The Authoritarianism of American Labor Law

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American labor law is a dank miasma of special-interest legislation
that tramples on the rights of some citizens in order to advance
the interests of others. The main beneficiaries are labor-union
officials who lobbied for and received extraordinary and unique
powers from compliant politicians. The victims are business owners
and workers who prefer to have nothing to do with unions.

Even with their powers, however, union officials have seen a steady
decline in the popularity of their “product” ever since
the 1950s. The percentage of workers in the private sector who are
unionized has fallen from 36 percent in 1953 to less than 8 percent
today. (Unionization among government employees has, however, grown
considerably over time. That shouldn’t be surprising, since
government agencies don’t have to worry about inefficiency
and competition.) Naturally, union officials have decided to look
to politics for salvation. This year, they spent lavishly in an
effort to get Congress to pass a bill with the exceptionally misleading
title “Employee Free Choice Act.”

That effort was defeated in the Senate last year, but the bill
will undoubtedly be introduced again and again by politicians who
wish to curry favor with Big Labor.

Since most people know little about labor law, it’s worth
taking some time to examine it and the proposed changes and to compare
both with what the ideal law regarding labor unions would be –
ideal, that is, from the libertarian standpoint of protecting the
rights of all people equally.

The National Labor Relations Act

The key piece of legislation controlling unionization is the National
Labor Relations Act (NLRA). It was passed in 1935 as a favor to
organized labor for its electoral support of Franklin D. Roosevelt
and the Democratic Party. The new law wiped out all state laws covering
unionization in the private sector and instituted a federal system
based on the notion that collective bargaining was a good thing
for the nation and should therefore be facilitated by government
power.

Crucially, unionization was made to be a matter of collective decision
rather than individual choice. Under the NLRA, if enough workers
express a desire for an election to decide whether the workplace
will be unionized, a federal agency, the National Labor Relations
Board (NLRB), conducts such an election under rules that are supposed
to ensure “fairness.” For example, it’s illegal for
the employer to promise benefits to the workers if they vote not
to unionize. That interference with freedom of speech and contract
is just one of the many coercive aspects of the law.

In union elections, eligible workers vote by secret ballot either
for representation by a particular union or to have no union representation.
The NLRB counts the ballots and if the union receives a majority
of the votes, it is then certified as the exclusive bargaining representative
for all the employees in the “bargaining unit.” And here
we uncover another of the coercive features of the law. All of the
workers must accept the union’s representation, even those
who don’t want it. The law prohibits individual bargaining
between workers and the company. Freedom of contract thus takes
a beating in order for the government to help union officials and
the workers who want their services achieve their objectives. A
specious concept of collective rights triumphs over the true rights
of people to contract according to their own desires.

One more feature of the NLRA deserves mention here. Once a union
has been certified, the management of the firm is under a legal
obligation to bargain “in good faith.” In a free society,
no one is compelled to bargain with anyone else. Under the neutral
principles of contract law, no contract is valid unless it has the
assent of both parties. When one party is forced to the bargaining
table and faces legal sanctions unless it negotiates “in good
faith,” we don’t have true assent. With the NLRA legal
neutrality is discarded in favor of promoting the interests of some
people at the expense of the freedom of others.

The Employee Free Choice Act

Despite the authoritarianism of the NLRA, unions have been steadily
slipping in their numbers. For the last several years, Big Labor
has suffered net losses in dues payers. (I say “dues payers”
rather than “members” because individual workers have
the right to refuse to become union members, but in order to keep
their jobs they are often required to pay the union a fee that is
nearly as high as the dues.) In an effort to remedy that decline,
union officials and their political allies put on a full-court press
in favor of a bill called the “Employee Free Choice Act”
(EFCA).

The secret-ballot elections under the NLRA at least have the virtue
of shielding individual workers from reprisals for going “the
wrong way.” Union officials have found what they regard as
a better method of determining whether a majority want their services.
It’s called the “card check” system. If a majority
of workers sign a card saying that they want a union to represent
them, then that should suffice for the NLRB to declare the union
to be the exclusive bargaining representative, without resort to
an election. Naturally, it’s easier for union organizers to
get signatures on cards – using tactics that can include misrepresentation
and harassment – than to get workers to vote for them in an
election after the airing of arguments for and against the union.

Under the NLRA, however, employers have the right to insist on
a secret-ballot election no matter how many cards might be signed.
The Employee Free Choice Act would take that away and require the
NLRB to certify unions simply on the basis of signed cards.

Furthermore, the EFCA would ratchet up the coercion regarding contract
negotiations. The current law is bad enough in compelling “good
faith” bargaining, but the proposed new law would allow government
officials to arbitrate the terms of the initial union contract.
That is to say, if management and the union can’t arrive at
a mutually agreeable labor contract, the federal government will
impose one. That additional dollop of federal coercion is said by
supporters to be necessary to effectuate the workers’ “right
to bargain.” In a free society, though, there is no “right
to bargain” with people who don’t want to bargain with
you, and a fortiori there is no right to have the government dictate
the terms of that “bargaining.”

Union officials were licking their chops at the prospect of using
the EFCA to dragoon thousands of new workers into their ranks, but
the bill has died in Congress. It will be resurrected in the future
and we will again hear supporters making claims of why we need its
new coercive features. We will also hear opponents arguing that
we should stick with the good old status quo. What I think we really
need is a discussion about the proper approach to labor law in a
free society.

An ideal labor law

If we could fashion a new and morally proper law for unionization,
what would it be like?

First of all, it should not be federal law. The Constitution does
not give Congress any authority to legislate with respect to labor-management
relations. The Supreme Court’s decision upholding the NLRA
in 1937, NLRB v. Jones and Laughlin Steel, was wrongly decided,
with the majority relying on a tortured conception of the Interstate
Commerce Clause to find that Congress had the power to pass the
law. Ideally, Congress should simply repeal the NLRA in its entirety.

Second, any law regarding unions should be neutral. That is, the
law should not be intended to help (or hinder) unions or, for that
matter, businesses from achieving their objectives. The proper functions
of government do not include the use of power to help any persons
or groups get what they want.

Why not?

The answer is that the legitimate role of government is to protect
the rights of all citizens. When government takes the position that
some person or group is entitled to its assistance, that necessarily
means the use of coercion against others. Government should attempt
to uphold the right of all to attempt to achieve their goals through
peaceful means. When it goes further and attacks the liberty of
some to tip the scales in favor of those whom the state favors,
government loses its legitimacy. If you understand why, in Orwell’s
Animal Farm, there was a problem once the sign went up to proclaim,
“All animals are equal – but some are more equal than
others,” you’ll understand this point.

But how would we know if the law was not neutral? Advocates for
unions often say that although the law might seem to favor them,
it is actually just “evening things up” because employers
have “unfair” advantages. Since, however, there is no
objective standard for deciding what is or isn’t “fair,”
this approach won’t do. Instead, we must insist on laws that
do not entail the use (or threat) of coercion against people who
have done nothing to violate the rights of others.

Let’s apply that standard to some of the current features
of U.S. labor law. We have seen, for example, that the NLRA gives
certified unions the power of exclusive representation over all
the workers. So imagine that a company and any unionized worker
should ignore the union (and the law) and separately negotiate a
contract. Under the law, the government would declare that contract
void and mete out punishment to the firm if it proceeded to deal
with the worker under its terms. Negotiating and abiding by a contract
does not initiate force against the union and the workers who desire
its services and therefore the government should not interfere with
it. As much as union officials and pro-union workers might want
to have a monopoly, obtaining it through government coercion destroys
the neutrality of the law.

Or consider the mandatory-bargaining rule. Suppose that a group
of workers employed at ABC Enterprises designates the American Workers’
Union as their bargaining representative. The head of the AWU duly
calls on the president of ABC Enterprises and says, “I’m
here to negotiate a labor contract on behalf of your workers.”
The president of the company replies, “Sorry, but I choose
to have nothing to do with you. I’ll continue to deal with
my employees individually, but if any of them is unwilling to tolerate
that, he’s free to quit.” What will happen next is that
the AWU will call upon the NLRB to enforce the law and compel ABC’s
president to negotiate under threat of legal punishment.

Is that law neutral? No. People should be free to decide for themselves
whether they want to deal with others or not, and the law respects
that freedom in other settings. The mandatory-bargaining rule cannot
be defended because it necessitates the use of force against people
just because they have chosen not to do something – to bargain
with an organization favored by the government.

If you take away all of the provisions of the NLRA that are not
neutral, what you end up with is the common law of contracts, crimes,
torts, and property. Neither management nor union should have legal
cover for doing anything that would violate the precepts of those
common-law fields. If we were to return to neutral common-law principles,
governmentally approved coercion would disappear from labor-relations
law. That’s what everyone who advocates freedom and civil society
should want.

Finally, the law must respect individual rights to contract and
associate voluntarily. This point necessarily follows from the requirement
of neutrality, but it is worth spelling out separately. The law
must not force collective decisions on any party. If 51 percent
– or 49 percent or 99 percent – of the workers think they
want union representation, they are free to seek it and then ask
for collective bargaining to cover them. Businesses are then free
to accept or reject it. The law must not force those who don’t
want collective bargaining to surrender their freedom and become
subject to the union’s dues and rules. When individual rights
are respected, unions cease to have quasi-governmental power and
have exactly the same legal status as all other private associations.

February
19, 2009

George
C. Leef [send him mail]
is the director of the Pope Center for Higher Education Policy in
Raleigh, North Carolina, and book review editor of The
Freeman
.

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