Labor Law 2.0: the Impact of New Information Technology on the Employment Relationship and the Relevance of the Nlra

• Jurisdiction: United States,Federal
• Publication year: 2015
• Citation: Vol. 64 No. 0

Labor Law 2.0: The Impact of New Information Technology on the Employment Relationship and the Relevance of the NLRA

Kenneth G. Dau-Schmidt

LABOR LAW 2.0: THE IMPACT OF NEW INFORMATION TECHNOLOGY ON THE EMPLOYMENT RELATIONSHIP AND THE RELEVANCE OF THE NLRA

Kenneth G. Dau-Schmidt^*

ABSTRACT

The NLRA system of collective bargaining was born during the industrial age of the early twentieth century. As a result, key terms in the statute such as "employee," "employer," and "appropriate bargaining unit" were first interpreted in the context of long-term employment and large vertically integrated firms that dominated this era. Beginning in the late 1970s, the new information technology wrought a revolution in the organization of production increasing short-term contingent employment and the organization of firms horizontally in trading and subcontracting relationships across the globe. To maintain the relevance of collective bargaining to the modern workplace, the interpretation of the key terms of the NLRA must be updated to recognize the changed circumstances of production and interpret union access and employee mutual support in light of the new technology. However, new information technology promises further changes in the workplace with the accelerating mechanization of many jobs and perhaps a fundamental change in the relationship between labor and capital with the development of artificial intelligence. In this Essay, I explore the implications of new information technology for the workplace, the interpretation of the NLRA, and the continuing evolution of American labor policy.

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INTRODUCTION ............................................................................................ 1585

I. INDUSTRIAL PRODUCTION AND THE BIRTH OF THE NLRA ................ 1588

A. The Organization of Industrial Production ............................. 1588
B. Labor Law 1.0: The Birth of the NLRA ................................... 1589

II. PRODUCTION AND EMPLOYMENT USING NEW INFORMATION TECHNOLOGY ................................................................................... 1591

A. New Information Technology .................................................. 1591
B. The Organization of Production Under New Information Technology and the Rise of the Global Economy .................... 1594
C. Labor Law 2.0: Interpretation of the NLRA in Light of the Changed Methods of Production ............................................. 1599
D. Labor Law 3.0: Things to Come? The Brave New World of Employment Using New Information Technology ................... 1603

CONCLUSION ................................................................................................ 1608

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INTRODUCTION

Although aspiring to larger more timeless principles such as equity in bargaining power and industrial peace,¹ the language of the NLRA was formulated and first interpreted based on the economic realities of industrial production. During the industrial period, the dominant engines of economic production were large vertically integrated firms, supported by a stable workforce.² Size and vertical integration allowed firms to coordinate production ensuring that the right number and quality of parts were produced to meet assembly needs and firm demand.³ A stable workforce ensured that the firm had adequate employees with the right skills to fulfill the production demands of the firm.⁴ The employment relationship was long-term and employees of a single employer undertook work at one or perhaps a few physical locations so that employment relationships and bargaining units were relatively easy to define and stable over time, and employees regularly interacted with each other in the same physical environment.⁵ Moreover, these long-term relationships were regulated and encouraged through a system of corporate policies and benefits that profited from employee voice and enforcement through collective bargaining.⁶ In short, it was a time when it was relatively easy to define employers and employees in an appropriate bargaining unit that could benefit from collective bargaining and it was relatively easy for employees to communicate with each other and act in concert to represent and enforce their interests in the workplace.⁷

As several authors, including myself, have previously written, the rise of new information technology has changed the nature of the employment relationship, complicating the relationships of production and requiring new interpretations of the language of the NLRA consistent with its larger

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underlying principles.⁸ Beginning around 1980, new information technology fostered a paradigm shift in the best business practices and the employment relationship.⁹ During the "information age," information technology allowed the horizontal organization of production across multiple firms and across the globe with each firm focused only on its "core competency," or what it did best and cheapest in the global economy.¹⁰ Firms organized production through more tentative relationships of subcontracting and outsourcing that were subject not to corporate administrative rules but instead more the machinations of global markets.¹¹ Employers began to seek flexibility, not stability, in employment; and "contingent employees"—the number of employees who work part-time, or are leased or subcontracted—reached new heights in the American economy.¹² Employees engaged in the same productive enterprise became more distant from the economic power of the firm, and each other, both in their legal relationships and their geography.¹³ Moreover, information technology decreased the importance of the physical plant and itself raised new issues of employee access and communication. The information age raised new questions about the definitions of employers and employees in an appropriate bargaining unit that could benefit from collective bargaining and how these employees should be encouraged to communicate with each other in order to represent their interests in the workplace.¹⁴

Although the changes in the employment relationship experienced over the last forty years have left plenty of legal problems still to digest, the transformations wrought by new information technology are not done. Indeed, as information technology advances more rapidly, perhaps the largest changes are yet to come. Both the hardware and software components of new information technology have been improving exponentially.¹⁵ Following "Moore's law," the number of transistors in a minimum-cost integrated circuit

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has doubled every 12-18 months since about 1965, and there is no end to the process in sight.¹⁶ The efficiency of software algorithms has grown at an even faster exponential rate.¹⁷ It is not clear that many of the members of the workforce can keep up with this rate of change in adapting their skills and training.¹⁸ Moreover, advances in artificial intelligence suggest that we may be building computers that are "smarter" than the average human as soon as 2029.¹⁹ Once computers are "smarter" than humans, who knows what sort of improvements in information technology these machines might develop? Although many economists are hopeful about these developments, arguing that historically workers and the economy as a whole have benefited from improvements in technology,²⁰ "technologists" are not so sanguine, arguing that they portend enormous changes in the demand for labor and the allocation of the rewards from production.²¹ SpaceX CEO Elon Musk likened building computers with artificial intelligence to "summoning the demon."²² At the very least, continuing improvements in information technology will lead to the reformation of industries and dislocations of workers that will raise issues not only under the NLRA but also for our public policies in education and social welfare.

In this essay, I will outline the impact of new information technology on the employment relationship and the implication of these changes for labor law. I will first discuss the system of industrial production that was the background for the drafting and initial interpretation of the NLRA (Labor Law 1.0). Then I will discuss new information technology and how it has developed and impacted the employment relationship. In this discussion, I distinguish between the changes that have already occurred, and their implications for labor law (Labor Law 2.0) and the changes that are projected to happen in the near future and their implications for labor law and other public policies (Labor Law 3.0).

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I. INDUSTRIAL PRODUCTION AND THE BIRTH OF THE NLRA

A. The Organization of Industrial Production

America's period of industrial production began toward the end of the nineteenth century. The prior system of artisanal production had been marked by small local or regional "manufactories" owned by master craftsmen who supervised all facets of production.²³ Even in larger facilities, capitalists undertook production in partnership with master craftsmen who employed servants and whose knowledge base encompassed the entire technology of production.²⁴ Advances in communication and transportation technology increased the optimal scale of production so that many producers could sell on a regional or even a national basis.²⁵ Furthermore, advances in management techniques and the organization of production allowed mass production and the "deskilling" of jobs.²⁶ The "scientific management" techniques of Frederick Winslow Taylor were used to break each job down into its component parts to determine not only the best means to undertake production but also appropriate compensation.²⁷ In 1913, when Henry Ford added a moving assembly line to the principles of "Taylorism" at his Highland Park plant, modern industrial production was born.²⁸ Management controlled the speed of the assembly line and production while low-skilled workers performed the component parts without the necessity of understanding the...