Act—known as the Wagner Act after its sponsor, New York Senator Robert F. Wagner—revolutionized American labor law. The act purported to be an exercise of Congress's power “to regulate commerce … among the states,” and thus began with the claim that employers' refusal to recognize unions “leads to strikes and other forms of industrial strife or unrest, which have the intent or the necessary effect of burdening or obstructing commerce.”Footnote 100 Yet the industrial unrest that preceded the Wagner Act had resulted from the NIRA's attempt to promote unionization. And the Wagner Act would produce an even greater outbreak of industrial unrest in 1936–37. New Deal labor law is a prime example of what has been called “the phenomenon of self-generating interventions,” in which “every problem brought forward as a reason for further government intervention is the result of a prior intervention.”Footnote 101
The Wagner Act, like Norris-LaGuardia, tried to redress “the inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract and employers who are organized in the corporate or other forms of ownership association.” It compelled employers to bargain exclusively with the organization chosen by a majority of their workers to represent them. It banned “company unions” and any employer interference with employee organization.Footnote 102 The Wagner Act established a National Labor Relations Board to oversee representation elections and to enforce rulings. President Roosevelt initially opposed the act, until the Supreme Court struck down the NIRA in May 1935. He then threw his support behind the Wagner Act, perhaps assuming (and hoping) that the Court would strike it down as well. Many congressmen similarly voted for the act on the assumption that they could placate organized labor with an act that was doomed in light of recent Court decisions.Footnote 103
Despite the Wagner Act's claim to be an effort to foster “industrial peace,” it provoked a major wave of strike activity in 1936–37, especially after FDR's landslide reelection.Footnote 104 As employers continued to resist collective bargaining, awaiting an adverse Supreme Court decision, union organizers became more aggressive, culminating in the famous “sit-down” strikes in early 1937. In a sit-down strike, striking workers occupied the factory and refused to vacate it until their demands were met. This was a more effective way of preventing nonunion workers from breaking the strike. This tactic, even more than most ordinarily menacing picketing, was unlawful, but many officials—most notably Michigan governor Frank Murphy—refused to enforce court orders against it. Some prominent employers, like General Motors and U.S. Steel, came to terms with the new industrial unions, and most other employers stopped resisting after the Supreme Court upheld the Wagner Act in April 1937. Although no satisfactory explanation has yet been given for the Court's capitulation in the Wagner Act cases, the Court's preference for the act over the anarchy of the sit-down strikes is not an unlikely one.Footnote 105
The Wagner Act provided much more than a guarantee of labor's freedom of association. It furnishes a good illustration of the New Deal's transformation of American liberalism from a rights-based to an entitlement-based system.Footnote 106 From the founding until the twentieth century, the American regime assumed that government's purpose was to secure preexisting natural rights—such as life, liberty, property, or association. Everyone can exercise such rights simultaneously; nobody's exercise of his own rights limits anyone else's similar exercise. Your right to life or to work or to vote does not take anything away from anyone else. We can all pursue happiness at once. Entitlements, in contrast, require someone else to provide me with the substantive good that the exercise of rights pursues. The right to work, for example, is fundamentally different from the right (entitlement) to a job; the right to marry does not entitle me to a spouse; the right to free speech does not entitle me to an audience. The Wagner Act provided not freedom of association, but an entitlement to association—compulsory collective bargaining. “Full freedom of association” was something fundamentally different from the traditional understanding of freedom of association.Footnote 107 The New Deal gave unions a power to compel association by nonunion members and employers, while the classical standard of a right to associate would have prevented such compulsory association.
The Wagner Act removed both employers' and workers' ability to decline to associate with unions. Congress contributed to this effort by exposing the most egregious instances of employer resistance that seemed to violate old-fashioned freedom of association. The La Follette Committee, which met from 1936 until 1941, brought to light the industrial spies, private detectives, blacklists, professional strikebreaking firms, and corporate arsenals of machine guns and tear gas. “During [the 1930s] many American workers undoubtedly did not want to join unions,” the chief historian of the committee wrote. “But the framers of the Wagner Act and the members of the La Follette Committee were concerned with those who did. ‘Labor,’ in the context of the La Follette investigations, meant those workers who wished to become union members.”Footnote 108 The power of the state was required, not to protect unionists' freedom of association, but to compel employers and nonunion workers to accept unionization. Thus, an entirely new definition of “civil liberties” arose in the 1930s. The American Civil Liberties Union, like the AFL, gave up traditional liberal voluntarism and came to embrace state power.
Unions often claimed that a legal double standard worked against them (especially in antitrust cases); now it clearly worked in their favor. In the 1930s, the Supreme Court largely abandoned its protection of property rights under the Fifth and Tenth Amendments (with regard to federal law) and the Fourteenth Amendment (with regard to state law). In the Carolene Products case of 1938, Justice Harlan F. Stone wrote that the Court would henceforth give greater protection to nonproperty rights. The Court would now assume that laws affecting “ordinary commercial transactions” were constitutional. But it would apply a more stringent standard for laws that affected provisions in the Bill of Rights, or “particular religious, or national, or racial minorities.”Footnote 109 Advocates of New Deal labor legislation had adumbrated this “preferred freedoms” idea in Congress.Footnote 110
Roosevelt's proposal that Congress increase the size of the Supreme Court, to allow him to appoint up to six new justices—the infamous “court-packing plan” of 1937—prompted a widespread political reaction against the New Deal. The sit-down strikes and the sharp economic downturn (the “Roosevelt recession”) of that year also brought the New Deal effectively to an end. But Roosevelt was able to appoint two liberals to replace conservatives George Sutherland and Willis Van Devanter in 1937–38, and by the end of his presidency he had appointed every member of the Court but one. This New Deal Supreme Court continued to extend the privileges of organized labor. In the 1940 case of Thornhill v. Alabama, for example, the Court declared that peaceful picketing constituted “free speech” under the First Amendment, and thus states could not prohibit it. Justice Frank Murphy, whom Roosevelt had appointed to the Court in the prior year, wrote the opinion. Although there was some dispute about the peaceful nature of the picketing at issue, Murphy stressed its democratic-communication character, citing the Carolene Products precedent.Footnote 111
The Thornhill case also represented an important extension of federal judicial power in its application (known as “incorporation”) of provisions of the Bill of Rights to the states. Well into the twentieth century, the Supreme Court had held that the Bill of Rights applied only to the federal government. In the 1920s and 1930s, it began to apply some provisions to the states; by the end of the century, nearly all of the Bill of Rights had been incorporated.Footnote 112 This process helped to facilitate the agenda represented by the Carolene Products decision. Since the Bill of Rights concerns many noneconomic rights, the Court was able to strike down state acts through incorporation, as it had struck down state economic regulations via the “substantive due process” doctrine before 1937. With regard to picketing, however, the Court almost immediately stepped back; in 1941, it declared that peaceful picketing could be prohibited after a strike had manifested an atmosphere of intimidation and violence.Footnote 113 The Court “moved consistently toward the position that picketing was so bound up with elements of economic coercion, restraint of trade, labor relations, and other social and economic problems that a large measure of discretion in regulating it must be restored to the states.”Footnote 114
In 1940, a month after the Thornhill picketing-as-free-speech decision, the Court decided (in Apex Hosiery v. Leader) that a business could not recover damages under the antitrust acts after a sit-down strike had prevented the interstate shipment of its goods (in this case, stockings). While the Court did not hold that unions were completely exempt from antitrust action, it severely narrowed the bounds of union liability. In doing so, the Court evinced a definition of interstate commerce and federalism quite at odds with the tendency of its recent decisions regarding congressional economic regulation. Though the Court would soon hold that a farmer could be fined under the Agricultural Adjustment Act for cultivating eleven acres more wheat than he was allotted—even though none of the wheat left his farmFootnote 115—in Apex it held that, since the strike did not affect the market price of stockings, interstate commerce was not substantially affected. Justice Stone admitted that the strike evinced “a lawless invasion of petitioner's plant and destruction of property by force and violence of the most brutal and wanton character, under [union] leadership and direction,” but this did not justify the application of the federal antitrust laws. Such mayhem was the responsibility of state and local powers, though he noted here that the strike was carried on “without interference by the local authorities.”Footnote 116 Chief Justice Charles Evans Hughes's dissent called attention to an anomaly: the Wagner Act applied to employers because of the putative effect that antiunionism had on interstate commerce, but here employers were unprotected from “the direct and intentional obstruction or prevention of such [interstate] shipments by the employees.”Footnote 117
The next year, in U.S. v. Hutcheson, the Court decided that a secondary boycott, part of a jurisdictional conflict between two unions, could not be enjoined under the antitrust acts. The majority decision noted, “So long as a union acts in its self-interest and does not combine with non-labor groups, the licit and the illicit … are not to be distinguished by any judgment regarding the wisdom or unwisdom, the rightness or wrongness, the selfishness or unselfishness of the end of which the particular union activities are the means.”Footnote 118 In what Justice Owen Roberts called “a process of construction never, as I think, heretofore indulged by this court,” the Court found that the Norris-LaGuardia Act had repealed criminal penalties for unions under the Sherman Act. “I venture to say that no court has ever undertaken so radically to legislate where Congress has refused to do so.”Footnote 119 Nor were the holdovers from the pre-Roosevelt court the only dissenters in this line of double-standard cases. In 1945, the Court held that a union, from motives of revenge, could compel an employer to cease doing business with another firm so as to drive that firm out of business—reiterating the Hutcheson principle that the Court would not scrutinize the rightness or wrongness of union motives. Justice Robert H. Jackson, who had been FDR's attorney general and a supporter of the court-packing plan, noted:
With this decision, the labor movement has come full circle. The working man has struggled long, the fight has been filled with hatred, and conflict has been dangerous, but now workers may not be deprived of their livelihood merely because their employers opposed and they favor unions. Labor has won other rights as well…. This Court now sustains the claim of a union to the right to deny participation in the economic world to an employer simply because the union dislikes him. This Court permits to employees the same arbitrary dominance over the economic sphere which they control that labor so long, so bitterly and so rightly asserted should belong to no man.Footnote 120
Thus, national policy at once tried to preserve competition in product markets while tolerating or promoting labor monopolies.Footnote 121
In 1940, Chief Justice Hughes had mused, “Suppose … there should be a conspiracy among the teamsters … in New York City to prevent the hauling of goods and their transportation in interstate commerce, can it be doubted that the Sherman Act would apply?”Footnote 122 But two years later, in the case of U.S. v. Local 807, not only was the Sherman Act of no avail in an obvious case of a conspiracy to obstruct interstate commerce, but the Court held that the federal antiracketeering laws did not apply to union violence. In the events that led to this case, New York City teamsters forced their way into trucks coming into the city from other states, and demanded either to take over the delivery or to receive payment of a day's union wage to leave the out-of-state truckers alone. The Federal Anti-Racketeering Act of 1934 declared it a felony for any person to use force in interstate commerce to extort the payment of money, “not including, however, the payment of wages by a bona fide employer to a bona fide employee.” Despite the lack of bona fides or any employer-employee relation in this case, the Supreme Court found that this teamster activity was not extortion but a “traditional labor union activity,” one acceptable even when it involved resort to “violence and threats.”Footnote 123 Although Congress tried to overturn this decision with the Hobbs Act of 1946, the Court ultimately continued to hold union violence exempt from the antiracketeering laws.Footnote 124
V. Conclusion: Policy and Market Reaction
The power and privileges of organized labor peaked during World War II, and a reaction began to set in during and after the war. The outbreak of strikes in the middle of the war led Congress to enact (over President Roosevelt's veto) the War Labor Disputes (Smith-Connally) Act of 1943, which gave the United States the power to take over industries that were affected by strikes, provided criminal penalties for strike leaders, and prohibited expenditure of union funds on political campaigns. Though the act had little effect on most workers, “[l]abor discovered to its chagrin that government protection exacted a price in the form of greater supervision of union affairs.”Footnote 125 By the end of the war, the President's Committee on Fair Employment Practice and the federal courts had begun to impose a duty of “fair representation” on unions, to make sure that they did not use their majority and compulsory unionism to discriminate against members who were racial minorities.Footnote 126 The courts here recognized that federal labor relations law had delegated extraordinary power to unions—“power not unlike that of a legislature,” as the U.S. Supreme Court put it—and, therefore, unions had to abide by constitutional standards of equal protection. The Wagner Act had, as one historian puts it, “created a hybrid social organization, private in origin but exercising public power over individual rights; the majority union became something akin to a private government, a legally created ‘state within the state.’ ”Footnote 127
The War Labor Disputes Act provided a model for the Taft-Hartley Act of 1947, which preserved the basic principles of the Wagner Act but tried to balance the respective rights of management and unions. While the Wagner Act outlawed only “unfair labor practices” by employers, Taft-Hartley enumerated certain unfair labor practices that unions could not engage in. It outlawed the closed shop and secondary boycotts, required that union officers forswear Communist Party membership, and gave the president powers to forbid strikes that might imperil national security. Perhaps most important, it permitted states to prohibit the “union shop” or any kind of requirement that an employee join or pay dues to a union. This provision led many southern and western states to enact such “right-to-work” laws. Ironically, organized labor made an unsuccessful effort to get the Supreme Court to hold such laws unconstitutional on the “liberty of contract” basis that underlay the old understanding of freedom of association.Footnote 128
While virtually no one accepts the contemporary union claim that Taft-Hartley was a “slave labor act,” it did restrict union freedom in unprecedented ways. Even if the closed shop were a mutually acceptable arrangement for employer and union, they were forbidden voluntarily to adopt it. Taft-Hartley also established the first real prohibition on the right of employees to strike, by giving the president power to suspend strikes and to impose federal mediation. Nevertheless, the act did not seriously clip the wings of organized labor, especially as it was interpreted by the National Labor Relations Board.Footnote 129 Union membership continued to grow, peaking at about one-third of the nonfarm private sector labor force in the mid-1950s.
During the 1950s, union violence, corruption, and connections to organized crime led to further calls for restrictions on union power. Perhaps the most revealing observation came from Harvard law professor Roscoe Pound. Pound had been the principal theorist of “sociological jurisprudence,” which attacked the natural law tradition that underlay the nineteenth-century individualist, voluntarist common law of labor relations. But by the mid-twentieth century, he concluded that legislation intended to compensate workers for their unequal bargaining power and to secure “real” liberty of contract had done more harm than good. Unions, he said, were free to commit torts against persons and property, interfere with the use of transportation, break contracts, deprive people of the means of livelihood, and misuse trust funds—“things no one else can do with impunity. The labor leader and labor union now stand where the king and government … stood at common law.” Rather than a countervailing force to limit corporate power, unions had themselves gained “a despotic centralized control.” American labor law had “substitute[d] tyranny of centralized employee oligarchies for tyranny of the employers.”Footnote 130 “There can be no question,” the economist F. A. Hayek wrote around the same time, “that the basic principles of the rule of law have nowhere in recent times been so generally violated and with such serious consequences as in the case of labor unions…. Most people, however, have so little realization of what has happened that they still support the aspirations of the unions in the belief that they are struggling for ‘freedom of association,’ when this term has in fact lost its meaning and the real issue has become the freedom of the individual to join or not to join a union.”Footnote 131 This perception was reinforced by the exposés of the McClellan Committee hearings in Congress, which revealed to a mass television audience the deep influence of organized crime in national unions. The award-winning Hollywood film On the Waterfront (1954), directed by Elia Kazan and starring Marlon Brando, also popularized the image of gangster-dominated unions. The 1959 Landrum-Griffin Act established a “bill of rights” for union members, and imposed greater reporting requirements on unions, particularly involving their finances.Footnote 132
Not surprisingly, the academic world that blamed the law for the failure of organized labor before the New Deal now blames the law for the decline of union power since the 1960s.Footnote 133 Though Taft-Hartley, Landrum-Griffin, and other laws and court decisions (such as those against racial discrimination) weakened union power in the second half of the twentieth century, much more important to the erosion of union power was the return of competitive market forces in the American and global economy.Footnote 134 Taft-Hartley permitted industries to relocate in right-to-work states or abroad, and shifted employment from unionized to nonunionized industries. At the same time, the United States became more open to immigration, and women entered the labor force in greater numbers. The unionized percentage of the American workforce began to decline after 1953, and the absolute number of union members began to fall in 1970. The only growth of union numbers has been in government employment, where workers began to be permitted to unionize in the late 1950s and 1960s.Footnote 135 Despite the growth of their legal privileges over the course of the twentieth century, unions entered the twenty-first century at about the same place they had occupied before those legal privileges were granted. “Economic forces, competition and economic change have eroded the power of the N.L.R.A.,” one economist notes, “just as economic forces have always undermined regulation of markets throughout history.”Footnote 136 The mixed, often contradictory set of policies that marked the twentieth century (most notably in the antitrust realm) has remained. There has been no fundamental alteration in American union policy since the 1935 Wagner Act. But the new, entitlement understanding of “real” freedom of association only went so far, because the old, rights-based tradition remained resilient.Footnote 137
Historians have fundamentally misunderstood the relationship between American unions and state power. Rather than suffering from legal disabilities, unions have depended on government privileges for their success. The great boon of federal legislation in the mid-twentieth century is what accounted for the temporary expansion of organized labor's numbers. In 2005, seventy years after the Wagner Act and fifty years after the merger of the American Federation of Labor and the Congress of Industrial Organizations (CIO), reacting to the moribund condition of the AFL-CIO, a group of dissident unions broke away and formed a rival federation, called “Change to Win.” Its leaders complained that the AFL-CIO spent too much time and money on political activities rather than trying to organize workers at the grass roots. But the history of American labor law suggests that, absent any major change in labor legislation, this effort will bear little fruit.
