I. THE LABOR INJUNCTION
A. “Objectives” test – The legality of union activity depended upon how any particular court chose to construe union objectives. Most decisions were very restrictive of union conduct.
1. Vegelahn v. Gunter (1896) – the court enjoined picketing or other “interference” with persons on the employer’s premises, holding that “no one can lawfully prevent employers or persons wishing to be employed from the exercise of their rights.”
a. Dissent – Holmes argued that the needs of the workers to organize could justify even intentional infliction of temporary damage to an employers business – that, short of force or threat of force, organized action such as picketing should be permitted.
2. Plant v. Woods (1900) – court enjoined strikes and picketing to enforce a union demand that the employers hire only its members, rather than members of a rival union. The court held that the need for protection of the organization was not sufficient to justify interference with the employer’s right to be “free of molestation.
a. Dissent – Holmes contended that the members’ purpose – strengthening union power bargaining over wages and working conditions – justified the strike: “Unity of organization is necessary to make the contest of labor effectual, and [unions] lawfully may employ in their preparation the means which they might use in the final contest.
3. Bowen v. Matheson (1867) – Case involved a business not a union – one business combines with another business and does something bad to a third business. Court held there was an injury to the third business but there was no legal remedy.
4. United Shoe Machinery Corp. v. Fitzgerald (1921) – plaintiff employer, which had individual contracts with its machinists binding them to work for a year at specified rates was struck and picketed in support of union demands for collective bargaining. Court held this was an unlawful objective, issued an injunction.
5. Hopkins v. Oxley Stave Co. (1987) – Plaintiff is a barrel maker that used to contract out the hooping barrels purchases a machine which puts the hoops on the barrel. The company refused to comply with demands by the union to discontinue the use of these machines and to rehire the workers that used to do this. Customers (meat packers, flour makers, other big companies) were contacted by the union makers and were asked to not purchase barrels from the plaintiff.
a. Applying Means/Objective Test – No means problem here – everyone has a right to contract with whoever they want and you can put pressure on people not to contract. Ends is a problem – can’t illicit the force/pressure in order to get an employer not to automate.
b. Policy considerations – want to let the employers have some liberty to manage/conduct their business in the manner they want to do. Also benefits society to employ the modern and efficient modes of production.
II. ANTITRUST LAWS & EFFECT ON LABOR
A. Sherman Antitrust Act of 1890 – Certain corporations came to achieve great economic power. Under strong public pressure to curtain business abuses, Congress passed the Sherman Antitrust Act in 1890. The Act purported to outlaw certain types of conduct (chiefly monopolization and restraints of trade) that were considered harmful to the public interest.
1. Act declared “every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce…” to be unlawful
2. Sec 1- makes it a crime to violate the act (only relates to interstate commerce; Sec 4 – makes an injunction available if the action is brought by the attorney general; Sec 7- for private actions only damages are available, no injunction.
3. But note – these antitrust provisions were first employed against organized laborrather than business entities. Most courts viewed corporations as single “persons” confronted by “groups of persons” (i.e. workers organized into unions), and found that the union posed a greater threat to society.
B. Sherman Act Interpreted
1. Loewe v. Lawler (1980) (the “Danbury Hatters” case) – The Sherman Act, used at first as a strike-breaking weapon, was subsequently interpreted to cast doubt on the legality of unions. In this case, an employer complained of secondary boycotts by the union against his hats. Although the precise question before the Court was procedural (the employer merely sought to have his complaint sustained against a general demurrer), the opinion broadly declared that the Sherman Act prohibited “any combination whatever to secure action which essentially obstructs the free flow of commerce between the states.”
a. Rationale – The Supreme Court noted that various legislative attempts to exempt farm and labor grounds from the Sherman Act had been unsuccessful. Hence, it concluded that all restraints were unlawful, and following Loewe, many lower courts employed the Sherman Act against any labor activity.
2. Coronado Coal Co. v. United Mine Workers (1925) – Case involves a strike in AK, the coal mines had been blown up so they were not operating and no coal was produced as a result of the violent strike. Economic consequences – less coal in the market, price of coal will probably go up an affect the national economy.
a. Held – this is case involves a local strike and is not affecting interstate commerce, therefore the Sherman Act is not implicated.
b. Problem with holding – the local strike has potential interstate commerce consequences. Evidence was produced on remand that there was a desire to keep the price of coal up so that the AK mines will increase the labor cost and therefore the cost of coal in order to make the unionized coal mines more competitive.
3. Apex Hosiery Co. v. Leader (1940) – Hosiery factory brought suit against labor organization to recover damages resulting from a strike at its factory. The strike was alleged to be a conspiracy under the Sherman Anti-Trust Act. Labor wanted company to run a closed shop. Labor union instigated a strike, the plant was seized and occupied for seven weeks – strikers wrecked machinery and did other substantial damage to company property and equipment. For months none of Apex’s hosiery could be shipped in interstate commerce.
a. ISSUE is whether the restraint resulting from the strike maintained to enforce union demands by compelling a shutdown of Petitioner’s factory is the type of “restraint of trace of commerce” which the Sherman Act condemns.
b. Sherman Act was intended to prevent monopolies and the restraints on free competition, raised prices which were associated with monopolies. Court never applied Sherman Act unless there was some form of restraint on commercial competition in the marketing of goods or services.
c. Held – Court refused to apply Sherman Act in situations in which local strikes conducted by illegal means in a production industry prevented interstate shipment of substantial amounts of goods but in which it was not shown that the restrictions on shipments had operated to restrain commercial competition in some substantial way.
4. In cases where the court held that labor unions violated the Sherman Act, the activities effecting interstate commerce were (1) DIRECTED AT CONTROL OF THE MARKET, AND (2) WERE SO WIDESPREAD AS SUBSTANTIALLY TO AFFECT IT.
C. The Clayton Act (1914) – Act was passed to address some problems of the application of the Sherman Act to labor by the Courts.
1. Section 6 provided that antitrust laws should not be construed to prohibit the existence of labor organizations or to prevent labor unions from “lawfully carrying out the legitimate objects thereof.”
2. Section 16 – Allows harmed individuals to seek an injunction
3. Section 20 barred the use of federal injunctions in disputes between an employer and employees, or between employers of employees, involving the terms and conditions of employers.
D. Emasculation of Clayton Act by the Supreme Court – The Supreme Court all but destroyed sections 6 and 20 of the Clayton Act. The Court chose to apply one antitrust standard to business and another, far more restrictive standard to organized labor.
1. Duplex Printing Press Co. v. Deering (1921) – Court upheld an injunction issued to break a secondary boycott imposed by the Machinists Union (whose members refused to work on printing presses manufactured by Duplex because Duplex had refused to recognize the union.)
a. The Court held that section 6 of the Clayton Act (exempting unions from the Sherman Act) was not available to shelter the union, since it protected only the “lawful” carrying out of “legitimate” objectives. The Court declared that secondary interference with a property right was neither lawful nor legitimate. ((Loewe v. Lawlor still good law.))
b. The Court found that section 20
prosecution case directed at unions).
a. Rationale – Court read the NLGA as establishing a public policy in favor of legitimate union activities, and in light of such policy, the Court refused to follow its previous narrow interpretation of section 20 of the Clayton Act (as in Duplex). Rather, the Court held that the clear purpose of Section 20 was to protect labor’s traditional weapons.
b. Note – Court emphasized that under the Clayton Act, judicial discretion was narrowly circumscribed. So long as a union was acting in its own interests (as opposed to combining with nonlabor groups) and used only lawful means (i.e. no violence or threats of violence), the courts had no right to examine the “objectives” of the union’s activities.
c. Effect – Since Hutcheson, the antitrust laws rarely have been asserted against union activity – and then only where collusion between labor and management is shown to have caused a restraint in interstate trade.
6. Burlington Northern RR v. Brotherhood of Maint. Of Way Empl. (1987) – By the passage of the Taft-Hartley act, secondary boycotts were prohibited. No provision in the Railway Labor act that prevented secondary boycotts. Court holds that under the Norris Laguardia Act, secondary boycotts can not be prohibited, no injunction for secondary boycotts.
C. Wagner Act (1935)(p. 75) – Growth of the union movement beginning in the 1930s (1) the federal government’s policy of giving active encouragement to unionization and collective bargaining and (2) the formation of the Congress of Industrial Organizations.
1. Established on a permanent foundation, the legally protected right of employees to organize and bargain collectively through representatives of their own choosing.
2. Section 7 – “Employees shall have the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.”
a. Provided 3 Rights (1) to organize (2) bargain collectively (3) engage in peaceful strikes and picketing
3. Section 8(a)(1) – outlawed employer coercion of employees in the exercise of their Section 7 rights
4. Section 8(2) – designed to outlaw company-formed “representation plans” or “work councils” which were carefully controlled so as to give employees the forms of organization without the substance and which were known as “company unions”.
5. Section 8(3) – forbade discrimination in hiring or firing
6. Section 8(4) – outlawed such discrimination in the specific case of employee asserting rights before the NLRB.
7. Section 8(5) – relates primarily to the period after the employees have organized and are seeking to engage in collective bargaining. Imposes an affirmative duty on the employer to bargain with the union which (under Section 9(a)) has been selected by the majority of the employees in a unit appropriate for such purposes”
8. Section 9 – gives the NLRB authority to conduct representation proceedings, culminating in a secret-ballot election and a certification of the results (and of any union receiving a majority of the valid votes case).
9. NLRB created under Sections 3, 4 & 10. Taft-Hartley amendments later made significant changes in both NLRB organization and the scope of judicial review.
D. The Taft Hartley Act (1947) – Attempted to redress a power imbalance.
Effect – highly controversial piece of legislation. Organized labor