Statutory Protection of Employment Law

Statutory Protection of Employment LawThe Failed Promise of Statutory ProtectionThe subject of the legal regulation of hollow is one of great complexity. Up to the present time a priori objections to such regulations have delayed their introduction, and only tardyly, as experience has demonstrated their usefulness, have they been across-the-board to situations which seem to require them. In the United States the nonion that the legislative power should not be used to regulate conditions of employment has been abandoned by nigh thoughtful persons, but the prejudice against deputisence is as strong as ever.Henry R. Seager, Economics, 1904, p. 431Following a period of legislative in exertion, selective statutory restrictions on the in effect(p) to dismiss came into existence largely as a byproduct of labor regulation of the late 1920s and early 1930s. The introduction of limitations to the at-will rule inside the NLRA frame influence, in grammatical constituenticular, marked the yearn everywheredue recognition that, as long as employers had the right to dismiss employees, at-will public policy goals, such as industrial peace and the extension of bafflely collective tradeing, were unattainable.Following a roughly historical chronology, this chapter explores how, from the 1920s onwards, restrictions on dismissals were constructed around notions of orderly collective negotiate. Thematically, the focus of the chapter is on the creation of new institutional structures and their impact on the status of workers in legal distress of art bail. Underlying this analysis is the tentative hypothesis that the NLRA, and the practices which evolved from it, provided amalgamations and their members with a genius of control over dismissal rights which was largely illusionary. This mistaken sense of control, in turn, encouraged joints to put efforts into dividing boundary security enhancing measures at the plant and beau monde level which ultimately did no t constrain managerial prerogatives in effect. This want of real control became apparent in the mid 1960s, when the Supreme Court handed down several(prenominal) decisions which reaffirmed the right of management to close branches and forgive employees without union interference. Apart from excluding non-unionized workers, the NLRA system, possibly against the intentions of its original sponsors, ultimately came to severely circumscribe the right of unions to bargain over job security at the real time when such protection was needed.The Promised Lands of Protected BargainingAt the turn of the century, many US industrial dealing scholars questioned the premiss that injustices in the labor market could be remedied through legislative acts and/or, more in general, via a strengthening of individual employment rights. Opposition to legislative approaches was grounded primarily in the belief that solutions to the labor problems of industrial societies could be created more easily by strengthening the standing of addressd labor as collective bargaining agentive role rather than by creating a host of limited employment regulations.1 Accordingly, in 1911, the Harvard economist Taussig suggested that the most urgent task in reforming US employment relations was not detailed new legislation per se, but rather the protection of bargaining representatives2The workmen clearly gain by having their case in charge of elect representatives, whether or not these be fellow employees and collective bargaining and unionization up to this point surely bring no offsetting disadvantages to society. As to the immediate employees, in that evaluate is often a real danger that he who presents a demand, or a grievance, will be victimized. He will be depleted and perhaps blacklisted very likely on some pretext, but in fact because he has made trouble.In the 1930s, Taylors influential labour Problems and press Law argued, very much along the lines of earlier reform advocates, t hat individual workers had been deprived of their ability to bargain primarily because of the expansion and centralization of management.3 To remedy this situation, Taylor argued, the state had to enable workers to bargain collectively, both for wages and for the protection of their jobs. Said Taylor4Legally free to dispose of his services at any price he deems just, immediate necessity in the face of an oversupply of labor abridges that independence to empty words. His meaning the workers inferior bargaining position is not wholly due to sparing inequality, but in part to a lack of knowledge of labor conditions, and a bargaining skill less effective than that of his employer. The injustices growing out of the individual bargaining burden run not only the individual worker but the entire group to which he belongs. Unregulated competition resulting from individual bargaining tends to pull down the circumstances of employment to the level of the weakest employerTaylors notion tha t inequalities of labor were due to the exposure of workers to individual rather than collective bargaining echoed the opinions of some of the nations leading judges of the time. Judges Holmes and battlefield had earlier opposed bans on union activity on account of the fact that union activity merely counterbalanced the combination of capitalists.5 Despite the gradual acknowledgement of the legitimacy of strike action by some chat ups, up until the 1920s, few judges had been willing to offer protection to those workers who were run offd for union membership or strike activity. In theory, collective bargaining could serve to limit the power disequilibrium between the employer, who, as Holmes says is free to discharge the worker, and the worker who depends on his job for his livelihood.6 In practice, however, the relationship between job security and collective action had remained largely antonymous. Post World War I, workers who participated in collective action, be it as organiz ers or as strike participants, were likely to face retaliatory discharges or even blacklisting.7 Industrial actions in which in excess of 1,000 workers were permanently dismissed include the Homestead strike of 1892, the Pullman strike of 1894, and the steel strike of 1919-20, which involved approximately 365,000 workers and resulted in over 10,000 permanent discharges. In the Boston police strike of 1919, in which the policemen struck for the right to organize with an AFL affiliate, meanwhile, more than one third of the police force were permanently discharged.The first congressional statute addressing issues of dismissal and organizing activity, the Erdman Act, had tryed to reverse the retaliatory discharge of union members working on the railroads at a time when the railroads were the only area where the Federal Government had the authority to regulate such matters. Passed by Congress in 1898, constituent 10 of the Erdman Act made it an offense to threaten an employee with dis charge or to blacklist the employee after a discharge because of membership in a labor organization. Specifically the Act read 8That any employer subject to the provisions of this act and any officer, agent or murderer of such employer who shall require any employee, or any person seeking employment, as a condition of such employment, to enter into an scorement, either written or verbal, not to become or remain a member of any labor corporation, association, or organization or shall threaten any employee with loss of employment, or shall unjustly single out against any employee because of his membership or who shall, after having discharges an employee, attempt or conspire to prevent such employee from obtaining employment or who shall after the quitting of an employee, attempt or conspire to prevent such employee from obtaining employment, is hereby declared to be guilty of a misdemeanor, and shall be punished for such offense by a fine of not less than one hundred dollars and not more than one thousand dollars.In 1908, dent 10 of the Erdman Act was declared in violation of the Fifth Amendment by the Supreme Court in Adair v. United States. This rather predictable decision again rendered members of labor organizations unprotected from retaliatory discharges.9 nonpolar workers were given some certify by the courts in the Brandeis and Holmes Supreme Court decisions of the 1920s.10 Explicit legislative protection of those engaging in organizing activity however commenced as late as 1926 with the passage of the Railroad Labor Act (RLA), which, apart from requiring employers to bargain with unions, prohibited employers from discriminating against union members.11 The RLA applied originally to interstate railroads and cerebrate undertakings, but was later amended to include airlines engaged in interstate commerce. The Norris La Guardia Act (NLGA) of 1932 gave some federal sanction to the right of labor unions to organize and strike.12 Implicitly, it also li mited the ability of federal courts to enforce yellow dog contracts, under which workers promised not to join a union or promised to discontinue union membership.13 The National Industrial Recovery Act (NRA) of 1933, the predecessor of the National Labor Relations Act, introduced the idea of codes of fair competition which fixed wages and hours in plastered industries. Title I of the Act, which was declared unconstitutional in 1935, guarantied the right of employees to collective bargaining without interference or coercion (which include the dismissal of employees). 14The National Labor Relations Act (NLRA) of 1935, or Wagner Act, include some previously invalidated labor sections of the NRA, as well as a number of additions. Primarily interested with restricting employer activities against union organizing and bargaining efforts, the NLRA prohibited employers from, firstly, dominating or new(prenominal)wise interfering with the formation of labor unions turnly, interfering or re straining employees engaged in employment their rights to organize and bargain collectively and, thirdly, from refusing to bargain collectively with unions representing a corporations employees. In doing so, sections 7 and 8 of the NLRA effectively tied the legal protection of employees from retaliatory discharges to the right of employees to organize collectively. The Act stated to this effect that15Sec. 7. 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 concerted activities, for the purpose of collective bargaining or other mutual aid or protection.Sec. 8. It shall be an below the belt practice for an employer(1) To interfere with, restrain, or embrace employees in the exercise of the rights guaranteed in section 7.(2) To dominate or interfere with the formation or administration of any labor organization or break financial or other suppor t to it(3) By discrimination in call for to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization(4) To discharge or otherwise discriminate against an employee because he had filed charges or given testimony under this act.(5) To refuse to bargain collectively with the representatives of his employeesUnder the NLRA regime, employers were required not to refuse to bargain collectively with the representatives of his employees with look at to rates of pay, wages and hours of employment, or other conditions of employment.16 While the Act had made it clear that retaliatory dismissals of union members were illegal, it gave no guidance on the question of whether bargaining over other conditions of employment, included issues relating to job security.17 Moreover, despite the appearance of sweeping legislation, coverage under the NLRAs protective umbrella was narrow. Public employees at the federal, state, and l ocal level, countrified workers, domestic workers, and supervisory employees all were excluded.18 Nonetheless, for those covered by the Act, statutory dismissal protection was available in connection with established categories of protected activity the courts had created. This included dismissals for strike action, union membership and related activities.Indeed, at its outset, the NLRB rulings allowed significant numbers of dismissed employees to gain reinstatement. From the appointment of the come along in the Fall of 1935 until March 1939, the Board handled a total of 20,192 cases involving over 4.5 million workers. Of these cases 19,018 or four fifths were closed. Of the total cases closed, about 52% were decided by agreements, while the remainder were dismissed, withdrawn or closed in some other way before coming to the Board. About two thousand cases were strike cases, involving 356 thousand workers, of which 75% were settled and in which 227 thousand workers had to be re- b usy. An additional 15 thousand cases were decided in favor of workers alleging non-strike related discriminatory discharges, and resulted in the reinstatement of the respective workers. Between January 1 of 1938 and April 1 of 1939 alone, the Board heard 1,675 cases alleging discriminatory discharges and ordered the reinstatement and/or compensation of 1,022 workers.19In theory, there was a potential for collective bargaining agreements to include job security guarantees of some form. Given existing cultural pre-dispositions, both amongst the judiciary and managers, however, the possibility of partial union control over personnel and investment decisions was remote. Judicial support for the right to manage had a strong pedigree and its influence would not wane quickly. In the 1890s already, some state courts had felt the need to refrain the right to manage. In the view of most courts this right was as much a part of the free labor creed as was the right to work. melt labor requir ed that both employers and individual workers were fully responsible for their decisions. Permitting workers to organize and successively influence managerial decisions was viewed as a danger to free economic competition. In State v. Glidden, an outraged Connecticut judge stated, that once workers could influence managerial decision, no lasting would the heads of industrial and commercial enterprises rise from the ranks of the toilers, no longer could self-reliant ambitious men push to the fore.20 Unable to manage as they saw fit, businessmen would stop risking their capital, time and experience. At best, the nations business would be conducted by paternalistic enterprises, at worst anarchy pure and simple would prevail.At the turn of the century, Taussig had already predicted that union demands for job security would clash with managers insistence on the right to manage. His Principles of Economics stated to this effect that21Private ownership carries with it the seeds of conflic tthe inevitable clash between those who employ and who are employed. Disguise it as we may, smooth over to our utmost, adjust where we can, there the conflict is, ever liable to break out. The private employer regards his business as his own, its methods of management as subject to his own judgment. It is almost ever urged by him and his spokesman that the effective working of the business machine depends above all on unfettered freedom in the selection and tenure of employees. So long as this attitude prevails, the workman will feel in turn that he must retain his weapon of defense, the strike, even though it entail injury to a wide circle of persons. Even if employers were to consent to restrictions on their power of discharge, contests would remain, strikes would brew. And on the other hand discharge is but one of the matters in which employers direct rule is to be questioned. Discharge is conspicuous because it is the outstanding weapon.As long as unions and their members h ad little formal protection through the law, management had been able to bank its dominance with relative ease, if only by dismissing those who questioned it. Once NLRA legislation protected concerted action, this situation had changed radically, and conflicts between unions and management over dismissal rights were pre-destined.When President Truman called the second National Labor focussing Conference in 1945, labor and management representatives found themselves unable to agree on the boundaries of collective bargaining. Disagreement had arisen particularly with regard to managements right to make workers redundant, close and/or relocate branches. The statement of the management representative at the conference expressed the employers dismay over this matter22Labor members of the Committee on Managements Rights to manage have been unwilling to any listing of specific management functions. Management members of the Committee conclude therefore, that the labor members are conve rt that the field of collective bargaining will, in all probability, continue to expand into the field of management.The only possible end of such a philosophy would be the joint management of the enterprise. To this management members naturally cannot agree. Management has functions that must not and cannot be compromised to the public interest. If labor disputes are to be minimized, labor must agree that certain specific functions and responsibilities of management are not subject to collective bargaining.In theory, the evolving conflict about the appropriate limits of collective bargaining, and particularly the rights of labor to interfere with managements redundancy and dismissal decisions, was resolved by reference to new management concepts such as the balance wheel rights doctrine. In practice, a set of employer friendly court decisions and the decline of unions in the US settled the issue, first, in rough terms, during the first decade of NLRA rule, and then, in greater de tail, over the following three decades.The notion of residual rights, which deserves a passing mention in this context, developed from the 1940s onwards to become a prominent feature of the management of industrial relations in the 1960s and 1970s. The residual rights doctrine postulated that management rights were the result of an evolutionary process, whereby initially management possessed total freedom in ordering the affairs of the enterprise. This included freedoms with regard to whom to hire and dismiss and when to do so. Union demands and labor legislation encroached on this freedom. It followed that every time a manager made a contractual concession, and/or every time a labor law restricted management options, the original rights of management were reduced. What remained then were the residual rights, not specifically renounced by management or restricted by law.23 If, for instance, management renounced the right to dismiss according to productivity or any other performance criterion and concord to dismiss according to seniority, seniority replaced managements previous decision criteria. Meanwhile other issues, such as how many workers could be dismissed in a specific time period, remained within the exclusive sphere of managerial decision making.24Adopting this view, many arbitration decisions applied a two-stage approach to questions about the appropriate bargaining dishearten of a union. If union representatives and management disagreed on whether an issue was a legitimate bargaining item, previous contractual agreements as well as legal requirements had to be investigated. If no explicit statement restricting managements rights in the respective matter could be found in these sources, the issue typically had to be considered as falling within managements remit. Since explicit renunciations of the rights to dismiss were typically rare, management usually maintained broad discretion over dismissals, which fell outwith causes covered explicitly by just-cause rules.Because existing practices and informal agreements had little legal bearing on conflicts over the interpretation of the NLRA, the residual rights doctrine offered almost no guidance to the courts in evaluating the legitimacy of union link in termination decisions. Here an alternative, and in many ways even more restrictive approach, evolved over time. While the NLRB of the early years generally looked favorably upon workers whose discharge could in some way be linked to union activity, it also condoned a wide set of permissible grounds for dismissal. In this context, several NLRB decisions early on vindicated traditional assumptions about managerial prerogatives. Discharges were sustained by the NLRB in cases involving gross inefficiency of a worker, incompetence, change in equipment, disturbance and horseplay, absenteeism, brawling, cursing of the boss, and the violation of company rules.25 Most importantly, discharges in the absence of employee misconduct were f requently declared permissible if there was no evidence for anti-union activity. This included discharges for lack of work, which were generally approved by the Board even in absence of union consultation, as long as anti-union bias could not be proven. In its Seagrave decision of 1938, for instance, the Board set a precedent for the preservation of employment-at-will within collective bargaining.26 Seagrave, an automotive equipment plant had discharged an employee three weeks after he got his job. The tribal chief testified to the fact that the employees work was satisfactory. The worker, a CIO member, had previously been arrested for disorderly conduct during a strike and alleged that he was fired because of this previous social function, and, more specifically, because his foreman had have a blacklist showing his name. The spokesman of the company explained that the polisher was hired because of a temporary emergency arising from the receipt of a special order, and that he was dismissed when the work on that order let up. The Board found no evidence for anti-union activity and declared the dismissal legal.In the case of Sheba Ann Frocks (1938), similarly, thirty employees, who had been dropped from the payroll of the Sheba arrange plant, complained to the Board alleging that their discharge was based on their CIO membership.27 Company officials testified that the layoffs took place because of a lack of work at the end of the regular production season. The Board reliable this explanation because the company retained over half of its CIO employees and discharged non-union employees as well, although not proportionally. In its conclusion the Board stated that, in the case of a dismissal for legitimate business reasons, such as slack work, no consultation with union members was required.While NLRB decisions of the late 1930s, such as Seagrave and Sheba, delineated the blank between dismissal protection and managerial prerogatives more or less by default, several court decisions attempted to give guidance which was general seemly to be applied to other contexts. This tendency towards establishing a formula which ringfenced managerial decision making from union intrusion could already be detected in the Supreme Courts ruling on NLRB v. Jones Laughlin Steel, the landmark case better known for its acceptance of the NLRA. In Jones, the Supreme Court stressed that although the Act required bargaining, it did not compel agreement.28 For the Supreme Court, in other words, the NLRA was legal because, and only because, the Act did not interfere with the normal exercise of the right of the employer to select employees or to discharge them.29 That, in defining normal rights, the Supreme Court emphasised the right to discharge workers did not bode well for those who expected the Act to significantly reduce arbitrary dismissals. With Jones, the court had indicated that outwith matters directly related to collective bargaining, employment-at-wil l was still very much in place, with restrictions only affecting those discharges which were explicitly declared illegal in the NLRA. More importantly, it had implied that would be difficult to create an agreement sanctioned and protected by the Act which would eliminate the right of employers to discharge workers for legitimate reasons.In NLRB v. sand Manufacturing (1938), a federal appeals court was even more explicit in affirming managements freedom to dismiss workers.30 In Sands, a collective agreement between the company and MESA, a labor union, was broken by the union. The company apparently bargained collectively with MESA. After two months, the company signed an agreement with another union, some of whose members were employed in order to replace MESA members. The NLRB ordered reinstatement of the MESA employees and requested the circuit court to enforce its order. The 6th circuit set aside the order and dismissed the petition to enforce. With respect to the termination of the employer-employee relationship the court stated that31The statute meaning the NLRA does not interfere with the normal right of the employer to select or discharge his employees If employees violate their contract they may be discharged for that reason and this does not constitute a discrimination in regard to tenure of employment nor an unfair labor practice, nor does it continue a discharge because the employees are members of a union. The statute does not provide that the relationship held in status quo under Title 29, Section 152(3) meaning the prohibition of dismissals during strikes shall continue in absence of wrongful conduct on the part of the employer and of rightful conduct on the part of the employees. If such were its meaning, the right of the employer to select, and discharge his employees would be cut off.The Sands decision was in many regards more radical than previous rulings. In Sands, the court had concluded that, provided the employer had engaged in bargain ing, NLRA legislation had to be interpreted so as not to otherwise constrain the employers rights to select and discharge employees. In other words, the court indicated that any action which would effectively restrict the right of employers to discharge, after basic bargaining engagements were met, could be struck down.While both the Jones Laughlin Steel and the Sands cases redefined space for at-will discharges relatively broadly, the Supreme Courts 1942 capital of Alabama Ward decision attempted to give a comprehensive definition of managements rights which gave managers broad control over discharge decisions.32 In its Montgomery Ward decision, the 9th set excluded from arbitrable grievances33 changes in business practice, the opening and closing of new units, the choice of personnel (subject, however to the seniority provision), the choice of merchandise to be sold, and other questions of a like nature not having to do directly and primarily with the day-to-day life of the emp loyees and their relations with supervisors.Although Montgomery Ward supported traditional concepts of management rights with respect to day-to-day arbitration, it left open a number of important questions with regard to dismissals arising as a consequence of longer term strategic decisions. This included questions relating to the dividing line between a rational business decision to relocate a plant, and one involving, for example, the elimination of a unionized plantan illegal antiunion activity. Moreover, the Courts decision to exclude changes in business practice from arbitrable grievances, merely prohibited unions from insisting on arbitration in these matters and hence relieved management from the legal duty to demonstrate these matters in good confidence. This did neither mean that union representatives could not bargain about these issues when contracts were negotiated, nor did it imply that once management conceded to union involvement in these matters, this involvement w as illegal or unenforceable.The latter issue of bargaining about alleged management prerogatives was addressed first in 1952 in NLRB v. American National policy Group.34 In American National, the Supreme Court held that management could enforce limits to bargaining on the basis of a management prerogative clause, under which the union was ousted from involvement in certain matters. American Nationals management prerogative clause included issues of discipline and work schedules that is, statutory rights with respect to mandatory bargaining. The court, nonetheless, rejected the Boards position that employers were compel to establish ongoing bargaining during the terms of the collective agreement on issues subject to defined managerial prerogatives.While in American National the company had attempted to impose broad limitations on bargaining rights, many companies insisted only on the type of management prerogatives listed in the Montgomery case, such as the freedom to decide on the c losure of units. In the mid-1950s, Haber and Levison reported that over 80% of the contracts signed in the building industries contained one or another form of a managerial rights clause. Many of these clauses explicitly prohibited bargaining over issues of job security.35 The management literature, meanwhile, welcomed American National because companies were now less likely to face NLRA legal proceeding if they refused to discuss issues of employment security. This was the case, not only where companies had gained past assurances that union representatives would respect managerial prerogatives, but also where such clauses could be inferred from existing bargaining agreements.36Management rights in matters of dismissals and layoffs were clarified further in the 1958 Supreme Court decision on Borg-Warner. In NLRB v. Wooster Division of Borg-Warner the Court held that there were three subjects of bargaining mandatory, nonmandatory, and illegal.37 The obligation to bargain, as specifi ed in the NLRA, applied only to mandatory subjects. A nonmandatory subject was permissive, meaning that it could be raised by either party. However, when a party insisted on a position regarding such an area to the point of impasse, it was acting illegally under the provisions of the Act.38 Since the law had defined the mandatory subjects of bargaining, Borg-Warner play an important role in the preservation of managerial prerogatives with regard to redundancies and dismissals. Under Borg-Warner, union demands for job security or employment guarantees could be rejected, as they could not be reasonably classified as mandatory bargaining items.39When determining what were mandatory and nonmandatory bargaining subjects, the NLRB and the courts of the 1950s and 1960s typically referred to the relevant NLRA section 9(a) which mandated bargaining for pay, wages, hours of employment, and other conditions of employment. Given these specifications, any issue involving pay and hours was obviou sly a mandatory bargaining item, requiring both parties to bargain in good faith or face sanctions through NLRB proceedings. More problematic was the clause including, other conditions of employment. When issues like redundancies, mass layoffs and mass discharges were at stake, the courts and the Board usually interpreted other conditions of employment to mean that union involvement in decisions about which workers were to be laid off or made redundant, was mandatory. To this effect union representatives were to be certain about planned manpower reductions. Union representatives were free to address issues related to discharges, make suggestions with regard to manpower relocation, or suggest alternative ways of pillow slip costs. If the company refused, unions, however, could not insist on a settlement of the issue. While strike action relating to these matters was not per se illegal, any protracted industrial action on non-mandatory manpower issues was likely to be declared an un fair labor practice by the NLRB or the courts.40 This approach, needless to say, gave unions with little power to influence a companys manpower decisions even in industries where levels of organization were high. Since it was often difficult to link a redundancy decision to union avoidance or to invoke contractual clauses which