The word ultracrepidarian comes from an old Roman story about a shoemaker. Though good at his own job, the shoemaker apparently ventured (unsuccessfully) to offer opinions about painting and art. So the term has come to stand for someone who comments outside his own expertise. And while it is rarely invoked in modern labor law, it aptly describes a recent amicus brief filed by the National Labor Relations Board. The Board filed the brief in a case about the proposed merger between Kroger and Albertsons. The brief asserted that the companies were defending their merger under an incorrect understanding of labor law. But what the brief really showed was that the Board has an underdeveloped understanding of antitrust law. It also showed why “expert” agencies should tread carefully when venturing beyond their supposed expertise.
To be fair, the Board’s brief did center on a labor-law concept: multi-employer bargaining. Multi-employer bargaining is what it sounds like: bargaining between a union and several employers. It’s never mentioned in the National Labor Relations Act (NLRA), which discusses bargaining only between one employer and one union. But it has deep historical roots. For decades, it was common in manufacturing, retail, and other major sectors. And even today, it’s used in industries like entertainment and professional sports. Besides, it fits the NLRA’s basic goals. The NLRA expressly promotes collective bargaining as the preferred way to regulate workplaces. And sometimes, collective bargaining works best with multiple employers.
Multi-employer bargaining does, however, raise concerns outside labor law. Employers can’t normally coordinate on wages or benefits. That kind of coordination would be a form of price fixing, and price fixing almost always violates antitrust law. In fact, this price-fixing problem is endemic to almost all collective bargaining, even when it involves only one employer. For example, when an employer agrees with a union to limit store hours, it effectively agrees to limit production. And when a union agrees to a fixed wage schedule, it effectively agrees to eliminate wage competition. All collective agreements have this same feature, and thus the same problem. They are all, in some sense, anticompetitive.
To deal with that tension, Congress carved out certain union conduct from antitrust law. In the 1914 Clayton Act, Congress declared that labor was not a “commodity or article of commerce.” And in the 1932 Norris–LaGuardia Act, it forbade courts from using antitrust law to block certain union conduct (such as secondary boycotts). These laws protected many common union activities, such as strikes. But they did not, oddly, extend to collective bargaining. They applied only to unilateral union conduct, not to agreements between unions and employers. And those agreements were the centerpiece of federal labor policy.
To make sense of this mess, courts implied another exemption. This “nonstatutory” exemption comes from the implied policy embedded in national labor law. It essentially insulates collective bargaining from antitrust review, even when bargaining might otherwise harm competition. And while the statutory exemption applies only to unions, the nonstatutory one applies to both unions and employers—even when employers coordinate among themselves to improve their bargaining positions.
That last point has taken center stage in the Kroger–Albertsons case. Among other things, the FTC has argued that the companies’ proposed merger would be anticompetitive because it would reduce competition over unionized labor. The FTC says that workers at both companies are represented by the United Food and Commercial Workers Union (UFCW), which can play the two companies off one another to get better wages. But if the companies merged, the union would lose its leverage. It could no longer pit the companies against each other or hit them with “whipsaw” strikes. Instead, it would have to bargain with a single employer.
That theory, the companies say, makes no sense. To start, there is no discrete market for “unionized” labor; even after the merger, the companies would still have to compete for labor with other retailers. And besides, the companies can already bargain in coordination with one another. Even as separate entities, they can invoke the nonstatutory exemption to avoid antitrust liability. So they don’t need a merger to bargain in concert; they can do it already.
That’s where the Board intervened. In a twelve-page amicus brief (much of which was devoted to the Board’s own lack of economic know-how), the Board argued that the companies had misstated labor law. The Board said that while multi-employer bargaining is permitted under labor law, all parties have to consent to it. So unless the UFCW agrees to multi-employer bargaining, the companies can’t bargain with the union for a single contract.
But that argument is a non sequitur. While it’s true that multi-employer bargaining requires consent, courts have never conditioned the nonstatutory antitrust exemption on multi-employer bargaining. In fact, they have often applied the exemption in other scenarios. For example, one court applied the exemption to an employer who borrowed employees from another employer during a strike. Another court applied the exemption after a union unilaterally decertified itself, making multi-employer bargaining impossible. And still another court applied the exemption to separate agreements with multiple employers that allegedly gave the employers price advantages over their rivals.
Of course, none of these cases addressed a situation exactly like the Kroger-Albertsons case. None said whether the nonstatutory exemption would apply to coordinated bargaining by employers outside a voluntary, multi-employer structure. But the exemption’s logic suggests that it should. The exemption recognizes that Congress meant to insulate collective bargaining from antitrust scrutiny. In effect, Congress put a protective bubble around bargaining. And within that bubble, Congress allowed the parties to take positions and make agreements that would otherwise be considered anticompetitive. Nothing about that rationale depends on formal multi-employer bargaining. So it should, and likely does, apply to coordinated bargaining by employers even when the union doesn’t agree.
It's possible, of course, that courts might one day tie the exemption to multi-employer bargaining. Maybe courts will want to cabin the exemption to prevent it from swallowing the general rule. But so far, no court has done that, and the Board’s brief offers no reason why one should. Instead, it merely betrays the Board’s thin grasp of antitrust law, even when it intersects with labor policy.
Maybe next time, the Board should learn from the shoemaker and stick to what it knows.
Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at [email protected].