The Meaning and Contemporary Vitality of the Norris-laguardia Act

• Publication year: 2021
• Citation: Vol. 93

93 Nebraska L. Rev. 6. The Meaning and Contemporary Vitality of the Norris-LaGuardia Act

The Meaning and Contemporary Vitality of the Norris-LaGuardia Act

Matthew W. Finkin(fn*)

TABLE OF CONTENTS

I. Introduction..........................................7

II. A Tale of Three Laws.................................8
A. The Arbitration Act (1925).........................8
B. The Norris-LaGuardia Act (1932)..................9
C. The National Labor Relations Act (1935)...........17

III. The Run Up to the Conflict: The Supreme Court Transforms the Arbitration Act........................ 18

IV. The Norris-LaGuardia Act Confronts a Reconstructed Arbitration Act ....................................... 21

V. The Policy Choice ..................................... 23
A. The Court's Further Explication of Norris-LaGuardia ........................................24
B. The Policy Choice.................................26

VI. The Moral Dimension.................................29

George William Norris represented Nebraska's 5th congressional district from 1903 to 1913, and then the state as a United States Senator from 1913 to 1942, in all but his last term as a Republican. He was known, as his autobiography is titled, as The Fighting Liberal. He was a powerful advocate for the New Deal. He fought for the Rural Electrification Act and the creation of the Tennessee Valley Authority-the latter earning him both a dam and a town bearing his name: Norris, Tennessee. He was a sponsor of the law that also bears his name, the Norris-LaGuardia Act, of which he later wrote: it is a "law that attempts to safeguard and protect the liberties of the individual man." It is a law whose meaning and relevance have come into question today. The author is gratified that the editors of the Nebraska Law Review have chosen to devote its pages to reflect on what Norris's work continues to say to us, eighty years after its passage.

1

I. INTRODUCTION

Ms. Tiffany Ryan took a job with JPMorgan Chase & Co. in 2010. As a condition of employment she was required to sign a Binding Arbitration Agreement. It was a six-page, single-spaced document that provided in pertinent part:

As a condition of and in consideration of my employment with JPMorgan Chase & Co. or any of its direct or indirect subsidiaries, I agree with JPMor-gan Chase as follows:

1. SCOPE: Any and all "Covered Claims" (as defined below) between me and JPMorgan Chase . . . shall be submitted to and resolved by final and binding arbitration in accordance with this agreement.

2. COVERED CLAIMS: "Covered Claims" include all legally protected employment-related claims, excluding those set forth below in Paragraphs 3 and 4 of this Agreement, that I now have or in the future may have against JPMorgan Chase or its officers, directors, shareholders, employees or agents which arise out of or relate to my employment or separation from employment with JPMorgan Chase and all legally protected employment-related claims that JPMorgan Chase has or in the future may have against me, including, but not limited to, claims of employment discrimination or harassment if protected by applicable federal, state or local law, and retaliation for raising discrimination or harassment claims, failure to pay wages, bonuses or other compensation, tortious acts, wrongful, retaliatory and/or constructive discharge, breach of an express or implied contract, promissory estoppel, unjust enrichment, and violations of any other common law, federal, state, or local statute, ordinance, regulation or public policy, including, but not limited to Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866 and 1991, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Fair Labor Standards Act of 1938, the Equal Pay Act of 1963, Section 1981 of the Civil Rights Act, and the Worker Adjustment and Retraining Notification Act.

***

4. CLASS ACTION/COLLECTIVE ACTION WAIVER: All Covered Claims under this Agreement must be submitted on an individual basis. No claims may be arbitrated on a class or collective basis unless required by applicable law. Covered Parties expressly waive any right with respect to any Covered Claims to submit, initiate, or participate in a representative capacity or as a plaintiff, claimant or member in a class action, collective action, or other representative or joint action, regardless of whether the action is filed in arbitration or in court.(fn1)

It is not surprising that she would be required to agree. The substitution of company-created arbitration systems for the courts has become a fixture of the American economy. Employers see legal and efficiency benefits in it: the process is confidential, avoiding precedent, and thought to be faster and less expensive than judicial litigation. As

2

much as a third of the workforce is covered by such provisions.(fn2) This explains the sweep of section 2. However, because the conventional wisdom is that the disposition of a large number of common small claims in a single proceeding is more efficient than proceeding piecemeal on them, the precise purpose served by section 4 is rather in need of explanation.(fn3)

In any event, the legal question it poses is whether employment can be conditioned contractually upon the individual's surrender of the capacity to bring or participate in a class or a group proceeding in the forum substituted for the courts. The answer requires an engagement with two laws. One, a sedate matter of commercial law, was presented to Congress at the end of 1921, and culminated in early 1925, with no real dispute, in the Federal Arbitration Act.(fn4) The other involved a struggle over labor law that played out over decades-in the state legislatures, the courts, and in intense public debate-and which took a decisive turn in the Norris-LaGuardia Act of 1932.(fn5)

II. A TALE OF THREE LAWS

A. The Arbitration Act (1925)

In 1921, the American Bar Association's (ABA) Committee on Commerce, Trade and Commercial Law drafted a proposed federal arbitration statute as part of a comprehensive package-a uniform state law and an international treaty-intended to expedite the resolution of commercial disputes. At the time, many state courts were disinclined to enforce agreements to arbitrate future disputes, and the ABA sought to sweep that aside. The law was introduced in Congress in December, 1921. A hearing before the relevant Senate committee was held at the end of January, 1923. In the interim, the bill had drawn the opposition of organized labor and the endorsement of the then-

3

Secretary of Commerce, Herbert Hoover. The union opposition was noted in the Senate's hearing,(fn6) an employment-exempting proviso, submitted by Secretary Hoover, was adopted,(fn7) and the bill was enacted.

The key section provided that, subject to the employment exemption, a written agreement to submit to arbitration a controversy arising out of a transaction involving commerce "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the reservation of any contract."(fn8) As the Supreme Court was later to opine, Congress enacted the law "to replace judicial indisposition to arbitration with a 'national policy favoring [it] and plac[ing] arbitration agreements on equal footing with all other contracts.'"(fn9)

B. The Norris-LaGuardia Act (1932)

The Arbitration Act dealt with an issue of commercial law. Its passage was relatively swift and uncontroversial, save for the hiccup resulting in the employment exemption. The Norris-LaGuardia Act engaged with one of the most controversial issues of the time. Its passage was stormy; its terms were subject to intense dispute.

Stefan Riesenfeld pointed out that all industrialized democracies have followed a common legal trajectory when they confronted collective employee protests and demands for collective bargaining: suppression, tolerance, recognition.(fn10) At the century's turn, the United States was still in the first phase. The flashpoint of dispute was often

4

not over specific wage demands but whether employers would deal with their employees on a collective basis, through their unions. All too often the confrontation was lethal: the Ludlow Massacre of April 20, 1914, which took the lives of twenty-four men, women, and chil-dren;(fn11) the Matewan Massacre in West Virginia on May 19, 1920, which led to the Mingo County War that, at one point, involved a confrontation between 10,000 armed miners, more or less, and the mine owners, until President Harding placed the entire state under martial law;(fn12) and the Herrin Massacre of June 22, 1922, in southern Illinois in which, after a gunfight, about twenty-five (no one knows for sure) non-union miners were captured and slaughtered, some having their throats slit.(fn13)

In the last quarter of the nineteenth century, "American labor relations were the most violent in the Western world with the exception of Russia."(fn14) As in the last third of the nineteenth century so, too, in the first third of the twentieth.

Under the constitutional warrant of the Hitchman Coal decision (1917), which validated the yellow-dog contract in a West Virginia case . . . newly formed open-shop associations urged employers to remove

...