Introduction to Labor Law - Module 1 of 5

Module 1: Introduction to Labor Law

As the U.S. economy industrialized during the nineteenth and twentieth centuries, laborers were subjected to increasingly unsafe and unhealthy working conditions, unregulated child labor, unlivable wages and work weeks that commonly exceeded seventy hours. Employees needed some way to advocate for safe workplaces, adequate wages, benefits for them and their families and reasonable hours. Labor unions arose in the United States to facilitate collective bargaining structures that help balance the power business owners can exert over their workers.The early days of labor conflict were rife with violent conflict. It was only after labor unions established themselves as a force to be reckoned with in the workforce that Congress began to develop a regulatory structure for labor relations.

The Rise of American Labor Laws

Between 1881 and 1900, an estimated 35,000 industrial workers lost their lives from unsafe conditions and workplace accidents. Labor unions have offered an effective counterbalance against employers seeking to impose unfair working conditions or wage standards. Labor unions go back as far as the 1700s, but employer-employee conflict was a major issue in American life well into the twentieth century.[1] By the turn of the twentieth century, an estimated 100,000 workers were going on strike each year.[2] These workers had very little power to bargain for fair wages and workplace conditions unless they banded together. However, because there were no clear national laws regulating how employees and employers were permitted to manage these conflicts, they often escalated to violence.  

During the nineteenth and early twentieth centuries, the state and federal governments took a position against organized labor. Labor unions were considered illegal conspiracies under old common law doctrines, and once the Sherman and Clayton Acts made any conspiracy to restrain trade a criminal act, unions could be legally prosecuted for organizing boycotts, walkouts or strikes.

While some states passed laws during the 1860s and 1870s that legalized collective bargaining, for the most part, participating in a labor union before Congress passed modern labor reforms in the 1930s was a highly risky endeavor.[3] During the Homestead Strike of 1892, for example, management at the Carnegie Steel Company’s Homestead Steel Works responded to a worker strike by locking picketing workers out of the shop floor and then hiring professional strikebreakers to forcibly push past the picket line. The strike turned deadly when both sides opened fire, and the conflict continued until the local government sent in the militia to forcibly reopen the plant.[4]

Any lessons learned from the Homestead Strike were short-lived, and another deadly labor conflict – the Pullman Strike – followed quickly on its heels. During an economic downturn in 1894, the Pullman Palace Car Company cut wages to below livable standards. In response, workers joined in a strike against the company. Members of the American Railway Union, led by famed labor advocate Eugene V. Debs, joined together to organize a national boycott of Pullman railway cars, and within just a few days over 125,000 workers on 29 railroads had quit work. Siding with management, President Cleveland deployed 2,000 Army troops to intervene and end the conflict. Thirteen workers died during the Pullman Strike, and shortly after the conflict ended President Grover Cleveland established Labor Day as a national holiday in memory of the sacrifices of these and others who lost their lives fighting for fair labor.[5]

The U.S. government intervened on behalf of the striking workers for the first time in American history during a coal worker’s strike in 1902. President Theodore Roosevelt threatened to take federal control of the coal mines if owners did not bargain with the United Mine Workers of America labor union in good faith and settle the strike quickly.[6] The conflict resolved peacefully, and the union achieved higher wages and shorter workdays in the process.  

In 1935, Congress passed the National Labor Relations Act, a federal law aimed at standardizing and regulating union formation and labor relations across the nation.[7] The law, an important component of the New Deal legislation passed to help stimulate the economy out of the Great Depression, was passed to help unemployed people improve their prospects in the struggling economy. The National Labor Relations Act forms the basis for labor relations activities nationwide, and it has helped American labor unions evolve from small, grass-roots organizations to major players in the American economy. Today, there are roughly 60 unions representing nearly 15 million workers in the United States.[8]

The National Labor Relations Act

On July 5, 1935, President Franklin Roosevelt signed the National Labor Relations Act into law. The National Labor Relations Act was the first federal law governing unions, and it provided an express right for the collective bargaining and representation of people in a workplace. The law aims to encourage healthy labor relations and limit potential conflicts between employees, employers and labor unions. It seeks to achieve this goal by articulating and enforcing a set of basic rights guaranteed to every private sector employee: to organize, to join trade unions, to strike and to engage in collective bargaining, contract administration and grievances. The law also created the National Labor Relations Board and charged that agency with overseeing the administration of the law.[9]

To claim rights under the National Labor Relations Act, employees must qualify for coverage. The law applies to most private sector workers and employers that meet a minimum threshold of commercial activities that have been standardized over time. Jurisdiction under the NLRA is very broad but is also highly fact-specific. For example, employers in retail industries that provide apartment homes, condominiums, hotel or motel accommodations, taxi services, home construction or amusement services trigger NLRA jurisdiction when they achieve annual gross revenue of $500,000.

For non-retailers and businesses providing transportation, shipping, warehousing or packing services, this threshold goes down to $50,000. Cultural and educational institutions must achieve at least $1 million in gross annual revenue to be covered by the law. The Act also applies to all commercial activities owned and operated by Indian tribes, except tribal enterprises organized to carry out traditional government functions.[10] The law does not cover supervisors or managers, nor does it apply to independent contractors, farm workers or government employees.[11]

The NLRA applies to most workers in the United States, but some categories of employment are excluded. Some are excluded, for example, because they are afforded labor protection through other federal laws. Employees of the federal, state or local governments – including wholly-owned government corporations – are expressly excluded from coverage.[12] However, in 1962, President John F. Kennedy issued Executive Order 10988,[13] which officially established federal government employees’ rights to bargain collectively. Today, the American Federation of Government Employees labor union represents over 700,000 federal government employees.[14]

Section 7 of the NLRA guarantees important workplace labor rights, and employers violate the law if they interfere with the exercise of those rights. This portion of the law gives covered workers the right to form, join or assist labor unions for collective bargaining through representatives of their choosing. It also gives workers the express right to “engage in other concerted activities for the purpose of collective bargaining,” which includes a broad set of rights surrounding when, where and how workers can assemble.

Section 8 of the Act forbids employers from interfering with, restraining or coercing employees when they exercise their rights under Section 7 of the law. If people protected by Section 7 are retaliated against or otherwise victimized by conduct violating the NLRA, they are encouraged to file charges against the employer with the National Labor Relations Board within six months of the violation.[15]

The National Labor Relations Board

When Congress passed the National Labor Relations Act, it also created the National Labor Relations Board to oversee the enforcement and administration of the law. The National Labor Relations Board has two primary functions: it oversees the decision-making process when an employee chooses to be represented by a labor union or organization, and it prosecutes violations of the National Labor Relations Act.[16]

The NLRB consists of five members appointed to five-year terms by the President and confirmed by the Senate.[17] Congress tasked the Board with protecting the rights of workers who refuse to work in unsafe or hazardous conditions, as long as the refusal is in good faith, concerted and not in violation of a “no strike” clause of the union contract. This includes a right to brief work stoppages and strikes necessary to avoid job hazards and abnormally dangerous threats.

Employees, employers and unions can file charges with the Board against each other alleging illegal activity or behavior. In some cases, such as when an employer retaliates against an employee for refusing to work in unsafe conditions, the employee can file a charge or complaint with both the National Labor Relations Board and with the Occupational Safety and Health Administration.[18]

The agency’s general counsel conducts investigations and uses its discretion to decide which possible labor violations to litigate.[19] Once the Board accepts a case, it has the power to order an employer to cease and desist any labor law violations, reinstate employees who were wrongly fired and even to require the employer to issue back pay to the employee for any period that she was wrongfully unemployed.  

The Board has a deferral policy for certain unfair labor practices that cease before the agency issues an order stopping it.This means that in many such cases, the Board will defer to the union’s grievance procedure if the union can file a contract grievance to try to settle the alleged violation activity. This has the effect of allowing the “normal” civil system to deal with damages from past violations, leaving the Board to focus on ongoing violations.

However, there are two exceptions where the Board may take the case without deferring: accusations that an employer has refused to provide a union with information or that the employer has retaliated against workers for filing unfair labor practice charges.[20] In either such case, even if the illegal activity has ceased, the Board may still move forward with a case.

Employer Restrictions Under the NLRA

In addition to clarifying the rights of labor unions and employees in the workplace, the National Labor Relations Act places several limitations on how employers can interact with their employees. For example, employers may not favor nonunionized employees over unionized employees by granting bonuses such as promotions, pay raises or special favors. Employers also cannot lock out employees for supporting unionization, nor may an employer prohibit union discussions. Companies may not discriminate against non-union workers or against union workers in any overt manner when forming the workplace rules for communications and activities in work areas.

Employers violate the NLRA if they threaten employees with a loss of work or benefits or closure of the facility as a consequence of joining a union. Likewise, employers may not spy on union gatherings, pretend to spy on union meetings or question employees about union membership under coercive circumstances. Discriminating against any employee who has engaged in activity protected by Section 7 of the NLRA or otherwise exercises rights under the law is also prohibited, so employees cannot be demoted, fired or penalized for engaging in these activities.[21] However, this is not to say that employers are banned from deterring union activity in any manner. Employers may pass neutral policies that have the effect of suppressing union representation, so long as this is not the intent of the rule.

Consider, for example, that a company may ban all literature, union related or not, from being distributed in work areas, even if that has the indirect effect of preventing dissemination of union-related flyers, pamphlets or other promotional literature, unless it can be proven that this was the intent of the rule. Likewise, while the companies must allow workers to discuss union matters during non-working hours in non-working areas, companies may prohibit employees from talking about unionization during working hours in work areas just as businesses are permitted to limit any distracting activity during work hours in work areas.[22]

Some companies that oppose unions have gone so far as to hire professional consultants to carry out anti-unionization tactics.These so-called “union busters” are usually business professionals or attorneys who help companies divert employees’ attention away from unionization.They may advise companies on techniques to discourage the official organization of unions and, if necessary, defeat union organizing campaigns.

Union busting techniques can be as aggressive as any political campaign. They can include directed strategies aimed at using misinformation and distraction to deter workers from unionizing without quite reaching the threshold required to violate the law. However, under the Labor Management Reporting and Disclosure Act, employers and hired union avoidance professionals must report their activities to the Office of Labor-Management Standards to ensure transparency in these campaigns.[23]

If a workplace labor organization campaign is successful, a union can petition the National Labor Relations Board for certification. In the next module, we will focus on the process of union formation.