Since Barack Obama took office, the National Labor Relations Board has become a hotbed of controversy. Republicans charge that the NLRB is brazenly favoring unions and thwarting corporations on one bogus pretext after another. Unfortunately, those controversies are simply the latest chapter in a long history of federal subversion of freedom of contract.
Prior to the 1930s, courts and legislatures generally refused to recognize that individual workers’ right to make their own contracts could be nullified by the demands of groups of other workers. Massachusetts judge Frederick Arnold ruled in 1912, “To enforce a collective contract would be to deny the individual’s liberty to make his own contract.” Judges at that time recognized and respected voluntary collective bargaining contracts but not collective bargaining contracts that prohibited other workers from making their own contracts. Since the essence of a contract is voluntary consent by every party to the agreement, a collective bargaining agreement could not forcibly impose contract terms on workers who did not support the agreement.
But thanks to lobbying by unions and occasional savage actions by employers suppressing protesting workers, the U.S. Congress chipped away at the individual worker’s right of contract.
Congress exempted unions from the Sherman Antitrust Act in 1914, thus making it extremely difficult to sue or fine unions for restraint of trade. In 1932, the Norris-Laguardia Act prevented federal courts from issuing injunctions to end strike-related violence. In 1935, Congress enacted the National Labor Relations Act (NLRA, also known as the Wagner Act) to force employers to bargain with unions and to make it far easier for unions to force workers to join or pay dues to the union.
The essence of federal labor law is to give some people veto power over the contracts that other people are allowed to make. The Supreme Court declared in 1944 that “individual contracts, no matter what the circumstances that justify their execution or what their terms, may not be availed of to defeat or delay” collective bargaining or “to limit or condition the terms of the collective agreement.” Supreme Court Justice Wiley Rutledge, in a dissent in another labor case in 1944, observed that federal labor law gave unions “a thraldom over the men who designate them” by “creating rights in the unions overriding those of the employees they represent.”
Federal labor legislation currently implicitly permits some workers to use violence against other workers. Nowadays, a man’s right to sell his labor is often totally at the mercy of whether other men feel that such a sale might damage their own bargaining positions. That is the equivalent of giving every business the right to firebomb any competitor that tries to undercut its prices. The preamble to the National Labor Relations Act of 1935 declared, “Experience has proven that protection by law of the right of employees to organize and bargain collectively … promotes the flow of commerce by removing certain recognized sources of industrial strife and unrest….” But, in reality, empowering unions has had the opposite effect.
In 1990, the New York Daily News was dying financially largely because of the huge inefficiencies built into its union contracts. Delivery-truck drivers routinely earned $100,000 — even though union restrictions on the number of newspaper bundles on each truck often meant that the trucks went out half empty.
Once the News announced plans for job cutbacks, the union struck. Michael O’Neill, the editor of the News, complained shortly after the strike began, “Even without adding any new automation, the News today has 50 percent more workers than it needs.” The Boston Globe noted, “Newsstands that have tried to sell the paper have been burned down. Men wielding baseball bats have attacked delivery trucks driven by replacements brought in by management. A vendor said that two men who visited his Manhattan stall last week said they would ‘put my eyes out’ if he sold the News again.”
Hundreds of incidents of strike-related violence occurred, including the firebombing of a store selling the News; an arson attack that destroyed 13 tractor trailers in the Bronx; the stabbing of a replacement truck driver; and the destruction of several delivery trucks. After widespread violence had already occurred, New York’s governor, Mario Cuomo, addressed a rally of thousands of striking union members and their supporters and hailed “the courage and sacrifice of the union movement” and told the crowd, “Stay strong — you’re fighting for all of us.”
Unions routinely use their power to extort payment for make-work jobs. Up through 1987, Burlington Northern railroad crews received hazardous-duty pay bonuses for working trains traveling through Montana because, according to the union contract, Montana was still classified as Indian territory. The National Labor Relations Board has decreed a byzantine web of federal regulations and rulings to govern relations between employers and unions. It has sweeping discretion to penalize companies, unions, or individuals for “unfair labor practices.” In reality, an “unfair labor practice” is whatever displeases a majority of the five political appointees to the NLRB.
The NLRB supervises union-management relations in part to ensure that companies do not coerce unions. NLRB officials have a very expansive concept of coercion when it comes to management behavior; companies have been found guilty of “unfair labor practices” for merely criticizing unions or for offering raises to their workers before the workers vote on whether to join a union. (By the same standard, congressmen could almost always be found guilty of trying to bribe voters at election time.) Yet the NLRB ruled in 1993 that a Teamsters union local affiliate filing of a $20 million class-action lawsuit against an employer three days before an election was not objectionable conduct or an unfair labor practice.
If a union promises workers higher pay if they vote for the union, that is deemed a legitimate union-election tactic. But if an employer promises workers higher pay if they vote against the union, the NLRB pronounces the employer guilty of coercion of his employees. Judge Richard Posner noted, “For many years, the Board interpreted the NLRA to prohibit all anti-union speeches by employers because it believed that such speeches inhibited union activities.” The NLRB has penalized employers for photographing strikers on the picket line. Even though there have been thousands of incidents of picket-line violence since 1975, the NLRB effectively holds that employers cannot take any pictures until after violence has begun.
According to the NLRB, violence by strikers is not an unfair labor practice unless the violence becomes excessive. In 1979, the NLRB announced, “Although an employee may have engaged in misconduct [during a strike], he or she may not be deprived of reinstatement rights absent a showing that the conduct was so violent … as to render an employee unfit for future service.”
Most persons who are attacked by an angry mob consider any amount of violence excessive, but NLRB officials — with their tenure and their comfortable offices — make judicious distinctions on just how much violence people should be required to suffer before the government recognizes it as an “unfair labor practice.”
Picketing routinely degenerates into a simple economic blockade — an effort to cut off entrances and exits of the picketed site. Thus, it is surprising that the NLRB finds excuses or pretexts to discount the reality of picket-line violence. Apparently, union violence is not bad in itself but only when it becomes an embarrassment to the NLRB. The NLRB’s attitude towards picket-line violence is akin to the attitude of some old-time Southern white sheriffs’ attitude towards violence against blacks: a little violence is okay, as long as there is no lynching.
The NLRB often is creative in finding pretexts to force companies to provide back pay to strikers for time the strikers did not work. But as a 1983 University of Pennsylvania–Wharton School of Business study noted, “The board has consistently refused to order unions to compensate employees who have incurred hospital or medical expenses as a result of union violence. It has likewise refused to order monetary awards covering union damage to company property and equipment.”
The NLRB has also refused to force unions to compensate individuals for blocking them from earning pay even in cases where union rampages resembled riots and were severely violent. People who are prevented by unions from working for a living have no right to damages from the union, in the eyes of the NLRB.
Federal labor law is largely based on a blind faith in the benefits of forcing people into herds — on a presumption of the total incompetence or inability of the individual worker to achieve justice for himself. The large majority of American workers do just fine in making their own terms with their employers. And the federal pro-union bias is especially unjustified, considering the pervasive corruption of some of the nation’s larger unions.
The issue of unions’ right to try to forcibly shut down businesses during a strike turns on a question of property rights — whether a worker somehow automatically has an inalienable right to his existing job, at a salary that he demands. Does the fact that a businessman hired a worker automatically give that worker a perpetual right to employment on terms that the worker demands? A worker has a right to walk off his job (unless he has voluntarily signed a contract binding him to a certain length of time) if he is not satisfied. But the right to walk off a job does not include the right to fracture the skull of someone else who walks onto the job.
Unions can be an excellent means for handling grievances, making the will of the workers known to employers, and providing a medium for communication on key issues. The right of freedom of association is guaranteed by the First Amendment. New York University law professor Sylvester Petro wrote, “The right to strike for higher wages and better working conditions is a fundamental right of working men in a free society, and it must be preserved largely intact if the society is to remain free.” But the contracts that some workers negotiate with employers must not be allowed to nullify the right of other workers to make their own contracts.
This article originally appeared in the May 2012 edition of Future of Freedom. Subscribe to the print or email version of The Future of Freedom Foundation’s monthly journal, Future of Freedom (previously called Freedom Daily).