Labor Unions: Saviors or Scourges?

Author:Richard A. Epstein
Position:Laurence A. Tisch Professor of Law, New York University Law School, the Peter and Kirsten Bedford Senior Fellow, the Hoover Institution, and the James Parker Hall Distinguished Service Professor of Law Emeritus and senior lecturer, the University of Chicago
Pages:1-33
 
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LABOR UNIONS: SAVIORS OR SCOURGES?
RICHARD A. EPSTEIN*
I. INTRODUCTION: LABOR RETURNS TO THE SPOTLIGHT
I am most honored to have been invited this past April 13, 2012, to
join the distinguished list of Sullivan lecturers at Capital University Law
School. I am also pleased that the law school invited my long-time friend
and basketball buddy, Craig Becker, to comment on my remarks, which, as
we both know, are not entirely to his liking. The new prominence that
labor law receives today stands in sharp contrast to the widespread public
indifference to the subject a generation ago.1 A dozen years or so ago, I
attended a meeting of the Labor Law Section of the Association of
American Law Schools, only to hear this common complaint: enrollments
in labor law were dropping, and the course was struggling to survive. That
trend has continued so that today union membership in the private sector
stands at about 6.6% of the workforce, down from about 35% in the
1950s.2 At the same time, the percentage of unionized workers in the
public sector rose for much of this period, but it too is now in decline for
two reasons: first, many of the recent austerity layoffs; and second, in
Wisconsin and Indiana in particular, the rapid decline in union members3
Copyright © 2013, Richard A. Epstein.
* Laurence A. Tisch Professor of Law, New York Universit y Law School, the Peter and
Kirsten Bedford Senior Fellow, the Hoover Institution, and the James Parker Hall
Distinguished Service Professor of Law Emeritus and senior lecturer, the University of
Chicago. My thanks to Jordana Haviv, Ben Margo, and Joshua Stanton , New York
University Law School Class of 2014, for their valuable research assistance.
1 Charles Fried, Individual and Collective Rights in Work Relations: Reflections on the
Current State of Labor Law and Its Prospects, 51 U. CHI. L. REV. 1012, 1012 (1984).
2 Steven Greenhouse, Share of the Work Force in a Union Falls to a 97-Year Low,
11.3%, N.Y. TIMES (Jan. 23, 2013), http://www.nytimes.com/2013/01/24/business/union-
membership-drops-despite-job-growth.html?_r=0.
3 Douglas Belkin & Kris Maher, Wisconsin Unions See Ranks Drop Ahead of Recall
Vote, WALL ST. J., May 31, 2012, at A1 (“Wisconsin membership in the American
Federation of State, County and Municipal Employees—the state’s second-largest public
sector union after the National Educati on Association, which represents teachers—fell to
28,745 in February [2012] from 62,818 in March 2011 . . . .”). The overall union
membership rate fell from 13.3% to 11.2% between 2011 and 2012. Union Affiliation of
Employed Wage and Salary Workers by State, DEPT OF LABOR (Jan. 23, 2013),
http://www.bls.gov/news.release/union2.t05.htm.
2 CAPITAL UNIVERSITY LAW REVIEW [41:1
once legislation stripped unions of the right to direct payment of union
dues from workers’ paychecks.4 Until recently, unions in the public sector
did not generate much by way of legal controversy because of two key
features of public unions’ basic structure.5 First, public unions were
recognized as of right.6 Second, impasses in bargaining were generally
resolved by compulsory arbitration and not by strike (or at least not by
legal strike).7 The real action therefore is in the area of employment
discrimination, with its expanding docket of issues extending to everything
from affirmative action and class actions for disparate impact cases, to
sexual harassment, mandatory retirement, and much more.8
Employment discrimination continues to receive much attention
today,9 but the larger question of the role of unions in both the public and
the private sector has generated massive controversy that has reached the
mainstream press.10 The major struggles in labor law started with the now-
aborted efforts of labor unions to secure passage of the (misnamed)
Employee Free Choice Act,11 which would have done three things: allowed
union recognition to take place by card check; imposed mandatory
arbitration of initial two-year “contracts” if the parties failed to reach an
agreement within 120 days of union recognition; and stiffened penalties for
alleged unfair labor practices committed by employers during the course of
an organizati onal campaign.12 The inability to pass that proposed
legislation did not stop the union pressure for an expansion of their rights.
Instead, the campaign switched to the National Labor Relations Board,
whose chairman is by law a presidential appointee and whose other four
4 The dues provision of 2011 Wisconsin Act 10, the so-called Budget Repair Bill, was
later struck down. Wis. Educ. Ass’n Council v. Walker, 824 F. Supp. 2d 856, 869–70
(W.D. Wis. 2012).
5 See RICHARD A. EPSTEIN, THE CASE AGAINST THE EMPLOYEE FREE CHOIC E ACT 8
(2009).
6 Id. at 8–9.
7 Id. at 9.
8 RICHARD A. EPSTEIN, FORBIDDEN GROUNDS: THE CASE AGAINST EMPLOYMENT
DISCRIMINATION LAWS 281–82 (1992).
9 See, e.g., Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011).
10 See generally Belkin & Maher, supra note 3; Greenhouse, supra note 2 (both
demonstrating mainstream media coverage).
11 Employee Free Choice Act of 2007, S. 1041, 110th Cong. (2007); Employee Free
Choice Act of 2009, S. 560, 111th Cong. (2009).
12 EPSTEIN, supra note 5, at 4–6.
2013] SAVIORS OR SCOURGES? 3
members are divided equally between Democrats and Republicans.13 The
polarization by party was evident during the Bush Administration on a
wide range of substantive and procedural issues.14 Once Barack Obama
was elected President in 2009, the balance of advantage shifted, but the
deep political di visions did not abate.15 The Republicans mounted a long
and determined campaign to block the confirmation of Craig Becker, who
received a recess appointment by President Obama in March 2010 over
ferocious Republican objections.16 In June, the Supreme Court of the
United States in New Process Steel v. NLRB17 held that the NLRB could
not operate with only two of its five members when the National Labor
Relations Act required a quorum of three members.18 Shortly thereafter,
the NLRB general counsel Lafe Solomon initiated a suit against Boeing
claiming that it unlawfully refused to bargain with its various unions when
it announced that it was going to open a new plant in North Charleston,
South Carolina.19 The dispute was settled privately before the case reached
the Board, but it generated once again a pitched battle over whether unions
should be able to exert that degree of control over major management
decisions.20
At the same time, the status of public unions has become far more
controversial as well. Generous pensions for workers in public unions in
states like California and Illinois have become the most divisive issue in
state politics, with no short-term solution on hand.21 Most dramatically,
13 29 U.S.C. § 153(a) (2006); Richard Epstein, The Tussle over Craig Becker, FORBES
(Nov. 10, 2009, 12:01 AM), http://www.forbes.com/2009/11/09/craig-becker-nlra-nlrb-
john-mccain-nomination-opinions-columnists-richard-a-epstein.html.
14 Epstein, supra note 13.
15 See, e.g., Meredith Shiner, Senate Stops Craig Becker Nomination, POLITICO (Feb. 9,
2010, 5:00 PM), http://www.politico.com/news/stories/0210/32758.html.
16 Id.; Press Release, Office of the Press Sec’y, President Obama Announces Recess
Appointments to Key Administration Positions (Mar. 27, 2010),
http://www.whitehouse.gov/the-press-office/president-obama-announces-recess-
appointments-key-administration-positions.
17 130 S. Ct. 2635 (2010).
18 Id. at 2644.
19 See Steven Greenhouse, Labor Board Case Against Boeing Points to Fights to Come,
N.Y. TIMES, Apr. 23, 2011, at B1.
20 Steven Greenhouse, Labor Board Drops Case Against Boeing After Union Reaches
Accord, N.Y. TIMES, Dec. 10, 2011, at B3.
21 Brian Chappatta & Michael B. Marois, California Beating Illinois Shows Pension-
Gap Cost, BLOOMBERG BUSINESSWEEK (Sept. 4, 2012, 12:01 AM),
(continued)

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