What Can We Learn From the History of American Labor Law?

by Howard B. Lenow, Founding Partner, Lenow & McCarthy and Labor Guild School Instructor

*Disclaimer:  The views expressed in this essay are my own and do not necessarily reflect the views or opinions of the Labor Guild or its staff.*

This essay explores two themes: 

1. How to think critically about American labor law;  and,

2. How to connect the dots in looking back to recognize how best to move forward. 

I have a very different view from many in our community about the role of American legal institutions on the growth and direction of the American labor movement.  While a short blog post does not provide the space for an in-depth analysis of the complex relationship between the legal system and the labor movement, one seminal moment was the passage of the National Labor Relations Act in 1935 (“The Wagner Act”) and the path this set for at least the next 77 years and likely long into the future.  Moreover, as we all watch many political forces in the United States embrace a radical right-wing, and frankly unhinged view of government, the lesson of the legacy of the Wagner Act, the inability of well-meaning Democrats to obtain even moderate reforms and the rightward trend of the current Supreme Court’s clearly anti-union sympathies are instructive.

The Wagner Act of 1935:

Most labor historians credit the passage of the the Wagner Act in 1935 as an historic victory for the American labor movement.  The Wagner Act granted workers in the private sector the right to form unions along with legal protection against retaliation from employers against union organizing.  The Wagner Act created the National Labor Relations Board (The NLRB) as an independent federal agency with the authority to conduct union elections and receive and rule on charges filed by unions and workers for retaliation and refusals to bargain in good faith.

But some, including me, take a different view of the significance of the passage of the Wagner Act.  The passage of the Wagner Act followed one of the most militant and widespread periods of strike activity in the United States in major industries from coast to coast. What truly scared American industry and government officials was seeing different unions in the same city work together to conduct coordinated general strikes.  This strike wave in 1934, a few years into the chaos and misery of the Depression of the early 1930’s also saw workers break away from traditional craft union structures of the old AFL and move workers towards true industrial unionism in factories and other workplaces.  This 1934 strike wave was also massive and militant.

The threat of this militant strike activity in 1934 convinced the progressive wing of the Democratic Party that the time had come to “equalize bargaining power between labor and industry”[1]and impose control on the militant actions of the labor movement. Senator Robert F. Wagner, author of the Wagner Act wrote, “We are entering a new industrial age… this is a time in which the old laissez-faire attitudes were worse than obsolete.” The Wagner Act was based on the philosophical concept that affording a limited number of private sector workers (no supervisors and no agricultural workers) the right to form and join unions within the confines and guidelines of the law would “equalize” the bargaining power of labor and capital.  In other words, by giving unions the right to organize, but only within strict legalistic guidelines, the Wagner Act was designed to make the labor movement become a part of the establishment rather than continue to grow as an external political or social movement.

Where the labor movement in Europe and other industrialized nations remained a workers’ movement outside of political parties and operating outside of strict legal guidelines prescribed by national laws, the American labor movement was effectively subjected to the control of a legal process that was designed to de-radicalize what was looking like a militant workers’ movement. Under the Wagner Act and its progeny, private sector workers were divided into clusters of workers called “appropriate bargaining units” and almost 90 years of litigation has defined which workers at which companies in what numbers can form each bargaining unit.  Management lawyers formed a booming cottage industry organized around new and better ways to prevent union organizing and break existing unions under under cover of these complicated and arcane labor laws. As any union officer who has dealt with the NLRB knows, it is a slow, creeping bureaucracy whose procedures for getting to union elections are painfully frustrating and easily abused by employers who most often choose to fight union organizing drives with both legal and extra-legal tactics. The process of filing and litigating unfair labor practice charges to protect workers against employer retaliation can take years, long past when effective relief is meaningful.

Now, to be clear, subsequent legislation like the Taft-Hartley Act of 1947 and the Landrum-Griffin Act of 1959 expanded the restrictions on private sector labor unions that started with the Wagner Act.  The Courts also contributed in major ways to narrow the protections afforded workers by interpreting the Wagner Act in the most restrictive manner possible. And to avoid offending my union lawyer colleagues, because labor laws are so hostile to organized labor, the labor movement desperately needs its own lawyers to fight back especially given that the legal deck is stacked against unions. But, in my view, it is important to recognize that the passage of the Wagner Act was the first step in the “legalization” of the American Labor Movement and with that, the compartmentalization and control of militant labor activity.

To be fair, the proponents of the Wagner Act had the best intentions. Wagner and his allies believed that granting workers the right to organize truly created an “equality of bargaining power” between labor and industry that would bring industrial peace and promote and protect commerce to everyone’s benefit. And even after passage of the Wagner Act in 1935, in the face of the Supreme Court’s resistance to many of FDR’s New Deal reforms, many also thought that the Supreme Court would most likely strike down the Wagner Act as unconstitutional just as the Court had done to so many other New Deal policies and legislation. But, in the few years after passage of the Wagner Act, another huge strike wave hit the United States, including the famous 44-day sit-down strike in the GM plant in Flint Michigan along with waves of strikes in rubber, steel and shipping.  Also, by the beginning of 1937, enmity for the Supreme Court was at its height, and the Court was under siege in the face of FDR’s unsuccessful effort to “pack the Court” by adding new justices who would be more favorable to FDR’s New Deal policies. 

Now, for those readers who are interested in constitutional law, the United States Constitution grants different powers to the three branches of government. In Article 1, the Constitution established the House of Representatives and the Senate, generally referred to as “Congress.” In Article 1, Section 8, the Constitution grants Congress, among others, the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;” This language is generally referred to as “the Commerce Clause.”  And until the Court’s battles with FDR and the New Deal, the Commerce Clause was largely ignored. In fact, until the Court dealt with the constitutional challenge to the Wagner Act, the Court routinely struck down major economic legislation as an overbroad exercise of Congress’ authority.

But, on April 12, 1937, much to the world’s surprise, the Supreme Court upheld the constitutionality of the Wagner Act by a narrow vote of 5 to 4 with former Republican presidential nominee and now Chief Justice Charles Evans Hughes writing the decision for the majority.[2] In his opinion, Chief Justice Hughes abandoned the Court’s prior “direct and indirect” effects on commerce rule that his Court relied upon in striking down many of FDR’s New Deal policies including a decision only two years earlier in 1935 striking down major provisions of FDR’s National Recovery Act. In upholding the constitutionality of the Wagner in NLRB v. Jones & Laughlin Steel Corporation, Chief Justice Hughes wrote:

“The Court was asked to shut our eyes to the plainest facts of our national life and deal with the question of direct and indirect effects in an intellectual vacuum…When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate commerce from the paralyzing consequences of industrial war.“

And so, for the first time, the Supreme Court set out the guidelines that would control 75 years of Court review of Congressional power under the Commerce Clause of the United States Constitution.  Looking back, what is supremely ironic (pun intended), the NLRA was passed as a way of dealing with the growing militancy of the labor movement following the most significant strike wave in U.S. history in 1934 and the birth of industrial unions and militant strikes from 1935 to 1937. With the passage of the Wagner Act and its protection by the Court, militant strike waves dissipated. Even the large-scale strikes that followed WWII were generally peaceful and short-lived. By 1954, amidst the much-heralded years of prosperity that followed WWII (primarily for white, male workers), union membership increased to its high point of 35% of the workforce. Since then, the percentage of union membership has been steadily decreasing and now sits at only 10% of the total workforce. Today, labor union density in the United States—a measure of the percentage of workforce members in labor unions—is the lowest among all G7 countries by a strikingly wide margin.

From 1937 until 2012, the constitutional principle upon which the Wagner Act was upheld, that the Commerce Clause grants Congress the authority to regulate interstate commerce, was generally unchallenged. In 2012, the new conservative majority on the Supreme Court led by Chief Justice John Roberts was pushed into reviewing the constitutionality of the signature accomplishment of the Obama Presidency, the popular but controversial Affordable Care Act (Obama Care). The ACA, even with the many compromises from its original form, was an historic piece of legislation that sought to guarantee broad access to health care to millions more Americans and was undoubtedly an effort regulate the national impact of health care on interstate commerce. The good news is the Roberts’ Court upheld the constitutionality of the ACA but only on the basis that the Court viewed the individual mandate and tax penalty for failing to sign up for health insurance as a valid exercise of Congress’s power to levy taxes.  The bad news—the very bad news— is that the majority opinion also held that Congress did not have the power under the Commerce Clause to enact the ACA. This shocking aspect of the Court’s decision abandoned 77 years of unchallenged precedent recognizing Congress’ power to enact national economic legislation under the Commerce Clause. This Trojan Horse “sleight of hand” that Chief Justice Roberts employed to obtain the five votes needed to uphold the ACA ushered in a new era of conservative judicial philosophy undercutting the power of the federal government to regulate commerce. This new constitutional movement to limit the power of the federal government lies at the very core of the current right-wing “states’ rights” movement to limit civil rights laws, women’s reproductive rights, protection for environmental legislation and regulation and so many other long-recognized and accepted roles for Congress and the Executive branch.

Concluding Notes:

I have been a practicing labor union attorney for 45 years.  I have seen my share of legal victories on a case-by-case basis, but I have also seen the overwhelming power of the law abused by employers to crush union organizing drives and to devastate the lives of employees.  The most successful organizing campaigns in which I have been involved or which I have observed from afar have been those where the workers and their unions depended upon their own power and independence rather than the “protections” afforded by national or state labor laws. Yes, we have seen some renewed success in organizing in recent years, but we should not fool ourselves; organized labor in the United States is at an historic low point, only 6% of workers in the private sector are in unions compared to 36% of workers in the public sector. Much emphasis has been placed on “reforming” our current national labor laws to make them more responsive to organizing efforts.  With respect and gratitude to those mostly failed efforts, they have still all been based upon the naïve and misguided assumption that the American Labor Movement should be subject to a set of laws like the Wagner Act that are designed to manage and control organized labor, not to promote its expansion.  And forget about the Courts— we are stuck with our current Supreme Court for perhaps another generation.

History teaches us that no one will help the American labor movement except the workers themselves.  That is the lesson I take from my years of study and union labor law practice. You decide for yourselves. 

[1] The preamble to the Wagner Act provides in part, “ It is declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self- organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.

[2] [2] A personal note: I own the gavel that was used by Chief Justice Charles Evans Hughes during his term on the Supreme Court. As it happens, my wife’s grandfather ran Justice Hughes’ 1916 campaign for the Presidency and he gave the gavel to my wife’s grandfather as a gift.