Background to Labor Movement
Before the Wagner Act, in the 1800’s, many courts considered concerted activities by workers, such as strikes, picketing and refusals to deal with certain employers, to be common law criminal conspiracies.
Philadelphia Cordwainers (PA 1806) — before Sherman Antitrust Act (1890)
Defendants are union and the court found the union guilty for inhibiting freedom of market. Defendants trying to enforce closed shop. Modest fine. Epstein thinks that the modest fines makes this case a huge win for labor. Fines should be more than gains.
Three charges against cartel
price fixing
threaten non-union workers for working under fixed price
refuse to work for firms employing non-union
Reason not to allow cartel is because price instability in future if don’t let market operate.
Commonwealth v. Hunt (1842)
Horne accepted below union rate. Union wanted him to sign agreement to play by union rules. When he refused, union had employer fire him at threat of strike. C.J. Shaw says that each worker can decide to do whatever they want, straight libertarian view. Unions as long as not breaking a contract should not be found criminal.
Subjecting workers to criminal sanctions drew public criticism and in 1842 the case of Commonwealth v. Hunt marked a shift from criminal to civil liability as a way to control union activity. The court adopted an ends/means test: the finding of a criminal conspiracy required proof of either an illegal purpose or the use of illegal means.
During this period federal courts were also staking out a role in the judicial regulation of labor-management relations. Jurisdiction was asserted by virtue of diversity of citizenship or by application of the Sherman Antitrust Act. The prima facie tort doctrine was one substantive ground for outlawing union activity, but the antitrust laws proved even more useful. (treble damages) The Sherman Act’s prohibition of “restraint of trade” could be applied to most union tactics involving organizing and economic pressure.
After the early doctrine of criminal conspiracy lapsed, civil actions were brought against unions for damages and, more typically, for injunctive relief restraining the strike or boycott.
Vegelahn v. Guntner (1896)
An injunction was issued to prevent defendants from picketing in front of store employing non-union people. J. Allen afraid of social pressure and physical force. Allen called the picket a private nuisance.
J. Holmes justifies picket if done in “victory in battle of trade.” He likes free trade. Supports C.J. Shaw in Commonwealth v. Hunt.
Epstein says that pickets are coercive because they increase the likelihood of violence or threats. If they cross line once, shut them down. Pickets can proceed if peaceful.
Sherman Antitrust Act (1890)
§ 1: Every contract, in combination in the form of trust or otherwise, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.
Danbury Hatters case, Loewe v. Lawlor (U.S. 1908)
Sherman Act violation when a union instigated a boycott of retail stores that sold hats produced by a struck manufacturer. The union was subjected to treble damages.
Congress attempted to diminish unions exposure to antitrust liability by passing the Clayton Act in 1914.
Clayton Act (1914)
§ 6: the labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed t
he statute’s coverage, federal courts are powerless to enjoin even a clear violation of substantive law. Act made government neutral, so that unions could have more power.
Reexamination of the Antitrust Laws
Apex Hosiery Co. v. Leader (1940)
After being denied a closed shop, the union called a sitdown strike, which became violent and stopped production for four months. The union prevented the shipment of finished goods into interstate commerce. There was no showing of a union purpose to prevent the company’s goods from competing with union-made goods. J. Stone says antitrust laws are not applicable because stream of commerce not disrupted. Prices not actually affected by union activity.
Apex did not mention an exemption for union activities, rather it cut back on antitrust liability by restricting the substantive grounds on which unions could be exposed.
United States v. Hutcheson (1941)
Carpenters and Machinists are having a dispute and a resulting strike against a primary employer, picketing of a secondary employer, and a call for nationwide boycott of the primary employer’s product. J. Frankfurter reasoned that the Clayton Act had withdrawn certain specified union practices from the coverage of the Sherman Act. Frankfurter concluded that the question of whether union conduct violates the Sherman Act could only be decided by reading the provisions of the Sherman, Clayto
