An important aspect of constitutional law has been the connection between individual rights and state or national power to regulate economic affairs. The constitutional treatment of employment is a paradigmatic example: what is the status of the relationship between employer and employee? What power does government have to change it? Of course, the answers to these questions depend on whether they are asked about the pre-or post-NEW DEAL era.
Before the mid-1930s, labor legislation was subjected to searching JUDICIAL REVIEW by a Supreme Court committed to a laissez-faire treatment of economic issues under the DUE PROCESS clauses and a limited conception of federal authority under the COMMERCE CLAUSE. Since the New Deal, constitutional questions involving labor have been dominated by issues of expression and association, and the classification of labor activity as "economic" or "political."
The constitutional treatment of employment prior to the New Deal is best understood against the background of the COMMON LAW, a law dominated by concepts of FREEDOM OF CONTRACT and employment at will. The employer had the right to discharge an employee at any time, and the employee had supposedly equivalent right to quit at any time.
At an early stage, concerted actions by workers to affect contractual relations sometimes were treated as criminal conspiracies. Thus, in the Philadelphia Cordwainers' Case (1806), a strike for higher wages by a group of shoemakers was held to be illegal. "A combination of workmen to raise their wages may be considered in a twofold view: one is to benefit themselves, the other is to injure those who do not join their society. The rule of law condemns both."
Later in the nineteenth century, the courts recognized the right of workers to join together. Commonwealth v.
Hunt (1842) is the landmark. Chief Justice LEMUEL SHAW, for the Supreme Judicial Court of Massachusetts, held that, for a combination of workers to constitute a CRIMINAL CONSPIRACY, the state must prove that the workers had specific criminal objectives or used specific criminal methods. Thereafter, the common law treatment of labor focused on the limits of legitimate labor activity?whether combinations of workers had illegal purposes or used illegal methods.
But many courts at common law continued to take a restrictive view of legal labor activity. In Vegelahn v. Gunter (1869), for example, the Massachusetts Court found that strikers had used "intimidation" to interfere with the contractual relationship of the employer and strikebreakers. The "coercive" methods ranged from threats of personal injury to simple "persuasion and social pressure." Similarly, in Plant v. Woods (1900), the same court found that a threat by strikers that the employer could "expect trouble in his business" indicated that the strike was "only the preliminary skirmish" in violent industrial warfare; the workers had given "the signal, and in doing so must be held to avail themselves of the degree of fear and dread which the knowledge of such consequences will cause in the minds of those ? against whom the strike is directed." Thus, in measuring "illegal" objectives and methods, common law courts often assumed that even a low level of labor activity constituted a "signal" that was inherently coercive.
This common law view of the permissible limits of labor activity was read into the Constitution by the Supreme Court in the late nineteenth century, as it interpreted SUBSTANTIVE DUE PROCESS and elaborated a restrictive conception of the federal commerce power.
The Supreme Court constitutionalized the common law of employment by placing "freedom of contract" within the liberty protected by the FIFTH and FOURTEENTH AMENDMENTS, Many important cases concerned legislation designed to regulate the labor market as to hours, wages, and working conditions. This type of legislation?such as the wages and hours law in the leading case of LOCHNER V. NEW YORK (1905)?was invalidated if, in the Court's view, it unreasonably interfered with the contractual freedom of employer and employee. Even when such legislation was upheld, as in MULLER V. OREGON (1908), the Court made a detailed inquiry into the substantive reasonableness of the law.
Notions of freedom of contract were also applied to the activities of labor unions. In 1898, in the aftermath of a violent Pullman strike, Congress passed the ERDMAN ACT, outlawing YELLOW DOG CONTRACTS?contracts by which employees agreed not to join labor unions. In Adair v. United States (1908) the Supreme Court held that the act violated the due process clause of the Fifth Amendment: "the employer and the employee have equality of right, and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land.?" The Court struck down a similar state statute in COPPAGE V. KANSAS (1915), and, in the 1917 case of HITCHMAN COAL V. MITCHELL, relied on the constitutional protection of yellow dog contracts in holding that federal courts could prevent unions from organizing at plants they knew to be covered by such contracts. And in TRUAX V. CORRIGAN (1921) the Court held that an Arizona statute forbidding INJUNCTIONS against PICKETING was unconstitutional, since it protected an activity (picketing) that wrongfully interfered with employers' property rights, in violation of due process.
The Supreme Court narrowly interpreted the commerce power at the beginning of the New Deal, striking down measures such as "Hot Oil" Codes, the AGRICULTURAL ADJUSTMENT ACT, and the NATIONAL INDUSTRIAL RECOVERY ACT. This development was nothing new. Although there had been swings in doctrine, the Court had generally viewed congressional power under the commerce clause with suspicion in the area of employment relations. In HAMMER V. DAGENHART (1918), for example, the Court struck down an act banning commerce in goods produced by child labor, and twenty years later, in CARTER V. CARTER COAL CO. (1936), it struck down an act regulating hours and wages in the coal industry.
The constitutional treatment of employment was changed radically by the watershed events of the New Deal. This period saw the Supreme Court reject its earlier laissez-faire interpretations of due process and its narrow vision of federal commerce power.
During the New Deal the Court abandoned its view of freedom of contract in employment relations. In WEST COAST HOTEL V. PARRISH (1937) the Court sustained a state minimum wage law for women, holding that contractual freedom could be limited by a reasonable exercise of STATE POLICE POWERS : "Even if the wisdom of the policy be regarded as debatable and its effect uncertain, still the legislature is entitled to its judgment."
National Labor Relations Board v. Jones & Laughlin Steel Corp. (1937) upheld the WAGNER NATIONAL LABOR RELATIONS ACT (NLRA), which entitled workers to organize and required employers to bargain with their employees' chosen representatives. The Court found that the act did not invade freedom of contract: an employer was not compelled to make any agreement, but only to bargain with the employees' representatives in recognition of the "fundamental right" of workers to organize. The Court distinguished the "yellow dog" contract cases on the grounds that the NLRA did not interfere with an employer's right to discharge employees, but only prohibited coercion of employees in the guise of discharge. Despite this disclaimer,
it is clear that the Court was departing radically from the rule of its prior cases: the employer was prohibited from discharging employees for union activities, and was required to bargain in good faith with its employees' unions. (See WAGNER ACT CASES.) This new treatment of labor activity was reinforced the same year in Senn v. Tile Layers Union, in which the Court upheld a state law permitting peaceful picketing in conjunction with a labor dispute; although the Court distinguished cases such as Truax, the picketing involved was neither more peaceful nor less coercive than in prior cases.
The new approach to due process was exemplified by Justice FELIX FRANKFURTER, writing for the Court in Osborn v. Ozlin (1940), in an opinion reminiscent of Justice OLIVER WENDELL HOLMES'S classic dissent in Lochner: "It is immaterial that state action may run counter to the economic wisdom either of Adam Smith or of J. Maynard Keynes, or may be ultimately mischievous even from the point of view of avowed state policy. Our inquiry must be much narrower. It is whether [the state] has taken hold of a matter within her power, or has reached beyond her borders to regulate a subject which was none of her concern.?"
In the 1937 Jones & Laughlin case, the Court upheld the NLRA under the commerce clause. The act regulated industrial strife, which had a "close and substantial relation" to commerce...