Can Labor Still Use the Wagner Act?

Can Labor Still Use the Wagner Act?

Legal advisors in the Republic Steel unfair labor practices case meet in Washington, D.C., July 1937 (Library of Congress)

Amid the political turmoil of this tumultuous year, a significant historical anniversary passed all but unnoticed. Eighty years ago, on April 12, 1937, the U.S. Supreme Court upheld the constitutionality of the National Labor Relations Act (NLRA)—the Wagner Act—which had been signed into law in 1935. Before the court delivered its decision in NLRB v. Jones & Laughlin, most observers believed that it would overturn the act, as it had other crucial pieces of New Deal legislation, including the National Industrial Recovery Act (NIRA), which it consigned to oblivion by unanimous vote. When a 5–4 majority instead validated the Wagner Act, doing so just two months after the successful Flint sit-down strike had won a union contract at General Motors, and just weeks after U.S. Steel voluntarily recognized a steelworkers union, the court confirmed that the United States had entered a new era.

Although time would reveal significant weaknesses in the Wagner Act’s provisions—such as the costly nature of its exclusion of agricultural, domestic, and government workers from its protections—few disputed that it changed the character of the United States. The act helped a resurgent labor movement win a say over working conditions for millions of workers. In the process, it helped democratize the nation. Even the hobbling amendments of the 1947 Taft-Hartley Act did not seem to dim the significance of that achievement. After Taft-Hartley’s passage, young Archibald Cox, then a rising star in labor law, believed that collective bargaining, with its “roots in the ideals of self-rule and government according to law,” was “certain to grow, at least as long as there survives the political democracy on whose achievement it has followed.”

 

A deepening crisis

Eighty years after the Wagner Act’s validation, the triumph of collective bargaining in mass production industries seems as ancient as Exodus, and Cox’s optimism as quaint as greeting card poetry. Whereas the industrial Midwest once throbbed with demands for industrial democracy, today its depleted cities continue to bleed jobs and its hinterlands struggle with rampant opioid addiction. Flint, once home to a mobilized working class capable of taming General Motors, is today a desperately impoverished city lacking in decent jobs, whose residents continue to suffer from the aftermath of lead poisoning. Whereas sit-down strikers were protected by Governor Frank Murphy in 1937, today’s Michigan is a “right-to-work” state presided over by Governor Rick Snyder, a venture capitalist whose efforts to wrest local control away from distressed communities led directly to Flint’s poisoning. Little remains of the industrial union movement born in 1937, as private-sector union membership rates today dip toward 6 percent.

Nor is there reason to suppose the Supreme Court will help matters as it did eighty years ago. Today’s Court instead seems bent on interring the last legal vestiges of the New Deal labor order. In the case of Janus v. AFSCME, which the Court will decide in the coming term, the right of public-sector unions to collect “agency fees” from the workers they represent is being challenged. Opponents argue that government workers’ unions are merely political vehicles, and therefore granting them the right to collect agency fees infringes on the rights of workers who might not share the politics of the union that represents them. The case threatens to overturn a forty-year-old precedent, Abood v. Detroit Board of Education (1977), which recognized the unions’ rights to collect such fees in the interest of orderly workplace governance wherever state law allowed the practice.

If the Janus case overturns Abood, it would freeze the collection of fees from all state and local government workers, devastate union finances, and weaken unions in a sector where they still retain significant influence. Since nearly half of all union members work for government, this would constitute a catastrophic setback to organized labor as a whole. It would also deal a potentially fatal blow to a central principle of the Wagner Act: the idea that unions ought to serve as democratic instruments of workplace governance.

Wagner conceived of his act as an effort to establish “industrial democracy.” The transplantation of democratic forms into the workplace, he believed, was necessary if political democracy was to survive in an age of gigantic, powerful corporations. He saw the Jones & Laughlin decision as a vindication of his view, a defense of the “right to organize without interference from the employer and the right of the majority to bargain collectively for all.” If unions were to function effectively as self-governing institutions capable of counterbalancing management’s power, Wagner believed, they had to be free to negotiate contracts providing for their own security; they had a right to a taxing power that supported their governance function.

But the “right of the majority to bargain collectively for all” and the idea that unions should act as mini-democracies in work relations, establishing rules that govern the workers they represent and enjoying the right to negotiate union security, has been progressively marginalized over the past seventy years. In 1947, the Taft-Hartley Act gave states the right to set limits on private-sector workplace self-government through “right-to-work” laws, which forbid the majority of employees in a given bargaining unit from requiring their colleagues to support the union that bargains on their behalf. Twenty-eight states have now adopted such laws, six within the past five years alone.

To some extent the loss of union security under “right-to-work” laws in the private sector was offset by the introduction of the self-government model of collective bargaining into the public sector in the 1970s. In the years after Abood, both Democratic and Republican governors signed bills granting agency fee rights to unions in many states. Today twenty-three states and the District of Columbia extend such rights to at least some of their public employees. The Janus case would impose the logic of “right-to-work” on all of those jurisdictions, undermining public-sector worker bargaining power and bringing all unions one step closer to the status of mere voluntary associations.

Considering the scope of the threat represented by Janus illuminates just how marginalized the Wagner Act’s self-government model of collective bargaining has become since NLRB v. Jones & Laughlin validated the law. Moreover, Janus comes at a moment when the state of worker organization is more tenuous than it has been since the depths of the Great Depression.

 

How did we get here?

This conjuncture has been long in the making. As the 1970s dawned, prevailing opinion held that the NLRA still effectively protected workers’ rights to organize and bargain, despite the weakening provisions of Taft-Hartley. At that moment, the Wagner Act framework still served as labor’s bright beacon. Thus public-sector unions campaigned for a “Wagner Act for public workers” in the early 1970s. Although they never won such an act, they did see a growing number of states and localities adapt Wagner Act principles to the public sector, including exclusive representation and union security in the form of agency fees.

As that adaptation process proceeded, however, the weaknesses of the NLRA were becoming increasingly clear to private-sector workers. By the mid-1970s, employers had begun perfecting methods of union avoidance and were learning to brush off the meager penalties they suffered for violating the NLRA. To remedy these problems, labor allies introduced a sweeping labor law reform bill at the very moment the Supreme Court was considering the Abood case. That bill easily passed in the House only to die in a Senate filibuster in 1978.

By the turn of the century, changes in the economy had begun magnifying the failure of American labor law. Deindustrialization and the rise of international supply chains reorganized the manufacturing industries that the Wagner Act had once helped unionize. The spread of subcontracting, franchising, and the employment of temporary workers created a situation where workers’ immediate employers were not the ones most responsible for setting the terms and conditions under which they worked. This made the Wagner Act’s approach to shop-floor industrial democracy an anachronism: what bargaining power could workers at the bottom of the supply chain win when the entities with the real power over their work lives were not their direct employers? Meanwhile, the rise of financialization had created new disruptive forces. The movement to “maximize shareholder value” that arose in the 1970s, hedge funds, and private equity concerns were all based on wringing profits from the deconstruction of conglomerates, downsizing, outsourcing, and increasing competition among workers.

Organizers adapted to the changing environment with a range of new approaches that looked beyond the NLRA. Unions turned to corporate campaigns and capital stewardship initiatives in an effort to create new points of leverage in their fights with corporations, and they built community-labor coalitions such as Jobs with Justice to broaden the range of allies who fought beside them. Most significantly, new organizing models such as the Justice for Janitors campaign and worker centers emerged. Justice for Janitors, an innovative initiative of the Service Employees International Union (SEIU), unionized the hypercompetitive building services industry in major cities such as Los Angeles not by pressuring cleaning contractors who employed janitors but instead by pressuring the owners of the buildings that hired the contractors. Worker centers spread among low-wage workers, often immigrants, who worked in industries where the barriers to organizing and traditional collective bargaining were too daunting for unions.

Yet none of these initiatives resuscitated declining worker bargaining power. Corporate campaigns never delivered the leverage that strikes once did (the average number of major work stoppages plummeted from 289 a year in the 1970s to twenty in the 2000s). Justice for Janitors was not replicated in other industries. And worker centers failed to develop financial self-sufficiency and feared that if they attempted to bargain collectively they would become subject to the full range of legal constraints that were strangling unions.

As labor’s crisis deepened in the early 2000s, some labor intellectuals looked back to the Wagner Act for ideas. Labor historian David Brody reminded us that the act had recognized a variety of means for union certification but that, over time, secret ballot elections had become fetishized by the NLRB. Arguing that employers had mastered the art of subverting those elections using union-avoidance consultants, Brody advocated passage of the Employee Free Choice Act (EFCA), which promised to ease unionization by allowing for “card check” certification in place of elections. Legal scholar Charles J. Morris took a different tack, arguing that the Wagner Act had allowed for the recognition of minority unions (that is, unions that represent only a portion of the workers in a given setting) and urging unions to reclaim this forgotten approach. But the EFCA died in a 2010 Senate filibuster, like past labor law reform efforts, and Morris’s minority union argument roused little enthusiasm.

President Barack Obama’s appointees to the NLRB implemented long overdue improvements in the board’s procedures, but moving an ambitious labor law reform agenda was impossible in the aftermath of the disastrous 2010 midterm elections. Those elections propelled to power a determined group of Republican governors, led by Scott Walker of Wisconsin, who unleashed the all-out assault on public-sector unions that will soon culminate in the Janus case. Taking advantage of recession-induced austerity, Walker passed Act 10, which stripped most public-sector unions of the right to bargain collectively or collect agency fees, nearly halving Wisconsin’s unionization rate and helping make the state “right-to-work” by 2015.

In 2012 Supreme Court Justice Samuel Alito joined the battle, intent on repelling what he saw as the illegitimate, decades-long incursion of Wagner Act principles into the public sector. In his opinion in Knox, et al. v. Service Employees International Union, Local 1000, Alito inserted a gratuitous passage urging his colleagues to rethink the Abood precedent. Ironically, Alito’s theory—that agency fees violate workers’ First Amendment rights—found no support from the Court when the libertarian anti-unionist Sylvester Petro argued the Abood case. But times have changed. Oral arguments in Friedrichs v. California Teachers Association in January 2016 suggested that a majority was ready to embrace Alito’s argument. The sudden death of Justice Antonin Scalia a month later deadlocked Friedrichs 4–4, temporarily preserving the status quo. But President Donald Trump’s elevation of the anti-union Neil Gorsuch to the Court suggests that this brief respite will soon end.

 

What now?

With the expungement of Wagner Act principles from the public sector imminent and private-sector unionization rates dwindling, what little is left of the New Deal labor order is in danger of disappearing altogether. Worse, there is no consensus among unions and their allies on the best way forward.

Ideas are not lacking, to be sure. Law professors Catherine Fisk, Ben Sachs, and Xenia Tashlitsky urge unions to give up on the idea of exclusive jurisdiction and pursue efforts to build minority unions. Others, such as the labor lawyer Thomas Geoghegan, and writers Richard Kahlenberg and Moshe Marvit, suggest that we anchor future defenses of workers’ rights in an amended Civil Rights Act, which would include union membership along with race and gender as a category protected from discrimination. Former NLRB member Craig Becker argues for reforming the NLRA by widening our legislative focus to integrate the protection of workers’ rights to organize and bargain with a rationalization of the thicket of under-enforced employment laws that proliferated over the past half-century. A Roosevelt Institute project led by Mark Barenberg of Columbia Law School, meanwhile, has sketched out imaginative legal reforms that would allow workers to bargain across multiple employers, holding the dominant corporate actor in a supply chain accountable for conditions in subcontracted entities.

Yet while creative ideas proliferate, none have yet galvanized labor. Already weakened unions are understandably reluctant to surrender the system of exclusive representation that grew up under the Wagner Act when doing so might open the door to rival minority unions battling for influence in individual workplaces. Union leaders also know that labor law reform is a distant prospect. Defensiveness has therefore replaced the optimism visible across the labor movement only four years ago. In 2013 unions seemed energized: fresh from having helped reelect Barack Obama, the AFL-CIO held an unusually lively convention in Los Angeles that welcomed “alt-labor” organizations such as the National Day Laborer Organizing Network into the gathering; the United Food & Commercial Workers (UFCW) was financing the OUR Walmart campaign; and SEIU’s Fight for $15 movement of fast-food workers was growing.

Fight for $15 activists march in San Francisco, April 4, 2017 (Annette Bernhardt / Flickr)

By contrast, this year’s AFL-CIO convention promises to be a subdued affair after deep cuts to the federation’s staff and recurrent tensions among affiliates over their varying levels of opposition to Trump; the UFCW no longer funds OUR Walmart; and SEIU is scaling back the Fight for $15 to concentrate on a more focused Midwest strategy aimed at rebuilding union influence in the states that delivered the presidency to Trump. Many public-sector unions, meanwhile, are turning inward, feverishly working to convert agency-fee payers into full-fledged union members in hopes of softening the blow Janus seems certain to deliver.

Amid this troubled and uncertain context, we can draw three lessons from the Wagner Act and its history that might help us move past defensiveness and confusion. The first is that any future breakthrough in law will follow and codify changes that workers make on the ground more than it will precede and enable those changes. History suggests that law will not save a labor movement on the defensive. The passage of the Wagner Act itself was made possible by the strike wave of 1934 and workers’ rising expectations that the New Deal ought to give them a voice over their working conditions. Flint militants forced what was once the nation’s largest employer to heed the law even before the Supreme Court determined its constitutionality.

While we should not expect the imminent return of the sit-down strike, pockets of worker resistance and experimentation are even now helping identify potential pillars of a twenty-first century Wagner Act. Legal scholar Kate Andrias has recently argued that vague outlines of a future labor law regime can be discerned in the Obama NLRB’s responses to innovative union campaigns like the Fight for $15. In a case called Browning-Ferris (2015), the NLRB revised its definition of “joint employer” to cover situations where two or more employers “share or codetermine those matters governing the essential terms and conditions of employment,” a decision with huge implications in fast food where franchisors like McDonalds help determine the conditions of employment offered by their franchisees but have thus far avoided legal responsibility for those conditions. In Miller & Anderson (2016), the NLRB went further, holding that unions can represent bargaining units that combine workers of more than one company, including “temp” employees who work side by side with directly employed workers. While these rulings are subject to reversal by a Trump board, their efforts to expand the categories of “employer” and “worker” in response to changes in the economy point toward the sort of law we need.

The agitation of New York City fast-food workers has led to another significant step in the direction of a new bargaining model. On May 30, 2017, the New York City Council adopted a law that gives fast-food employees the ability to make voluntary contributions to not-for-profit organizations of their choice through payroll deductions. The creation of a 501(c)(4) group funded by fast-food workers’ payroll deductions and capable of advocating on their behalf stops well short of giving the workers a collective bargaining vehicle. A 501(c)(4) group would not be able to engage in traditional bargaining. But it does not take much imagination to see how such an organization might lay the experiential basis for a future self-funded union of fast-food employees.

A number of public-sector unions and their allies are also helping point the way toward the future with the Bargaining for the Common Good initiative. Beginning with the Chicago teachers strike in 2012, an increasing number of public-sector unions have built alignments with community allies and used the collective bargaining process as a tool to highlight the extent to which the financialization of the economy has starved the public sector, given rise to an undemocratic austerity politics, and pitted government workers against beleaguered tax payers for the benefit of the “1 percent.” Through this approach, unions are attempting to reach beyond their hard-pressed government employers to bargain with the economic forces that dominate their communities. By bringing their allies to the table with them, they are trying to redefine not only the scope of bargaining, but who gets to bargain. In this way they are modeling the fundamental transformation of bargaining that must take place in the private sector if we are to restore worker bargaining power in an age of hedge funds, private equity, and what Gerald F. Davis aptly calls “management by the markets.”

The second lesson to be drawn from the Wagner Act’s history is that the integrity of any future labor law will depend on its organic connection to other bodies of law and to a larger vision of political economy that reinforces worker bargaining power. The fates of public- and private-sector unions, labor laws, employment laws, and the structure of the larger economy have long been intertwined. The principles of the Wagner Act inspired public-sector labor laws and private-sector union power helped enact those laws; the erosion of private-sector unionism in turn exposed the public sector to the attacks of Scott Walker and Samuel Alito. Similarly, strong unions helped enact employment laws that set minimum standards, but the weakening of unions and ossification of labor law has contributed to the breakdown in enforcement of employment laws, on which workers have been forced to rely in lieu of unions. (One recent study showed that over a five-year period fewer than 4,000 out of more than half a million top twenty fast-food restaurant outlets were inspected for wage and hour violations.) Moreover, the entire structure of the New Deal political economy upon which collective bargaining and humane labor standards had been built—including regulated markets and an expanding welfare state—has given way to neoliberal policies that undercut worker bargaining power in the public and private sectors, exposing glaring weaknesses in both labor and employment law.

These interconnected problems cannot be solved in isolation. Thus while present times would seem to caution against indulging in grand visions, it is crucial that labor and its allies think big. Widening the scale of the fight will not make it any more daunting. After all, opponents have shown that they will implacably resist even modest reforms. Advancing a bigger vision might at least excite rank-and-file workers and labor allies more successfully than past efforts did.

The final lesson is that any effort to remake U.S. labor law must preserve the Wagner Act’s central purpose: to strengthen workers’ bargaining power in ways that deepen democracy. Most labor law reform ideas now afoot focus on protecting the right to organize without reference to democracy, and while Wagner asserted that his bill would promote “industrial democracy,” today’s reformers have yet to formulate an analogous concept for a post-industrial economy. Instead, too many have replaced the worker self-government vision that was central to the Wagner Act with a fundamentally libertarian approach, such as the employee “free choice” argument upon which the EFCA was premised. Unfortunately, that approach has further legitimized the individual rights arguments with which the Supreme Court now threatens to demolish the self-government model of collective bargaining in the public sector in Janus.

While it will not be easy to formulate an analogue to industrial democracy that fits our world of boundaryless workplaces, Uber-ized independent contractors, disaggregated corporations, distended supply chains, subcontracted work, and financialization, it is imperative that we meet that challenge. The promotion of democracy must be central to any real labor reform.

Weeks after the Supreme Court upheld his law, Senator Wagner hoped that as his nation moved forward it would “above all . . . hold fast to the spirit and practice of democracy.” He did not see industrial democracy as an end in itself. Rather, he believed the “struggle for a voice in industry through the processes of collective bargaining is at the heart of the struggle for the preservation of political as well as economic democracy in America.” We would do well to remember his words, for our money-dominated political democracy requires repair every bit as much as workers need to recover their bargaining power. We cannot improve one without the other.

So if the Supreme Court strikes another blow against worker self-government in the Janus case as expected, and we bid adieu to the last vestiges of the New Deal labor order, let us “hold fast to the spirit and practice of democracy,” and turn our efforts to building the twenty-first century order we need.


Joseph A. McCartin is professor of history and executive director of the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University. This article is adapted from “‘As Long as There Survives’: Contemplating the Wagner Act After Eighty Years,” which originally appeared in Labor: Studies in Working-Class History of the Americas 14:2 (May 2017).