The National Labor Relations Act
AND Bargaining Power
E llen D annin
C
hris Rhomberg’s remarkable
new book The Broken Table: The Detroit Newspaper
Strike and the State of American Labor (Sage Foundation, 2012) tells
the story of the Detroit Newspaper strike
through the many contexts in which the
strike took place—including relationships, law, greed, ideology, traditions,
power—and how, together, they determined how the dispute played out. Power, of course, is always key, but power
emerges from many sources.
It is no surprise, then, that on February 28, 1934, when Senator Robert
Wagner introduced the bill that would
eventually become the National Labor
Relations Act, the purpose listed first
was “to equalize the bargaining power of
employers and employees,” followed by
“to encourage the amicable settlement of
disputes between employers and employees.”1 The bill declared that “modern
economic life” had destroyed the balance of bargaining power between the
individual employer and the individual
employee.2 The solution was to bring the
power of these two parties back into balance by “encouraging the equalization
of the bargaining power of employers
and employees.”3 The bill chose not to
return to the days of individual employers and employees, but to respond to the
power distortion caused by corporate
24
and partnership law by making it legal
for employees to also become collective:
Employers are allowed to unite in trade
associations in order to pool their information and experience and make a
concerted drive upon the problems of
modern industrialism. If properly directed, this united strength will result in unalloyed good to the Nation. But it is fraught
with great danger to workers and consumers if it is not counterbalanced by the
equal organization and equal bargaining
power of employees. Such equality is
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the central need of the economic world
today. It is necessary to insure a wise
distribution of wealth between management and labor, to maintain a full flow of
purchasing power, and to prevent recurrent depressions.
Genuine collective bargaining is the
only way to attain equality of bargaining
power.4
Rep. George J. Schneider, of the Wisconsin Progressive Party, put the case this
way:
As indicated in the preamble of the bill,
this legislation is necessary to equalize
the rights and privileges of workingmen
and their employers by removing the
inequalities in bargaining power. It also
aims to give the worker full freedom of
association with a view and for the purpose of securing an agreement on any
matter in dispute in the relationships of
the employer and the employee. Since
the great expansion of our industrial system, the laborer has become only a small
cog in the vast industrial machinery, and
an attempt is made here to preserve his
right to stand on an equal footing with
the employer in making a contract for the
sale of his services and regulating the
conditions under which he works.5
The drafters of the
The drafters of the
NLRA did
not value
National Labor
freedom of
Relations Act strove
contract as
to create conditions
an abstract
principle
of equality that
that applied
would lead to a
even when
governfair apportionment
ment gave
of the fruits of the
one party
employer-employee
power that
was denied
relationship.
to others.6
They strove to create conditions of
equality that would lead to a fair apportionment of the fruits of the employ-
© Fotosearch
er-employee relationship. The current
conditions promoted gross inequality.
Senator Wagner observed that “corporate surpluses rose from $8,500,000,000
in 1923 to $16,000,000,000 in 1929,”
while profits rose by 86 percent and
dividends rose by 104 percent from
1926–1929, employees’ real wages increased by less than 10 percent between
1922–1929. As a result, 60 percent of
people “had annual incomes below the
$2,000 per year necessary for the basic
requirements of health and decency,”
while those in the top “one-tenth of
1 percent of the families in the United
States were earning as much as the 42
percent at the bottom.” Furthermore,
“while wages stood at 44 percent of the
1926 level in 1932, and the national
income at only 62 percent of that level,
dividend payments remained as high as
142 percent of that level.”7
Unbalancing Bargaining Power—
Judicial Amendments to the NLRA
Federal judges and justices swear to
“administer justice without respect to
persons, and do equal right to the poor
and to the rich, and . . . faithfully and
impartially discharge and perform all
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the duties incumbent upon [them] under
the Constitution and laws of the United
States.” Despite that oath, judges
began judicially “amending” the
NLRA to erode employee rights
soon after the NLRA was enacted.8
For example, Section 13 of
the NLRA says: “Nothing in
this Act, except as specifically provided for herein, shall
be construed so as either
to interfere with or impede
or diminish in any way the
right to strike or to affect
the limitations or qualifications
on that right.” Yet, three years
after the NLRA became law, the
Supreme Court in Mackay held that
employers could legally permanently
replace a striker.9 That decision usurped
Congress’s will by ignoring § 13 and, by
giving employers the right to displace a
striking employee, diminished the right
to strike and tipped the balance of bargaining power toward employers.
Just a few years later, courts began the
process of allowing employers to implement their final offers when the parties
are at impasse.10 In The Broken Table,
Rhomberg observed that
one side comes to the table looking
to make a deal. The other side comes
looking to get rid of the table. . . . Deliberately negotiating to impasse, unilaterally imposing conditions, and breaking
strikes—all of these actions destroy
the function of collective bargaining.
. . . ­every strike is de facto a recognition strike in which the practical continuity of the relationship hangs in the
­balance.11
Indeed, a simulation that tested the effects
of legal regimes that either allowed or did
not allow implementation upon impasse
and/or permanent or temporary striker
replacement found that the balance of
power shifted away from the union to the
employer based on the type and number
26
conditions of their employment or other
mutual aid or protection.
Section 7 states:
Employees shall have the
right to self-organization, to
form, join, or assist labor
organizations, to bargain
collectively through
representatives of their
own choosing, and to
engage in other concerted activities for
the purpose of collective bargaining or other
mutual aid or protection,
and shall also have the
right to refrain from any or
all such activities except to
the extent that such right may be
affected by an agreement requiring
membership in a labor organization as a
condition of employment as authorized in
section 8(a)(3).
Used by permission NLRB
of impasse weapons permitted.12 Those
results track the effects of the employers’
use of striker replacement and implementation of employers’ final offers in high
stakes strikes of recent years.
Judicial decisions have progressively
eroded NLRA remedies and, again, ignored an express Congressional policy.
Section 10(c) requires that remedies must
“effectuate the policies of this Act.”
Those policies include §§ 1 and 7.
Section 1 states:
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
Yet remedies are regularly ordered
without even considering whether the
remedy promotes NLRA policies. The
process of ordering ineffective remedies
began shortly after the NLRA was enacted. When Congress was debating
the NLRA, some opponents advocated amending the law to deny an employee who had committed any wrong
of a ­remedy—even thought that wrong
would be punished elsewhere. Congress
refused to include that limit, but within
a few years, the Supreme Court judicially
amended the NLRA to include it.13 Other
Court decisions limited back pay by placing the burden of proof on the injured
employee rather than on the wrongdoer.14
No evidence is ever presented to meet
the command of § 10(c) that remedies
effectuate the NLRA’s policies. Remedies
fail to address the harm to employee
rights when a co-worker has been fired
or injured in other ways. Indeed, what
we think of as the NLRA is largely the
judicial amendments that have overwritten its language and Congress’s intent.
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Imbalance in Bargaining Power
Congress made clear that allowing employers to aggregate power while failing
to create a counterweight and by forbidding employees to have equal bargaining
power had and would continue to have
disastrous consequences. It declared:
sented here by three excerpts from those
debates.
Robert L. Hale, Professor of Law
at Columbia University, argued for the
closed shop:
expect the community to come to the aid
of those in distress. This leaves employers free to shirk their responsibilities of
so managing the economic system as to
make it serve its main purpose of providing the population with the best possible
living. In an industrial society worthy of
the name, owners and employers should
be leaders and builders as well as profit
takers. Is there any way of holding them
to these responsibilities as long as they
are free to refuse to deal with their
employees on a basis that enables their
employees to protect their economic
right to employment at the best possible
terms?17
There is frequently a great deal of talk to
the effect that a closed shop destroys the
freedom of the worker to be independent
The inequality of bargaining power beof a union if he wishes to be. Well, to a
tween employees who do not possess
certain extent, of course, it does, but in
full freedom of association or actual
a complicated modern society like ours,
liberty of contract and employers who
nobody is going to be entirely free. If a
are organized in the corporate or other
man wants to work in a steel plant, he
forms of ownership association subdoes not just go out and work according
stantially burdens and affects the flow
to his own ideas about how it
of commerce, and tends
should be worked; he has to
to aggravate recurrent
Indeed,
what
we
join an organization. Normally,
And, finally, Richard W. Hogue, Direcbusiness depressions, by
in
the
case
of
a
steel
plant,
tor of the Independent Legislative Budepressing wage rates
think of as the
he becomes an employee of
reau, said:
and the purchasing power
NLRA is largely
a
steel
company,
and
then
of wage earners in indusWe tell people that they are members of
he has no freedom as to the
the judicial
try and by preventing the
a democratic nation. Yet when those to
details of his work whatever;
stabilization of competiwhom we have been talking about deamendments that
he is a non-voting member of
tive wage rates and workmocracy enter the factory gates, liberty
have overwritten
a
society.
Now,
if
he
belongs
ing conditions within and
ceases. Take the case of a man who has
to a union in a closed-shop
its language and
between industries.15
been 20 or 30 years in a factory, a man
industry, it is perfectly true
of mature years. He sees a notice about
Congress enacted the
Congress’s intent.
he has no freedom to work
which he has never been consulted,
NLRA with the expectawithout being a member of the
making fundamental changes in his contion that the new law would promote
union, but he has a little more freedom
ditions of work, and perhaps he demurs.
equality of bargaining power and that
through the brotherhood of his union
He is told, “If you don’t like it, you know
this power realignment would rein in
against the restraint imposed upon him
what to do. There are plenty of other
the forces that lead to depressions.
by the employer.16
places where you can look for a job.” All
However, this has not happened. Inthe conditions of work are determined
Industrial
Relations
author,
Arthur
E.
stead, the power the law makes availin the manager’s office, and then the
Suffern
observed
that
able to businesses organized as corponotices are put up on the wall. What
rations and partnerships now includes
employers through corporation orgaabout this democracy? Where does it
limited liability for corporate wrongdonization, trade associations, and now
come in? The workers do not
ers and unlimited political speech. The
under code authorities
see it here, and yet the war
desperation caused by the Great Recesare able to act as a unit
Disparity
in
taught them to live and die for
sion has driven states and cities to be
in setting wage rates
it. They were told that their
“business friendly” by lowering wages
and establishing working
bargaining power
country could not do without
and workplace protections and gutting
conditions. This disparfrequently results in them and that they had rights
public sector labor laws.
ity in bargaining power
as well as duties. Now, they
an exploitation of
Today, we seem to live only a few steps
frequently results in an
away from Kim Stanley Robinson’s Red
exploitation of labor that
labor which drives are asking for a recognition
of those rights and for a real
Mars, in which all but a few countries on
drives workers down to
workers down to a voice concerning the condiearth are owned by one of three megaa subsistence level or
subsistence level or tions under which they work,
corporations, and the world in which
below. If workers cannot
and not merely a few exCongress debated and eventually enacted
find employment and earn
below.
tremely superficial details.18
the National Labor Relations Act, repreliving wages, employers
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Notes
1. 1 Legislative History of the National
Labor Relations Act 1935, Pt. 1, 1
(1949).
2. Ibid.
3. Ibid.
4. 1 Legislative History of the National
Labor Relations Act 1935, Pt. 1, 15
(1949).
5. 2 Legislative History of the National
Labor Relations Act 1935, Pt. 2, 3229
(1949).
6. 1 Legislative History of the National
Labor Relations Act 1935, Pt. 1, 20,
24 (1949).
7. 2 Legislative History of the National
Labor Relations Act 1935, Pt. 2, 2326–
27 (1949).
8. J. B. Atleson, “Values and Assumptions
in American Labor Law (Amherst:
University of Massachusetts, 1984); K.
Klare, “Judicial Deradicalization of the
Wagner Act and the Origins of Modern
Legal Consciousness” Minnesota Law
Review 62, (1978), 265.
9. NLRB v. Mackay Radio & Tel. Co.,
304 U.S. 333 (1938).
10. E. Dannin, “Collective Bargaining, Im-
28
passe and the Implementation of Final
Offers: Have We Created a Right Unaccompanied by Fulfillment” University of Toledo Law Review 19, no. 1
(1987), 41–72; Dannin, “From Dictator
Game to Ultimatum Game . . . and
Back Again: Judicial Amendment Posing as Legal Interpretation,” University
of Pennsylavania Journal of Labor &
Employment Law 6, no. 1 (2004), 241.
11. C. Rhomberg, The Broken Table: The
Detroit Newspaper Strike and the State
of American Labor (New York: Sage
Foundation, 2012).
12. Dannin, M. Dean, and G. Singh, “Law
Reform, Collective Bargaining, and the
Balance of Power,” WorkingUSA 11,
no. 2 (2008), 219.
13. Dannin, “Hoffman Plastics as Labor
Law—Equality at Last for Immigrant
Workers?,” Symposium on The Evolving Definition of the Immigrant Worker: The Intersection Between Employment, Labor, and Human Rights Law,
University of San Francisco Law Review 44 (2010), 393, http://ssrn.com/
abstract=1548082.
14. Dannin, “No Rights without a Remedy—Securing Effective National Labor
Relation Act Remedies,” Issue Brief,
American Constitution Society (2011).
15. National Labor Relations Act, 29
U.S.C. § 151 (1935).
16. R. H. Hale, 1. Legislative History
of the National Labor Relations Act
1935, Pt. 1, 81 (1949) (Statement of
Robert L. Hale, Professor of Law at
Columbia University).
17. A. E. Suffern, 1. Legislative History
of the National Labor Relations Act
1935, Pt. 1, 316 (1949) [Statement of
Arthur E. Suffern, Industrial Relations
author].
18. R. W. Hogue, 1. Legislative History
of the National Labor Relations Act
1935, Pt. 1, 334–35 (1949) [Statement
of Richard W. Hogue, Director of the
Independent Legislative Bureau].
Ellen Dannin
Ellen Dannin is the Fannie Weiss Distinguished Faculty
Scholar and Professor of Law at the Dickinson School of
Law at Pennsylvania State University. She is an expert
in the labor law of the United States and New Zealand.
Before entering teaching, Dannin was a trial attorney
with the National Labor Relations Board.
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