Supreme Court and labor law - Business in United States of America

Definition: Decisions by the nation’s highest court regarding the constitutionality and interpretation of legislation regulating labor unions, collective bargaining, and the rights of workers and employers
Significance: Since the late nineteenth century, the precedents established by the Supreme Court have had a profound impact on the complex field of labor law, and the Court has been the final arbiter in legal disputes between organized labor and management.
Until the late nineteenth century, judicial rulings concerning labor law were the purview almost entirely of state courts. After the U.S. Supreme Court asserted its authority in the field, it went through distinct phases in its interpretation and adjudication of labor law. From the 1880’s until the 1930’s, the Court’s majority tended to be hostile toward unions and to defend an ideology of laissez-faire constitutionalism, opposing many governmental regulations of the private sector. Then, from the late 1930’s through the end of World War II, the majority was generally sympathetic toward unions, upholding legislation that protected the rights of workers to engage in collective bargaining. The Court’s decisions since the war have generally been less favorable toward organized labor, based on postwar legislation that curbed some of the privileges that unions had earlier acquired. Finally, since the 1960’s, the Court has made many important interpretations of antidiscrimination laws.

Hostility Toward Unions

During the 1880’s, the federal courts increasingly became involved in settling conflicts between private businesses and labor unions. For the next half century, the decisions of both the Supreme Court and the lower courts tended to favor business interests at the expense of organized labor. During this period, lower federal and state courts issued about three thousand injunctions requiring labor unions to terminate strikes and boycotts, and the Court generally approved of such injunctions. In a major precedent, In re Debs (1895), the Court upheld a federal court order that unions end the Pullman Strike and its accompanying boycotts. The Court endorsed a broad use of equity jurisdiction, treating strikes and boycotts as public nuisances, and it further recognized the federal government’s constitutional authority to remove obstacles to commerce and to ensure delivery of the mails.
The Supreme Court’s bias was reflected in its approach to the Sherman Antitrust Act of 1890, which broadly outlawed monopolistic practices and combinations in restraint of trade. In the famous Danbury Hatters’ case, Loewe v. Lawlor (1908), the Court held that the statute prohibited labor unions from organizing or publicizing consumer boycotts of particular companies. Although the Clayton Antitrust Act of 1914 appeared to prohibit application of antitrust legislation against labor unions, the Court in Duplex Printing Co. v. Deering (1921) narrowly interpreted the act as not applying to secondary boycotts or coercive acts. Injunctions against union activities continued to be common for another decade.
From 1897 until 1938, the Court interpreted the due process clauses of the Fifth and Fourteenth Amendments to provide substantive protection for a freedom of contracts, often overturning legislation designed to improve working conditions. In Lochner v. New York (1905), the Court voided a statute establishing maximum work hours for employees in bakeries. In Adair v. United States (1908), the Court overturned the Erdman Act of 1898, a federal law that had prohibited so-called yellow-dog contracts and the punishment of workers for engaging in union activities. In this and other decisions, the justices posited that employers and employees possessed equal bargaining power. The majority of justices, however, believed that the Constitution allowed state laws specifically designed to protect the health or safety of workers. Thus, the court upheld maximum-hour laws for underground miners and women.
The Supreme Court, however, was not ready to allow Congress to regulate manufacturing under its constitutional power to regulate interstate commerce. After the Child Labor Act of 1916 (also known as the Keating-Owen Act) proscribed goods made by children from interstate commerce, the justices in Hammer v. Dagenhart (1918) held by a 5 to 4 vote that the law violated the states’ powers under the Tenth Amendment. Congress responded with a second federal child labor law, which used the government’s power of taxation rather than prohibition to achieve the same result. In Bailey v. Drexel Furniture Co. (1922), however, the Court again ruled that Congress had exceeded its constitutional authority.

New Deal-Era Decisions

During the first five years of President Franklin D. Roosevelt’s administration, five conservative justices (called the “five horsemen”) were firmly committed to the laissez-faire perspective and opposed many New Deal reforms. In Schechter Poultry Corp. v. United States (1935), the conservative majority overturned the cornerstone of the New Deal’s labor-relations policy, the National Industrial Recovery Act of 1933, reiterating a narrow construction of congressional power under the commerce clause. In Morehead v. New York ex rel. Tipaldo (1936), moreover, the justices voted 5 to 4 to strike down a minimum wage law, reiterating their support for the freedom of contracts doctrine.
The next year, however, the Court issued two monumental, landmark reversals—often referred to as constituting the “judicial revolution of 1937.” In West Coast Hotel v. Parrish, the justices voted 5 to 4 to uphold a state minimum wage law, thereby overturning Morehead v. New York ex rel. Tipaldo. In National Labor Relations Board v. Jones & Laughlin Steel Corp., the Court upheld the prolabor National Labor Relations Act of 1935, which guaranteed the right of employees of private businesses to organize labor unions and engage in collective bargaining. Not long after these two decisions, the retirement of conservative justices allowed President Roosevelt to appoint justices sympathetic to New Deal reforms.
The Supreme Court’s change in direction reflected public opinion, which was becoming more sympathetic toward organized labor. Even before Roosevelt’s election, Congress had enacted the Norris-LaGuardia Act of 1932, which unambiguously prohibited federal courts from issuing injunctions to prevent nonviolent strikes, picketing, or boycotts. In 1938, the Court upheld the statute when it overruled a lower court’s antiunion injunction in Lauf v. E. G. Shinner.
In Hague v. Congress of Industrial Organizations (1939), the Court for the first time declared that the First Amendment protected the right of labor organizations to hold peaceful meetings and distribute literature without government interference. First Amendment protection was further extended in Thornhill v. Alabama (1940), which struck down an antipicketing ordinance and emphasized the importance of free discussion of labor issues. In another landmark ruling, United States v. Darby Lumber Co. (1941), the Court interpreted the commerce clause broadly to uphold the Fair Labor Standards Act of 1938, which provided maximum hours and minimum wages for all employees who manufactured goods shipped in interstate commerce.
In interpreting the National Labor Relations Act, however, the Court did not always support the interests of organized labor. In National Labor Relations Board v. Fansteel Metallurgical Corp. (1939), the Court recognized the discretion of an employer to discharge workers who had participated in a sit-down strike. Although workers had the right to engage in lawful strikes, the seizure of an employer’s plant was deemed a form of illegal violence. Likewise, in Milk Wagon Drivers Union v. Meadowmoor Dairies (1941), the Court recognized that state courts may issue injunctions to stop picketing whenever violence erupts.

Collective Bargaining Since 1945

During the years following World War II, there was a reaction against the power that organized labor had gained during the New Deal period. After the government seized coal mines in 1946, the president of the miners’ union refused to obey an injunction to end the strike. The Supreme Court held in United States v. United Mine Workers (1947) that the union privilege against injunctions did not apply when government was the employer. Public reaction to the controversy encouraged passage of the Taft- Hartley Act of 1947, also called the Labor Management Relations Act, which placed a significant number of limitations on unions’ powers and activities.
To the dismay of labor unions, the Supreme Court firmly endorsed all the provisions of the Taft- Hartley Act. In American Communications Association v. Dowds (1950), the Court upheld the requirement that union officers swear that they were not members of the Communist Party, based on the public interest in “the free flow of commerce.” In a series of complex cases, particularly National Labor Relations Board v. Denver Building and Construction Council (1951), the Court upheld and broadly interpreted the act’s ban on secondary boycotts, that is, on unions pressuring neutral parties to stop doing business with companies involved in labor disputes. The Court also sustained state right-to-work laws, which prohibited employees from being forced to pay union dues as a condition of employment. In Boys Market, Inc. v. Retail Clerks’ Local 770 (1970), unions were again disappointed when the Court, in spite of the Norris-LaGuardia Act, allowed a federal court to issue an injunction against a peaceful strike conducted in violation of a no-strike pledge.
The Court has continued to decide many complex National Labor Relations Act-related questions, including the question of which workers are covered under the act. In Beasley v. Food Fair (1974), the Court ruled that managers of a grocery store chain were supervisors rather than employees, and they therefore were not guaranteed the rights of collective bargaining. Likewise, teachers in private schools, if allowed sufficient independence in their teaching, were classified as supervisors in National Labor Relations Board v. Yeshiva University (1980). The Court in Sure-Tan v. National Labor Relations Board (1984) ruled that provisions of the National Labor Relations Act prohibiting unfair labor practices applied to undocumented workers, although in Hoffman Plastic Compounds v. National Labor Relations Board (2002), it found that such workers were not entitled to recover back pay.
Another long-standing National Labor Relations Act issue has been the right of collective bargaining in the public sector. In AFSCME v. Woodward (1969), the Eight Circuit Court of Appeals recognized that public employees had a right to unionize under the First and Fourteenth Amendments. Although the U.S. Supreme Court ruled in 1976 that the National Labor Relations Act did not apply to state and local governments, it reversed that ruling in Garcia v. San Antonio Transit Authority (1985). The Court held that the First Amendment protected no policymaking government employees from dismissals for partisan reasons in Elrod v. Burns (1976). This principle was extended to promotions, transfers, and hiring of low-level employees in Rutan v. Republican Party of Illinois (1990).

Workplace Discrimination

Before the Civil Rights movement, the Supreme Court in Steele v. Louisville & Nashville Railroad Co. (1944) established the doctrine of “fair representation,” requiring that a labor union fairly represent all workers in a bargaining unit, regardless of race. The decision was based on a very broad interpretation of the Railroad Labor Act. Two decades later, Congress enacted an explicit antidiscrimination mandate in Title VII of the Civil Rights Act of 1964, which provided remedies for discrimination in employment based on race, sex, religion, or national origin.
The Court has interpreted Title VII to prohibit not only intentional discrimination but also employment practices that have an indirect discriminatory impact on particular groups. In the landmark case Griggs v. Duke Power Co. (1971), the Court ruled that hiring and promotion policies that result in a “racially disparate impact” must be clearly job related to be lawful. In United Steelworkers v. Weber (1979), the Court allowed employers voluntarily to grant preferences (even quotas) for members of racial minorities that are underrepresented in a particular employment category of the company. In cases such as United States v. Paradise (1987), the Court approved of judicially imposed quotas as remedies to overcome the present consequences of an employer’s past racial discrimination.
The Court’s broad interpretations of Title VII also allowed preferences for women in affirmative action programs designed to counter gender imbalance, as in Johnson v. Santa Clara County (1987). In Automobile Workers v. Johnson Controls (1991), moreover, the Court unanimously rejected a company’s fetal protection rules, which had required women to be sterilized as a condition of holding positions that exposed them to high levels of lead. In 1986, the Court endorsed an Equal Employment Opportunity Commission (EEOC) regulation that interpreted sexual harassment as a form of illegal discrimination. The ruling was expanded in Teresa Harris v. Forklift Systems (1993).
Another labor statute requiring judicial interpretation is the Americans with Disabilities Act (ADA) of 1990, which prohibits unjustified discrimination against persons with substantial impairments and requires employers to provide “reasonable accommodations” that do not cause “undue hardship.” The courts must decide the meaning of “reasonable” and “undue.” Although the statute requires significant changes in the workplace, ADA plaintiffs have generally not prevailed in court, in part because of relevant Supreme Court decisions. In Sutton v. United States (1999), for instance, the Court held that a correctable impairment (myopia correctable by eyeglasses in this case) cannot be classified as a disability under the ADA.