Regulatory Stranglehold on Labor

May 2, 2025

Disclaimer: These words are the author’s personal views and do not reflect the Labor Guild’s opinion.

What I have been talking about is our story, the story of Labor, however you must understand “Labor” was not the only event going on in history at this time, or any time, for that matter. For this was a time called the “Progressive Era” (1890’s – 1920’s) a time of social and political reform, a rise in multiple types of socialist parties and a need to intervene in political corruption which caused corporate abuse. The Spanish-American War, the immigrant population was growing and still certainly an issue. WWI, the Bolshevik Revolution and the ushering in of the “Roaring 20’s”.

By the 1900’s The Gilded Age was thriving, the Capitalist had the upper hand in that they still controlled the means of production, and were protected by their friends in the courts, legislative and executive branches of government (Governors and Presidents). In working toward a shorter work week, better pay and benefit packages, unions became for the most part militant. The ever-expanding gulf between workers and owners brought the dialectic confrontations that Marx spoke of (if they won’t give you what you need, you have friction). Through groups like the Wobblies (International Workers of the World) workers demanded more control of the workplace. Major strikes led to massive unrest among the workers in the society. That coupled with the rampant and uncontrolled corruption of Corporations led to conflicts. Industrialists owned the Courts and Legislators and together attempted to close every avenue for workers to find relief.

That relief valve was released in social unrest like the Pullman Strike and the Colorado Labor Wars which was reported as close as this country ever came to open warfare. The Battle of Blair Mountain (Matewan) West Virginia was in fact open warfare, where mine owners used WWI war surplus to be used on strikers. Along with the government approved army air reconnaissance. Owners had no problem hiring their mercenary armies to kill striking workers.

The Holding Companies were proliferating and without regulation, purchasing competitors and adding them to their stable within the “Holding Company” thereby controlling the means of production of entire industries. Which forced Congress to intervene, they were concerned that corporations had gone too far. Corporations have, many times since their existence, shown how they have not learned to control their own success. They just keep grabbing until their “Golden Goose” is dead or until the government steps in to save them from themselves. Congress tried to restrain the Corporations with the Sherman Anti-Trust Law in 1890. I said, tried because look at what corporations are doing today. It was designed to stop price fixing and other practices that limited competition and to stop the monopolization of entire industries. However, the law that was designed to inhibit Industry was used to stifle the Unions. As in the case of Pullman where it was determined that the Unions restrained commerce. In that case, the U.S. Mail, was secretly planted so it could be used to bring forward enforcement of this Act for the first time. In fact, it seemed whenever labor struck, it restrained commerce and the courts became the framer of social policy of the day, despite what the people or the legislative bodies wanted. (Sound familiar?) It was like a game of “whackamo”. Every time Labor managed to make strides they got knocked back down.

In the case of Loewe v. Lawlor (Danbury Hatters, 1903) the Court ruled that a secondary boycott on the open shop of the employer violated the Sherman Act because it restrained commerce. It went even further and declared the union officials personally liable for the damage done and personally responsible for the fines imposed. It is interesting to see the law had no problem in granting limited liability to corporate executives. What I find astounding is that Industrial CEOs ordered and approved tactics such as the Ludlow massacre and the mine owners at Matewan and their officers, and the people who performed these atrocities were never charged. I would say that is well beyond the scope of limited liability. Yet, they hammered the union executives in the exercise of their duties. In 1913 the Supreme Court Chief Justice, Melville Fuller, who was appointed by Grover Cleveland, upheld the lower courts and in its ruling awarded treble damages to Loewe for violating the Sherman Act and restricting commerce.

Around the same time as the Lowell Mill strike, Buck Stove v. Gompers, the Court ruled that because Gompers took out an ad in a trade journal not to patronize Buck Stove, he and other union leaders were responsible for damages. It was still the Federal Courts that stood out as the guarantor of the corporate interest by ruling over and over again, in favor of property rights rather than human rights.

Through the militancy of workers, by 1900 workers realized they had the power to change the environment through the use of the ballot box and began political activity. I must note that if it were not for these radical militant instigators, there would not be a Labor Movement, we would have been crushed without their opposition to the status quo.

As immigrant workers brought their trade skills to the new world, they also brought their ethnic social cultures, celebrations, religions, and politics too. They were acutely aware that they were being exploited by the Capital interests in keeping them impoverished. Many drew back to their Socialist roots as we see the rise of workers joining Socialist parties and publicizing their struggles. As a result, we see a rise of pro labor candidates elected to local offices (one, even to Congress from Minneapolis, Victor Berger) and through Labor’s efforts and tireless lobbying we see the passage of the Clayton Act in 1914.

The Clayton Act was designed by Henry De Lamar Clayton (D-Alabama) to clarify and supplement the Sherman Act and to carve out labor out of the Sherman Act’s enforcement. It was hoped that the threat of injunction against strikers would cease, and the transition of labor struggle would be moved away from the Federal Court. The Act in Section 6 exempted labor organization from the Sherman Act, saying that human labor is not an article of commerce nor is it a commodity. In Section 20, it protected boycotts, strikes and picketing as long as they are peaceful, would remain exempt. Under this law, injunctions could not be used to settle labor disputes. Perfect, just what we were looking for.

Instead, the Court ruled in Duplex Printing v. Deering that the Clayton Act did not exempt unions from the Sherman Act. In this case the union called a secondary boycott against the nonunion Duplex. Which meant literally stopping supplies to the company, blocking them from trade shows and stopping the shipping of their product. They stopped repairs of their equipment and protested the buying of their goods. Basically, shutting them down and trying to force them to join the union.

The court held that Congress exempted only those activities that were permitted at the time the Clayton Act was passed and not before. Therefore, those activities that were illegal before Clayton were still illegal, making the Clayton Act subservient to Sherman.

If that was really the case what was the purpose of the law that was passed? You can see here the cute wordsmithing that was designed to protect Corporations.

Because Section 1 of the Act did not define a difference between price fixing of goods or the price fixing of labor; the Court viewed the two as the same. Even though establishing wage rates is a prime duty within a collective bargaining agreement (it is not comparable to price fixing like it is in an entire industry). Also, the Court felt the Unions, in shutting down commerce with secondary boycotts, was not so different than the anti-monopoly language that Sherman was designed for. The fact that industry had the power to crush workers and even kill them seemed to be protected activity within property rights law.

And so, the law that was hoped to help labor was pretty much voided and actually used as a tool by the employers to prosecute unions under the dominate Sherman Act. Is it not interesting then, just as today, the Supreme Court got pretty clever in wordsmithing their decisions in favor of the constituencies that put them there?

With the demise of the Knights of Labor and the success of the AFL, unskilled workers were left with no place to go. It became very obvious there needed to be a place for non-skilled labor. The AFL was very homogeneous in keeping their workers within their auspices. Many jobs and hiring were kept within the families of these organizations and were very protective in not allowing their skills be dispersed to a wider population which could weaken them. It was a wake-up call that unskilled workers needed a home and the same protections the AFL enjoyed. In the end it was the Congress of Industrial Organization (CIO) that finally took root but back then it was the Wobblies. Thus, it was the Wobblies who recognized they were never going to attain any sense of dignity in the workplace, i.e., fair wages, a shorter work week or benefits unless they overthrow the system in place and transfer the ownership of the means of production to the workers.

As I have stated before, many of our early labor leaders were socialist. Take Samuel Gompers, born of German parents in London in 1850, emigrated to New York and took up his father’s trade as a cigar maker. One of his jobs was a “reader”. Where the majority of his colleagues were also of German descent understood Socialism. Gompers read mostly socialist doctrine to the workers to pass the time as cigar makers repeatedly rolled tobacco leaves into cigars. Gompers regularly attended Socialist Party meetings and enjoyed the scope of great speakers as well as the offer of new ideas. However, he never joined the Party. Excited about some of the new ideas, he confided in a confidant, Karl Laurrell.

“I went to Laurrell with glowing enthusiasm. Laurrell would gently say, ‘Study your union card Sam, and if the idea doesn’t square with that, it ain’t true.’ My trade union card came to be my standard in all new problems.” Great advice for every worker that carries a union card.

The fact is, during this period the Industrialists had control of the three branches of government. Now, I am certainly not suggesting there were times in our history that Labor as well have a share of sympathetic Justices, regulators and legislators that did not lean toward us, but that didn’t really begin until the 1930’s. However, if we were to keep score. I do think Labor has taken a beating throughout our history. What I am telling you is that it matters who is installed in judicial and regulatory positions. I think I have shown you enough examples of that. So, even those who have insisted to me that all politicians are alike, I can tell you they are not. If they sympathize with Labor, they will appoint the people that will support us.

Before I move on to write about the Great Depression and the development of Labor Law, I wanted you to have a taste of what was happening and how Labor grew into its shoes of using the system to get what they needed.