Employment Law (Management 445)

1. Employment Law (Management 445) Professor Charles H. Smith Labor Law (Chapters 12, 19 and 20) Fall 2006

2. Introduction to Labor Law • At common law, unions were held to be criminal conspiracies; courts did not hesitate to throw union leaders and members in jail as well as issue injunctions stopping union activity. • While individual workers were free to negotiate for better pay and working conditions under the “freedom of contract” theory, combining their efforts to achieve the same goal was thought to be antisocial.

3. Early Judicial Involvement in the American Labor Movement • Philadelphia Cordwainers case (Pa. 1806) – shoemakers wanted raise from 25¢ to 75¢ per pair; they were found guilty of conspiracy to raise their wages; each man fined $8. • People v. Melvin (N.Y. 1809) – conspiracy charge dismissed since workers could join together in effort to raise wages so long as means not “of a nature too arbitrary and coercive, and which went to deprive their fellow citizens of rights as precious as any they contended for” (see the jury instruction at pages 345-46). • People v. Fisher (N.Y. 1835) – workers convicted under statute that read: “If two or more persons shall conspire . . . to commit any act injurious to the public health, to public morals, or to trade or commerce, or for the perversion or obstruction of justice or the due administration of the laws—they shall be deemed guilty of a misdemeanor.”

4. Early Judicial Involvement in the American Labor Movement cont. • Commonwealth v. Hunt (Mass. 1842) – considered to be the landmark case in American labor movement • Statement of applicable law – “it is a criminal and indictable offence, for two or more to confederate and combine together, by concerted means, to do that which is unlawful or criminal, to the injury of the public, or portions or classes of the community, or even to the rights of an individual . . . a conspiracy must be a combination of two or more persons, by some concerted action, to accomplish some criminal or unlawful purpose, or to accomplish some purpose, not in itself criminal or unlawful, by criminal or unlawful means.” • Court noted that no unlawful purpose was shown and “it must be averred and proved that the actual, if not the avowed object of the association, was criminal.” • The facts of this case were not really different from the facts of prior cases; why did the court in Hunt come to a different conclusion?

5. Post-Civil War Era • Knights of Labor – locals represented all workers (skilled and unskilled); problem since unskilled workers could be easily replaced, which reduced locals’ leverage. • Socialists – inspired by Marx; more of a political movement later eclipsed by Communists; labor issues represented by Industrial Workers of the World (IWW or “Wobblies”), a radical group that engaged in many violent strikes. • American Federal of Labor (AFL) – emphasized union activities; open to locals of unskilled workers but dominated by skilled workers. • Congress of Industrial Organizations (CIO) – organized unskilled production workers (auto, steel and mine industries); merged with AFL in 1955 to form dominant body in American labor movement. • “Yellow-dog” contracts – employment contract requiring employee to agree to not join a union.

6. Recent Trends in American Labor Movement • Post-WW2 – union membership peaked in early 1950’s but have been steadily declining since then due to increasing competition from domestic non-union workforce and overseas imports, oil-induced inflation of 1970’s, general decline in manufacturing sector, and relocation of workforce from unionized Northeast to non-union South. • Early 1950’s – 1/3 of manufacturing workforce unionized. • 2000 – about 14% of workforce unionized. • Case study – “Making Labor Relevant in the ‘New Economy’: Organizing in Silicon Valley” (pages 354-55).

7. Management’s Legal Tactics • Injunctions • Court order commanding person(s) or organization to stop doing illegal act (either continuing or threatened) • Often used to stop strikes because injunction violator can be jailed for contempt of court. • Company supposed to show inadequacy of remedy at law and irreparable harm; in other words, later money judgment would not be sufficient to address damage to company; in reality, harm often presumed due to union activity and injunction would be broadly-drafted in order to stop all union activity (not just specific strike). • “Yellow-dog” contracts – see prior slide. • Antitrust laws (such as Sherman Act of 1890 and Clayton Act of 1914) – originally intended to prevent monopolies and other anti-competitive activity by large companies, but early cases allowed antitrust laws to be used against unions; e.g., Duplex Printing Press Company v. Deering (1921) (no general immunity for unions despite Clayton Act § 20 restricted issuance of labor injunctions).

8. Development of Federal Labor Statutes • Starting in the 1930’s, Congress passed several laws intending to outlaw management tactics set forth on previous slide. • Norris-La Guardia Act of 1932 • Prohibited federal courts from issuing labor injunctions except under specific circumstances, such as open-court hearing with opportunity to cross-examine all witnesses; also, company had to show actual or threatened unlawful acts by union. • “Yellow-dog” contracts violate U.S. public policy and thus not enforceable in federal courts. • Many states enacted similar laws for state courts. • See page 360 for list of protected union activities and definition of “labor dispute.” • Case study – New Negro Alliance v. Sanitary Grocery Co. (pages 361-63).

9. Development of Federal Labor Statutes cont. • Railway Labor Act of 1926 • Permitted rail workers to designate own bargaining representative free of employer interference. • Three-step dispute resolution procedure – mediation, arbitration, emergency board of investigation (including “cooling-off” periods designed to permit time to negotiate settlements). • National Industrial Recovery Act of 1933 • Major industries would operate under codes of fair competition developed by trade associations for each industry. • No input from organized labor.

10. Development of Federal Labor Statutes cont. • National Labor Board (1933) • Comprised of seven members – three management and three labor plus Senator Wagner; tended to vote in blocs. • Very limited enforcement powers; relied mainly on “power of persuasion.” • Lost all respect during auto workers strike in 1934, when FDR had head of National Recovery Administration negotiate settlement. • “Old” National Labor Relations Board (1934) • Formed under NIRA, which was ruled unconstitutional in 1935.

11. National Labor Relations Act of 1935 • Enacted by Congress in wake of NIRA’s downfall. • Held to be constitutional under Commerce Clause (Congress’ power to regulate interstate commerce) in 1937; U.S. Supreme Court – in a 5-4 decision – reasoned that many industries were organized on a “national scale” making “interstate commerce the dominant factor in their activities.”

12. NLRA cont. • Overview – see pages 368-69 • Purpose of NLRA was to “eliminate the causes of certain substantial obstructions to the free flow of commerce . . . by encouraging . . . collective bargaining and by protecting the exercise by workers of full freedom of association.” • Basis of NLRA was protection of employees’ rights. • Five practices specified as “unfair labor practices.” • Later amendments provided counterbalancing rights to management as well as rights by workers against their own unions.

13. Union’s Duty of Fair Representation • Once certified, union has duty of fair representation, which is an obligation created by the courts requiring union to fairly represent all employees of the bargaining unit. • Issues include • Discrimination based on race, etc. by union in representing bargaining unit; case study – Steele v. Louisville & Nashville RR (pages 573-75). • “Trade-offs” – union concedes certain benefit(s) in order to get certain new benefit(s); give and take in any contract negotiation is appropriate, but how much discretion does union have? • Union discretion re whether or not to arbitrate employee’s dispute; case study – Hines v. Anchor Motor Freight, Inc. (pages 576-78).

14. Union’s Duty of Fair Representation cont. • Duty of fair representation includes duty to fairly represent all employees in bargaining unit whether union members or not. • However, union can negotiate “union shop” or “agency shop” contract unless there is a state “right to work” law that bars mandatory union membership or union dues. • “Union shop” – requires all employees in bargaining unit to become union members within specified time. • “Agency shop” – requires employees to pay union dues and fees; employer’s unilateral decision to stop deducting union dues and fees violates NLRA; union may not use non-union members’ dues and fees for non-collective bargaining activities (those employees entitled to pro rata reduction in dues and fees); case study – Int’l Brotherhood of Teamsters, Local 776 (pages 579-81).

15. Union’s Duty of Fair Representation cont. • Union liability for breach of duty of fair representation – union can be liable for damages to employee if shown that union breached duty of fair representation; e.g., union wrongfully refused to handle arbitration or handled it in “perfunctory” fashion. • Enforcing duty of fair representation – NLRB does not have exclusive jurisdiction; federal and state courts also have jurisdiction; cases decided under federal labor law, not state contract law.

16. Union’s Duty of Fair Representation cont. • Exhaustion of Internal Remedies • Many employers and union contracts feature internal remedies such as informal and/or formal hearings (e.g., ADR procedure such as mediation or arbitration) in order to process employment disputes without need for court intervention. • Use of internal remedies generally required before lawsuit can be filed in court; consistent with policy of voluntary resolution of disputes. • Exhaustion may not be required if use of internal remedies would be futile, such as where union and employer are cooperating in violation of employee rights or if internal remedy could not result in complete relief sought by employee (e.g., reinstatement, back pay).

17. Rights of Union Members • Union discipline of members – union cannot restrain, coerce or interfere with employee section 7 rights (see page 368), but union can fine members who cross picket line and enforce payment of such fines in state court. • Union members’ bill of rights – see page 586 for due process afforded to union member before discipline can be imposed; case study – Boilermakers v. Hardeman (pages 587-89).

18. Rights of Union Members cont. • Free speech and association – every union member has broad latitude to express views subject to union rules re reasonable and orderly conduct of meetings. • Election procedures – certain democratic procedures must be followed (see page 590); case study – Herman v. Local 1011, United Steelworkers of America (pages 591-92).

19. Other Restrictions on Unions • Duties of union officers – see lists on page 593. • Welfare and pension plans – must be handled to protect all employees’ interests; administrators can received only one full-time salary and be careful to keep roles as trustee and union official separate.

20. Chapter 19 – Case Problems • 1 – duty of fair representation (page 595). • 2 – breach of collective bargaining agreement and duty of fair representation (page 595). • 6 – union discipline (pages 597-98). • 8 – duty of fair representation (pages 599-600).

21. Introduction to Public Sector Labor Relations • Some unique issues are raised in the public sector that do not pertain to the private sector • Constitutional rights of employees may be implicated since employer is a “state actor.” • Right to strike – traditionally, public employees cannot strike though this rule has been watered down.

22. Constitutional Rights of Public Employees • What is the extent of a public employee’s 1st Amendment right to free speech? Does a public employee’s free speech rights include the right to criticize the employer? • Case studies (see following slides) • Connick v. Myers, 461 U.S. 138 (1983). • Garcetti v. Ceballos, 126 S. Ct. 1951 (2006). • Meaney v. Dever, 326 F.3d 283 (1st Cir. 2003) (page 623). • Make your own copies of the Connick and Garcetti cases for the exam since no copies will be provided.

23. Connick v. Myers • Issue was whether firing a state gov’t employee (deputy district attorney) for distributing a questionnaire about internal office affairs (at the district attorney’s office) violated the employee’s 1st Amendment free speech rights. • U.S. Supreme Court held no 1st Amendment violation since employee not speaking as citizen re public concerns but as employee re private concerns, and public employer not required to tolerate action he reasonably believed would disrupt the office, undermine his authority and destroy the close working relationships in the office.

24. Garcetti v. Ceballos • Issue was whether 1st Amendment prohibited discipline of public employee for making statements pursuant to employee’s official duties. • U.S. Supreme Court held public employee does not speak as citizen when making statements pursuant to official duties; otherwise, courts would have new and intrusive role as overseer of communications between public employees and their superiors in the course of official business.

25. Meaney v. Dever • Issue was whether police officer’s blowing truck’s air horn as part of demonstration during mayor’s inauguration was protected by the 1st Amendment. • Federal court of appeals held that horn-blowing was motivated by officer’s personal dislike for and desire to irritate the mayor; neither related to public concern, so no 1st Amendment protection.

26. Summary of 1st Amendment Cases • In all three cases, plaintiffs lost due to the “personal” nature of their communications • Connick v. Myers – plaintiff had just been transferred over her objection when she circulated the questionnaire in the district attorney’s office. • Garcetti v. Ceballos – plaintiff was disciplined after he questioned the honesty of a police officer’s affidavit used in support of a search warrant; all communications were intra-office. • Meaney v. Dever – plaintiff admitted that he wanted to “piss off” the mayor and disrupt the inauguration due to animosity between plaintiff’s family and the mayor as well as mayor’s denial of plaintiff’s request for a leave of absence. • Therefore, plaintiff needs to (1) show he/she is acting on the public’s behalf and not for his/her own personal benefit and (2) go “public” (e.g., to the media) with his/her concerns.

27. Public Employees’ Right to Strike • Traditionally, public employees have had no right to strike though this rule has been watered down. • Established reasons – which have now been challenged – for this prohibition against the right to strike include • Government sovereignty – government cannot delegate duties; now considered outdated due to popularity of privatization of tasks (e.g., prison and airport security, road maintenance). • Government by contract – terms of public employment often fixed by law; however, public employees now have many rights held by private sector (e.g., collective bargaining). • Distortion of the political process – once thought that public employers would be forced to make large concessions to employees; not true now since use of private subcontractors is viable alternative to public employees. • Essential public services – questionable if all government services are actually “essential.”

28. Public Employees’ Right to Strike – Case Studies • Postal Clerks v. Blount (pages 602-04). • Professional Air Traffic Controllers Org. v. FLRA (pages 612-13). • County Sanitation Dist. No. 2 v. Los Angeles County Employees’ Ass’n, 38 Cal.3d 564 (1985). • City of Santa Ana v. Santa Ana Police Benevolent Ass’n, 207 Cal.App.3d 1568 (1989). • Make your own copies of the County Sanitation and Santa Ana cases for the exam since no copies will be provided.

29. Postal Clerks v. Blount • Issue was whether public employees have an absolute right to strike absent express prohibition in the federal statute (5 U.S.C. § 7311). • Federal district court held that no right to strike unless statutory authority to do so; traditional rule says no public employee strike due to “more serious impact upon the public interest” and “Congress has an obligation to ensure that the machinery of the Federal Government continues to function at all times without interference.”

30. Professional Air Traffic Controllers Org. v. FLRA • Issue was whether Federal Labor Relations Authority had discretion to take disciplinary action against union and its member employees who engaged in illegal strike. • Federal court of appeals ruled that FLRA acted legally based on union’s knowledge of strike and continued flouting of injunctions obtained by government against union’s strike. • Query – was the fact that the striking employees (air traffic controllers) were essential to public safety an argument against the union?

31. County Sanitation Dist. No. 2 v. Los Angeles County Employees’ Ass’n • Issue was whether employer could be awarded damages against a union which had engaged in an allegedly illegal strike. • California Supreme Court held that public employee strike was not illegal unless imminent threat to public health or safety. • While operation and maintenance of sewage transport and treatment facilities and landfill disposal sites is important, would these employees be more easily replaced than, say, air traffic controllers?

32. City of Santa Ana v. Santa Ana Police Benevolent Ass’n • Issue was whether injunction proper to stop police officers from engaging in work stoppage under guise of illness (“blue flu”). • California court of appeal held that injunction proper due to public safety threat; city was requiring officers who had already worked one shift to stay for another shift when numerous officers called in sick.