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XVIII. Labor & Employment Law

Gary S. Becker, The Economics of Discrimination (2d ed. 1971). This landmark study demonstrates that discriminatory employers raise their own labor costs by discriminating, while benefiting non-discriminatory competitors at the same time. The bottom line, according to Professor Becker, is that economic forces will eventually drive discriminatory firms out of business, as more efficient nondiscriminatory firms out-compete them.

The Civil Rights Act of 1991: A Symposium, 54 La. L. Rev. 1459 (1994). This symposium by the National Legal Center for the Public Interest focused on the controversial legislation that amended Title VII of the 1964 Civil Rights Act after a series of 1989 Supreme Court decisions that angered the civil rights lobby. Articles were contributed by Roger Clegg, Boyden Gray, Nelson Lund, John McGinnis, Glen Nager, and Rosalie Silberman.

Richard Epstein, Forbidden Grounds: The Case Against Employment Discrimination Laws (1992). Like Becker, Professor Epstein concludes that the free market imposes severe penalties on employment discrimination. Epstein also argues that employment discrimination laws are economically inefficient because they forbid people from associating with the persons they prefer, and because the laws forbid employers from making rational economic decisions. In addition, Epstein argues that employment discrimination laws are an unjustified intrusion into individual liberty.

Bernard D. Meltzer, The Weber Case: The Judicial Abrogation of the Antidiscrimination Standard in Employment, 47 U. Chi. L. Rev. 423 (1980). Argues forcefully that the Weber case was wrongly decided. For another trenchant criticism of the ways in which the Court has misread the Civil Rights Act of 1964, see Lino A. Graglia, The “Remedy” Rationale for Requiring or Permitting Otherwise Prohibited Discrimination: How the Court Overcame the Constitution and the 1964 Civil Rights Act, 22 Suffolk L. Rev. 569 (1988).

Michael Gold, Griggs’ Folly: An Essay on the Theory, Problems, and Origin of the Reverse Impact Definition of Employment Discrimination and a Recommendation for Reform, 7 Indus. Rel. L.J. 429 (1985). Perhaps the most problematic aspect of antidiscrimination legislation is the way it has been interpreted to ban not only intentional discrimination but also practices that have a disproportionate impact on certain groups, whether intended or not. This article critiques that doctrine.

Richard A. Posner, The Efficiency and Efficacy of Title VII, 136 U. Pa. L. Rev. 513 (1987). Argues that employment discrimination laws are economically inefficient, because they disallow employers from making rational economic decisions about hiring and firing employees. Judge Posner also notes that employment discrimination laws impose huge costs on society, largely stemming from the large number of employment discrimination cases litigated each year. In addition, Posner argues that employment discrimination laws do not actually help the minority groups they are intended to benefit; rather, by making it more costly for employers to hire, retain, and fire minority workers, the employment discrimination laws actually give employers a strong incentive to avoid hiring minority workers altogether. Hence, Posner concludes that the massive costs generated by Title VII are a “dead weight loss” to society. For an overview of the law and economics literature on the regulation of employment, consult chapter 11 of Richard Posner, Economic Analysis of Law.

Thomas J. Campbell, Regression Analysis in Title VII Cases: Minimum Standards, Comparable Worth, and Other Issues Where Law and Statistics Meet, 36 Stan. L. Rev. 1299 (1984). Analyzes the use of statistics in Title VII “disparate impact” cases. Professor Campbell examines two fundamental errors in the manner in which courts routinely use statistical data in discrimination cases, and demonstrates that misuse of statistics by a court can easily result in a finding of discrimination when none in fact exists.

Richard A. Epstein, A Common Law for Labor Relations: A Critique of the New Deal Labor Legislation, 92 Yale L.J. 1357 (1983). Argues that the New Deal labor relations statutes constitute “a mistake that, if possible, should be scrapped in favor of the adoption of a sensible common law regime relying heavily upon tort and contract law.”

Richard A. Epstein, In Defense of the Contract at Will, 51 U. Chi. L. Rev. 947 (1984). Examines employment contracts at will “in light of the three dominant standards that have emerged as the test of the soundness of any legal doctrine: intrinsic fairness, effects upon utility or wealth, and distributional consequences.” Concludes that “the first two tests point strongly to the maintenance of the at will rule, while the third, if it offers any guidance at all, points in the same direction.”

Ralph K. Winter, Jr., Collective Bargaining and Competition: The Application of Antitrust Standards to Union Activities, 73 Yale L.J. 14 (1963). This article explores the economic and legal-policy consequences of applying the antitrust laws to a variety of union activities.

In 2009 the proposed Employee Free Choice Act was introduced to Congress, intended to amend the National Labor Relations Act in three ways: first, by allowing unions to opt for recognition through a card check instead of the secret ballot currently required under the NLRA; second, by instituting a regime, if the parties do not reach an agreement within 130 days after the union is recognized, of compusory arbitration and arbitrator-imposed requirements and restrictions, binding for a two-year period; and, third, by increasing the current sanctions for unfair labor practices committed by employers during an organizational campaign.

For an argument that that all of these changes are unwise deviations from the status quo that would introduce unwise dislocations in labor markets that are not justified by the claim that the decline of unionization in the private sector is largely attributable to improper employer intransigence see Richard Epstein, The Case Against the Employee Free Choice Act (February 3, 2009). U of Chicago Law & Economics, Olin Working Paper No. 452. Available at SSRN: http://ssrn.com/abstract=1337185.  See also Harry Hutchison, Employee Free Choice or Employee Forged Choice? Race in the Mirror of Exclusionary Hierarchy, 15 Mich. J. Race & L. 369 (2010) (deploying Critical Race Reformist theory, economics and apartheid-era South African labor history in order to show that rather than embracing freedom for workers, eliminating poverty, and expanding opportunities for all, this proposal would likely invert such goals and instead operate consistently with the record of exclusion and subordination tied to American Progressivism and the labor movement).

For some preliminary empirical analysis and suggestions for further inquiry on the question of employment arbitration generally, see David Sherwyn, Samuel Estreicher & Michael Heise, Assessing the Empirical Case for Employment Arbitration, 57 Stan. L. Rev. 1557 (2005).

Keith Hylton, Law and the Future of Organized Labor in America, 49 Wayne L. Rev. 685 (2003).  Professor Hylton argues that the change in the public-versus-private composition will lead unions to pursue legislative strategies that will further reduce the share of the private-sector workforce in unions and that a law reform program that has any chance of success in reversing the decline of private-sector unions will have to aim to reduce the competitive disadvantage to firms from unionization. As solutions he proposes 1) making labor law more predictable and 2) removing the National Labor Relations Board (NLRB or Board) from regulating the substantive terms of labor contracts.

Harry Hutchison, Reclaiming The First Amendment Through Union Dues Restrictions?, 10 Penn. J. Bus. & Emp. L. 663 (2008). Professor Hutchison makes the pessimistic argument that First Amendment rights of expression and association cannot be recaptured from the current labor regime, despite the Supreme Court’s decision in Davenport upholding Washington State’s restriction of the extraction of union dues for political purposes.

Samuel Estreicher, Trade Unionism Under Globalization: The Demise of Voluntarism?, 54 St. L. Univ. L. Rev. 415 (2010) (arguing that, largely in response to the deepening of competitive forces in private markets in the U.S. - from deregulation, changing technology and the opening up of global labor and product markets - organized labor increasingly will function predominantly as a political organization).

Internet resources: The Heritage Foundation’s “Labor Home Page” contains a lot of policy-oriented material, http://www.heritage.org/issues/labor.

Last updated April 2011

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