The Lost Constitutional Stakes of Labor Unions

Excerpted with permission from Diana S. Reddy, After the Law of Apolitical Economy: Reclaiming the Normative Stakes of Labor Unions, 132 YALE L.J. 1391 (2023)

It is a consequential moment for American labor unions. Over the past decade, public support for labor unions has skyrocketed. Yet even in this moment of renewed public interest, the American conversation about unions remains constrained by the legacy of past legal decisions,...[by what I call] the “the law of apolitical economy.”

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Framing Labor Law for Lochner-Era Courts

The American labor movement of the mid-late 1800s and early 1900s advanced inherently normative claims about the value of unionism. Unions served fundamental American ideals. Early labor leaders spoke of “labor republicanism,” the idea that a democracy required autonomy and self-determination in the economic sphere too. Progressives in the early twentieth century championed an ideal of “industrial democracy,” that workers should have a voice in an otherwise authoritarian workplace. The 1914 Clayton Antitrust Act—labor’s first federal legislative win—insisted that market logic should not trump human rights. It proclaimed: “[T]he labor of a human being is not a commodity or article of commerce.” According to Samuel Gompers, President of the American Federation of Labor, that proclamation was “epochal.” It would, he said, “mark[] the end of the old period where workers were under the shadow of slavery and the beginning of a new period [in which neither] workers nor their labor power are to be regarded as things—the property of another.” Consistent with this view, labor unionists also saw themselves as effectuating constitutional values under the First, Thirteenth, and Fourteenth Amendments to the U.S. Constitution.

But New Dealers hoping to revolutionize American political economy in 1935 were neither labor leaders nor workers. They were politicians, lawyers, and economists with their own agendas, and who knew they would face challenges in effectuating them. Senator Wagner was especially concerned about how the Supreme Court would react to his statute. This was no remote fear. The NLRA was actively under consideration by Congress on May 27, 1935, when the Supreme Court issued three unanimous decisions ruling against the Roosevelt Administration. The last of those, Schechter Poultry Corp. v. United States, invalidated the National Industrial Recovery Act, a law with clear analogues to the NLRA. Wagner acted in the middle of a political revolution that had not yet become a judicial or constitutional revolution. Making legal arguments to courts, he decided, would demand code-switching….

The politicians, lawyers, and economists working on the statute...insisted that the statute be framed as a regulation of commerce….The justification of labor law under the Commerce Clause relied on two main arguments. First, consistent with Secretary Perkins’s vision, it was an “essential economic factor[] for recovery,” rendered logical by the dominant economic views of the time. By increasing worker bargaining power, labor law would increase consumers’ income, stimulating aggregate demand and economic growth. Second, it would promote industrial peace. At a time when workers across the nation were striking, some in increasingly radical ways, deterring strikes with a rationalized collective-bargaining process was also good economic policy.

The preamble to the NLRA reflects the constitutional strategy of its drafters, and it arguably suffers as a result. In the late 1800s and early 1900s, labor’s normative arguments had been a clarion call. In contrast, the preamble to the NLRA reads as somewhat muddled. Its most powerful normative stances are asserted in subordinate clauses. On the way to its macroeconomic concerns, the preamble notes “the inequality of bargaining power” between employers and employees who lack “full freedom of association [and] actual liberty of contract.” But its intervention is premised on the purported economic effect of these infringements, not their inherent injustice. Workers should have equality, freedom, and liberty, because when they do not, it “substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions.”

To be sure, Senator Wagner and his aide Leon Keyserling, the two who together drafted most of the bill, were invested in the law’s broader normative aspirations. They believed there was a moral case for redistribution and were particularly interested in the idea of “worker freedom.” They also believed in the economic arguments. In their minds, the two were complementary. As Keyserling would later reflect: “[W]e were interested in the struggle to be free as well as in the bread and butter issue. I really don’t know whether we explicitly weighed one higher than the other. They were complementary and each fed the other.” It was only in the years that followed that the inherent link between these two justifications would fracture.

The Law of Apolitical Economy

In 1937, the Supreme Court upheld the constitutionality of the NLRA in a decision that reflects all the possibilities and uncertainties of that moment. In NLRB v. Jones & Laughlin Steel Corp., the Court ruled that the NLRA was a reasonable exercise of Congress’s Commerce Clause power. Its reasoning mirrored the statutory preamble—commerce and rights, all at the same time. Consistent with the industrial-peace argument advanced by strategic lawyers, the Court found that strikes had a major impact on commerce, and so Congress could act to deter them. At the same time, the Court opined—for the first and only time in the history of Supreme Court jurisprudence on labor unions—that labor collective action was a “fundamental right.” In 1937, and perhaps only in 1937, unions’ roles in shaping commerce and in advancing rights were allowed to overlap.

One year later, the Court would decide United States v. Carolene Products Co. In it, the Court set forth guiding principles for judicial review in a post-Lochner era. The federal judiciary would reserve searching constitutional scrutiny for those cases in which majoritarian democratic processes might prove insufficient, when legislation affected “discrete and insular minorities” or intruded upon enumerated fundamental rights. In contrast, purely “commercial” regulation would henceforth be presumed not to have constitutional stakes. With this line-drawing, the Court suggested that regulation of the economy should be guided by a particular logic, crafted on a “rational basis” by legislators acting “within their knowledge and experience.” The goal of the Carolene Products framework was to protect statutes like the NLRA from invalidation by hostile courts, through categorically restricting the scope of judicial review over economic legislation. But to do so also meant deconstitutionalizing the stakes of labor unions, walking away from the emergent vision of fundamental union rights set forth in Jones & Laughlin. And as applied, it would mean even more than that, effectively cabining the range of legible normative arguments for labor unions within legal discourse. Labor law would be judged based on its rationality, its consistency with existing knowledge and expertise.

A few years later, the Supreme Court was called upon to adjudicate unions’ actual constitutional rights under the First Amendment, in a case involving peaceful labor picketing. The resulting decision in Thornhill v. Alabama has been heralded as a high point in Constitutional political economy, and it was. Yet the particularities of its reasoning also highlight a real-time shift toward applying the law of apolitical economy to unions, toward purposefully eliding their full normative stakes.

In Thornhill, the Court struck down an Alabama statute that prohibited labor picketing. It did so by equating labor’s interests with business interests, and treating them both as matters of public concern deserving of First Amendment solace. “It is recognized now,” the Court said, that “satisfactory hours and wages and working conditions in industry and a bargaining position which makes these possible have an importance which is not less than the interests of those in the business or industry directly concerned.” This phrasing—“not less than”—was carefully considered. An earlier draft of the opinion said that labor’s importance “transcends” business interests. Three years prior, when labor advocacy was a “fundamental right” all on its own, that might have been the case. But with the Court’s commitment to a deconstitutionalized economy solidified, their language needed to be precise. Good jobs and the freedom and power to fight for them were economic issues; they did not transcend them. In the Court’s pointed “now,” this categorization still worked in labor’s favor. When workers’ interests were seen as integral to the national economy, labor advocacy was a matter of public concern, worthy of First Amendment protection. But it would not always be.

Legal scholar Martha T. McCluskey has described Carolene Products as a constitutional theory that “treats economic justice as discretionary, separate from and subordinate to fundamental constitutional protections for political and civil justice.” And it does so in part through line-drawing. According to the law of apolitical economy, economic issues and sociopolitical ones are not inherently bound together; they are separate categories. The NLRA intimated that unions advanced constitutional values, “actual liberty of contract” and “full freedom of association” within the economic sphere. But Thornhill used the NLRA’s economic justifications to firmly classify labor law on one side of the line. Having drawn that line, the law of apolitical economy then cabined the kinds of justification available. Appropriate regulation of the economy is rational, not moral.

Perhaps unsurprisingly, the Court’s protection of labor speech for its industrial importance did not last long. Over time, the law of apolitical economy would soundly carve out unions’ statutorily defined role from the material and symbolic benefits of constitutional protection under the First Amendment and an evolving constitutional conception of values-based advocacy. In time, I suggest it would also play a role in denying labor’s legibility as a rights-based movement at a time when rights had become the leading normative discourse within American culture and law.

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Under the law of apolitical economy, unions’ core statutory functions—allowing workers to come together to improve their working conditions, full freedom of association and actual liberty of contract—were shorn of their normative importance. They were legally framed as transactional and self-interested. The goal was to give unions more power, to insulate them from potentially hostile courts. But the problem is that if you say something enough times, people start to believe it. Unions and their supporters today still struggle to overcome that construction, to reclaim good jobs and the power to achieve them as a normative good, in and of itself.

Diana S. Reddy will be an Assistant Professor at the University of California, Berkeley, School of Law, starting July 2023. She recently completed her PhD in the University of California, Berkeley’s Jurisprudence and Social Policy Program.

Workers’ Rights