Tag: Labor Law

Labor Law and ‘Takings’ Clause Collide

 

Last week the Supreme Court heard oral argument in the highly contentious case of Cedar Point Nursery v. Hassid. The case lies at the troubled junction of labor and takings law, which operate from fundamentally different premises.

In this instance, state regulations under the California Agricultural Labor Relations Act of 1975 (CALRA) provide that “an agricultural employer’s property shall be available to any one labor organization for no more than four (4) thirty-day periods in any calendar year.” The period of access covers one hour before work, one hour after work, and one hour during lunch for employees to “meet and talk” about union representation.

In this case, however, the United Farm Workers (UFW) entered Cedar Point’s trim sheds one morning at 6 a.m. using bullhorns, during work hours, thereby disrupting the employer’s business operations. That simple action gives rise to two very different claims. The first, and more modest, claim is that the UFW engaged in an unfair labor act under CALRA by going beyond its regulation. The second is that the CALRA itself is unconstitutional. Any trespass onto the employer’s property, which the regulation explicitly authorizes, constitutes a taking of private property, Cedar Point argues, in violation of the Fifth Amendment that provides “nor shall private property be taken for public use without just compensation.”

Richard Epstein reacts to the recent Supreme Court decision in Epic Systems Corp v. Lewis, defending the right of employers to use arbitration and avoid class action lawsuits.

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Back in the summer, the Department of Labor announced a proposed rule change to overtime / hourly wages – effectively forcing all businesses to put any employee under their arbitrary threshold (Approx $50,500) on an hourly pay scale, regardless of their exemption status.  This was targeted to start in 2016.  Is this rule actually going […]

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Scott Walker Talks Turkey on Labor Market Reform

 

shutterstock_280248305One of the central questions of the current Republican presidential campaign is when potential candidates will talk about important issues of political economy. That talk has thus far been in short supply because of the intellectual oxygen that is sucked out of the room every time Donald Trump walks into it. The recent remarks by Wisconsin Governor Scott Walker in union-dominated Las Vegas, however, have begun to change that. They represent his effort to breathe some life into his faltering campaign by harking back to his successful effort to take on public unions in Wisconsin.

High-stakes gambles like this usually lose. Indeed, to everyone’s surprise, Walker seems to have become a long-shot at this point. Nonetheless, even if his latest proposals don’t revive his candidacy, other Republicans should take up this cause. The union movement is powerful and united, but it is also vulnerable to political attack. The forces that led to the adoption of right-to-work laws in Wisconsin, Indiana, and Michigan are good evidence that many voters, including union members, realize that powerful unions are as bad for working people as they are for employers in the long run

Walker is not a theoretical type, so his speech does not offer the intellectual justifications for curbing the union power that has pervaded American life since the passage of the National Labor Relations Act of 1935. The major problem with unions is that they are monopolies. Employment markets need to be competitive, with ease of entry and exit by both firms and individuals. If you keep tabs on employer efforts to monopolize through the antitrust laws and otherwise leave the process free to function, the interplay of market forces will give both workers and employers the opportunity to work together to maximize their joint welfare by figuring ways to expand the pie and then divide the proceeds.

The Hollow Men of the NLRB

 

NLRBlogoT.S. Eliot’s remarkable 1925 poem, “The Hollow Men,” ends with these oft-quoted lines: “This is the way the world ends—Not with a bang, but a whimper.“ Those words capture, in a far less grand context, this week’s decision by the National Labor Relations Board involving the efforts of some Northwestern University varsity football players to organize athletes on scholarship as “statutory employees” protected by the National Labor Relations Act.

Last year, a regional NLRB ruling took the side of the players, a decision that, as I wrote here at the time, was on the shakiest of grounds. There is no reason to rehash those legal arguments, because no one wanted a decision on the merits this week. The key task now is to explore the political forces behind the decision.

NLRB rulings are normally split sharply along party lines. In this case, however, the Board issued a unanimous decision that “it would not effectuate the policies of the Act to assert jurisdiction in this case … even if we assume, without deciding, that the grant-in-aid scholarship players are employees within the meaning of Section 2(3)” of the Act. Their reasoning: because it is clear that the definition of an “employer” under Section 2(2) excludes any state (including any state-run university), any ensuing regulations would apply to teams like Northwestern but not to their public university counterparts, upsetting the competitive balance in college sports. And so it is that a widely heralded decision that gave rise to both great hopes and fears has ended with a jurisdictional whimper.

Uber and the Costs of Employment Regulation

 

shutterstock_251175352Uber and its customers are rightly concerned over a recent ruling out of California that calls into question whether the company’s drivers can continue to be classified as independent contractors. As I note in my new column for Defining Ideas, however, the problem runs much deeper than just the application of California law. The entire legal framework is ill-equipped to deal with the complexities of modern labor markets:

The clear lesson to learn from this fiasco is that it is a hopeless task to apply traditional regulatory structures to modern arrangements, especially when they block the implementation of new business models. Indeed, it is necessary to go one step further: it makes no sense to apply these regulatory statutes to older businesses, too. Time after time, these statutes are drafted with some “typical” arrangement in mind, only for the drafters to discover that they must also try to apply the statutes to nonstandard transactions that do not fit within the mold. Rigidity is not just a problem today. It was a problem with the [Fair Labor Standards Act] and other New Deal labor statutes even when they were first passed.

This point is unfortunately lost on a lot of modern commentators who think that their real challenge is only to update the employment laws for the sharing economy, rather than scrap them altogether. For example, James Surowiecki, writing in the New Yorker, comes out in favor of “Gigs with Benefits,” a great title for a bad idea. He rightly notes the scads of critics who claim that Uber is disguising its employees as independent contractors are wrong, and he recognizes that calling Uber drivers employees could be the death knell for many of these gigs.

The NLRB, Northwestern Football, and the Theater of the Absurd

 

footballsThis is a case where the caption says it all. The National Labor Relations Board’s decision as to whether football players at Northwestern University can unionize is introduced in the opinion as “Northwestern University — Employer, and College Athletes Player Association — petitioner.” That simple but bold verbal stroke renders the rest of NLRB Regional Director Peter Sung Ohr’s decision largely redundant. If Northwestern is classified as an employer, how then can the football players be anything other than employees? And, if they are employees, then surely they have the power to form a union or players’ association under the aegis of the Act.

Taken in this robotic fashion, a major question of labor policy is reduced to a mindless syllogism that manages to ignore all the difficult institutional issues on this case, some of which I addressed in my earlier Ricochet post on this question, soberly entitled “No Good Answers on Reforming College Sports.” What is striking about the long but aimless opinion of Regional Director Ohr is that it is virtually devoid of any serious examination of the difficult issues that are involved here.

The opinion is roughly divided into two parts. The first half is a detailed (indeed, tedious) examination of all the strict controls that Northwestern University imposes on its football players before, during, and after the football season. The purpose of this demonstration is to tell us what we already know: that the students who receive football scholarships are subject to strict oversight with respect to every aspect of their behavior. We should hardly expect less.