STRUCTURAL LABOR RIGHTS.

• Author: Hafiz, Hiba

American labor law was designed to ensure equal bargaining power between workers and employers. But workers' collective power against increasingly dominant employers has disintegrated. With union density at an abysmal 6.2 percent in the private sector--a level unequaled since the Great Depression--the vast majority of workers depend only on individual negotiations with employers to lift stagnant wages and ensure upward economic mobility. But decentralized, individual bargaining is not enough. Economists and legal scholars increasingly agree that, absent regulation to protect workers' collective rights, labor markets naturally strengthen employers' bargaining power over workers. Existing labor and antitrust law have failed to step in, leaving employers free to coordinate and consolidate labor-market power while constraining workers' ability to do the same. The dissolution of workers' collective rights has resulted in spiking income inequality: workers have suffered economy-wide wage stagnation and a declining share of the national income for decades. To resolve this crisis, some scholars have advocated for ambitious labor law reforms, like sector-wide bargaining, while others have turned to antitrust law to tackle employer power. While these proposals are vital, they overlook an existing opportunity already contained in the labor law that would avoid the political and doctrinal obstacles to such large-scale reforms.

This Article argues for a "structural" approach to the labor law that revives and modernizes its equal bargaining power purpose through deploying innovative social scientific analysis. A "structural" approach is one that takes into account workers' bargaining power relative to employers in determining the scope of substantive labor rights and in resolving disputes. Because employers' current buyer power strengthens their ability to indefinitely hold out on worker demands in the employment bargain, the "structural" approach seeks to deploy social scientific tools to tailor the labor law's provisions so that they resituate workers to a bargaining position from which they could equally hold out.

This Article makes three key contributions. First, it documents the dispersion and misalignment of workers' collective rights under current labor law, detailing the historical narrowing of workers' collective rights to limited tactics by a small set of workers against highly protected individual enterprises and the concomitant rise of employer power (Part I). Second, it introduces and schematizes the wealth of social scientific literature relevant for evaluating the relative bargaining power of employers and employees (Part II). And finally, it offers concrete proposals for how to apply these social scientific tools and insights to three areas of the National Labor Relation Board's adjudication and regulatory authority: the determination of "employer'7"employee" status, the determination of employees' substantive rights under section 7 of the National Labor Relations Act (NLRA), and the determination of what counts as sanctionable unfair labor practices under section 8 of the NLRA (Part III).

INTRODUCTION I. DISPERSION AND MISALIGNMENT OF WORKERS' COLLECTIVE RIGHTS A. Equal Bargaining Power: The Origins of Modern Labor Regulation B. Narrowing Workers' Collective Rights: Antitrust's Labor Exemption C. Narrowing Workers' Collective Rights: Bargaining Units and Unprotected Workers D. Narrowing Workers' Section 7 Rights and Unfair Labor Practices 1. Section 7 Labor Rights 2. Section 8 Unfair Labor Practices II. EQUAL BARGAINING POWER AND SOCIAL SCIENCE DEVELOPMENTS A. Bargaining Power in Labor Economics B. Market Power in Antitrust Law and Industrial Organization Economics C. Bargaining Power in Microeconomic, Negotiation, and Game Theory D. Bargaining in Behavioral Economics, Industrial Relations, and Organizational Psychology E. Bargaining Power in Macroeconomics F. Equal Bargaining Power: Coherence and Administrability III. EQUAL BARGAINING POWER AND STRUCTURAL LABOR RIGHTS A. Equal Bargaining Power Analysis of "Employer" and "Employee" Status B. Equal Bargaining Power analysis of Workers' Substantive Rights Under Section 7 C. Equal Bargaining Power Analysis of Employers' Unfair Labor Practices CONCLUSION INTRODUCTION

Workers' collective power against increasingly dominant employers has disintegrated. With union density at an abysmal 6.2 percent in the private sector--a level unequaled since the Great Depression (1)--the vast majority of workers depend only on individual negotiations with employers to lift stagnant wages and ensure upward economic mobility. (2) But decentralized, individual bargaining is not enough. Economists and legal scholars increasingly agree that, absent regulation, labor markets naturally strengthen employers' bargaining power over workers. (3)

The social costs of unequal bargaining power are immense. When employers have monopsony power, or power to operate as wage setters rather than wage takers in the employment bargain, they hire fewer workers--increasing under- and unemployment--and those workers suffer suppressed pay and benefits as well as worse working conditions. (4) Monopsony power also reduces economic productivity because employers are not competing over wages to lure workers into jobs that are the best match for their productivity and skills. (5) Monopsony has distributional effects as well, increasing inequality by allowing employers to capture rents from workers' labor. (6) In addition, when firms hire fewer workers, they produce less output and can charge higher prices that harm consumers. (7)

Existing law has failed to step in, leaving employers free to coordinate and consolidate labor-market power while limiting workers' ability to do the same. (8) Focused on consumer welfare, antitrust enforcers have allowed employers to merge without considering the effects of increased labor-market concentration on workers' wages. (9) And lax enforcement has enabled employers to engage in a range of conduct that suppresses worker pay, such as reaching wage-fixing and "no-poach" agreements with other employers and imposing restrictive noncompete provisions in employment contracts. (10) Unsurprisingly, in the absence of collective, or "countervailing," power against employers, workers enter individualized bargaining at a significant disadvantage. (11) And the empirical consensus is in: income inequality has spiked as workers have suffered economy-wide wage stagnation and a declining share of the national income for decades. (12)

When passed in 1935, the National Labor Relations Act (NLRA or Act) was designed to overcome this disparity by lifting workers' leverage as against their employers. The Act established labor rights as collective rights to ensure "equal [] ... bargaining power between employers and employees." (13) It created a national labor enforcement agency--the National Labor Relations Board (NLRB or Board)--to secure this balance. (14) And its first members set out to establish a Division of Economic Research (DER) to ensure institutional alignment between this foundational purpose and the Board's real-world enforcement. (15) The DER furnished the Board with robust social scientific analyses to help the Board target its enforcement to ensure that workers' bargaining strength matched that of employers. (16)

But employer lobbying and formalist interpretations of the NLRA have driven labor law from its original purpose. In its Taft-Hartley and Landrum-Griffin Amendments to the Act, among other things, Congress exempted independent contractors from its jurisdiction and reduced workers' strike protections. (17) Even more, labor law doctrine restrained workers' rights to isolated pockets of enterprise bargaining, or bargaining restricted to a single, narrowly defined employer, and limited protections for workers' exercise of economic pressure against employer buyer power. (18) This is particularly true in "fissured" workplaces, where the rise of franchising, outsourcing, subcontracting, and vertical disintegration has increasingly fragmented workplace structures, in part as a means of stripping upstream employers of compliance obligations under labor and employment law. (19) So while employers retain rights to integrate, disintegrate, consolidate, or tacitly coordinate their power to their advantage under corporate, antitrust, contract, and property law, (20) workers' collective rights have eroded to the point where they lack any substantive ability to function as counterstructure--as effective countervailing power against employers. A legislative ban on Board hiring of economists cemented this collapse and relegated the Board to outlier status among federal agencies. (21) Lacking a social scientist-staffed internal division, the Board was handicapped in its ability to tailor regulation to the policy goals of its organic statute. (22) This lack of social scientific expertise has deprived the Board and the courts of the benefits of empirical analysis in evaluating how their decisions contribute to reducing workers' bargaining power. (23)

The NLRB's recent adjudication of the lawfulness of the McDonald's antiunion campaign is illustrative of this failure. McDonald's franchisees allegedly fired Sean Caldwell, Tracee Nash, and Quanisha Dupree and temporarily suspended and reduced work hours of others in retaliation for their participation in the Fight for $15 campaign, a national campaign led by unions, worker centers, and labor advocates to lift the minimum wage to $15 an hour. (24) In all, the NLRB's General Counsel ("GC") charged McDonald's franchisees with seventy-eight unfair labor practice ("ULP") violations for interfering with and retaliating against workers for their participation. (25) But the GC did not stop there. He charged McDonald's USA--the franchisees' franchisor--as a "joint employer" for coordinating and controlling franchisees' responses to the...