Chapter 12
THE RISE OF ORGANIZED LABOR AND ITS REGULATORY FRAMEWORK
INTRODUCTION
The twelfth chapter focuses on the development of labor law in the United States. From its origins as illegal
criminal activity, collective bargaining has evolved into a legitimate way for employees to earn equal
CHATPER OUTLINE
Labor Development in America
Pre-Civil War
*Criminal conspiracy is a crime that may be committed when two or more persons agree to do something
unlawful.
The Post-Civil Way Period
*Yellow-dog contract is an employment contract requiring employees to agree not to join a union.
The Socialists
The labor activities of the socialist movement came to be represented by the Industrial
Workers of the World (the IWW, or “Wobblies”) during the early decades of the twentieth century.
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Emphasized union activities in contrast to the political activities of the Knights and the
Socialists.
Adopted a pattern of union organization based on the British trade union system:
Local unions were to be organized under the authority of a national association;
Federation of unions that sought to organize the unskilled production workers largely
ignored by the AFL.
After years of bitter rivalry, the AFL was finally forced to recognize the CIO; the AFL (with
10.5 million members) merged with the CIO (with 4.5 million members) in 1955. The resulting
organization, the AFL-CIO, was the dominant body in the American labor movement.
The Change to Win Coalition
Legal Responses to the Labor Movement
Injunctions
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*Injunction is a court order to provide remedies prohibiting some action or commanding the righting of
some wrongdoing.
*Ex parte proceedings are court hearings in which one party, usually the defendant, is not present and is not
able to take part.
Yellow-Dog Contracts
CASE 12.1 LOEWE V. LAWLOR
208 U.S. 274 (1908)
Facts: A company alleged that a boycott was a conspiracy to restrain trade and sought damages of
$240,000 against individual union members. The district court sided with the company saying that the
union’s boycott interfered with “trade or commerce among the states” as disallowed by the Sherman Act.
The union appealed.
Issue: Are union boycotts attempts to restrain or interfere with trade in violation of the Sherman Act?
CASE 12.2 DUPLEX PRINTING PRESS COMPANY V. DEERING
254 U.S. 443 (1921)
Facts: Printing union organized a strike to force the employer to agree to a closed-shop provision, eight–
hour workday, and to adopt a wage scale. The union called for a boycott. The employer filed suit under
the Clayton Act. The union argued that Sections 6 and 20 of the act prevented an injunction.
Issue: Does the Clayton Act exempt labor union activities from the prohibitions of the Sherman Act?
Decision: The Court found that Congress did not intend for Section 6 or Section 20 to be a general grant
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The Development of the National Labor Relations Act
*Common law is law developed from court decisions rather than through statutes.
The Norris-La Guardia Act
Provisions
State Anti-Injunction Laws
The Norris–La Guardia Act applies only to the federal courts.
CASE 12.3 PULTE HOMES, INC. V. LABORERS’ INTERNATIONAL UNION OF NORTH
AMERICA
648 F.3d 295 (6th Cir. 2011)
Facts: Pulte Homes, Inc. a successful home builder, sued a national labor union for orchestrating an
attack on the company’s phone and e-mail systems. The complaint stems from an employment dispute.
In September 2009, Pulte fired a construction crew member, Roberto Baltierra, for misconduct and poor
performance. Shortly thereafter, the Laborers’ International Union of North America [LIUNA] began
mounting a national corporate campaign against Pulte—using both legal and allegedly illegal tactics—in
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e-mails to customers and vendors.
Four days after LIUNA started its phone and e-mail blitz, Pulte’s general counsel contacted LIUNA and
requested that LIUNA stop the attack because it prevented Pulte’s employees from doing their jobs.
When the calls and e-mails continued, Pulte filed this suit alleging several state-law torts and violations
of the Federal Computer Fraud and Abuse Act [CFAA, a statute that both criminalizes certain computer–
fraud crimes and allows for civil suit.]
Issue: Is the phone and email campaign by LIUNA within the definition of a labor dispute under the
NLGA, so that the court is unable to issue an injunction prohibiting the conduct?
Decision: This is not “every reasonable effort” to settle the dispute. Because Pulte failed to comply with
The Railway Labor Act
Passed in 1926, allowed railroad employees to designate bargaining representatives of their
own choosing, free from employer interference.
The railroads were one of the earliest industries in which employees were unionized.
These associations would be under the supervision and guidance of the National Recovery
Administration (NRA).
The National Labor Board
The National Labor Board (NLB) was created in August 1933. It was composed of seven
members; three representatives each would be chosen by the NRA’s Industrial Advisory Board and
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Empowered to investigate disputes arising under Section 7(a) of the NIRA and to conduct
secret ballot representation elections among employees.
Overview of the National Labor Relations Act
Passed by Congress and enacted into law in 1935.
The main concern over the constitutionality of the NLRA was whether it was a valid
exercise of the interstate commerce power given to Congress under the commerce clause of the
Constitution.
*Closed shop is an employer who agrees to hire only those employees who are already union numbers.
The National Labor Relations Board
Organization
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*Administrative law judges (ALJs), formerly called trial examiners, these judges are independent of both
the Board and the general counsel.
Current Members of the NLRB
-Lauren McFerran was sworn in on December 17, 2014, for a term ending Decem– ber 16,
2019.
-Phillip A. Miscimarra was sworn in as a member of the Board on August 7, 2013, for a
term that expires on December 16, 2017.
The General Counsel
Section 10(b) of the act requires that unfair practice charges must be filed within six months
of the occurrence of the alleged unfair practice.
See Exhibit 12.3 for a summary of unfair labor practice procedures.
Representation Elections
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Jurisdiction
General Jurisdictional Standards
The NLRB jurisdictional standards are set in terms of the dollar volume of business that a
firm does annually.
Exempted Employers
Labor organizations in their representational capacity. (Unions are covered by the act in the
hiring and treatment of their own employees.)
Exempted Employees
Exclusions from coverage are the result of both statutory provisions and judicial decisions.
Expressly excluded:
*Independent contractor is a person working as a separate business entity.
*Supervisor is a person with authority to direct, hire, fire, or discipline employees in the interests of the
employer.
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CASE 12.4 NATIONAL LABOR RELATIONS BOARD V. KENTUCKY
RIVER COMMUNITY CARE, INC.
532 U.S. 706 (2001)
Background: Union petitioned the NLRB to represent employees at a care facility. The employer
objected to the inclusion of registered nurses arguing they were supervisors. The regional director ruled
that the employer had the burden of proving status and that they had not carried that burden, so that the
nurses could be included. The employer then refused to bargain with the union in order to get judicial
review of the certification decision. The board held that the employer violated the NLRA and the
employer appealed to the circuit court. The circuit court held that the board erred in putting the burden
on the employer and also found that the nurses exercised independent judgment. The board appealed.
Issue: Are the nurses supervisors and therefore not protected by the act?
Decision: Someone is a supervisor (excluded from protection of the act) if he or she exercises
ANSWERS TO CASE QUESTIONS
1. The text of §2(11) of the Act…sets forth a three-part test for determining supervisory status.
Employees are statutory supervisors if (1) they hold the authority to engage in any 1 of the 12 listed
2. The board argued that employees do not use “independent judgment” when they exercise “ordinary
professional or technical judgment in directing less-skilled employees to deliver services in
3. The significance of the determination that the staff nurses are supervisors means that they are not
“employees” under the NLRA and do not have any of the statutory protections of the NLRA—so
*Managerial employee is a person involved in the formulation or effectuation of management policies.
ELTHICAL DILEMMA
Faculty Consultation Rights at Prestigious University?
Discussions will likely center around the need for a balance between keeping the association happy and
keeping the university financially sound.
NOTE: In 1980 the U.S. Supreme Court held in NLRB v. Yeshiva, 444 U.S. 672, that tenured faculty of a
prestigious university were managers and, therefore, not covered by the NLRA. As a result, many private
universities withdrew recognition of their faculty bargaining units and ceased collective bargaining. In
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2011 the NLRB announced that it intended to revisit this issue:
*Confidential employee is a person whose job involves access to confidential labor relations information.
CASE 12.5 NLRB V. MEENAN OIL CO., L.P.
139 F.3d 311 (2d Cir. 1998)
Background: The Board petitioned for enforcement of its order finding that an employer had violated the
act by refusing to bargain with a union. The employer argues that some of the employees in the union are
outside of the protection of the NLRA as confidential employees. On employee is a secretary with access
to confidential information.
Issue: Are these employees confidential employees and outside the scope of the act?
1. The rationale for the exclusion of confidential employees (as so defined) is that management
2. In Hendricks County, the Supreme Court approved the Board’s use of this “labor nexus” test; so
employees who have access to confidential business information are not for that reason excludible
CASE 12.6 NLRB V. TOWN & COUNTRY ELECTRIC, INC.
516 U.S. 85 (1995)
Facts: A nonunion contractor advertised for applicants but refused to interview some who were known
paid organizers for a union. The ALJ ruled in favor of the union, and the Board affirmed. The circuit
court reversed stating that an “employee” did not include those persons who work for a company while
being paid by a union to organize that company. This made those applicants unprotected by the act. The
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Board appealed.
Issue: Does the definition of “employee” under the NLRA include persons working for a company and,
at the same time, being paid by a union to help the union organize the company?
Decision: Yes. The language of the act is broad enough to include them. The employer may not refuse to
THE WORKING LAW:
Are College Athletes Employees?
The College Athletics Players Association (CAPA) filed a petition with the NLRB to seek a
representation election for the members of the football team at Northwestern University. The NLRB
Jurisdiction Over Labor Organizations
NLRB and Supreme Court decisions have held that the words “dealing with” are broad
enough to encompass relationships that fall short of collective bargaining.
There is also case law to suggest that a single individual cannot be considered a labor
organization “in any literal sense.”
Federal legislation may also expressly preserve the right of the states to regulate activities.
ANSWERS TO END OF CHAPTER PROBLEMS
QUESTIONS
1. The injunction was effective against union activities because courts generally issued it at the request
of employers, without any union representatives having an opportunity to refute the allegations. As
well, the injunctions were vaguely worded, prohibiting a broad range of union actions. The
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2. The antitrust laws could be used against concerted union activities⎯union boycotts pursuant to a
3. The Norris-La Guardia Act prohibited federal courts from issuing injunctions in labor disputes unless
4. The major provisions of the Wagner Act were the declaration of employees’ rights to organize or join
3. The effects of the Wagner Act were to give unions governmental support, resulting in a dramatic
increase in union organizing and growth.
5. Private sector employers engaged in, or affecting, interstate commerce that are not excluded from the
coverage of the Act and are within the NLRB jurisdictional guidelines are subject to the NLRA. The
following employers are excluded from the coverage of the NLRA: the federal government and
wholly-owned corporations, state governments and any political subdivision thereof, employers
CASE PROBLEMS
6. The hospitals could argue that the requirement of representatives from organized labor on the board
could create a conflict of interest because the boards would be responsible for determining the
7. The Board held that Jones was a supervisory employee because the balancing of workloads required
8. The Supreme Court held that the law was not preempted by S. 7 of the NLRA because the law didn’t
actually conflict with S. 7. S. 504 of the Labor–Management Reporting and Disclosure Act of 1959
prohibits persons from serving as union officials if they have been convicted of certain crimes; S.
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9. The 10th Circuit upheld the NLRB’s jurisdiction in the case. The Court held that the services
provided were sufficiently secular in nature to allow the Board to assert jurisdiction; the activities
10. Because the ship was a U.S. flagged vessel, the laws of the U.S. applied to it. The employees on the
ship were not subject to the laws of a foreign country; the ship was within the reach of U.S. law.
11. The Board, in overruling the decision of the regional director, held that the close relationship
National had with the bank, an international organization, excluded it from the Act. The degree of
control retained by the bank involved control over significant aspects of the employment relationship
of the guards’ requiring a finding that the employees were excluded from the Board‘s jurisdiction. In
12. The court agreed with the Board that the plaintiff’s discharge violated section 8(a)(1) of the Act. The
13. The Board‘s decision to assert jurisdiction over the university was refused enforcement by a divided
1st Circuit Court of Appeals, which held there was sufficient involvement with the Catholic church
to come under the Catholic Bishops doctrine. Subsequently, in Trustees of St. Joseph’s College, 282
14. The Board held that the 6-month time limit runs from when the employee is informed of the
termination, not from the time that the termination becomes effective.
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15. The Board had held that illegal aliens were entitled to protection under the Act because no federal
statute prohibited hiring illegal aliens, see Duke City Lumber Co., 251 NLRB 53 (1980); NLRB v.
Apollo Tire Co., 604 F. 2d 1180 (9th Cir. 1980); and Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984).
HYPOTHETICAL SCENARIOS
16. The following employees are excluded from the coverage of the NLRA: agricultural workers,
domestics employed in a person’s home, individuals employed by parent or spouse, independent
17. The students will not be able to answer this question without more information. This scenario is
synonymous to Meenan Oil in that Betty is the administrative assistant to the manager and she has
18. Cantor, Inc. is an employer covered under the NLRA because it does not meet any of the
19. The drivers are not employees under the NLRA because they are expressly excluded as being
20. Hospital medical students in residency (residents) enjoy the same rights as any other employee
under the NLRA. They have been recognized as employees under the National Labor Relations
Act since 1999, when the NLRB ruled that residents are employees, regardless of the educational