The Labor Policy of the Free Society
18. Free Collective Bargaining
On no subject in labor relations, indeed, is there as widespread agreement as there is in regard to the desirability of free collective bargaining. Union officers, employers, and labor relations specialists have all repeatedly announced allegiance to this principle; and labor law itself has long been evolving naturally toward according it a prominent role. Despite the agreement in principle and the long-run evolutionary trend, however, the current status of collective-bargaining law and practice leaves a great deal to be desired. Not every one means the same thing when he advocates “free collective bargaining.” Moreover, a number of prevailing legal rules are inconsistent with “free collective bargaining.”
This chapter is designed to offer a meaningful conception of free collective bargaining, to describe the more important departures from that conception in current law and practice, and to indicate the kinds of measures necessary to effectuate a policy of genuinely free collective bargaining. The thesis is, quite simply, that there are no insuperable problems in the creation and enforcement of a collective-bargaining policy in all respects consistent with the theory of the free society. The basic rules necessary to such a policy are simple, clear, and workable. Only understanding and will are needed to make collective bargaining a vital, fruitful institution of the free society.
Employer and Union Restraints
A free market is the essential prerequisite to free collective bargaining. In an environment other than that of the free market, the term “free collective bargaining” is an idle and even deceptive abstraction, useful only to distort and misrepresent issues. Although achievement of a free market in labor relations depends to some extent upon the elimination of governmental intervention in collective bargaining, it depends mainly and more immediately upon the prevention of employer and trade-union interference with the market.
The free market can provide the means of civilized settlement of even the most complicated industrial disputes. If it is to do so, however, all violent, coercive, and monopolistic interference in its operation, whether by unions or employers, must be eliminated.
The economic issues in labor disputes can be satisfactorily solved only in a peaceful environment, for a satisfactory solution is one which accords with the wishes and desires of the employer and the employees immediately involved. If the employer is privileged to use force and violence as means of compelling the employees to work under terms unsatisfactory to them, it must be perfectly obvious to all that the underlying dispute has not been resolved in any enduring and satisfying way and that there has been no free collective bargaining. Hence every effort must be bent toward the elimination of employer compulsion and coercion in labor disputes.
No tenable argument can be advanced in support of a “right” in organized workers to picket in numbers. Such picketing can be designed only to frighten people. If the union and the organized workers wish to advise, observe, and persuade only, they should welcome a law which proscribes all picketing in numbers, for such picketing only interferes with and confuses advice, observation, and persuasion. One or two persons, or even a large sign, posted at each entrance to struck premises will not frighten anyone or obscure the events which are to be observed. Observation and persuasion proceed satisfactorily in a calm and peaceful atmosphere; they are impossible in an atmosphere of turbulence and fright.
Perhaps we as a nation will never take the steps necessary to establish civilization in labor disputes. But if we fail in this it will not be to our credit. Failure in this project will not be a glowing tribute to our “sympathy for the underdog”; for the underdog in picket-line violence is always the man who is frightened, hurt, or killed. That man, if he understands the situation accurately, will know that his society has failed him by its refusal effectively to prevent so atavistic an enemy of civilization as the picket line. With respect to the members of society as a whole, the refusal must reflect itself in all the undesirable consequences which flow from the absence of a free market and free collective bargaining.
The equivalent of the strikers’ access to a free market is the access of employers to all alternatives available in a free market during a strike. When an employer seeks replacements for strikers, or when he asks another employer to take over services or production interrupted by a strike, he is exercising exactly the same right which strikers do in seeking other employment during a strike. The replacements who seek the work vacated by the strikers are also exercising the same basic property right. And the businessmen who agree to take over functions from the struck employer are likewise exercising the property right which is the basis of the free market. To permit a union to block the access of a struck employer to these free-market alternatives is to give that union the privilege of destroying the free market—the privilege, in short, of expropriating the struck employer, the striker-replacements, and the outside businessmen who are strangers to the labor dispute.
These decisions, since they are wrong in terms of both general principle and law, should of course be abandoned. Once the federal courts understand that the limitation of union coercion of outsiders is balanced by the proscription of employer coercion or blacklisting of strikers, they may well abandon their erroneous interpretation on their own motion. In any event, the proposal already made in Chapter 17 is designed to correct this misapplication of law and principle.
Governmental Restraints
All interventionism affects labor relations and collective bargaining to some degree. High, discriminatory corporate and personal income taxes impede capital formation, industrial growth, and competition. They thus influence the general environment of collective bargaining by limiting the alternatives available to workers; and the consequent tendency for wages to be lower than they otherwise might be tends to reduce standards of living. Tariffs and other subsidies tend likewise to impoverish everyone, and often bear intimately upon labor relations problems. The maritime industry offers a significant example. There, subsidies of one kind and another to American shipowners have weakened their resistance to the antisocial, coercive, and monopolistic pressures exerted by the maritime trade unions. The result has been a wage structure for maritime workers which bears no relationship to reality, which has made competition between American and foreign shipowners a joke, and which, in normal and expectable fashion, has continuously evoked more and ever more tortuous forms of interventionism. Another obvious result has been the underemployment of American seamen.
We must confine ourselves here, however, to interventionism as it relates directly to labor relations and collective bargaining; for that type of interventionism presents difficulties and complexities enough. As has been shown in Chapters 12-15, governmental intervention in the collective-bargaining process takes an extreme variety of forms. It has tended to give large, affiliated unions advantages over smaller, independent unions; and the effect of complex and detailed regulations of the negotiation aspects of the bargaining process has been to hamper the resistance of employers to union pressures.
Fundamentally, terms and conditions of employment are a resultant of the combined effect of general market factors: the desires of and alternatives available to employees, prevailing fashions and trends as regards employment terms and conditions, the market position of the employer, and the productivity of the employer and his employees. Political interventionism, unless it goes so far as to subsidize the employer or the employees directly, can have no very great substantive effect upon employment terms or conditions. It serves mainly to confuse and to debilitate collective bargaining and employer-union-employee relations.
A consequence reasonably to be expected of a limited bargaining requirement is that the institution of collective bargaining will develop more naturally, and that it will become a more effective instrument of establishing wages and working conditions, than under a regime of governmental intervention.
It need scarcely be added here, after the discussion in Chapter 15, that collective bargaining should be left free of governmental intervention even in industry-wide labor disputes. The present law, providing for “cooling-off” periods, involves about as much governmental regulation as is consistent with free collective bargaining. To go any further would be to supplant the free market with a rigged market—rigged against employers in most cases, probably, but quite possibly against organized workers when political conditions are propitious. Industry-wide strikes can cause a great deal of inconvenience and even tragic harm. Yet these are less to be dreaded than the consequences of governmental intervention.
Mr. Truman’s insistence that his conduct did not amount to expropriation must of course not be allowed to modify the facts. His conduct, whatever he might say about it, may be fairly defined as an attempt at expropriation. For an integral aspect of the right of private property is the ability to put a value upon one’s goods or services and to control the disposition of the objects of one’s property rights; and thus when Mr. Truman “seized” the steel companies, he intended to exercise the control which the right of private property vests in the owners of goods, services, and means of production.
Mr. Truman’s analysis of the facts and circumstances may tend to divert attention from the real problems and consequences involved in governmental intervention in the collective-bargaining process. But a firm grip on the main point will emphasize the fact that in the steel dispute an attempt was made to impose prices, wages, and working conditions by political fiat. That the political force then in power happened to find the union’s position the more attractive one is interesting; but in terms of the larger analysis, it is only a relatively unimportant detail. The important consideration lies in the expropriation inherent in the abrogation of free collective bargaining. Intervention into the collective-bargaining process means both expropriation and the end of free collective bargaining.
The current structure of unionization and the current deficiencies in the controls over abuse of power by union leaders lead to industry-wide labor disputes and create great temptations to political intervention. These temptations must be resisted if we are to have a viable collective-bargaining policy. The only satisfactory long-run solution is a structure of unionism which reflects more the desires and interests of workers and less the power motivations of union officials. The hope for such a structure rests essentially in vigorous promotion of the principle of free employee choice.
Anyone who correctly understands the consequences reasonably to be expected of a departure from the current rule must resist these pressures if he is in favor of free collective bargaining. The proposed revision would tend to make union leaders even more careless than they are now in calling strikes. Under the current rule, a union leader takes a real risk of losing his own influence if he errs too badly in his leadership. It is true that union leaders never suffer as badly during strikes as the strikers themselves do; the union leader’s salary usually continues. Still, the current rule does tend to impose a functional, structural check upon union leadership. The union leader may lose his representative status if he errs too badly in calling a strike when many are unemployed, and if he persists in that error.
Objectors to this check upon the abuse of union power contend that it gives employers the power to defeat unionization. The argument is that since under current law an employer has the right to ask for a representative election whenever a controversy concerning the representation of his employees arises, employers will demand elections as soon as they have hired replacements for strikers. The replacements will naturally vote against the union which has called the strike, and, since the strikers will not be eligible to vote in the election, the striking union will be defeated.
This account of the character of representation proceedings reveals the true nature of the demand for a change in the present rules. The demand for a change is, properly understood, a demand for a special privilege. It is a demand by unions for the special privilege to make mistakes without incurring any penalties. More important than that, it is a demand for the special privilege of frustrating free employee choice. It is entirely accurate to say that unions, in seeking a revision of the current eligibility rules, are insisting that they should have the privilege of stuffing the ballot boxes in representation elections.
The current rule is vitally necessary to the integrity of the principle of free employee choice. Abandoning this rule will mean in effect that employees in a bargaining unit do not have the right of self-determination. Again, abandonment will tend to encourage stupid and arrogant conduct by union leaders; it will relieve them of a part of the responsibility to exercise with care their power to call strikes. To do this would be the equivalent of saying to businessmen that they may carelessly raise prices without the fear that they will lose their positions on the market if they do so. The interests in free employee choice, in free collective bargaining, and in the encouragement of responsible union leadership all converge in favor of the present rule declaring strikers ineligible to vote in elections in bargaining units where they are not employed.
Respect for Collective Agreements
If collective bargaining is to occupy a respected status in the community, its most significant product, the collective agreement, must be scrupulously honored and enforced. Disrespect for collective agreements by the parties who make them, or a legal status shrouded in ambiguity, must necessarily redound in the long run to the disadvantage of the whole institution of collective bargaining. Those who are in favor of collective bargaining, therefore, must insist upon a status for the collective agreement comparable to the status of traditional contracts.
A coherent collective-bargaining policy requires reversal of the Supreme Court’s narrow construction. The Taft-Hartley Act should be amended to state clearly that the federal courts have jurisdiction to apply the general law of contracts to collective agreements, and that unions, employers, and employees may bring suit for any violation of a collective agreement. The law should be amended also to provide explicitly that the jurisdiction of the federal courts extends to the issuance of injunctive relief in appropriate cases involving the violation of collective agreements. These proposals would bring to collective bargaining the same rules and principles which the common law has been developing for centuries in regard to other contractual relationships. The law of labor relations has been a heavy loser as a result of its long divorcement from the general law. A sensible policy in the circumstances requires that the losses be cut—that, wherever possible, the law of labor relations become an integral part of the general law.
