Chipping Away at the Labor Truce
Unnoticed except by employment lawyers, the United States Court of Appeals in New Orleans last month issued what might be the most important workers’ rights opinions in decades. The decision permits employers to require workers, as a condition of keeping their jobs, to agree to arbitrate all workplace disputes and to do so as individuals, standing alone against their employer. The ruling could spell the end of employment class actions that were instrumental to breaching the barriers of both race and sex discrimination after the passage of the 1964 Civil Rights Act and remain critical to enforcement of minimum wage and other labor standards laws
The New Orleans Court of Appeals, by a 2-1 vote…[concluded] that employees’ longstanding labor-law right to act collectively was trumped by the Federal Arbitration Act (FAA), which was enacted in 1925 to require courts to enforce private parties’ lawful agreements to resolve disputes out of court. But the FAA does not say anything about class actions and does not require enforcement of arbitration agreements that violate another law, such as the National Labor Relations Act. The court’s holding was guided instead by recent Supreme Court decisions giving the FAA an expansive reading—for example, permitting AT&T Mobility to enforce an arbitration clause appearing in the fine print in its form contract with cell-phone users, precluding consumers from bringing a class action.
It’s not clear that the midcentury American system was the optimal balance of power between employee and employer, but it seemed to have some advantages. Wages were high, growth was strong, and the outright warfare that characterized labor relations in early 20th-century America was gone.
Labor relations are ultimately about power, of which law is just one aspect. When the law is tilted heavily towards employees, as in France or Spain, it can put economic growth in straitjacket. When the law is tilted heavily towards employers, as in America a century ago, they take full advantage to make working life miserable. The result then, and in many other countries, was workers seeking to seize power through any means possible. Workers aren’t just passive subjects of employers, they are people who want to enhance their own autonomy. When the law makes that effectively impossible, people resort to extreme measures like strikes and violence.
The zealots eager to tear down the New Deal might get what they want, and I have a feeling they might not like it.