The new labor law.

Author:Andrias, Kate
Position::III. The Case for the New Labor Law B. A Qualified Defense through Conclusion, with footnotes, p. 76-100
  1. A Qualified Defense

    The foregoing critiques have merit. But they pose a challenge for the design and enactment of the new labor law, rather than a reason to resist its development.

    Consider, first, the post-union approach, i.e., exclusive reliance on employment regulation or corporate self-governance. This may be the path of least resistance, but for several reasons, regulation and self-governance, without the existence of strong worker organizations, are unlikely to achieve many of the most important aims of labor law.

    First, an employment-law or governance approach does nothing to facilitate worker voice or to protect the right to associate--to organize, bargain, and strike. These rights are both recognized in domestic law and enshrined in international law. (396)

    Second, an employment-law or governance approach does little to shift how power is distributed in society. Strong worker organizations, in contrast, help redistribute power, which, over time, helps maintain a measure of political and economic equality. (397) Unions help shift the balance of power through several mechanisms. Most obviously, organized labor exercises collective bargaining power that affects wage rates. (398) But unions also have the capacity to affect corporate governance decisions, such as executive compensation. (399) In addition, they can push policymakers to address issues relating to workers, to ensure enforcement of statutory standards, and to "resist policy changes that further inequality." (400) Comparative studies support the conclusions that strong unions are associated with reduced wage dispersion, (401) enhanced welfare state generosity, (402) and increased electoral participation among low income groups. They also play a networking and informational function by making working-class voters aware of partisan differences and their implications for policy. (403)

    Finally, effective and democratic worker organizations bring other important benefits over a purely regulatory approach: they have the potential to create workplace democracy (404) and thus serve as an important training ground for political democracy. (405) Unions can also improve workplace outcomes by facilitating voices of affected participants. (406) Indeed, even leading scholars urging a governance approach recognize the necessity of facilitating worker voice in some shape or form. (407)

    Why not, then, try to revive the existing system of firm-based bargaining? Because as earlier parts of this Article demonstrated, traditional NLRA collective bargaining is profoundly mismatched with the contemporary economy in which employers are fissured and work is increasingly global, contingent, shared, and automated. (408) Moreover, the existing system of firm-based collective bargaining largely removes unions from the spaces of politics and governance, in an era in which those arenas are increasingly dominated by organized wealth. (409)

    The new labor law regime emerging from the efforts of the Fight for $15 and similar social movements is thus far more promising than either the purely regulatory approach or the traditional NLRA approach. To be sure, its merits depend in large part on the details. To that end, in Part IV, I consider how, concretely, the new labor law might continue to develop in the United States. But at the level of principle, the arguments in favor of a more sectoral and social form of labor law are significant.

    Perhaps the most straightforward reason to embrace the new labor law is that it would enable unions to negotiate in ways that respond to the problem of the fissured employer. Under the emerging system, no longer would the bargaining relationship be structured around the outmoded employer-employee dyad. Workers throughout an economic sector would bargain together, whether employed by the lead firm, one of the contracted firms, or any particular plant. This would avoid protracted legal battles about the identity of the employer while strengthening unions' ability to implement their goal of raising worker wages.

    For several reasons, sectoral bargaining, which is common throughout Europe, (410) better serves labor law's goal of increasing workers' bargaining power so as to reduce economic and political inequality. (411) Researchers have shown that firm-based bargaining has some impact on income inequality, but the impact is primarily felt within firms; bargaining compresses wages within the firm at which it occurs. (412) The existing model of firm-based bargaining thus tends to raise wages throughout an industry only if there is enough union presence in the industry or geographic area to pose a threat to nonunionized firms; employers raise wages to stave off unionization or to compete for labor. (413) This rarely occurs under our current regime in which sectoral bargaining, though permissible, is not required. In contrast, mandatory sectoral bargaining directly impacts wages throughout the labor market; agreements apply to all employers in the industry or region, helping create more wage compression overall. (414) Unions empowered to bargain sectorally also tend to be more effective at shaping public policy and democratic decision making. (415) Their more expansive mandate enhances their incentive and ability to serve as a counterweight to organized business interests in the political sphere. (416)

    The U.S. experience demonstrates, however, that simply allowing unions to bargain sectorally is unlikely to accomplish much--the NLRA already permits multi-employer bargaining to the extent employers and unions agree to it. (417) Nor would the voluntary centralization of union organizations necessarily produce sectoral bargaining. (418) A critical addition is active support from the state: for sectoral bargaining effectively to reduce wage inequality, employers must be required to engage in it, and its fruits must be extended throughout the labor market. (419) Such state-supported sectoral bargaining--social bargaining--also provides workers greater influence in politics, over a host of policy decisions that affect workers' daily lives. Indeed, comparative studies suggest that, from the perspective of creating egalitarian outcomes at the societal level, the two most important factors in a labor law regime are the establishment of broadly inclusive union organizations and the capacity of the state actively to broker deals between employer and union organizations. (420)

    Governmental support for bargaining need not be accompanied by governmental control of labor organizations or restrictions on their freedoms--just as the absence of state support for bargaining under the current system does not ensure protection from state interference. Indeed, the American system includes significant governmental control over labor organizations, and significant court sanction of labor protest, despite the ideal of a voluntaristic, private system of labor relations. (421) In contrast, numerous European systems grant unions significant political power but leave them much less fettered in their internal operations and in their ability to exercise economic power. (422) In short, the extent of state intervention in unions is highly contingent, the product of multiple policy choices, and does not necessarily follow from giving unions more power to bargain at the social level.

    The case for social bargaining as a means to enhance the economic and political power of workers is thus compelling. But the argument fails to respond to one of the critiques launched by proponents of the existing system: that the new labor law may well undervalue vibrant workplace organizations and may minimize the extent of worker voice at the place of employment. Our current system places the workplace at the heart of the labor-management relationship and seeks to increase worker voice and dignity at that location. Local unions, organized at the firm level, can have a significant impact on the daily work experience of individual workers and can shift their relationships with immediate supervisors in ways that enhance workers' dignity. (423)

    But the nascent labor law does not, and need not, eschew a system of workplace organizations altogether. Indeed, the Fight for $15 and other new campaigns suggest the possibility of a hybrid in which sectoral social bargaining would accompany either the existing system of exclusive representation at individual shops, or a new, developing system of non-exclusive representation, under which members-only worker organizations, or perhaps even works councils, would exist at individual worksites to supplement social bargaining.


    In the end, for those committed to achieving greater economic and political equality, the strongest objection to the emerging labor law regime is not that it would be ineffective but that it is unlikely to be achieved. Commentators have described earlier proposals for mandatory sectoral bargaining as fanciful and from the "political ozone." (424) But as Part II demonstrated, social bargaining is already nascent through the efforts of the Fight for $15 and other social movements. This Part elaborates on the existing legal footholds that could be deepened to facilitate the new labor law in the United States and considers potential obstacles.

  2. A Legal Framework for Social Bargaining

    The NLRB took a critical step toward more centralized bargaining with its recent Browning-Ferris decision. (425) Returning to the broader, common law joint employment test in use before the mid-1980s, the Board emphasized its responsibility to adapt the NLRA to "changing patterns of industrial life." (426) Whether the Board's standard will survive court review, hostile congressional oversight, or reconsideration by a different Board are open questions. (427) But if the standard endures, it will further the goal of sectoral unionism advanced by the Fight for $15--to a point. As a result of the Browning-Ferris decision...

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