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United States labor law sets the rights and duties for employees,
labor unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits (su ...
, and
employer Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any o ...
s in the United States. Labor law's basic aim is to remedy the "
inequality of bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater p ...
" between employees and employers, especially employers "organized in the
corporate A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
or other forms of ownership association". Over the 20th century, federal law created minimum social and economic rights, and encouraged state laws to go beyond the minimum to favor employees. The Fair Labor Standards Act of 1938 requires a federal
minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. B ...
, currently $7.25 but higher in 29 states and D.C., and discourages working weeks over 40 hours through time-and-a-half overtime pay. There is no federal law, and few state laws, requiring paid holidays or
paid family leave Parental leave, or family leave, is an employee benefit available in almost all countries. The term "parental leave" may include maternity, Paternity (law), paternity, and adoption leave; or may be used distinctively from "maternity leave" an ...
. The
Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. The FMLA was a major part of President Bill C ...
creates a limited right to 12 weeks of unpaid leave in larger employers. There is no automatic right to an occupational pension beyond federally guaranteed
Social Security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
, but the
Employee Retirement Income Security Act of 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
requires standards of prudent management and good governance if employers agree to provide pensions, health plans or other benefits. The
Occupational Safety and Health Act of 1970 The Occupational Safety and Health Act of 1970 is a US labor law governing the federal law of occupational health and safety in the private sector and federal government in the United States. It was enacted by Congress in 1970 and was signed by ...
requires employees have a safe system of work. A
contract of employment An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old ...
can always create better terms than statutory minimum rights. But to increase their
bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
to get better terms, employees organize labor unions for
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
. The
Clayton Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipi ...
guarantees all people the right to organize, and the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
creates rights for most employees to organize without detriment through
unfair labor practices An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator R ...
. Under the
Labor Management Reporting and Disclosure Act of 1959 The Labor Management Reporting and Disclosure Act of 1959 (also "LMRDA" or the Landrum–Griffin Act), is a US labor law that regulates labor unions' internal affairs and their officials' relationships with employers. Background After enactment ...
, labor union governance follows democratic principles. If a majority of employees in a workplace support a union, employing entities have a duty to bargain in
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
. Unions can take collective action to defend their interests, including withdrawing their labor on strike. There are not yet general rights to directly participate in enterprise governance, but many employees and unions have experimented with securing influence through pension funds, and representation on
corporate A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
boards. Since the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
, all employing entities and labor unions have a duty to treat employees equally, without discrimination based on "race, color, religion, sex, or national origin". There are separate rules for sex discrimination in pay under the
Equal Pay Act of 1963 The Equal Pay Act of 1963 is a United States labor law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex (see gender pay gap). It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Fro ...
. Additional groups with "protected status" were added by the
Age Discrimination in Employment Act of 1967 The Age Discrimination in Employment Act of 1967 (ADEA; to ) is a United States labor law that forbids employment discrimination against anyone, at least 40 years of age, in the United States (see ). In 1967, the bill was signed into law by Pr ...
and the
Americans with Disabilities Act of 1990 The Americans with Disabilities Act of 1990 or ADA () is a civil rights law that prohibits discrimination based on disability. It affords similar protections against discrimination to Disability in the United States, Americans with disabilities ...
. There is no federal law banning all sexual orientation or
identity Identity may refer to: * Identity document * Identity (philosophy) * Identity (social science) * Identity (mathematics) Arts and entertainment Film and television * ''Identity'' (1987 film), an Iranian film * ''Identity'' (2003 film), an ...
discrimination, but 22 states had passed laws by 2016. These equality laws generally prevent discrimination in hiring, terms of employment, and make discharge because of a protected characteristic unlawful. There is no federal law against unjust discharge, and most states also have no law with full protection against wrongful
termination of employment Termination of employment or separation of employment is an employee's departure from a job and the end of an employee's duration with an employer. Termination may be voluntary on the employee's part, or it may be at the hands of the employer, of ...
.
Collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
made by labor unions and some individual contracts require people are only discharged for a " just cause". The
Worker Adjustment and Retraining Notification Act of 1988 The Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") is a U.S. labor law that protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance ...
requires employing entities give 60 days notice if more than 50 or one third of the workforce may lose their jobs. Federal law has aimed to reach
full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. F ...
through
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for federal funds, very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money s ...
and spending on infrastructure. Trade policy has attempted to put labor rights in international agreements, to ensure open markets in a
global economy The world economy or global economy is the economy of all humans of the world, referring to the global economic system, which includes all economic activities which are conducted both within and between nations, including production, consumptio ...
do not undermine
fair A fair (archaic: faire or fayre) is a gathering of people for a variety of entertainment or commercial activities. Fairs are typically temporary with scheduled times lasting from an afternoon to several weeks. Types Variations of fairs incl ...
and
full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. F ...
.


History

Modern US labor law mostly comes from statutes passed between
1935 Events January * January 7 – Italian premier Benito Mussolini and French Foreign Minister Pierre Laval conclude an agreement, in which each power agrees not to oppose the other's colonial claims. * January 12 – Amelia Earhart ...
and
1974 Major events in 1974 include the aftermath of the 1973 oil crisis and the resignation of United States President Richard Nixon following the Watergate scandal. In the Middle East, the aftermath of the 1973 Yom Kippur War determined politics; ...
, and changing interpretations of the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
. However, laws regulated the rights of people at work and employers from colonial times on. Before the
Declaration of Independence A declaration of independence or declaration of statehood or proclamation of independence is an assertion by a polity in a defined territory that it is independent and constitutes a state. Such places are usually declared from part or all of th ...
in 1776, the
common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omniprese ...
was either uncertain or hostile to labor rights. Unions were classed as conspiracies, and potentially criminal. It tolerated
slavery Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
and
indentured servitude Indentured servitude is a form of labor in which a person is contracted to work without salary for a specific number of years. The contract, called an " indenture", may be entered "voluntarily" for purported eventual compensation or debt repayme ...
. From the
Pequot War The Pequot War was an armed conflict that took place between 1636 and 1638 in New England between the Pequot tribe and an alliance of the colonists from the Massachusetts Bay, Plymouth, and Saybrook colonies and their allies from the Narraga ...
in
Connecticut Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the ...
from 1636 onwards, Native Americans were enslaved by European settlers. More than half of the European immigrants arrived as prisoners, or in
indentured servitude Indentured servitude is a form of labor in which a person is contracted to work without salary for a specific number of years. The contract, called an " indenture", may be entered "voluntarily" for purported eventual compensation or debt repayme ...
, where they were not free to leave their employers until a debt bond had been repaid. Until its abolition, the
Atlantic slave trade The Atlantic slave trade, transatlantic slave trade, or Euro-American slave trade involved the transportation by slave traders of enslaved African people, mainly to the Americas. The slave trade regularly used the triangular trade route and ...
brought millions of Africans to do forced labor in the Americas. However, in 1772, the
English English usually refers to: * English language * English people English may also refer to: Peoples, culture, and language * ''English'', an adjective for something of, from, or related to England ** English national ...
Court of King's Bench held in '' Somerset v Stewart'' that slavery was to be presumed unlawful at common law. Charles Stewart from
Boston Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...
,
Massachusetts Massachusetts (Massachusett: ''Muhsachuweesut Massachusett_writing_systems.html" ;"title="nowiki/> məhswatʃəwiːsət.html" ;"title="Massachusett writing systems">məhswatʃəwiːsət">Massachusett writing systems">məhswatʃəwiːsət'' En ...
had bought
James Somerset James Somerset ( – after 1772) was an African man and the plaintiff in a pivotal court case that confirmed that slavery was not legal in England and Wales. Biography Somerset was born in West Africa around 1741. He was captured when he was about ...
as a slave and taken him to
England England is a country that is part of the United Kingdom. It shares land borders with Wales to its west and Scotland to its north. The Irish Sea lies northwest and the Celtic Sea to the southwest. It is separated from continental Europe ...
. With the help of
abolitionists Abolitionism, or the abolitionist movement, is the movement to end slavery. In Western Europe and the Americas, abolitionism was a historic movement that sought to end the Atlantic slave trade and liberate the enslaved people. The Britis ...
, Somerset escaped and sued for a writ of ''
habeas corpus ''Habeas corpus'' (; from Medieval Latin, ) is a recourse in law through which a person can report an unlawful detention or imprisonment to a court and request that the court order the custodian of the person, usually a prison official, ...
'' (that "holding his body" had been unlawful).
Lord Mansfield William Murray, 1st Earl of Mansfield, PC, SL (2 March 170520 March 1793) was a British barrister, politician and judge noted for his reform of English law. Born to Scottish nobility, he was educated in Perth, Scotland, before moving to Lond ...
, after declaring he should "
let justice be done whatever be the consequence ''Fīat jūstitia ruat cælum'' is a Latin legal phrase, meaning "Let justice be done though the heavens fall." The maxim signifies the belief that justice must be realized regardless of consequences. According to the 19th-century abolitionist ...
", held that slavery was "so odious" that nobody could take "a slave by force to be sold" for any "reason whatever". This was a major grievance of southern slave owning states, leading up to the
American Revolution The American Revolution was an ideological and political revolution that occurred in British America between 1765 and 1791. The Americans in the Thirteen Colonies formed independent states that defeated the British in the American Revoluti ...
in 1776. The 1790 United States Census recorded 694,280 slaves (17.8 per cent) of a total 3,893,635 population. After independence, the
British Empire The British Empire was composed of the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts e ...
halted the
Atlantic slave trade The Atlantic slave trade, transatlantic slave trade, or Euro-American slave trade involved the transportation by slave traders of enslaved African people, mainly to the Americas. The slave trade regularly used the triangular trade route and ...
in
1807 Events January–March * January 7 – The United Kingdom of Great Britain and Ireland issues an Order in Council prohibiting British ships from trading with France or its allies. * January 20 – The Sierra Leone Company, faced with ...
, and abolished slavery in its own territories, by paying off slave owners in
1833 Events January–March * January 3 – Reassertion of British sovereignty over the Falkland Islands in the South Atlantic. * February 6 – His Royal Highness Prince Otto Friedrich Ludwig of Bavaria assumes the title His Majesty Othon the ...
. In the US, northern states progressively abolished slavery. However, southern states did not. In '' Dred Scott v Sandford'' the Supreme Court held the federal government could not regulate slavery, and also that people who were slaves had no legal rights in court. The
American Civil War The American Civil War (April 12, 1861 – May 26, 1865; also known by Names of the American Civil War, other names) was a civil war in the United States. It was fought between the Union (American Civil War), Union ("the North") and t ...
was the result.
President Lincoln Abraham Lincoln ( ; February 12, 1809 – April 15, 1865) was an American lawyer, politician, and statesman who served as the 16th president of the United States from 1861 until his assassination in 1865. Lincoln led the nation thro ...
's
Emancipation Proclamation The Emancipation Proclamation, officially Proclamation 95, was a presidential proclamation and executive order issued by United States President Abraham Lincoln on January 1, 1863, during the American Civil War, Civil War. The Proclamation c ...
in 1863 made abolition of slavery a war aim, and the Thirteenth Amendment of 1865 enshrined the abolition of most forms of slavery in the Constitution. Former slave owners were further prevented from holding people in involuntary servitude for debt by the
Peonage Act of 1867 The Peonage Abolition Act of 1867 was an Act passed by the U.S. Congress on March 2, 1867, that abolished peonage in the New Mexico Territory and elsewhere in the United States. Designed to help enforce the Thirteenth Amendment, the Act declare ...
. In 1868, the Fourteenth Amendment ensured equal access to justice, and the Fifteenth Amendment required that everyone would have the right to vote. The
Civil Rights Act of 1875 The Civil Rights Act of 1875, sometimes called the Enforcement Act or the Force Act, was a United States federal law enacted during the Reconstruction era in response to civil rights violations against African Americans. The bill was passed by the ...
was also meant to ensure equality in access to housing and transport, but in the ''
Civil Rights Cases The ''Civil Rights Cases'', 109 U.S. 3 (1883), were a group of five landmark cases in which the Supreme Court of the United States held that the Thirteenth and Fourteenth Amendments did not empower Congress to outlaw racial discrimination by pr ...
'', the Supreme Court found it was "unconstitutional", ensuring that racial segregation would continue. In dissent,
Harlan J John Marshall Harlan (June 1, 1833 – October 14, 1911) was an American lawyer and politician who served as an associate justice of the U.S. Supreme Court from 1877 until his death in 1911. He is often called "The Great Dissenter" due to his ...
said the majority was leaving people "practically at the mercy of corporations". Even if people were formally free, they remained factually dependent on
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
owners for work, income and basic services. Like slavery, common law repression of labor unions was slow to be undone. In 1806, '' Commonwealth v Pullis'' held that a
Philadelphia Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Since ...
shoemakers union striking for higher wages was an illegal "conspiracy", even though
corporations A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
—combinations of employers—were lawful. Unions still formed and acted. The first federation of unions, the
National Trades Union The National Trades' Union was the first federation of labor unions in the United States. It was established in 1834, but collapsed during the Panic of 1837 The Panic of 1837 was a financial crisis in the United States that touched off a major d ...
was established in 1834 to achieve a 10 hour working day, but it did not survive the soaring unemployment from the financial
Panic of 1837 The Panic of 1837 was a financial crisis in the United States that touched off a major depression, which lasted until the mid-1840s. Profits, prices, and wages went down, westward expansion was stalled, unemployment went up, and pessimism abound ...
. In 1842, '' Commonwealth v Hunt'', held that ''Pullis'' was wrong, after the Boston Journeymen Bootmakers' Society struck for higher wages. The first instance judge said unions would "render property insecure, and make it the spoil of the multitude, would annihilate property, and involve society in a common ruin". But in the
Massachusetts Supreme Judicial Court The Massachusetts Supreme Judicial Court (SJC) is the highest court in the Commonwealth of Massachusetts. Although the claim is disputed by the Supreme Court of Pennsylvania, the SJC claims the distinction of being the oldest continuously func ...
, Shaw CJ held people "are free to work for whom they please, or not to work, if they so prefer" and could "agree together to exercise their own acknowledged rights, in such a manner as best to subserve their own interests." This stopped criminal cases, although civil cases persisted. In 1869 an organisation called the
Knights of Labor Knights of Labor (K of L), officially Noble and Holy Order of the Knights of Labor, was an American labor federation active in the late 19th century, especially the 1880s. It operated in the United States as well in Canada, and had chapters also ...
was founded by Philadelphia artisans, joined by miners 1874, and urban tradesmen from 1879. It aimed for racial and gender equality, political education and cooperative enterprise, yet it supported the Alien Contract Labor Law of 1885 which suppressed workers migrating to the US under a contract of employment. Industrial conflicts on
railroads Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a prep ...
and
telegraphs Telegraphs were an alternative rock band based in Brighton, England. Biography Formed in 2005, Telegraphs was made up of members Darcy Harrison (vocals), Hattie Williams (bass/vocals), Sam Bacon (drums), Darren LeWarne (guitar) and Aung Yay ( ...
from 1883 led to the foundation of the
American Federation of Labor The American Federation of Labor (A.F. of L.) was a national federation of labor unions in the United States that continues today as the AFL-CIO. It was founded in Columbus, Ohio, in 1886 by an alliance of craft unions eager to provide mutua ...
in 1886, with the simple aim of improving workers wages, housing and job security "here and now". It also aimed to be the sole federation, to create a strong, unified labor movement. Business reacted with litigation. The
Sherman Antitrust Act of 1890 The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author. T ...
, which was intended to sanction business cartels acting in
restraint of trade Restraints of trade is a common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. It is a precursor of modern competition law. In an old leading case of ''Mitchel v Reynolds'' (1711) Lord Sm ...
, was applied to labor unions. In 1895, the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
in ''
In re Debs ''In re Debs'', 158 U.S. 564 (1895), was a US labor law case of the Supreme Court of the United States, United States Supreme Court decision handed down concerning Eugene V. Debs and trade union, labor unions. Background Eugene V. Debs, president ...
'' affirmed an injunction, based on the Sherman Act, against the striking workers of the
Pullman Company The Pullman Company, founded by George Pullman, was a manufacturer of railroad cars in the mid-to-late 19th century through the first half of the 20th century, during the boom of railroads in the United States. Through rapid late-19th century ...
. The strike leader
Eugene Debs Eugene may refer to: People and fictional characters * Eugene (given name), including a list of people and fictional characters with the given name * Eugene (actress) (born 1981), Kim Yoo-jin, South Korean actress and former member of the sin ...
was put in prison. In notable dissent among the judiciary, Holmes J argued in '' Vegelahn v Guntner'' that any union taking
collective action Collective action refers to action taken together by a group of people whose goal is to enhance their condition and achieve a common objective. It is a term that has formulations and theories in many areas of the social sciences including psyc ...
in
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
was lawful: even if strikes caused economic loss, this was equally legitimate as economic loss from corporations competing with one another. Holmes J was elevated to the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
, but was again in a minority on labor rights. In 1905, '' Lochner v New York'' held that
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
limiting bakers' working day to 60 hours a week violated employers'
freedom of contract Freedom of contract is the process in which individuals and groups form contracts without government restrictions. This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on pri ...
. The Supreme Court majority supposedly unearthed this "right" in the Fourteenth Amendment, that no State should "deprive any person of life, liberty, or property, without due process of law." With
Harlan J John Marshall Harlan (June 1, 1833 – October 14, 1911) was an American lawyer and politician who served as an associate justice of the U.S. Supreme Court from 1877 until his death in 1911. He is often called "The Great Dissenter" due to his ...
, Holmes J dissented, arguing that the "
constitution A constitution is the aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organisation or other type of entity and commonly determine how that entity is to be governed. When these pr ...
is not intended to embody a particular economic theory" but is "made for people of fundamentally differing views". On questions of social and economic policy, courts should never declare legislation "unconstitutional". The Supreme Court, however, accelerated its attack on labor in ''
Loewe v. Lawlor ''Loewe v. Lawlor'', 208 U.S. 274 (1908), also referred to as the Danbury Hatters' Case, is a United States Supreme Court case in United States labor law concerning the application of antitrust laws to labor unions. The Court's decision effectivel ...
'', holding that triple damages were payable by a striking union to its employers under the Sherman Act of 1890. This line of cases was finally quashed by the
Clayton Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipi ...
§6. This removed labor from
antitrust law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
, affirming that the " labor of a human being is not a commodity or article of commerce" and nothing "in the antitrust laws" would forbid the operation of labor organizations "for the purposes of mutual help". Throughout the early 20th century, states enacted labor rights to advance social and economic progress. But despite the
Clayton Act The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipie ...
, and abuses of employers documented by the ''
Commission on Industrial Relations The Commission on Industrial Relations (also known as the Walsh Commission) p. 12. was a commission created by the U.S. Congress on August 23, 1912, to scrutinize US labor law. The commission studied work conditions throughout the industrial Uni ...
'' from 1915, the Supreme Court struck labor rights down as unconstitutional, leaving management powers virtually unaccountable. In this ''
Lochner era The ''Lochner'' era is a period in American legal history from 1897 to 1937 in which the Supreme Court of the United States is said to have made it a common practice "to strike down economic regulations adopted by a State based on the Court's o ...
'', the Courts held that employers could force workers to not belong to labor unions, that a minimum wage for women and children was void, that states could not ban
employment agencies An employment agency is an organization which matches employers to employees. In developed countries, there are multiple private businesses which act as employment agencies and a publicly-funded employment agency. Public employment agencies One ...
charging fees for work, that workers could not strike in solidarity with colleagues of other firms, and even that the federal government could not ban child labor. It also imprisoned socialist activists, who opposed the fighting in
World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...
, meaning that
Eugene Debs Eugene may refer to: People and fictional characters * Eugene (given name), including a list of people and fictional characters with the given name * Eugene (actress) (born 1981), Kim Yoo-jin, South Korean actress and former member of the sin ...
ran as the Socialist Party's candidate for
President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university * President (government title) President may also refer to: Automobiles * Nissan President, a 1966–2010 Japanese ...
in
1920 Events January * January 1 ** Polish–Soviet War in 1920: The Russian Red Army increases its troops along the Polish border from 4 divisions to 20. ** Kauniainen, completely surrounded by the city of Espoo, secedes from Espoo as its own ma ...
from prison. Critically, the courts held state and federal attempts to create Social Security to be unconstitutional. Because they were unable to save in safe public pensions, millions of people bought shares in corporations, causing massive growth in the
stock market A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, ...
. Because the Supreme Court precluded regulation for good information on what people were buying, corporate promoters tricked people into paying more than stocks were really worth. The
Wall Street Crash of 1929 The Wall Street Crash of 1929, also known as the Great Crash, was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended late in October, when share prices on the New York Stock Exchange coll ...
wiped out millions of people's savings. Business lost investment and fired millions of workers. Unemployed people had less to spend with businesses. Business fired more people. There was a downward spiral into the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
. This led to the election of Franklin D. Roosevelt for president in 1932, who promised a "
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Con ...
". Government committed to create
full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. F ...
and a system of social and economic rights enshrined in federal law. But despite the Democratic Party's overwhelming electoral victory, the Supreme Court continued to strike down legislation, particularly the
National Industrial Recovery Act of 1933 The National Industrial Recovery Act of 1933 (NIRA) was a US labor law and consumer law passed by the 73rd US Congress to authorize the president to regulate industry for fair wages and prices that would stimulate economic recovery. It also ...
, which regulated enterprise in an attempt to ensure fair wages and prevent
unfair competition Unfair may refer to: * Double Taz and Double LeBron James in multiverses ''fair''; unfairness or injustice Injustice is a quality relating to unfairness or undeserved outcomes. The term may be applied in reference to a particular event or situ ...
. Finally, after Roosevelt's second overwhelming victory in 1936, and Roosevelt's threat to create more judicial positions if his laws were not upheld, one Supreme Court judge switched positions. In '' West Coast Hotel Co v Parrish'' the Supreme Court found that
minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. B ...
legislation was constitutional, letting the
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Con ...
go on. In labor law, the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
guaranteed every employee the right to unionize, collectively bargain for fair wages, and take collective action, including in solidarity with employees of other firms. The Fair Labor Standards Act of 1938 created the right to a minimum wage, and time-and-a-half
overtime Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways: *by custom (what is considered healthy or reasonable by society) ...
pay if employers asked people to work over 40 hours a week. The
Social Security Act of 1935 The Social Security Act of 1935 is a law enacted by the 74th United States Congress and signed into law by US President Franklin D. Roosevelt. The law created the Social Security program as well as insurance against unemployment. The law was p ...
gave everyone the right to a basic pension and to receive insurance if they were unemployed, while the
Securities Act of 1933 The Securities Act of 1933, also known as the 1933 Act, the Securities Act, the Truth in Securities Act, the Federal Securities Act, and the '33 Act, was enacted by the United States Congress on May 27, 1933, during the Great Depression and after ...
and the
Securities Exchange Act of 1934 The Securities Exchange Act of 1934 (also called the Exchange Act, '34 Act, or 1934 Act) (, codified at et seq.) is a law governing the secondary trading of securities ( stocks, bonds, and debentures) in the United States of America. A land ...
ensured buyers of securities on the
stock market A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, ...
had good information. The
Davis–Bacon Act of 1931 The Davis–Bacon Act of 1931 is a United States federal law that establishes the requirement for paying the local prevailing wages on public works projects for laborers and mechanics. It applies to "contractors and subcontractors performing on ...
and Walsh–Healey Public Contracts Act of 1936 required that in federal government contracts, all employers would pay their workers fair wages, beyond the minimum, at prevailing local rates. To reach
full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. F ...
and out of depression, the
Emergency Relief Appropriation Act of 1935 The Relief Appropriation Act of 1935 was passed on April 8, 1935, as a part of Franklin Delano Roosevelt's New Deal. It was a large public works program that included the Works Progress Administration (WPA), Public Works Administration (PWA), ...
enabled the federal government to spend huge sums of money on building and creating jobs. This accelerated as
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...
began. In 1944, his health waning, Roosevelt urged Congress to work towards a "
Second Bill of Rights The Second Bill of Rights or Bill of Economic Rights was proposed by United States President Franklin D. Roosevelt during his State of the Union Address on Tuesday, January 11, 1944. In his address, Roosevelt suggested that the nation had come ...
" through legislative action, because "unless there is security here at home there cannot be lasting peace in the world" and "we shall have yielded to the spirit of
Fascism Fascism is a far-right, authoritarian, ultra-nationalist political ideology and movement,: "extreme militaristic nationalism, contempt for electoral democracy and political and cultural liberalism, a belief in natural social hierarchy and t ...
here at home." Although the
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Con ...
had created a minimum safety net of labor rights, and aimed to enable fair pay through
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
, a Republican dominated Congress revolted when Roosevelt died. Against the veto of
President Truman Harry S. Truman (May 8, 1884December 26, 1972) was the 33rd president of the United States, serving from 1945 to 1953. A leader of the Democratic Party, he previously served as the 34th vice president from January to April 1945 under Frankli ...
, the Taft-Hartley Act of 1947 limited the right of labor unions to take solidarity action, and enabled states to ban unions requiring all people in a workplace becoming union members. A series of Supreme Court decisions, held the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
not only created minimum standards, but stopped or " preempted" states enabling better union rights, even though there was no such provision in the statute.See '' San Diego Building Trades Council v Garmon'' 359 US 236 (1959) but contrast '' Chamber of Commerce v Brown''
522 US 60
(2008) where Breyer J and Ginsburg J dissented.
Labor unions became extensively regulated by the
Labor Management Reporting and Disclosure Act of 1959 The Labor Management Reporting and Disclosure Act of 1959 (also "LMRDA" or the Landrum–Griffin Act), is a US labor law that regulates labor unions' internal affairs and their officials' relationships with employers. Background After enactment ...
. Post-war prosperity had raised people's living standards, but most workers who had no union, or
job security Job security is the probability that an individual will keep their job; a job with a high level of security is such that a person with the job would have a small chance of losing it. Many factors threaten job security: globalization, outsourcing ...
rights remained vulnerable to unemployment. As well as the crisis triggered by ''
Brown v Board of Education ''Brown v. Board of Education of Topeka'', 347 U.S. 483 (1954), was a landmark decision by the U.S. Supreme Court, which ruled that U.S. state laws establishing racial segregation in public schools are unconstitutional, even if the segregat ...
'', and the need to dismantle segregation, job losses in agriculture, particularly among
African Americans African Americans (also referred to as Black Americans and Afro-Americans) are an ethnic group consisting of Americans with partial or total ancestry from sub-Saharan Africa. The term "African American" generally denotes descendants of ens ...
was a major reason for the
civil rights movement The civil rights movement was a nonviolent social and political movement and campaign from 1954 to 1968 in the United States to abolish legalized institutional racial segregation, discrimination, and disenfranchisement throughout the Unite ...
, culminating in the
March on Washington for Jobs and Freedom The March on Washington for Jobs and Freedom, also known as simply the March on Washington or The Great March on Washington, was held in Washington, D.C., on August 28, 1963. The purpose of the march was to advocate for the civil and economic rig ...
led by
Martin Luther King Jr. Martin Luther King Jr. (born Michael King Jr.; January 15, 1929 – April 4, 1968) was an American Baptist minister and activist, one of the most prominent leaders in the civil rights movement from 1955 until his assassination in 1968 ...
Although Roosevelt's
Executive Order 8802 Executive Order 8802 was signed by President Franklin D. Roosevelt on June 25, 1941, to prohibit ethnic or racial discrimination in the nation's defense industry. It also set up the Fair Employment Practice Committee. It was the first federal ac ...
of 1941 had prohibited
racial discrimination Racial discrimination is any discrimination against any individual on the basis of their skin color, race or ethnic origin.Individuals can discriminate by refusing to do business with, socialize with, or share resources with people of a certain g ...
in the national defense industry, people still suffered discrimination because of their
skin color Human skin color ranges from the darkest brown to the lightest hues. Differences in skin color among individuals is caused by variation in pigmentation, which is the result of genetics (inherited from one's biological parents and or individu ...
across other workplaces. Also, despite the increasing numbers of women in work, sex discrimination was endemic. The government of John F. Kennedy introduced the
Equal Pay Act of 1963 The Equal Pay Act of 1963 is a United States labor law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex (see gender pay gap). It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Fro ...
, requiring equal pay for women and men.
Lyndon B. Johnson Lyndon Baines Johnson (; August 27, 1908January 22, 1973), often referred to by his initials LBJ, was an American politician who served as the 36th president of the United States from 1963 to 1969. He had previously served as the 37th vice ...
introduced the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
, finally prohibiting discrimination against people for "race, color, religion, sex, or national origin." Slowly, a new generation of equal rights laws spread. At federal level, this included the
Age Discrimination in Employment Act of 1967 The Age Discrimination in Employment Act of 1967 (ADEA; to ) is a United States labor law that forbids employment discrimination against anyone, at least 40 years of age, in the United States (see ). In 1967, the bill was signed into law by Pr ...
, the
Pregnancy Discrimination Act of 1978 The Pregnancy Discrimination Act (PDA) of 1978 () is a United States federal statute. It amended Title VII of the Civil Rights Act of 1964 to "prohibit sex discrimination on the basis of pregnancy." The Act covers discrimination "on the basis of ...
, and the
Americans with Disabilities Act of 1990 The Americans with Disabilities Act of 1990 or ADA () is a civil rights law that prohibits discrimination based on disability. It affords similar protections against discrimination to Disability in the United States, Americans with disabilities ...
, now overseen by the
Equal Employment Opportunity Commission The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency that was established via the Civil Rights Act of 1964 to administer and enforce civil rights laws against workplace discrimination. The EEOC investigates discrimination ...
. Although people, in limited fields, could claim to be equally treated, the mechanisms for fair pay and treatment were dismantled after the 1970s. The last major labor law statute, the
Employee Retirement Income Security Act of 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
created rights to well regulated occupational pensions, although only where an employer had already promised to provide one: this usually depended on
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
by unions. But in 1976, the Supreme Court in ''
Buckley v Valeo ''Buckley v. Valeo'', 424 U.S. 1 (1976), was a landmark decision of the US Supreme Court on campaign finance. A majority of justices held that, as provided by section 608 of the Federal Election Campaign Act of 1971, limits on election expenditu ...
'' held anyone could spend unlimited amounts of money on political campaigns, as a part of the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
right to "
freedom of speech Freedom of speech is a principle that supports the freedom of an individual or a community to articulate their opinions and ideas without fear of retaliation, censorship, or legal sanction. The right to freedom of expression has been recogni ...
". After the Republican
President Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
took office in 1981, he dismissed all air traffic control staff who went on strike, and replaced the National Labor Relations Board members with pro-management men. Dominated by Republican appointees, the Supreme Court suppressed labor rights, removing rights of professors, religious school teachers, or illegal immigrants to organize in a union, allowing employees to be searched at work, and eliminating employee rights to sue for medical malpractice in their own health care. Only limited statutory changes were made. The
Immigration Reform and Control Act of 1986 The Immigration Reform and Control Act (IRCA or the Simpson–Mazzoli Act) was passed by the 99th United States Congress and signed into law by U.S. President Ronald Reagan on November 6, 1986. The Immigration Reform and Control Act altered U.S ...
criminalized large numbers of migrants. The
Worker Adjustment and Retraining Notification Act of 1988 The Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") is a U.S. labor law that protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance ...
guaranteed workers some notice before a mass termination of their jobs. The
Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. The FMLA was a major part of President Bill C ...
guaranteed a right to 12 weeks leave to take care for children after birth, all unpaid. The
Small Business Job Protection Act of 1996 The Small Business Job Protection Act of 1996 () is a United States federal law. It was sponsored by Rep. Bill Archer ( R- TX) and it was signed into law by President Bill Clinton. The stated intent of the bill is: "To provide tax relief for smal ...
cut the minimum wage, by enabling employers to take the tips of their staff to subsidize the minimum wage. A series of proposals by Democratic and independent politicians to advance labor rights were not enacted, and the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
began to fall behind most other developed countries in labor rights, In relation to federal government contracting, Executive Order 13673, entitled ''Fair Pay and Safe Workplaces'', was issued by President
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
on 31 July 2014. It contained "new requirements designed to increase efficiency and cost savings in the Federal contracting process",Guidance for Executive Order 13673, "Fair Pay and Safe Workplaces"; Final Guidance
accessed 10 October 2022
specifically referring to "contracting with responsible sources who comply with labor laws".Executive Order 13673
accessed 6 November 2022
The Occupational Safety and Health Administration published guidance on 25 August 2016. The order listed 14 federal laws which were defined as "labor laws", and extended coverage to "equivalent state laws". A breach of any of these laws during the three year period preceding the contract award was treated as non-compliance; for a contract valued over $500,000,
contracting officer A Contracting Officer ( KO or CO ) is a person who can bind the Federal Government of the United States to a contract which is greater in value than the federal micro-purchase threshold ($10,000). This is limited to the scope of authority delegated ...
s were to consider such violations, and any corrective actions taken by the business concerned, in determining contract award. Similar provisions were built into sub-contracting arrangements. To support compliance, each federal agency was required to appoint a "Labor Compliance Advisor". The order was revoked by President
Donald Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021. Trump graduated from the Wharton School of the University of P ...
on 27 March 2017 under
Executive Order 13782 United States presidents issue executive orders to help officers and agencies of the executive branch manage the operations within the federal government itself. Donald Trump signed a total of 220 executive orders from January 2017 to January 2 ...
.


Contract and rights at work

Contracts A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
between employees and employers (mostly
corporations A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
) usually begin an employment relationship, but are often not enough for a decent livelihood. Because individuals lack bargaining power, especially against wealthy corporations, labor law creates legal rights that override arbitrary market outcomes. Historically, the law faithfully enforced property rights and
freedom of contract Freedom of contract is the process in which individuals and groups form contracts without government restrictions. This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on pri ...
on any terms, whether or not this was inefficient, exploitative and unjust. In the early 20th century, as more people favored the introduction of democratically determined economic and social rights over rights of property and contract, state and federal governments introduced law reform. First, the Fair Labor Standards Act of 1938 created a minimum wage (now $7.25 at federal level, higher in 28 states) and overtime pay of one and a half times. Second, the
Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. The FMLA was a major part of President Bill C ...
creates very limited rights to take unpaid leave. In practice, good employment contracts improve on these minimums. Third, while there is no right to an occupational pension or other benefits, the
Employee Retirement Income Security Act of 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
ensures employers guarantee those benefits if they are promised. Fourth, the Occupational Safety and Health Act 1970 demands a safe system of work, backed by professional inspectors. Individual states are often empowered to go beyond the federal minimum, and function as
laboratories of democracy Laboratories of democracy is a phrase popularized by U.S. Supreme Court Justice Louis Brandeis in '' New State Ice Co. v. Liebmann'' to describe how "a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social ...
in social and economic rights, where they have not been constrained by the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
.


Scope of protection

Common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omniprese ...
, state and federal statutes usually confer labor rights on "employees", but not people who are autonomous and have sufficient
bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
to be "independent contractors". In 1994, the '' Dunlop Commission on the Future of Worker-Management Relations: Final Report'' recommended a unified definition of an employee under all federal labor laws, to reduce litigation, but this was not implemented. As it stands, Supreme Court cases have stated various general principles, which will apply according to the context and purpose of the statute in question. In '' NLRB v Hearst Publications, Inc'', newsboys who sold newspapers in Los Angeles claimed that they were "employees", so that they had a right to collectively bargain under the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
. The newspaper corporations argued the newsboys were "independent contractors", and they were under no duty to bargain in
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
. The Supreme Court held the newsboys were employees, and common law tests of employment, particularly the summary in the Restatement of the Law of Agency, Second §220, were no longer appropriate. They were not "independent contractors" because of the degree of control employers had. But the National Labor Relations Board could decide itself who was covered if it had "a reasonable basis in law." Congress reacted, first, by explicitly amending the NLRA §2(1) so that independent contractors were exempt from the law while, second, disapproving that the common law was irrelevant. At the same time, the Supreme Court decided '' United States v Silk'', holding that "economic reality" must be taken into account when deciding who is an employee under the Social Security Act of 1935. This meant a group of coal loaders were employees, having regard to their economic position, including their lack of bargaining power, the degree of discretion and control, and the risk they assumed compared to the coal businesses they worked for. By contrast, the Supreme Court found truckers who owned their own trucks, and provided services to a carrier company, were independent contractors. Thus, it is now accepted that multiple factors of traditional common law tests may not be replaced if a statute gives no further definition of "employee" (as is usual, e.g., the Fair Labor Standards Act of 1938,
Employee Retirement Income Security Act of 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
,
Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. The FMLA was a major part of President Bill C ...
). Alongside the purpose of labor legislation to mitigate inequality of bargaining power and redress the economic reality of a worker's position, the multiple factors found in the Restatement of Agency must be considered, though none is necessarily decisive.
Common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omniprese ...
agency tests of who is an "employee" take account of an employer's control, if the employee is in a distinct business, degree of direction, skill, who supplies tools, length of employment, method of payment, the regular business of the employer, what the parties believe, and whether the employer has a business. Some statutes also make specific exclusions that reflect the common law, such as for independent contractors, and others make additional exceptions. In particular, the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
§2(11) exempts supervisors with "authority, in the interest of the employer", to exercise discretion over other employees' jobs and terms. This was originally a narrow exception. Controversially, in '' NLRB v Yeshiva University'', a 5 to 4 majority of the Supreme Court held that full time professors in a
university A university () is an institution of higher (or tertiary) education and research which awards academic degrees in several academic disciplines. Universities typically offer both undergraduate and postgraduate programs. In the United Stat ...
were excluded from collective bargaining rights, on the theory that they exercised "managerial" discretion in academic matters. The dissenting judges pointed out that management was actually in the hands of university administration, not professors. In '' NLRB v Kentucky River Community Care Inc'', the Supreme Court held, again 5 to 4, that six registered nurses who exercised supervisory status over others fell into the "professional" exemption. Stevens J, for the dissent, argued that if "the 'supervisor' is construed too broadly", without regard to the Act's purpose, protection "is effectively nullified". Similarly, under the Fair Labor Standards Act of 1938, in '' Christopher v SmithKline Beecham Corp'', the Supreme Court held 5 to 4 that a traveling medical salesman for GSK of four years was an "outside salesman", and so could not claim overtime. People working unlawfully are often regarded as covered, so as not to encourage employers to exploit vulnerable employees. For instance in '' Lemmerman v AT Williams Oil Co'', under the North Carolina Workers' Compensation Act an eight-year-old boy was protected as an employee, even though children working under the age of 8 was unlawful. However, in '' Hoffman Plastic Compounds v NLRB'', the Supreme Court held 5 to 4 that an undocumented worker could not claim back pay, after being discharged for organizing in a union. The gradual withdrawal of more and more people from the scope of labor law, by a slim majority of the Supreme Court since 1976, means that the US falls below international law standards, and standards in other democratic countries, on core labor rights, including
freedom of association Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline mem ...
. Common law tests were often important for determining who was, not just an employee, but the relevant employers who had "
vicarious liability Vicarious liability is a form of a strict, secondary liability that arises under the common law doctrine of agency, '' respondeat superior'', the responsibility of the superior for the acts of their subordinate or, in a broader sense, the re ...
". Potentially there can be multiple, joint-employers could who share responsibility, although responsibility in
tort law A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishab ...
can exist regardless of an employment relationship. In '' Ruiz v Shell Oil Co'', the
Fifth Circuit The United States Court of Appeals for the Fifth Circuit (in case citations, 5th Cir.) is a federal court with appellate jurisdiction over the district courts in the following federal judicial districts: * Eastern District of Louisiana * Mi ...
held that it was relevant which employer had more control, whose work was being performed, whether there were agreements in place, who provided tools, had a right to discharge the employee, or had the obligation to pay. In '' Local 217, Hotel & Restaurant Employees Union v MHM Inc'' the question arose under the
Worker Adjustment and Retraining Notification Act of 1988 The Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") is a U.S. labor law that protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance ...
whether a subsidiary or parent corporation was responsible to notify employees that the hotel would close. The
Second Circuit The United States Court of Appeals for the Second Circuit (in case citations, 2d Cir.) is one of the thirteen United States Courts of Appeals. Its territory comprises the states of Connecticut, New York and Vermont. The court has appellate jur ...
held the subsidiary was the employer, although the trial court had found the parent responsible while noting the subsidiary would be the employer under the NLRA. Under the Fair Labor Standards Act of 1938, 29 USC §203(r), any "enterprise" that is under common control will count as the employing entity. Other statutes do not explicitly adopt this approach, although the NLRB has found an enterprise to be an employer if it has "substantially identical management, business purpose, operation, equipment, customers and supervision." In '' South Prairie Construction Co v Local No 627'', the Supreme Court found that the DC Circuit had legitimately identified two corporations as a single employer given that they had a "very substantial qualitative degree of centralized control of labor", but that further determination of the relevant bargaining unit should have been remitted to the NLRB. When employees are hired through an agency, it is likely that the end-employer will be considered responsible for statutory rights in most cases, although the agency may be regarded as a joint employer.


Contracts of employment

When people start work, there will almost always be a
contract of employment An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old ...
that governs the relationship of employee and the employing entity (usually a
corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...
, but occasionally a human being). A "contract" is an agreement enforceable in law. Very often it can be written down, or signed, but an
oral agreement An oral contract is a contract, the terms of which have been agreed by spoken communication. This is in contrast to a written contract, where the contract is a written document. There may be written, or other physical evidence, of an oral contrac ...
is also a fully enforceable contract. Because employees have
unequal bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater power ...
compared to almost all employing entities, most employment contracts are " standard form". Most terms and conditions are photocopied or reproduced for many people. Genuine negotiation is rare, unlike in commercial transactions between two business corporations. This has been the main justification for enactment of rights in federal and state law. The federal right to
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
, by a labor union elected by its employees, is meant to reduce the inherently unequal bargaining power of individuals against organizations to make
collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
. The federal right to a minimum wage, and increased
overtime Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways: *by custom (what is considered healthy or reasonable by society) ...
pay for working over 40 hours a week, was designed to ensure a "minimum standard of living necessary for health, efficiency, and general well-being of workers", even when a person could not get a high enough wage by individual bargaining. These and other rights, including family leave, rights against
discrimination Discrimination is the act of making unjustified distinctions between people based on the groups, classes, or other categories to which they belong or are perceived to belong. People may be discriminated on the basis of Racial discrimination, r ...
, or basic
job security Job security is the probability that an individual will keep their job; a job with a high level of security is such that a person with the job would have a small chance of losing it. Many factors threaten job security: globalization, outsourcing ...
standards, were designed by the
United States Congress The United States Congress is the legislature of the federal government of the United States. It is Bicameralism, bicameral, composed of a lower body, the United States House of Representatives, House of Representatives, and an upper body, ...
and state legislatures to replace individual contract provisions. Statutory rights override even an express written term of a contract, usually unless the contract is more beneficial to an employee. Some federal statutes also envisage that state law rights can improve upon minimum rights. For example, the Fair Labor Standards Act of 1938 entitles states and municipalities to set minimum wages beyond the federal minimum. By contrast, other statutes such as the
National Labor Relations Act The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
of 1935, the
Occupational Safety and Health Act of 1970 The Occupational Safety and Health Act of 1970 is a US labor law governing the federal law of occupational health and safety in the private sector and federal government in the United States. It was enacted by Congress in 1970 and was signed by ...
, and the
Employee Retirement Income Security Act of 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
, have been interpreted in a series of contentious judgments by the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
to "
preempt Preempt (also spelled "pre-empt") is a bid in contract bridge whose primary objectives are (1) to thwart opponents' ability to bid to their best contract, with some safety, and (2) to fully describe one's hand to one's partner in a single bid. A ...
" state law enactments. These interpretations have had the effect to "stay experimentation in things social and economic" and stop states wanting to "serve as a laboratory" by improving labor rights. Where minimum rights do not exist in federal or state statutes, principles of
contract law A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to t ...
, and potentially
torts A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishab ...
, will apply. Aside from terms in oral or written agreements, terms can be incorporated by reference. Two main sources are
collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
and company handbooks. In '' JI Case Co v National Labor Relations Board'' an employing corporation argued it should not have to bargain in
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
with a labor union, and did not commit an
unfair labor practice An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator Ro ...
by refusing, because it had recently signed individual contracts with its employees. The
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
held unanimously that the "very purpose" of collective bargaining and the National Labor Relations Act 1935 was "to supersede the terms of separate agreements of employees with terms which reflect the strength and bargaining power and serve the welfare of the group". Terms of collective agreements, to the advantage of individual employees, therefore supersede individual contracts. Similarly, if a written contract states that employees do not have rights, but an employee has been told they do by a supervisor, or rights are assured in a company handbook, they will usually have a claim. For example, in '' Torosyan v Boehringer Ingelheim Pharmaceuticals, Inc'' the
Supreme Court of Connecticut The Connecticut Supreme Court, formerly known as the Connecticut Supreme Court of Errors, is the highest court in the U.S. state of Connecticut. It consists of a Chief Justice and six Associate Justices. The seven justices sit in Hartford, acr ...
held that a promise in a handbook that an employee could be dismissed only for a good reason (or "just cause") was binding on the employing corporation. Furthermore, an employer had no right to unilaterally change the terms. Most other state courts have reached the same conclusion, that contracts cannot be altered, except for employees' benefit, without new
consideration Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions. The court in '' Currie v Misa'' declar ...
and true agreement. By contrast, a slight majority on the
California Supreme Court The Supreme Court of California is the highest and final court of appeals in the courts of the U.S. state of California. It is headquartered in San Francisco at the Earl Warren Building, but it regularly holds sessions in Los Angeles and Sac ...
, appointed by Republican governors, held in '' Asmus v Pacific Bell'' that a company policy of indefinite duration can be altered after a reasonable time with reasonable notice, if it affects no vested benefits. The four dissenting judges, appointed by Democratic governors, held this was a "patently unfair, indeed unconscionable, result—permitting an employer that made a promise of continuing job security ... to repudiate that promise with impunity several years later". In addition, a basic term of
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
which cannot be waived, is implied by common law or equity in all states. This usually demands, as a general principle that "neither party shall do anything, which will have the effect of destroying or injuring the right of the other party, to receive the fruits of the contract". The term of
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
persists throughout the employment relationship. It has not yet been used extensively by state courts, compared to other jurisdictions. The
Montana Supreme Court The Montana Supreme Court is the highest court of the state court system in the U.S. state of Montana. It is established and its powers defined by Article VII of the 1972 Montana Constitution. It is primarily an appellate court which reviews ...
has recognized that extensive and even punitive damages could be available for breach of an employee's reasonable expectations. However others, such as the
California Supreme Court The Supreme Court of California is the highest and final court of appeals in the courts of the U.S. state of California. It is headquartered in San Francisco at the Earl Warren Building, but it regularly holds sessions in Los Angeles and Sac ...
limit any recovery of damages to contract breaches, but not damages regarding the manner of termination. By contrast, in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
the requirement for "
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
" has been found to limit the power of discharge except for fair reasons (but not to conflict with statute), in Canada it may limit unjust discharge also for self-employed persons, and in Germany it can preclude the payment of wages significantly below average. Finally, it was traditionally thought that arbitration clauses could not displace any employment rights, and therefore limit access to justice in public courts. However, in '' 14 Penn Plaza LLC v. Pyett'', in a 5 to 4 decision under the Federal Arbitration Act of 1925, individual employment contract arbitration clauses are to be enforced according to their terms. The four dissenting judges argued that this would eliminate rights in a way that the law never intended.


Wages and pay

While contracts often determine wages and terms of employment, the law refuses to enforce contracts that do not observe basic standards of fairness for employees. Today, the Fair Labor Standards Act of 1938 aims to create a national minimum wage, and a voice at work, especially through collective bargaining should achieve fair wages. A growing body of
law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...
also regulates
executive pay Executive compensation is composed of both the financial compensation (executive pay) and other non-financial benefits received by an executive from their employing firm in return for their service. It is typically a mixture of fixed salary, variab ...
, although a system of "
maximum wage A maximum wage, also often called a wage ceiling, is a legal limit on how much income an individual can earn. It is a prescribed limitation which can be used to effect change in an economic structure, but its effects are unrelated to those of minim ...
" regulation, for instance by the former
Stabilization Act of 1942 The Stabilization Act of 1942 (), formally entitled "An Act to Amend the Emergency Price Control Act of 1942, to Aid in Preventing Inflation, and for Other Purposes," and sometimes referred to as the "Inflation Control Act", was an act of Congress ...
, is not currently in force. Historically, the law actually suppressed
wages A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', '' prevailing wage'', and ''yearly bonuses,'' and remuner ...
, not of the highly paid, by ordinary workers. For example, in 1641 the
Massachusetts Bay Colony The Massachusetts Bay Colony (1630–1691), more formally the Colony of Massachusetts Bay, was an English settlement on the east coast of North America around the Massachusetts Bay, the northernmost of the several colonies later reorganized as th ...
legislature A legislature is an assembly with the authority to make laws for a political entity such as a country or city. They are often contrasted with the executive and judicial powers of government. Laws enacted by legislatures are usually known ...
(dominated by property owners and the official church) required wage reductions, and said rising wages "tende to the ruin of the Churches and the
Commonwealth A commonwealth is a traditional English term for a political community founded for the common good. Historically, it has been synonymous with "republic". The noun "commonwealth", meaning "public welfare, general good or advantage", dates from the ...
". In the early 20th century, democratic opinion demanded everyone had a
minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. B ...
, and could bargain for fair wages beyond the minimum. But when states tried to introduce new laws, the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
held them unconstitutional. A right to
freedom of contract Freedom of contract is the process in which individuals and groups form contracts without government restrictions. This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on pri ...
, argued a majority, could be construed from the Fifth and Fourteenth Amendment's protection against being deprived "of life, liberty, or property, without due process of law". Dissenting judges argued that "due process" did not affect the legislative power to create social or economic rights, because employees "are not upon a full level of equality of choice with their employer". After the Wall Street Crash, and the
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Con ...
with the election of Franklin D. Roosevelt, the majority in the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
was changed. In '' West Coast Hotel Co v Parrish'' Hughes CJ held (over four dissenters still arguing for
Freedom of Contract Freedom of contract is the process in which individuals and groups form contracts without government restrictions. This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on pri ...
) that a
Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered o ...
law setting minimum wages for women was constitutional because the state legislatures should be enabled to adopt legislation in the public interest. This ended the "''
Lochner ''Lochner v. New York'', 198 U.S. 45 (1905), was a landmark decision of the U.S. Supreme Court in which the Court ruled that a New York state law setting maximum working hours for bakers violated the bakers' right to freedom of contract under th ...
'' era", and Congress enacted the Fair Labor Standards Act of 1938. Under §202(a) the federal minimum wage aims to ensure a "standard of living necessary for health, efficiency and general well being". Under §207(a)(1), most employees (but with many exceptions) working over 40 hours a week must receive 50 per cent more
overtime Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways: *by custom (what is considered healthy or reasonable by society) ...
pay on their hourly wage. Nobody may pay lower than the minimum wage, but under §218(a) states and municipal governments may enact higher wages.29 USC §218(a)
This is frequently done to reflect local productivity and requirements for decent living in each region. However the federal minimum wage has no automatic mechanism to update with inflation. Because the
Republican Party Republican Party is a name used by many political parties around the world, though the term most commonly refers to the United States' Republican Party. Republican Party may also refer to: Africa * Republican Party (Liberia) *Republican Party ...
has opposed raising wages, the federal real minimum wage is over 33 per cent lower today than in 1968, among the lowest in the industrialized world. Although there is a federal minimum wage, it has been restricted in (1) the scope of who it covers, (2) the time that counts to calculate the hourly minimum wage, and (3) the amount that employers' can take from their employees' tips or deduct for expenses. First, five
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
judges held in '' Alden v Maine'' that the federal minimum wage cannot be enforced for employees of state governments, unless the state has consented, because that would violate the Eleventh Amendment. Souter J, joined by three dissenting justices, held that no such "sovereign immunity" existed in the Eleventh Amendment. Twenty-eight states, however, did have minimum wage laws higher than the federal level in 2016. Further, because the
US Constitution The Constitution of the United States is the supreme law of the United States of America. It superseded the Articles of Confederation, the nation's first constitution, in 1789. Originally comprising seven articles, it delineates the nation ...
, article one, section 8, clause 3 only allows the federal government to "regulate
Commerce Commerce is the large-scale organized system of activities, functions, procedures and institutions directly and indirectly related to the exchange (buying and selling) of goods and services among two or more parties within local, regional, natio ...
... among the several States", employees of any "enterprise" under $500,000 making goods or services that do not enter commerce are not covered: they must rely on state minimum wage laws. FLSA 1938 §203(s) explicitly exempts establishments whose only employees are close family members. Under §213 the minimum wage may not be paid to 18 categories of employee, and paying overtime to 30 categories of employee. This include under §213(a)(1) employees of "''bona fide'' executive, administrative, or professional capacity". In '' Auer v Robbins'' police sergeants and lieutenants at the
St Louis St. Louis () is the second-largest city in Missouri, United States. It sits near the confluence of the Mississippi and the Missouri Rivers. In 2020, the city proper had a population of 301,578, while the bi-state metropolitan area, which e ...
Police Department,
Missouri Missouri is a state in the Midwestern region of the United States. Ranking 21st in land area, it is bordered by eight states (tied for the most with Tennessee): Iowa to the north, Illinois, Kentucky and Tennessee to the east, Arkansas t ...
claimed they should not be classed as executives or professional employees, and should get overtime pay.
Scalia J Antonin Gregory Scalia (; March 11, 1936 – February 13, 2016) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1986 until his death in 2016. He was described as the intellectua ...
held that, following Department of Labor guidance, the St Louis police commissioners were entitled to exempt them. This has encouraged employers to attempt to define staff as more "senior" and make them work longer hours while avoiding overtime pay. Another exemption in §213(a)(15) is for people "employed in domestic service employment to provide companionship services". In '' Long Island Care at Home Ltd v Coke'', a corporation claimed exemption, although Breyer J for a unanimous court agreed with the Department of Labor that it was only intended for carers in private homes. Second, because §206(a)(1)(C) says the minimum wage is $7.25 per hour, courts have grappled with which hours count as "working". Early cases established that time traveling to work did not count as work, unless it was controlled by, required by, and for the benefit of an employer, like traveling through a coal mine. For example, in, '' Anderson v Mount Clemens Pottery Co'' a majority of five to two justices held that employees had to be paid for the long walk to work through an employer's Mount Clemens Pottery Co facility. According to
Murphy J William Francis Murphy (April 13, 1890July 19, 1949) was an American politician, lawyer and jurist from Michigan. He was a Democrat who was named to the Supreme Court of the United States in 1940 after a political career that included servi ...
this time, and time setting up workstations, involved "exertion of a physical nature, controlled or required by the employer and pursued necessarily and primarily for the employer's benefit." In '' Armour & Co v Wantock''
firefighters A firefighter is a first responder and rescuer extensively trained in firefighting, primarily to extinguish hazardous fires that threaten life, property, and the environment as well as to rescue people and in some cases or jurisdictions also ...
claimed they should be fully paid while on call at their station for fires. The
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
held that, even though the firefighters could sleep or play cards, because " adiness to serve may be hired quite as much as service itself" and time waiting on call was "a benefit to the employer". By contrast, in 1992 the Sixth Circuit controversially held that needing to be infrequently available by phone or pager, where movement was not restricted, was not working time. Time spent doing unusual cleaning, for instance showering off toxic substances, does count as working time, and so does time putting on special protective gear. Under §207(e) pay for overtime should be one and a half times the regular pay. In '' Walling v Helmerich and Payne Inc'', the
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
held that an employer's scheme of paying lower wages in the morning, and higher wages in the afternoon, to argue that overtime only needed to be calculated on top of (lower) morning wages was unlawful. Overtime has to be calculated based on the average regular pay. However, in '' Christensen v Harris County'' six
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
judges held that police in
Harris County, Texas Harris County is a county located in the U.S. state of Texas; as of the 2020 census, the population was 4,731,145, making it the most populous county in Texas and the third most populous county in the United States. Its county seat is Houston, ...
could be forced to use up their accumulated "compensatory time" (allowing time off with full pay) before claiming overtime. Writing for the dissent, Stevens J said the majority had misconstrued §207(o)(2), which requires an "agreement" between employers, unions or employees on the applicable rules, and the Texas police had not agreed. Third, §203(m) allows employers to deduct sums from wages for food or housing that is "customarily furnished" for employees. The
Secretary of Labor The United States Secretary of Labor is a member of the Cabinet of the United States, and as the head of the United States Department of Labor, controls the department, and enforces and suggests laws involving unions, the workplace, and all o ...
may determine what counts as fair value. Most problematically, outside states that have banned the practice, they may deduct money from a "tipped employee" for money over the "cash wage required to be paid such an employee on August 20, 1996"—and this was $2.13 per hour. If an employee does not earn enough in tips, the employer must still pay the $7.25 minimum wage. But this means in many states tips do not go to workers: tips are taken by employers to subsidize low pay. Under FLSA 1938 §216(b)-(c) the Secretary of State can enforce the law, or individuals can claim on their own behalf. Federal enforcement is rare, so most employees are successful if they are in a labor union. The Consumer Credit Protection Act of 1968 limits deductions or "garnishments" by employers to 25 per cent of wages, though many states are considerably more protective. Finally, under the Portal to Portal Act of 1947, where Congress limited the minimum wage laws in a range of ways, §254 puts a two-year time limit on enforcing claims, or three years if an employing entity is guilty of a willful violation. *
Income tax in the United States Income taxes in the United States are imposed by the federal government, and most states. The income taxes are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allowa ...
* Legal history of income tax in the United States *
State income tax In addition to Federal government of the United States, federal Income tax in the United States, income tax collected by the United States, most individual U.S. states collect a state income tax. Some local governments also impose an income tax, ...
*
Payroll tax Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the em ...
,
Federal Insurance Contributions Act tax The Federal Insurance Contributions Act (FICA ) is a United States federal payroll (or employment) contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for reti ...


Working time and family care

People in the United States work among the longest hours per week in the
industrialized world A developed country (or industrialized country, high-income country, more economically developed country (MEDC), advanced country) is a sovereign state that has a high quality of life, developed economy and advanced technological infrastru ...
, and have the least annual leave. The Universal Declaration of Human Rights of 1948 article 24 states: "Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay." However, there is no general federal or state legislation requiring paid annual leave. Title 5 of the
United States Code In the law of the United States, the Code of Laws of the United States of America (variously abbreviated to Code of Laws of the United States, United States Code, U.S. Code, U.S.C., or USC) is the official compilation and codification of the ...
§6103 specifies ten
public holidays A public holiday, national holiday, or legal holiday is a holiday generally established by law and is usually a non-working day during the year. Sovereign nations and territories observe holidays based on events of significance to their history ...
for federal government employees, and provides that holidays will be paid. Many states do the same, however, no state law requires private sector employers to provide paid holidays. Many private employers follow the norms of federal and state government, but the right to annual leave, if any, will depend upon
collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
and individual employment contracts. State law proposals have been made to introduce paid annual leave. A 2014
Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered o ...
Bill from
United States House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...
member
Gael Tarleton Gael Frances Donelan Tarleton (January 1, 1959) is an American politician who served as a member of the Washington House of Representatives for the 36th Legislative District from 2013 to 2021. Tarleton was a candidate for Secretary of State of Wa ...
would have required a minimum of 3 weeks of paid holidays each year to employees in businesses of over 20 staff, after 3 years work. Under the
International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...
Holidays with Pay Convention 1970 three weeks is the bare minimum. The Bill did not receive enough votes. By contrast, employees in all
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
countries have the right to at least 4 weeks (i.e. 28 days) of paid annual leave each year. Furthermore, there is no federal or state law on limits to the length of the working week. Instead, the Fair Labor Standards Act of 1938 §207 creates a financial disincentive to longer working hours. Under the heading "Maximum hours", §207 states that time and a half pay must be given to employees working more than 40 hours in a week. It does not, however, set an actual limit, and there are at least 30 exceptions for categories of employee which do not receive overtime pay. Shorter working time was one of the labor movement's original demands. From the first decades of the 20th century, collective bargaining produced the practice of having, and the word for, a two-day "weekend". State legislation to limit working time was, however, suppressed by the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
in '' Lochner v New York''. The
New York State Legislature The New York State Legislature consists of the two houses that act as the state legislature of the U.S. state of New York: The New York State Senate and the New York State Assembly. The Constitution of New York does not designate an officia ...
had passed the Bakeshop Act of 1895, which limited work in bakeries to 10 hours a day or 60 hours a week, to improve health, safety and people's living conditions. After being prosecuted for making his staff work longer in his Utica, Mr Lochner claimed that the law violated the Fourteenth Amendment on "
due process Due process of law is application by state of all legal rules and principles pertaining to the case so all legal rights that are owed to the person are respected. Due process balances the power of law of the land and protects the individual per ...
". Despite the dissent of four judges, a majority of five judges held that the law was unconstitutional. The Supreme Court, however, did uphold Utah's mine workday statute in 1898. The Mississippi State Supreme Court upheld a ten hour workday statute in 1912 when it ruled against the due process arguments of an interstate lumber company. The whole ''Lochner'' era of jurisprudence was reversed by the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
in 1937, but experimentation to improve working time rights, and " work-life balance" has not yet recovered. Just as there are no rights to paid annual leave or maximum hours, there are no rights to paid time off for child care or family leave in federal law. There are minimal rights in some states. Most collective agreements, and many individual contracts, provide paid time off, but employees who lack
bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
will often get none. There are, however, limited federal rights to unpaid leave for family and medical reasons. The
Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. The FMLA was a major part of President Bill C ...
generally applies to employers of 50 or more employees in 20 weeks of the last year, and gives rights to employees who have worked over 12 months and 1250 hours in the last year. Employees can have up to 12 weeks of unpaid leave for child birth, adoption, to care for a close relative in poor health, or because of an employee's own poor health. Child care leave should be taken in one lump, unless agreed otherwise. Employees must give notice of 30 days to employers if birth or adoption is "foreseeable", and for serious health conditions if practicable. Treatments should be arranged "so as not to disrupt unduly the operations of the employer" according to medical advice. Employers must provide benefits during the unpaid leave. Under §2652(b) states are empowered to provide "greater family or medical leave rights". In 2016 California,
New Jersey New Jersey is a state in the Mid-Atlantic and Northeastern regions of the United States. It is bordered on the north and east by the state of New York; on the east, southeast, and south by the Atlantic Ocean; on the west by the Delawa ...
,
Rhode Island Rhode Island (, like ''road'') is a U.S. state, state in the New England region of the Northeastern United States. It is the List of U.S. states by area, smallest U.S. state by area and the List of states and territories of the United States ...
and
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
had laws for paid family leave rights. Under §2612(2)(A) an employer can make an employee substitute the right to 12 unpaid weeks of leave for "accrued paid vacation leave, personal leave or family leave" in an employer's personnel policy. Originally the Department of Labor had a penalty to make employers notify employees that this might happen. However, five judges in the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
in '' Ragsdale v Wolverine World Wide, Inc'' held that the statute precluded the right of the Department of Labor to do so. Four dissenting judges would have held that nothing prevented the rule, and it was the Department of Labor's job to enforce the law. After unpaid leave, an employee generally has the right to return to his or her job, except for employees who are in the top 10% of highest paid and the employer can argue refusal "is necessary to prevent substantial and grievous economic injury to the operations of the employer." Employees or the
Secretary of Labor The United States Secretary of Labor is a member of the Cabinet of the United States, and as the head of the United States Department of Labor, controls the department, and enforces and suggests laws involving unions, the workplace, and all o ...
can bring enforcement actions, but there is no right to a jury for reinstatement claims. Employees can seek damages for lost wages and benefits, or the cost of child care, plus an equal amount of liquidated damages unless an employer can show it acted in good faith and reasonable cause to believe it was not breaking the law. There is a two-year limit on bringing claims, or three years for willful violations. Despite the lack of rights to leave, there is no right to free
child care Child care, otherwise known as day care, is the care and supervision of a child or multiple children at a time, whose ages range from two weeks of age to 18 years. Although most parents spend a significant amount of time caring for their child(r ...
or
day care Child care, otherwise known as day care, is the care and supervision of a child or multiple children at a time, whose ages range from two weeks of age to 18 years. Although most parents spend a significant amount of time caring for their child(r ...
. This has encouraged several proposals to create a public system of free child care, or for the government to subsize parents' costs.


Pensions

In the early 20th century, the possibility of having a "retirement" became real as people lived longer, and believed the elderly should not have to work or rely on charity until they died. The law maintains an income in retirement in three ways (1) through a public
social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
program created by the Social Security Act of 1935, (2) occupational pensions managed through the employment relationship, and (3) private pensions or
life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the dea ...
that individuals buy themselves. At work, most occupational pension schemes originally resulted from
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
during the 1920s and 1930s. Unions usually bargained for employers across a sector to pool funds, so that employees could keep their pensions if they moved jobs. Multi-employer retirement plans, set up by
collective agreement A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with an ...
became known as " Taft-Hartley plans" after the Taft-Hartley Act of 1947 required joint management of funds by employees and employers. Many employers also voluntarily choose to provide pensions. For example, the pension for professors, now called
TIAA The Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA, formerly TIAA-CREF), is a Fortune 100 financial services organization that is the leading provider of financial services in the academic, research ...
, was established on the initiative of
Andrew Carnegie Andrew Carnegie (, ; November 25, 1835August 11, 1919) was a Scottish-American industrialist and philanthropist. Carnegie led the expansion of the American steel industry in the late 19th century and became one of the richest Americans in ...
in 1918 with the express requirement for participants to have voting rights for the plan trustees. These could be collective and
defined benefit Defined benefit (DB) pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employee's earnings history, tenure of service and age ...
schemes: a percentage of one's income (e.g. 67%) is replaced for retirement, however long the person lives. But more recently more employers have only provided individual "
401(k) In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodical employee contributions come directly out of the ...
" plans. These are named after the
Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 2 ...
§
401(k) In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodical employee contributions come directly out of the ...
, which allows employers and employees to pay no tax on money that is saved in the fund, until an employee retires. The same
tax deferral Tax deferral refers to instances where a taxpayer can delay paying taxes to some future period. In theory, the net taxes paid should be the same. Taxes can sometimes be deferred indefinitely, or may be taxed at a lower rate in the future, particula ...
rule applies to all pensions. But unlike a "
defined benefit Defined benefit (DB) pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employee's earnings history, tenure of service and age ...
" plan, a
401(k) In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodical employee contributions come directly out of the ...
only contains whatever the employer and employee contribute. It will run out if a person lives too long, meaning the retiree may only have minimum social security. The
Pension Protection Act of 2006 The Pension Protection Act of 2006 (), 120 Stat. 780, was signed into law by U.S. President George W. Bush on August 17, 2006. Pension reform This legislation requires companies who have underfunded their pension plans to pay higher premiums to ...
§902 codified a model for employers to automatically enroll their employees in a pension, with a right to opt out. However, there is no right to an occupational pension. The
Employee Retirement Income Security Act of 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
does create a series of rights for employees if one is set up. It also applies to health care or any other "employee benefit" plan. Five main rights for beneficiaries in
ERISA 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax eff ...
include information,
funding Funding is the act of providing resources to finance a need, program, or project. While this is usually in the form of money, it can also take the form of effort or time from an organization or company. Generally, this word is used when a firm use ...
,
vesting In law, vesting is the point in time when the rights and interests arising from legal ownership of a property is acquired by some person. Vesting creates an immediately secured right of present or future deployment. One has a vested right to an ...
,
anti-discrimination Discrimination is the act of making unjustified distinctions between people based on the groups, classes, or other categories to which they belong or are perceived to belong. People may be discriminated on the basis of race, gender, age, rel ...
, and fiduciary duties. First, each beneficiary should receive a "summary plan description" in 90 days of joining, plans must file annual reports with the
Secretary of Labor The United States Secretary of Labor is a member of the Cabinet of the United States, and as the head of the United States Department of Labor, controls the department, and enforces and suggests laws involving unions, the workplace, and all o ...
, and if beneficiaries make claims any refusal must be justified with a "full and fair review". If the "summary plan description" is more beneficial than the actual plan documents, because the pension fund makes a mistake, a beneficiary may enforce the terms of either. If an employer has pension or other plans, all employees must be entitled to participate after at longest 12 months, if working over 1000 hours. Second, all promises must be funded in advance. The Pension Benefit Guaranty Corporation was established by the federal government to be an insurer of last resort, but only up to $60,136 per year for each employer. Third, employees' benefits usually cannot be taken away (they "
vest A waistcoat ( UK and Commonwealth, or ; colloquially called a weskit), or vest ( US and Canada), is a sleeveless upper-body garment. It is usually worn over a dress shirt and necktie and below a coat as a part of most men's formal wear. ...
") after 5 years, and contributions must accrue (i.e. the employee owns contributions) at a proportionate rate. If employers and pension funds merge, there can be no reduction in benefits, and if an employee goes bankrupt their creditors cannot take their occupational pension. However, the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
has enabled benefits to be withdrawn by employers simply amending plans. In '' Lockheed Corp v Spink'' a majority of seven judges held that an employer could alter a plan, to deprive a 61-year-old man of full benefits when he was reemployed, unbound by fiduciary duties to preserve what an employee had originally been promised. In dissent, Breyer J and Souter J reserved any view on such "highly technical, important matters". Steps to terminate a plan depend on whether it is individual, or multi-employer, and '' Mead Corp v Tilley'' a majority of the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
held that employers could recoup excess benefits paid into pension plans after PBGC conditions are fulfilled. Stevens J, dissenting, contended that all contingent and future liabilities must be satisfied. Fourth, as a general principle, employees or beneficiaries cannot suffer any discrimination or detriment for "the attainment of any right" under a plan. Fifth, managers are bound by responsibilities of competence and loyalty, called " fiduciary duties". Under §1102, a
fiduciary A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exa ...
is anyone who administers a plan, its trustees, and investment managers who are delegated control. Under §1104,
fiduciaries A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exampl ...
must follow a " prudent" person standard, involving three main components. First, a fiduciary must act "in accordance with the documents and instruments governing the plan". Second, they must act with "care, skill and diligence", including "diversifying the investments of the plan" to "minimize the risk of large losses". Liability for carelessness extends to making misleading statements about benefits, and have been interpreted by the Department of Labor to involve a duty to vote on proxies when
corporate stocks In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
are purchased, and publicizing a statement of investment policy. Third, and codifying fundamental equitable principles, a
fiduciary A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exa ...
must avoid any possibility of a
conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations i ...
. Fiduciaries must act "solely in the interest of the participants ... for the exclusive purpose of providing benefits" with "reasonable expenses", and specifically avoiding self-dealing with a related "party in interest". For example, in '' Donovan v Bierwirth'', the
Second Circuit The United States Court of Appeals for the Second Circuit (in case citations, 2d Cir.) is one of the thirteen United States Courts of Appeals. Its territory comprises the states of Connecticut, New York and Vermont. The court has appellate jur ...
held that trustees of a pension which owned shares in the employees' company as a
takeover In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to ...
bid was launched, because they faced a potential
conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations i ...
, had to get independent legal advice on how to vote, or possibly abstain. Remedies for these duties have, however, been restricted by the
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
to disfavor damages. In these fields, according to §1144,
ERISA 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax eff ...
will "supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan". ERISA did not, therefore, follow the model of the Fair Labor Standards Act of 1938 or the
Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. The FMLA was a major part of President Bill C ...
, which encourage states to legislate for improved protection for employees, beyond the minimum. The preemption rule led the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
to strike down a
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
that required giving benefits to pregnant employees in
ERISA The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
plans. It held a case under
Texas Texas (, ; Spanish: ''Texas'', ''Tejas'') is a state in the South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2020, it is the second-largest U.S. state by ...
law for damages for denying vesting of benefits was preempted, so the claimant only had
ERISA The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...
remedies. It struck down a
Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered o ...
law which altered who would receive life insurance designation on death. However, under §1144(b)(2)(A) this does not affect 'any law of any State which regulates insurance, banking, or
securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
.' So, the Supreme Court has also held valid a
Massachusetts Massachusetts (Massachusett: ''Muhsachuweesut Massachusett_writing_systems.html" ;"title="nowiki/> məhswatʃəwiːsət.html" ;"title="Massachusett writing systems">məhswatʃəwiːsət">Massachusett writing systems">məhswatʃəwiːsət'' En ...
law requiring mental health to be covered by employer group health policies. But it struck down a
Pennsylvania Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...
statute which prohibited employers becoming subrogated to (potentially more valuable) claims of employees for insurance after accidents. Yet more recently, the court has shown a greater willingness to prevent laws being preempted, however the courts have not yet adopted the principle that state law is not preempted or "superseded" if it is more protective to employees than a federal minimum. The most important rights that
ERISA 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax eff ...
did not cover were who controls investments and
securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
that beneficiaries' retirement savings buy. The largest form of retirement fund has become the
401(k) In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodical employee contributions come directly out of the ...
. This is often an individual account that an employer sets up, and an
investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be instit ...
firm, such as
Vanguard The vanguard (also called the advance guard) is the leading part of an advancing military formation. It has a number of functions, including seeking out the enemy and securing ground in advance of the main force. History The vanguard derives f ...
,
Fidelity Fidelity is the quality of faithfulness or loyalty. Its original meaning regarded duty in a broader sense than the related concept of ''fealty''. Both derive from the Latin word ''fidēlis'', meaning "faithful or loyal". In the City of London fin ...
,
Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
or
BlackRock BlackRock, Inc. is an American multi-national investment company based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager, with trill ...
, is then delegated the task of trading fund assets. Usually they also vote on corporate shares, assisted by a "proxy advice" firm such as
ISS The International Space Station (ISS) is the largest modular space station currently in low Earth orbit. It is a multinational collaborative project involving five participating space agencies: NASA (United States), Roscosmos (Russia), JAXA (J ...
or
Glass Lewis Glass, Lewis & Co. (Glass Lewis) is a major American proxy advisory services company. As of spring 2019, Glass Lewis controlled 28% of the proxy advisory market for mutual funds; this makes it the second-largest company in the market behind Inst ...
. Under
ERISA 1974 The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax eff ...
§1102(a), a plan must merely have named fiduciaries who have "authority to control and manage the operation and administration of the plan", selected by "an employer or employee organization" or both jointly. Usually these
fiduciaries A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exampl ...
or
trustees Trustee (or the holding of a trusteeship) is a legal term which, in its broadest sense, is a synonym for anyone in a position of trust and so can refer to any individual who holds property, authority, or a position of trust or responsibility to t ...
, will delegate management to a professional firm, particularly because under §1105(d), if they do so, they will not be liable for an investment manager's breaches of duty. These investment managers buy a range of assets, particularly
corporate stocks In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
which have voting rights, as well as
government bonds A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest, called coupon payments'','' and to repay the face value on the maturity dat ...
,
corporate bonds A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, M&A, or to expand business. The term is usually applied to longer-term debt instruments, with maturity of ...
,
commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...
, real estate or derivatives. Rights on those assets are in practice monopolized by investment managers, unless pension funds have organized to take voting in house, or to instruct their investment managers. Two main types of pension fund to do this are union organized Taft-Hartley plans, and state public pension plans. Under the amended
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
§302(c)(5)(B) a union bargained plan has to be jointly managed by representatives of employers and employees. Although many local pension funds are not consolidated and have had critical funding notices from the Department of Labor, more funds with employee representation ensure that corporate voting rights are cast according to the preferences of their members. State public pensions are often larger, and have greater
bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
to use on their members' behalf. State pension schemes invariably disclose the way trustees are selected. In 2005, on average more than a third of trustees were elected by employees or beneficiaries. For example, the California Government Code §20090 requires that its public employee pension fund,
CalPERS The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.5 million California public employees, retirees, and their families".CalPERSFa ...
has 13 members on its board, 6 elected by employees and beneficiaries. However, only pension funds of sufficient size have acted to replace
investment manager Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be instituti ...
voting. Furthermore, no general legislation requires voting rights for employees in pension funds, despite several proposals. For example, the Workplace Democracy Act of 1999, sponsored by
Bernie Sanders Bernard Sanders (born September8, 1941) is an American politician who has served as the junior United States senator from Vermont since 2007. He was the U.S. representative for the state's at-large congressional district from 1991 to 20 ...
then in the
US House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...
, would have required all single employer pension plans to have trustees appointed equally by employers and employee representatives. There is, furthermore, currently no legislation to stop investment managers voting with other people's money as the Dodd-Frank Act of 2010 §957 banned
broker-dealer In financial services, a broker-dealer is a natural person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers. Broker-dealers are at the heart of the securities and ...
s voting on significant issues without instructions. This means votes in the largest
corporations A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
that people's retirement savings buy are overwhelmingly exercised by investment managers, whose interests potentially conflict with the interests of beneficiaries' on
labor rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights infl ...
, fair pay,
job security Job security is the probability that an individual will keep their job; a job with a high level of security is such that a person with the job would have a small chance of losing it. Many factors threaten job security: globalization, outsourcing ...
, or pension policy.


Health and safety

The
Occupational Safety and Health Act The Occupational Safety and Health Act of 1970 is a US labor law governing the federal law of occupational health and safety in the private sector and federal government in the United States. It was enacted by Congress in 1970 and was signed by P ...
, signed into law in 1970 by President
Richard Nixon Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States, serving from 1969 to 1974. A member of the Republican Party, he previously served as a representative and senator from California and was ...
, creates specific standards for workplace safety. The Act has spawned years of litigation by industry groups that have challenged the standards limiting the amount of permitted exposure to chemicals such as
benzene Benzene is an organic chemical compound with the molecular formula C6H6. The benzene molecule is composed of six carbon atoms joined in a planar ring with one hydrogen atom attached to each. Because it contains only carbon and hydrogen atoms ...
. The Act also provides for protection for "whistleblowers" who complain to governmental authorities about unsafe conditions while allowing workers the right to refuse to work under unsafe conditions in certain circumstances. The Act allows states to take over the administration of OSHA in their jurisdictions, so long as they adopt state laws at least as protective of workers' rights as under federal law. More than half of the states have done so. *
Child labor laws in the United States Child labor laws in the United States address issues related to the employment and welfare of working children in the United States. The most sweeping federal law that restricts the employment and abuse of child workers is the Fair Labor Standard ...


Civil liberties

* '' Pickering v Board of Education'', 391 US 563 (1968) 8 to 1, a public school teacher was dismissed for writing a letter to a newspaper that criticized the way the school board was raising money. This violated the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
and the Fourteenth Amendment * '' Connick v Myers'', 461 U.S. 138 (1983) 5 to 4, a public attorney employee was not unlawfully dismissed after distributing a questionnaire to other staff on a supervisor's management practices after she was transferred under protest. In dissent, Brennan J held that all the matters were of public concern and should therefore be protected by the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
* '' Rankin v McPherson'', 483 U.S. 378 (1987) 5 to 4, a Texas deputy constable had a First Amendment right to say, after the assassination attempt on
Ronald Reagan Ronald Wilson Reagan ( ; February 6, 1911June 5, 2004) was an American politician, actor, and union leader who served as the 40th president of the United States from 1981 to 1989. He also served as the 33rd governor of California from 1967 ...
"Shoot, if they go for him again, I hope they get him." Dismissal was unlawful and she had to be reinstated because even extreme comments (except potentially advocating actual murder) against a political figure should be protected. She could not be fired for merely exercising a right in the Constitution. * '' Waters v Churchill'', 511 U.S. 661 (1994) 7 to 2, a public hospital nurse stating, outside work at dinner, that the cross-training policies of the hospital were flawed, could be dismissed without any violation of the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
because it could be seen as interfering with the employer's operations * '' Garcetti v Ceballos'', 547 U.S. 410 (2006) 5 to 4, no right against dismissal or protected speech when the speech relates to a matter in one's profession *
Employee Polygraph Protection Act of 1988 The Employee Polygraph Protection Act of 1988 (EPPA) is a United States federal law that generally prevents employers from using polygraph (lie detector) tests, either for pre-employment screening or during the course of employment, with certain ...
outlawed the use of lie detectors by private employers except in narrowly prescribed circumstances * Whistleblower Protection Act of 1989 * '' Huffman v Office of Personnel Management'', 263 F.3d 1341 (Fed. Cir. 2001) * '' O'Connor v Ortega'', 480 U.S. 709 (1987) searches in the workplace * '' Ontario v Quon'', 130 S.Ct. 2619, (2010) the right of privacy did not extend to employer owned electronic devices so an employee could be dismissed for sending sexually explicit messages from an employer owned pager. * '' Heffernan v. City of Paterson'', 578 US __ (2016)


Workplace participation

The central right in
labor law Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee ...
, beyond minimum standards for pay, hours, pensions, safety or privacy, is to participate and vote in workplace governance. The American model developed from the
Clayton Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipi ...
, which declared the "labor of a
human being Humans (''Homo sapiens'') are the most abundant and widespread species of primate, characterized by bipedality, bipedalism and exceptional cognitive skills due to a large and complex Human brain, brain. This has enabled the development of ad ...
is not a
commodity In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...
or article of commerce" and aimed to take workplace relations out of the reach of courts hostile to collective bargaining. Lacking success, the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
changed the basic model, which remained through the 20th century. Reflecting the "
inequality of bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater p ...
between employees ... and employers who are organized in the
corporate A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
or other forms of ownership association", the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
codified basic rights of employees to organize a union, requires employers to bargain in
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
(at least on paper) after a union has majority support, binds employers to
collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
, and protects the right to take
collective action Collective action refers to action taken together by a group of people whose goal is to enhance their condition and achieve a common objective. It is a term that has formulations and theories in many areas of the social sciences including psyc ...
including a strike. Union membership, collective bargaining, and standards of living all increased rapidly until Congress forced through the Taft-Hartley Act of 1947. Its amendments enabled states to pass laws restricting agreements for all employees in a workplace to be unionized, prohibited collective action against associated employers, and introduced a list of unfair labor practices for unions, as well as employers. Since then, the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
chose to develop a doctrine that the rules in the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
preempted any other state rules if an activity was "arguably subject" to its rights and duties. While states were inhibited from acting as "
laboratories of democracy Laboratories of democracy is a phrase popularized by U.S. Supreme Court Justice Louis Brandeis in '' New State Ice Co. v. Liebmann'' to describe how "a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social ...
", and particularly as unions were targeted from 1980 and membership fell, the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
has been criticized as a "failed statute" as US labor law "ossified". This has led to more innovative experiments among states, progressive corporations and unions to create direct participation rights, including the right to vote for or codetermine directors of corporate boards, and elect work councils with binding rights on workplace issues.


Labor unions

Freedom of association Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline mem ...
in labor unions has always been fundamental to the development of democratic society, and is protected by the
First Amendment to the Constitution The First Amendment (Amendment I) to the United States Constitution prevents the government from making laws that regulate an establishment of religion, or that prohibit the free exercise of religion, or abridge the freedom of speech, the ...
. In early
colonial history Colonial or The Colonial may refer to: * Colonial, of, relating to, or characteristic of a colony or colony (biology) Architecture * American colonial architecture * French Colonial * Spanish Colonial architecture Automobiles * Colonial (1920 aut ...
, labor unions were routinely suppressed by the government. Recorded instances include cart drivers being fined for striking in 1677 in New York City, and carpenters prosecuted as criminals for striking in
Savannah A savanna or savannah is a mixed woodland-grassland (i.e. grassy woodland) ecosystem characterised by the trees being sufficiently widely spaced so that the canopy does not close. The open canopy allows sufficient light to reach the ground to ...
,
Georgia Georgia most commonly refers to: * Georgia (country), a country in the Caucasus region of Eurasia * Georgia (U.S. state), a state in the Southeast United States Georgia may also refer to: Places Historical states and entities * Related to the ...
in 1746. After the
American Revolution The American Revolution was an ideological and political revolution that occurred in British America between 1765 and 1791. The Americans in the Thirteen Colonies formed independent states that defeated the British in the American Revoluti ...
, however, courts departed from repressive elements of
English common law English law is the common law legal system of England and Wales, comprising mainly criminal law and civil law, each branch having its own courts and procedures. Principal elements of English law Although the common law has, historically, be ...
. The first reported case, '' Commonwealth v Pullis'' in 1806 did find shoemakers in
Philadelphia Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Since ...
guilty of "a combination to raise their wages". Nevertheless, unions continued, and the first federation of trade unions was formed in 1834, the National Trades' Union, with the primary aim of a 10-hour working day. In 1842 the Supreme Court of Massachusetts held in '' Commonwealth v Hunt'' that a strike by the Boston Journeymen Bootmakers' Society for higher wages was lawful. Chief Justice Shaw held that people "are free to work for whom they please, or not to work, if they so prefer" and "to agree together to exercise their own acknowledged rights". The abolition of
slavery Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
by
Abraham Lincoln Abraham Lincoln ( ; February 12, 1809 – April 15, 1865) was an American lawyer, politician, and statesman who served as the 16th president of the United States from 1861 until his assassination in 1865. Lincoln led the nation throu ...
's
Emancipation Proclamation The Emancipation Proclamation, officially Proclamation 95, was a presidential proclamation and executive order issued by United States President Abraham Lincoln on January 1, 1863, during the American Civil War, Civil War. The Proclamation c ...
during the
American Civil War The American Civil War (April 12, 1861 – May 26, 1865; also known by Names of the American Civil War, other names) was a civil war in the United States. It was fought between the Union (American Civil War), Union ("the North") and t ...
was necessary to create genuine rights to organize, but was not sufficient to ensure freedom of association. Using the Sherman Act of 1890, which was intended to break up business cartels, the Supreme Court imposed an injunction on striking workers of the
Pullman Company The Pullman Company, founded by George Pullman, was a manufacturer of railroad cars in the mid-to-late 19th century through the first half of the 20th century, during the boom of railroads in the United States. Through rapid late-19th century ...
, and imprisoned the leader, and future presidential candidate,
Eugene Debs Eugene may refer to: People and fictional characters * Eugene (given name), including a list of people and fictional characters with the given name * Eugene (actress) (born 1981), Kim Yoo-jin, South Korean actress and former member of the sin ...
. The Court also enabled unions to be sued for triple damages in '' Loewe v Lawlor'', a case involving a
hat maker Hat-making or millinery is the design, manufacture and sale of hats and other headwear. A person engaged in this trade is called a milliner or hatter. Historically, milliners, typically women shopkeepers, produced or imported an inventory of ...
union in
Danbury, Connecticut Danbury is a city in Fairfield County, Connecticut, United States, located approximately northeast of New York City. Danbury's population as of 2022 was 87,642. It is the seventh largest city in Connecticut. Danbury is nicknamed the "Hat Cit ...
.208 US 274 (1908) The President and
United States Congress The United States Congress is the legislature of the federal government of the United States. It is Bicameralism, bicameral, composed of a lower body, the United States House of Representatives, House of Representatives, and an upper body, ...
responded by passing the
Clayton Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipi ...
to take labor out of
antitrust law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
. Then, after the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
passed the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
to positively protect the right to organize and take collective action. After that, the law increasingly turned to regulate unions' internal affairs. The Taft-Hartley Act of 1947 regulated how members can join a union, and the
Labor Management Reporting and Disclosure Act of 1959 The Labor Management Reporting and Disclosure Act of 1959 (also "LMRDA" or the Landrum–Griffin Act), is a US labor law that regulates labor unions' internal affairs and their officials' relationships with employers. Background After enactment ...
created a "bill of rights" for union members. While union governance is founded upon
freedom of association Freedom of association encompasses both an individual's right to join or leave groups voluntarily, the right of the group to take collective action to pursue the interests of its members, and the right of an association to accept or decline mem ...
, the law requires basic standards of democracy and accountability to ensure members are truly free in shaping their associations. Fundamentally, all unions are democratic organizations, but they divide between those where members elect delegates, who in turn choose the executive, and those where members directly elect the executive. In 1957, after the
McClellan Committee The United States Senate Select Committee on Improper Activities in Labor and Management (also known as the McClellan Committee) was a select committee created by the United States Senate on January 30, 1957,Hilty, James. ''Robert Kennedy: Broth ...
of the
US Senate The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and po ...
found evidence of two rival Teamsters Union executives,
Jimmy Hoffa James Riddle Hoffa (born February 14, 1913 – disappeared July 30, 1975; declared dead July 30, 1982) was an American labor union leader who served as the president of the International Brotherhood of Teamsters (IBT) from 1957 until 1971. ...
and
Dave Beck David Daniel Beck (June 16, 1894December 26, 1993) was an American labor leader, and president of the International Brotherhood of Teamsters from 1952 to 1957. He helped found the "Conference" system of organization in the Teamsters union, and s ...
, falsifying delegate vote counts and stealing union funds, Congress passed the
Labor Management Reporting and Disclosure Act of 1959 The Labor Management Reporting and Disclosure Act of 1959 (also "LMRDA" or the Landrum–Griffin Act), is a US labor law that regulates labor unions' internal affairs and their officials' relationships with employers. Background After enactment ...
. Under § 411, every member has the right to vote, attend meetings, speak freely and organize, not have fees raised without a vote, not be deprived of the right to sue, or be suspended unjustly. Under § 431, unions should file their constitutions and bylaws with the
Secretary of Labor The United States Secretary of Labor is a member of the Cabinet of the United States, and as the head of the United States Department of Labor, controls the department, and enforces and suggests laws involving unions, the workplace, and all o ...
and be accessible by members: 29 USCbr>§ 481
/ref> today union constitutions are online. Under § 481 elections must occur at least every 5 years, and local officers every 3 years, by secret ballot. Additionally, state law may bar union officials who have prior convictions for felonies from holding office. As a response to the Hoffa and Beck scandals, there is also an express fiduciary duty on union officers for members' money, limits on loans to executives, requirements for bonds for handling money, and up to a $10,000 fine or up to 5 years prison for
embezzlement Embezzlement is a crime that consists of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type ...
. These rules, however, restated most of what was already the law, and codified principles of governance that unions already undertook. On the other hand, under § 501(b) to bring a lawsuit, a union member must first make a demand on the executive to correct wrongdoing before any claim can be made to a court, even for misapplication of funds, and potentially wait four months' time. The Supreme Court has held that union members can intervene in enforcement proceedings brought by the
US Department of Labor The United States Department of Labor (DOL) is one of the executive departments of the U.S. federal government. It is responsible for the administration of federal laws governing occupational safety and health, wage and hour standards, unemploy ...
. Federal courts may review decisions by the Department to proceed with any prosecutions. The range of rights, and the level of enforcement has meant that labor unions display significantly higher standards of accountability, with fewer scandals, than corporations or
financial institutions Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial insti ...
. Beyond members rights within a labor union, the most controversial issue has been how people become members in unions. This affects union membership numbers, and whether labor rights are promoted or suppressed in democratic politics. Historically, unions made
collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
with employers that all new workers would have to join the union. This was to prevent employers trying to dilute and divide union support, and ultimately refuse to improve wages and conditions in
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
. However, after the Taft-Hartley Act 1947, the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
§ 158(a)(3) was amended to ban employers from refusing to hire a non-union employee. An employee can be required to join the union (if such a collective agreement is in place) after 30 days. But § 164(b) was added to codify a right of states to pass so called " right to work laws" that prohibit unions making collective agreements to register all workers as union members, or collect fees for the service of collective bargaining. Over time, as more states with
Republican Republican can refer to: Political ideology * An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law. ** Republicanism, the ideology in support of republics or agains ...
governments passed laws restricting union membership agreements, there has been a significant decline of
union density The union density or union membership rate conveys the number of trade union members who are employees as a percentage of the total number of employees in a given industry or country. This is normally lower than collective agreement coverage rate, ...
. Unions have not, however, yet experimented with agreements to automatically enroll employees in unions with a right to opt out. In '' Machinists v Street'', a majority of the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
, against three dissenting justices, held that the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
precluded making an employee become a union member against their will, but it would be lawful to collect fees to reflect the benefits from collective bargaining: fees could not be used for spending on political activities without the member's consent. Unions have always been entitled to publicly campaign for members of Congress or presidential candidates that support
labor rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, these rights infl ...
. But the urgency of political spending was raised when in 1976 ''
Buckley v Valeo ''Buckley v. Valeo'', 424 U.S. 1 (1976), was a landmark decision of the US Supreme Court on campaign finance. A majority of justices held that, as provided by section 608 of the Federal Election Campaign Act of 1971, limits on election expenditu ...
'' decided, over powerful dissents of White J and
Marshall J Thurgood Marshall (July 2, 1908 – January 24, 1993) was an American civil rights lawyer and jurist who served as an associate justice of the Supreme Court of the United States from 1967 until 1991. He was the Supreme Court's first African-A ...
, that candidates could spend unlimited money on their own political campaign, and then in '' First National Bank of Boston v. Bellotti'', that corporations could engage in election spending. In 2010, over four dissenting justices, ''
Citizens United v FEC ''Citizens United v. Federal Election Commission'', 558 U.S. 310 (2010), was a landmark decision of the Supreme Court of the United States regarding campaign finance laws and free speech under the First Amendment to the U.S. Constitution. It wa ...
'' held there could be essentially no limits to corporate spending. By contrast, every other democratic country caps spending (usually as well as regulating donations) as the original Federal Election Campaign Act of 1971 had intended to do. A unanimous court held in '' Abood v Detroit School Board'' that union security agreements to collect fees from non-members were also allowed in the public sector. However, in '' Harris v Quinn'' five
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
judges reversed this ruling apparently banning public sector union security agreements, and were about to do the same for all unions in '' Friedrichs v California Teachers Association'' until
Scalia J Antonin Gregory Scalia (; March 11, 1936 – February 13, 2016) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1986 until his death in 2016. He was described as the intellectua ...
died, halting an anti-labor majority on the Supreme Court. In 2018, '' Janus v AFSCME'' the Supreme Court held by 5 to 4 that collecting mandatory union fees from public sector employees violated the First Amendment. The dissenting judges argued that union fees merely paid for benefits of collective bargaining that non-members otherwise received for free. These factors led campaign finance reform to be one of the most important issues in the
2016 US Presidential election The 2016 United States presidential election was the 58th quadrennial presidential election, held on Tuesday, November 8, 2016. The Republican ticket of businessman Donald Trump and Indiana governor Mike Pence defeated the Democratic ticket ...
, for the future of the labor movement, and democratic life.


Collective bargaining

Since the
industrial revolution The Industrial Revolution was the transition to new manufacturing processes in Great Britain, continental Europe, and the United States, that occurred during the period from around 1760 to about 1820–1840. This transition included going f ...
, collective bargaining has been the main way to get fair pay, improved conditions, and a voice at work. The need for positive rights to organize and bargain was gradually appreciated after the
Clayton Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipi ...
. Under §6, labor rights were declared to be outside of
antitrust law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
, but this did not stop hostile employers and courts suppressing unions. In '' Adair v United States'', and '' Coppage v Kansas'', the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
, over powerful dissents, asserted the Constitution empowered employers to require employees to sign
contracts A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
promising they would not join a union. These "
yellow dog contracts A yellow-dog contract (a yellow-dog clause of a contract, also known as an ironclad oath) is an agreement between an employer and an employee in which the employee agrees, as a condition of employment, not to be a member of a labor union. In th ...
" were offered to employees on a " take it or leave it" basis, and effectively stopped unionization. They lasted until the
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
when the Norris–La Guardia Act of 1932 banned them. This also prevented the courts from issuing any injunctions or enforcing any agreements in the context of a labor dispute. After the
landslide election A landslide victory is an election result in which the victorious candidate or party wins by an overwhelming margin. The term became popular in the 1800s to describe a victory in which the opposition is "buried", similar to the way in which a geol ...
of Franklin D. Roosevelt, the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
was drafted to create positive rights for collective bargaining in most of the private sector. It aimed to create a system of federal rights so that, under §157, employees would gain the legal "right to self-organization", "to bargain collectively" and use "concerted activities" including strikes for "mutual aid or other protection". The Act was meant to increase
bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
of employees to get better terms in than individual contracts with employing corporations. However §152 excluded many groups of workers, such as state and federal government employees, railway and airline staff, domestic and
agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people ...
workers. These groups depend on special federal statutes like the Railway Labor Act of 1926 or state law rules, like the California Agricultural Labor Relations Act of 1975. In 1979, five
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
judges, over four forceful dissents, also introduced an exception for church operated schools, apparently because of "serious
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
questions". Furthermore, "independent contractors" are excluded, even though many are economically dependent workers. Some courts have attempted to expand the "independent contractor" exception. In 2009, in '' FedEx Home Delivery v NLRB'' the DC Circuit, adopting submissions of
FedEx FedEx Corporation, formerly Federal Express Corporation and later FDX Corporation, is an American multinational conglomerate holding company focused on transportation, e-commerce and business services based in Memphis, Tennessee. The name "Fe ...
's lawyer
Ted Cruz Rafael Edward "Ted" Cruz (; born December 22, 1970) is an American politician and attorney serving as the junior United States Senator from Texas since 2013. A member of the Republican Party, Cruz served as Solicitor General of Texas fro ...
, held that post truck drivers were independent contractors because they took on "entrepreneurial opportunity". Garland J dissented, arguing the majority had departed from common law tests. The "independent contractor" category was estimated to remove protection from 8 million workers. While many states have higher rates, the US has an 11.1 per cent unionization rate and 12.3 per cent rate of coverage by collective agreement. This is the lowest in the industrialized world. At any point employers can freely bargain with union representatives and make a
collective agreement A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with an ...
. Under
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
§158(d) the mandatory subjects of collective bargaining include "wages, hours, and other terms and conditions of employment". A collective agreement will typically aim to get rights including a fair day's wage for a fair day's work, reasonable notice and severance pay before any necessary
layoff A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees (collective layoff) for business reasons, such as personnel management or downsizing (reducing the ...
s, just cause for any job termination, and
arbitration Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the ...
to resolve disputes. It could also extend to any subject by mutual agreement. A union can encourage an employing entity through
collective action Collective action refers to action taken together by a group of people whose goal is to enhance their condition and achieve a common objective. It is a term that has formulations and theories in many areas of the social sciences including psyc ...
to sign a deal, without using the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
procedure. But, if an employing entity refuses to deal with a union, and a union wishes, the National Labor Relations Board (NLRB) may oversee a legal process up to the conclusion of a legally binding
collective agreement A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with an ...
. By law, the NLRB is meant to have five members "appointed by the President by and with the advice and consent of the
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
", and play a central role in promoting collective bargaining. First, the NLRB will determine an appropriate "
bargaining unit A bargaining unit, in labor relations, is a group of employees with a clear and identifiable community of interests who is (under US law) represented by a single labor union in collective bargaining Collective bargaining is a process of negoti ...
" of employees with employers (e.g., offices in a city, or state, or whole economic sector), The NLRB favors " enterprise bargaining" over " sectoral collective bargaining", which means US unions have traditionally been smaller with less
bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
by international standards. Second, a union with "majority" support of employees in a bargaining unit becomes "the exclusive representatives of all the employees". But to ascertain majority support, the NLRB supervises the fairness of elections among the workforce. It is typical for the NLRB to take six weeks from a petition from workers to an election being held. During this time, managers may attempt to persuade or coerce employees using high-pressure tactics or
unfair labor practices An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator R ...
(e.g. threatening job termination, alleging unions will bankrupt the firm) to vote against recognizing the union. The average time for the NLRB to decide upon complaints of
unfair labor practices An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator R ...
had grown to 483 days in 2009 when its last annual report was written. Third, if a union does win majority support in a bargaining unit election, the employing entity will have an "obligation to bargain collectively". This means meeting union representatives "at reasonable times and confer in
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
with respect to wages, hours, and other terms" to put in a "written contract". The NLRB cannot compel an employer to agree, but it was thought that the NLRB's power to sanction an employer for an "unfair labor practice" if they did not bargain in good faith would be sufficient. For example, in '' JI Case Co v NLRB'' the
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
held an employer could not refuse to bargain on the basis that individual contracts were already in place. Crucially, in '' Wallace Corp v NLRB'' the Supreme Court also held that an employer only bargaining with a
company union A company or "yellow" union is a worker organization which is dominated or unduly influenced by an employer, and is therefore not an independent trade union. Company unions are contrary to international labour law (see ILO Convention 98, Article ...
, which it dominated, was an
unfair labor practice An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator Ro ...
. The employer should have recognized the truly independent union affiliated to the
Congress of Industrial Organizations The Congress of Industrial Organizations (CIO) was a federation of unions that organized workers in industrial unions in the United States and Canada from 1935 to 1955. Originally created in 1935 as a committee within the American Federation of ...
(CIO). However, in '' NLRB v Sands Manufacturing Co'' the Supreme Court held an employer did not commit an unfair trade practice by shutting down a water heater plant, while the union was attempting to prevent new employees being paid less. Moreover, after 2007 President George W. Bush and the
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
refused to make any appointments to the Board, and it was held by five judges, over four dissents, in '' New Process Steel LP v NLRB'' that rules made by two remaining members were ineffective. While appointments were made in 2013, agreement was not reached on one vacant seat. Increasingly it has been made politically unfeasible for the NLRB to act to promote collective bargaining. Once collective agreements have been signed, they are legally enforceable, often through
arbitration Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the ...
, and ultimately in federal court. Federal law must be applied for national uniformity, so state courts must apply federal law when asked to deal with collective agreements or the dispute can be removed to federal court. Usually, collective agreements include provisions for sending grievances of employees or disputes to binding
arbitration Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the ...
, governed by the Federal Arbitration Act of 1925. For example, in '' United Steelworkers v Warrior & Gulf Navigation Co'' a group of employees at a steel transportation works in
Chickasaw The Chickasaw ( ) are an indigenous people of the Southeastern Woodlands. Their traditional territory was in the Southeastern United States of Mississippi, Alabama, and Tennessee as well in southwestern Kentucky. Their language is classif ...
,
Alabama (We dare defend our rights) , anthem = " Alabama" , image_map = Alabama in United States.svg , seat = Montgomery , LargestCity = Huntsville , LargestCounty = Baldwin County , LargestMetro = Greater Birmingham , area_total_km2 = 135,7 ...
requested the corporation go to
arbitration Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the ...
over layoffs and outsourcing of 19 staff on lower pay to do the same jobs. The
United Steelworkers The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, commonly known as the United Steelworkers (USW), is a general trade union with members across North America. Headquar ...
had a collective agreement which contained a provision for arbitration.
Douglas J William Orville Douglas (October 16, 1898January 19, 1980) was an American jurist who served as an associate justice of the Supreme Court of the United States, who was known for his strong progressive and civil libertarian views, and is often ...
held that any doubts about whether the agreement allowed the issue to go to arbitration "should be resolved in favor of coverage." An arbitrator's award is entitled to judicial enforcement so long as its essence is from the collective agreement. Courts can decline to enforce an agreement based on public policy, but this is different from "general considerations of supposed public interests". But while federal policy had encouraged arbitration where unions and employers had made agreements, the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
drew a clear distinction for arbitration over individual statutory rights. In ''Alexander v Gardner-Denver Co'' an employee claimed he was unjustly terminated, and suffered unlawful race discrimination under the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
. The Supreme Court held that he was entitled to pursue remedies both through arbitration and the public courts, which could re-evaluate the claim whatever the arbitrator had decided. But then, in 2009 in ''14 Penn Plaza LLC v Pyett'' Thomas J announced with four other judges that apparently "[n]othing in the law suggests a distinction between the status of arbitration agreements Inequality of bargaining power, signed by an individual employee and those agreed to by a union representative." This meant that a group of employees were denied the right to go to a public court under the
Age Discrimination in Employment Act of 1967 The Age Discrimination in Employment Act of 1967 (ADEA; to ) is a United States labor law that forbids employment discrimination against anyone, at least 40 years of age, in the United States (see ). In 1967, the bill was signed into law by Pr ...
, and instead potentially be heard only by arbitrators their employer selected. Stevens J and Souter J, joined by Ginsburg J, Breyer J dissented, pointing out that rights cannot be waived even by collective bargaining. An Arbitration Fairness Act of 2011 has been proposed to reverse this, urging that "employees have little or no meaningful choice whether to submit their claims to arbitration". It remains unclear why
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
§1, recognizing workers' "
inequality of bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater p ...
" was not considered relevant to ensure that collective bargaining can only improve upon rights, rather than take them away. To address further perceived defects of the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
and the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
's interpretations, major proposed reforms have included the Labor Reform Act of 1977, the Workplace Democracy Act of 1999, and the Employee Free Choice Act of 2009. All focus on speeding the election procedure for union recognition, speeding hearings for
unfair labor practices An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator R ...
, and improving remedies within the existing structure of labor relations.


Right to organize

To ensure that employees are effectively able to bargain for a collective agreement, the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
created a group of rights in §158 to stall "
unfair labor practices An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator R ...
" by employers. These were considerably amended by the Taft-Hartley Act of 1947, where the US Congress over the veto of President Harry S. Truman decided to add a list of unfair labor practices for labor unions. This has meant that union organizing in the US may involve substantial levels of litigation which most workers cannot afford. The fundamental principle of freedom of association, however, is recognized worldwide to require various rights. It extends to the state, so in ''Hague v. Committee for Industrial Organization'' held the
New Jersey New Jersey is a state in the Mid-Atlantic and Northeastern regions of the United States. It is bordered on the north and east by the state of New York; on the east, southeast, and south by the Atlantic Ocean; on the west by the Delawa ...
mayor violated the
First Amendment First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...
when trying to shut down Congress of Industrial Organizations, CIO meetings because he thought they were "communist". Among many rights and duties relating to unfair labor practices, five main groups of case have emerged. First, under §158(a)(3)–(4) a person who joins a union must suffer no discrimination or retaliation in their chances for being hired, terms of their work, or in termination. For example, in one of the first cases, ''NLRB v Jones & Laughlin Steel Corp'', the US Supreme Court held that the National Labor Relations Board was entitled to order workers be rehired after they had been dismissed for organizing a union at their plant in Aliquippa,
Pennsylvania Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...
. It is also unlawful for employers to monitor employees who are organizing, for instance by parking outside a union meeting, or videotaping employees giving out union fliers. This can include giving people incentives or bribes to not join a union. So in ''NLRB v Erie Resistor Corp'' the Supreme Court held it was unlawful to give 20 years extra seniority to employees who crossed a picket line while the union had called a strike. Second, and by contrast, the Supreme Court had decided in ''Textile Workers Union of America v Darlington Manufacturing Co Inc'' that actually shutting down a recently unionized division of an enterprise was lawful, unless it was proven that the employer was motivated by hostility to the union. Third, union members need the right to be represented, in order to carry out basic functions of collective bargaining and settle grievances or disciplinary hearings with management. This entails a duty of fair representation. In ''NLRB v J Weingarten, Inc'' the Supreme Court held that an employee in a unionized workplace had the right to a union representative present in a management interview, if it could result in disciplinary action. Although the NLRB has changed its position with different political appointees, the United States Court of Appeals for the District of Columbia Circuit, DC Circuit has held the same right goes that non-union workers were equally entitled to be accompanied. Fourth, under §158(a)(5) it is an unfair labor practice to refuse to bargain in good faith, and out of this a right has developed for a union to receive information necessary to perform collective bargaining work. However, in ''Detroit Edison Co v NLRB'' the Supreme Court divided 5 to 4 on whether a union was entitled to receive individual testing scores from a program the employer used. Also, in ''Lechmere, Inc. v. National Labor Relations Board'' the Supreme Court held 6 to 3 that an employer was entitled to prevent union members, who were not employees, from entering the company parking lot to hand out leaflets. Fifth, there are a large group of cases concerning "unfair" practices of labor organizations, listed in §158(b). For example, in ''Pattern Makers League of North America v NLRB'' an employer claimed a union had committed an unfair practice by attempting to enforce fines against employees who had been members, but quit during a strike when their membership agreement promised they would not. Five judges to four dissents held that such fines could not be enforced against people who were no longer union members. The
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
policy of Federal preemption, preemption, developed from 1953, means that states cannot legislate where the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
does operate. The
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
contains no clause requiring Federal preemption, preemption as is found, for example, in the Fair Labor Standards Act 1938 §218(a) where deviations from the minimum wage or maximum hours are preempted, unless they are more beneficial to the employee. The first major case, ''Garner v Teamsters Local 776'', decided a
Pennsylvania Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...
statute was preempted from providing superior remedies or processing claims quicker than the NLRB because "the Board was vested with power to entertain petitioners' grievance, to issue its own complaint" and apparent "Congress evidently considered that centralized administration of specially designed procedures was necessary to obtain uniform application of its substantive rules". In '' San Diego Building Trades Council v Garmon'', the
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
held that the
California Supreme Court The Supreme Court of California is the highest and final court of appeals in the courts of the U.S. state of California. It is headquartered in San Francisco at the Earl Warren Building, but it regularly holds sessions in Los Angeles and Sac ...
was not entitled to award remedies against a union for picketing, because if "an activity is arguably subject to §7 or §8 of the Act, the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board". This was true, even though the NLRB had not given any ruling on the dispute because its monetary value was too small. This reasoning was extended in ''Lodge 76, International Association of Machinists v Wisconsin Employment Relations Commission'', where a Wisconsin Employment Relations Commission sought to hold a union liable for an unfair labor practice, by refusing to work overtime. Brennan J held that such matters were to be left to "be controlled by the free play of economic forces". While some of these judgments appeared beneficial to unions against hostile state courts or bodies, supportive actions also began to be held preempted. In ''Golden State Transit Corp v City of Los Angeles'' a majority of the
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
held that Los Angeles was not entitled to refuse to renew a taxi company's franchise license because the Teamsters Union had pressured it not to until a dispute was resolved. Most recently in '' Chamber of Commerce v Brown'' seven judges on the Supreme Court held that California was preempted from passing a law prohibiting any recipient of state funds either from using money to promote or deter union organizing efforts. Breyer J and Ginsburg J dissented because the law was simply neutral to the bargaining process. State governments may, however, use their funds to procure corporations to do work that are union or labor friendly.


Collective action

The right of labor to take
collective action Collective action refers to action taken together by a group of people whose goal is to enhance their condition and achieve a common objective. It is a term that has formulations and theories in many areas of the social sciences including psyc ...
, including the right to strike, has been fundamental to Commonwealth v Hunt, common law, federal law, and International labour law, international law for over a century. As New York teacher unions argued in the 1960s, "If you can't call a strike you don't have real
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
, you have 'collective begging.'" During the 19th century, many courts upheld the right to strike, but others issued injunctions to frustrate strikes, and when the Sherman Act of 1890 was passed to prohibit business combinations in
restraint of trade Restraints of trade is a common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. It is a precursor of modern competition law. In an old leading case of ''Mitchel v Reynolds'' (1711) Lord Sm ...
, it was first used against labor unions. This resulted in
Eugene Debs Eugene may refer to: People and fictional characters * Eugene (given name), including a list of people and fictional characters with the given name * Eugene (actress) (born 1981), Kim Yoo-jin, South Korean actress and former member of the sin ...
, American Railway Union leader and future Socialist Presidential candidate, being imprisoned for taking part in the Pullman Strike. The Supreme Court persisted in '' Loewe v Lawlor'' in imposing damages for strikes under
antitrust law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust ...
, until Congress passed the
Clayton Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incipi ...
. Seen as "the Magna Carta of America's workers", this proclaimed that all collective action by workers was outside antitrust law under the commerce clause, because "labor is not a commodity or article of commerce". It became fundamental that no antitrust sanctions could be imposed, if "a union acts in its self-interest and does not combine with non-labor groups." The same principles entered the founding documents of the
International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...
in 1919. Finally at the end of the ''
Lochner era The ''Lochner'' era is a period in American legal history from 1897 to 1937 in which the Supreme Court of the United States is said to have made it a common practice "to strike down economic regulations adopted by a State based on the Court's o ...
'' the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
§157 enshrined the right "to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection" and in §163, the "right to strike". Although federal law guarantees the right to strike, American labor unions face the most severe constraints in the developed world in taking collective action. First, the law constrains the purposes for which strikes are allowed. The
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
only covers "employees" in the private sector, and a variety of state laws attempt to suppress government workers' right to strike, including for teachers, police and firefighters, without adequate alternatives to set fair wages. Workers have the right to take protected concerted activity. But ''NLRB v Insurance Agents' International Union'' held that although employees refusing to perform part of their jobs in a "partial strike" was not a failure to act in good faith, they could be potentially be discharged: perversely, this encourages workers to conduct an all-out strike instead. Second, since 1947 the law made it an "unfair labor practice" for employees to take collective action that is not a "primary strike or primary picketing" against the contractual employer. This prohibition on solidarity action includes a ban on employees of a subsidiary corporation striking in concert with employees of a parent corporation, employees striking with employees of competitors, against outsourced businesses, or against suppliers. However the same standards are not applied to employers: in ''NLRB v Truck Drivers Local 449'', the Supreme Court held that a group of seven employers were entitled to lock out workers of a union at once, in response to a strike at just one of the employers by the union. This said, employees may peacefully persuade customers to boycott any employer or related employer, for instance by giving out handbills. Third, a union is bound to act in
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
if it has negotiated a collective agreement, unless an employer commits an unfair labor practice. The union must also give 60 days warning before undertaking any strike while a collective agreement is in force. An employer must also act in good faith, and an allegation of a violation must be based on "substantial evidence": declining to reply to the National Labor Relations Board's attempts to mediate was held to be insubstantial. The fourth constraint, and most significant, on the right to strike is the lack of protection from unjust discharge. Other countries protect employees from any detriment or discharge for strike action, but the Supreme Court held in ''NLRB v Mackay Radio & Telegraph Co'' that employees on strike could be replaced by strikebreakers, and it was not an unfair labor practice for the employer to refuse to discharge the strikebreakers after the dispute was over. This decision is widely condemned as a violation of international law. However the Supreme Court further held in ''NLRB v Fansteel Metallurgical Corporation'' that the Labor Board cannot order an employer to rehire striking workers, and has even held that employers could induce younger employees more senior jobs as a reward for breaking a strike. Fifth, the Supreme Court has not consistently upheld the right to free speech and peaceful picketing. In ''NLRB v Electrical Workers'' the Supreme Court held that an employer could discharge employees who disparaged an employer's TV broadcasts while a labor dispute was running, on the pretext that the employees' speech had no connection to the dispute. On the other hand, the Supreme Court has held there was a right to picket shops that refused to hire African-American workers. The Supreme Court declared an Alabama law, which fined and imprisoned a picketer, to be unconstitutional. The Supreme Court held unions could write newspaper publications to advocate for pro-labor political candidates. It also held a union could distribute political leaflets in non-work areas of the employer's property. In all of these rights, however, the remedies available to employees for unfair labor practices are minimal, because employees can still be locked out and the Board cannot order reinstatement in the course of a good faith labor dispute. For this reason, a majority of labor law experts support the laws on collective bargaining and collective action being rewritten from a clean slate.


Right to vote at work

While
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
was stalled by
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
Federal preemption, preemption policy, a dysfunctional National Labor Relations Board, and falling union membership rate since the Taft-Hartley Act of 1947, employees have demanded direct voting rights at work: for corporate boards of directors, and in work councils that bind management. This has become an important complement to both strengthening
collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The ...
, and securing the votes in labor's capital on pension boards, which buy and vote on US corporate law, corporate stocks, and control employers. Labor law has increasingly converged with US corporate law, corporate law, and in 2018 the first federal law, the Reward Work Act was proposed by three US senators to enable employees to vote for one third of the directors on boards of listed companies. In 1919, under the Republican governor Calvin Coolidge,
Massachusetts Massachusetts (Massachusett: ''Muhsachuweesut Massachusett_writing_systems.html" ;"title="nowiki/> məhswatʃəwiːsət.html" ;"title="Massachusett writing systems">məhswatʃəwiːsət">Massachusett writing systems">məhswatʃəwiːsət'' En ...
became the first state with a right for employees in manufacturing companies to have employee representatives on the board of directors, but only if corporate stockholders voluntarily agreed. Also in 1919 both Procter & Gamble and the General Ice Delivery Company of Detroit had employee representation on boards. Board representation for employees spread through the 1920s, many without requiring any employee stock ownership plan. In the early 20th century, labor law theory split between those who advocated collective bargaining backed by strike action, those who advocated a greater role for binding arbitration, and proponents of codetermination as "industrial democracy". Today, these methods are seen as complements, not alternatives. A majority of countries in the Organisation for Economic Co-operation and Development have laws requiring direct participation rights. In 1994, the '' Dunlop Commission on the Future of Worker-Management Relations: Final Report'' examined law reform to improve collective labor relations, and suggested minor amendments to encourage worker involvement. Congressional division prevented federal reform, but labor unions and state legislatures have experimented. US corporate law, Corporations are chartered under state law, the larger mostly in Delaware General Corporation Law, Delaware, but leave investors free to organize voting rights and board representation as they choose. Because of
unequal bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater power ...
, but also because of historic caution among American labor unions about taking on management, shareholders have come to monopolize voting rights in American corporations. From the 1970s employees and unions sought representation on company boards. This could happen through
collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
, as it historically occurred in Germany or other countries, or through employees demanding further representation through employee stock ownership plans, but they aimed for voice independent from capital risks that could not be Diversification (finance), diversified. By 1980, workers had attempted to secure board representation at corporations including United Airlines, the General Tire and Rubber Company, and the Providence and Worcester Railroad. However, in 1974 the Securities and Exchange Commission, run by appointees of
Richard Nixon Richard Milhous Nixon (January 9, 1913April 22, 1994) was the 37th president of the United States, serving from 1969 to 1974. A member of the Republican Party, he previously served as a representative and senator from California and was ...
, had rejected that employees who held shares in AT&T were entitled to make shareholder proposals to include employee representatives on the board of directors. This position was eventually reversed expressly by the Dodd-Frank Act of 2010 §971, which subject to rules by the Securities and Exchange Commission entitles shareholders to put forward nominations for the board. Instead of pursuing board seats through shareholder resolutions the United Auto Workers, for example, successfully sought board representation by collective agreement at Chrysler in 1980. The United Steel Workers secured board representation in five corporations in 1993. Some representation plans were linked to employee stock ownership plans, and were open to abuse. At the energy company, Enron, workers were encouraged by management to invest an average of 62.5 per cent of their retirement savings from
401(k) In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodical employee contributions come directly out of the ...
plans in Enron stock against basic principles of prudent, Diversification (finance), diversified investment, and had no board representation. When Enron collapsed in 2003, employees lost a majority of their pension savings. For this reason, employees and unions have sought representation because they invest their labor in the firm, and do not want undiversifiable capital risk. Empirical research suggests by 1999 there were at least 35 major employee representation plans with worker directors, though often linked to corporate stock. As well as representation on a corporation's board of directors, or top management, employees have sought binding rights (for instance, over working time, break arrangement, and layoffs) in their organizations through elected work councils. After the National War Labor Board (1918–1919), National War Labor Board was established by the Woodrow Wilson administration, firms established work councils with some rights throughout the 1920s. Frequently, however, management refused to concede the "right to employ and discharge, the direction of the working forces, and the management of the business" in any way, which from the workforce perspective defeated the object. As the US presidency changed to the Republican Party (United States), Republican party during the 1920s, work "councils" were often instituted by employers that did not have free elections or proceedings, to forestall independent labor unions' right to collective bargaining. For this reason, the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
§158(a)(2) ensured it was an
unfair labor practice An unfair labor practice (ULP) in United States labor law refers to certain actions taken by employers or unions that violate the National Labor Relations Act of 1935 (49 Stat. 449) (also known as the NLRA and the Wagner Act after NY Senator Ro ...
for an employer "to dominate or interfere with the formation or administration of any labor organization, or contribute financial or other support to it". This was designed to enable free work councils, genuinely independent from management, but not dominated work councils or so called "
company union A company or "yellow" union is a worker organization which is dominated or unduly influenced by an employer, and is therefore not an independent trade union. Company unions are contrary to international labour law (see ILO Convention 98, Article ...
s". For example, a work council law was passed by the US government in Allied-occupied Germany called Control Council Law, No 22. This empowered German workers to organize work councils if elected by democratic methods, with secret ballots, using participation of free labor unions, with basic functions ranging from how to apply
collective agreements A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
, regulating health and safety, rules for engagements, dismissals and grievances, proposals for improving work methods, and organizing social and welfare facilities. These rules were subsequently updated and adopted in German law, although American employees themselves did not yet develop a practice of bargaining for work councils, nor did states implement work council rules, even though neither were preempted by the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
. In 1992, the National Labor Relations Board in its ''Electromation, Inc'', and ''EI du Pont de Nemours'', decisions confirmed that while management dominated councils were unlawful, genuine and independent work councils would not be. The Dunlop Report in 1994 produced an inconclusive discussion that favored experimentation with work councils. A
Republican Republican can refer to: Political ideology * An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law. ** Republicanism, the ideology in support of republics or agains ...
Congress did propose a Teamwork for Employees and Managers Act of 1995 to repeal §158(a)(2), but this was vetoed by President Bill Clinton as it would have enabled management dominated unions and councils. In 2014, workers at the Volkswagen Chattanooga Assembly Plant, in Chattanooga, Tennessee, sought to establish a work council. This was initially supported by management, but its stance changed in 2016, after the United Auto Workers succeeded in winning a ballot for traditional representation in an exclusive
bargaining unit A bargaining unit, in labor relations, is a group of employees with a clear and identifiable community of interests who is (under US law) represented by a single labor union in collective bargaining Collective bargaining is a process of negoti ...
. As it stands, employees have no widespread right to vote in American workplaces, which has increased the gap between political democracy and traditional labor law goals of Workplace democracy, workplace and economic democracy.


Equality and discrimination

Since the US Declaration of Independence in 1776 proclaimed that "all men are created equal", the US constitution, Constitution was progressively amended, and legislation was written, to spread equal rights to all people. While the right to vote was needed for true political participation, the "right to work" and "free choice of employment" came to be seen as necessary for "life, liberty and the pursuit of happiness". After state laws experimented, President Franklin D. Roosevelt's
Executive Order 8802 Executive Order 8802 was signed by President Franklin D. Roosevelt on June 25, 1941, to prohibit ethnic or racial discrimination in the nation's defense industry. It also set up the Fair Employment Practice Committee. It was the first federal ac ...
in 1941 set up the Fair Employment Practice Committee to ban discrimination by "race, creed, color or national origin" in the defense industry. The first comprehensive statutes were the
Equal Pay Act of 1963 The Equal Pay Act of 1963 is a United States labor law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex (see gender pay gap). It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Fro ...
, to limit discrimination by employers between men and women, and the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
, to stop discrimination based on "Racism in the United States, race, color, Religious discrimination in the United States, religion, sex, or national origin." In the following years, more "protected characteristics" were added by state and federal acts. The
Age Discrimination in Employment Act of 1967 The Age Discrimination in Employment Act of 1967 (ADEA; to ) is a United States labor law that forbids employment discrimination against anyone, at least 40 years of age, in the United States (see ). In 1967, the bill was signed into law by Pr ...
protects people over age 40. The
Americans with Disabilities Act of 1990 The Americans with Disabilities Act of 1990 or ADA () is a civil rights law that prohibits discrimination based on disability. It affords similar protections against discrimination to Disability in the United States, Americans with disabilities ...
requires "reasonable accommodation" to Social inclusion, include people with disabilities in the workforce. Twenty two state Acts protect people based on LGBT employment discrimination in the United States, sexual orientation in public and private employment, but Equality Act of 2015, proposed federal laws have been blocked by
Republican Republican can refer to: Political ideology * An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law. ** Republicanism, the ideology in support of republics or agains ...
opposition. There can be no detriment to National Labor Relations Act of 1935, union members, or people who have Uniformed Services Employment and Reemployment Rights Act, served in the military. In principle, states may require rights and remedies for employees that go beyond the federal minimum. Federal law has multiple exceptions, but generally requires no disparate treatment by employing entities, no disparate impact of formally neutral measures, and enables employers to voluntarily take affirmative action favoring under-represented people in their workforce. The law has not, however, succeeded in eliminating the disparities in income by Racial inequality in the United States, race, health, age or socio-economic background.


Constitutional rights

The right to equality in employment in the United States comes from at least six major statutes, and limited jurisprudence of the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
, leaving the law inconsistent and full of exceptions. Originally, the
US Constitution The Constitution of the United States is the supreme law of the United States of America. It superseded the Articles of Confederation, the nation's first constitution, in 1789. Originally comprising seven articles, it delineates the nation ...
entrenched gender, race and wealth inequality by enabling states to maintain Slavery in the United States, slavery, reserve the vote to white, property owning men, and enabling employers to refuse employment to anyone. After the
Emancipation Proclamation The Emancipation Proclamation, officially Proclamation 95, was a presidential proclamation and executive order issued by United States President Abraham Lincoln on January 1, 1863, during the American Civil War, Civil War. The Proclamation c ...
in the
American Civil War The American Civil War (April 12, 1861 – May 26, 1865; also known by Names of the American Civil War, other names) was a civil war in the United States. It was fought between the Union (American Civil War), Union ("the North") and t ...
, the Thirteenth Amendment to the United States Constitution, Thirteenth, Fourteenth Amendment to the United States Constitution, Fourteenth and Fifteenth Amendment to the United States Constitution, Fifteenth Amendments attempted to enshrined equal civil rights for everyone, while the Civil Rights Act of 1866, and Civil Rights Act of 1875, 1875 spelled out that everyone had the right to make contracts, hold
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
and access accommodation, transport and entertainment without discrimination. However, in 1883 the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
in the ''
Civil Rights Cases The ''Civil Rights Cases'', 109 U.S. 3 (1883), were a group of five landmark cases in which the Supreme Court of the United States held that the Thirteenth and Fourteenth Amendments did not empower Congress to outlaw racial discrimination by pr ...
'' put an end to development by declaring that US Congress, Congress was not allowed to regulate the actions of private individuals rather than public bodies. In his dissent,
Harlan J John Marshall Harlan (June 1, 1833 – October 14, 1911) was an American lawyer and politician who served as an associate justice of the U.S. Supreme Court from 1877 until his death in 1911. He is often called "The Great Dissenter" due to his ...
would have held that no "corporation or individual wielding power under state authority for the public benefit" was entitled to "discriminate against freemen or citizens, in their civil rights". By 1944, the position had changed. In ''Steele v Louisville & Nashville Railway Co'', a Supreme Court majority held a labor union had a duty of fair representation and may not discriminate against members based on race under the Railway Labor Act of 1926 (or the
National Labor Relations Act of 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and ...
.
Murphy J William Francis Murphy (April 13, 1890July 19, 1949) was an American politician, lawyer and jurist from Michigan. He was a Democrat who was named to the Supreme Court of the United States in 1940 after a political career that included servi ...
would have also based the duty on a right to equality in the Fifth Amendment to the United States Constitution, Fifth Amendment). Subsequently, ''Johnson v Railway Express Agency'' admitted that the old Enforcement Act of 1870 provided a remedy against private parties. However, the Courts have not yet accepted a general right of equality, regardless of public or private power. Legislation will usually be found unconstitutional, under the Fifth or Fourteenth Amendment if discrimination is shown to be intentional, or if it irrationally discriminates against one group. For example, in ''Cleveland Board of Education v LaFleur'' the Supreme Court held by a majority of 5 to 2, that a school's requirement for women teachers to take mandatory maternity leave was unconstitutional, against the Due Process Clause, because it could not plausibly be shown that after child birth women could never perform a job. But while the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
has failed, against dissent, to recognize a constitutional principle of equality, federal and state legislation contains the stronger rules. In principle, federal equality law always enables state law to create better rights and remedies for employees.


Equal treatment

Today legislation bans discrimination, that is unrelated to an employee's ability to do a job, based on sex, race, ethnicity, national origin, age and disability. The
Equal Pay Act of 1963 The Equal Pay Act of 1963 is a United States labor law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex (see gender pay gap). It was signed into law on June 10, 1963, by John F. Kennedy as part of his New Fro ...
banned gender pay discrimination, amending the Fair Labor Standards Act of 1938. Plaintiffs must show an employing entity pays them less than someone of the opposite sex in an "establishment" for work of "equal skill, effort, or responsibility" under "similar working conditions". Employing entities may raise a defense that pay differences result from a seniority or merit system unrelated to sex. For example, in ''Corning Glass Works v Brennan'' the Supreme Court held that although women plaintiffs worked at different times in the day, compared to male colleagues, the working conditions were "sufficiently similar" and the claim was allowed. One drawback is the equal pay provisions are subject to multiple exemptions for groups of employees found in the FLSA 1938 itself. Another is that equal pay rules only operate within workers of an "enterprise", so that it has no effect upon high paying enterprises being more male dominated, nor
child care Child care, otherwise known as day care, is the care and supervision of a child or multiple children at a time, whose ages range from two weeks of age to 18 years. Although most parents spend a significant amount of time caring for their child(r ...
being unequally shared between men and women that affects long-term career progression. Sex discrimination includes discrimination based on pregnancy, and is prohibited in general by the landmark
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
. Beyond gender equality on the specific issue of pay, the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
is the general anti-discrimination statute. Titles I to VI protects the equal right to vote, to access public accommodations, public services, schools, it strengthens the Civil Rights Commission, and requires equality in federally funded agencies. Title VII of the Civil Rights Act of 1964 bans discrimination in employment. Under §2000e-2, employers must not refuse to hire, discharge or discriminate "against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual's Race (human categorization), race, color, religion, sex, or national origin." Racial segregation, Segregation in employment is equally unlawful. The same basic rules apply for people Age Discrimination in Employment Act of 1967, over 40 years old, and for people with Americans with Disabilities Act of 1990, disabilities. Although states may go further, a significant limit to federal law is a duty only falls on private employers of more than 15 staff, or 20 staff for age discrimination. Within these limits, people can bring claims against disparate treatment. In ''Texas Dept of Community Affairs v Burdine'' the
US Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point of ...
held plaintiffs will establish a ''prima facie'' case of discrimination for not being hired if they are in a protected group, qualified for a job, but the job is given to someone of a different group. It is then up to an employer to rebut the case, by showing a legitimate reason for not hiring the plaintiff. However, in 1993, this position was altered in ''St Mary's Honor Center v Hicks'' where
Scalia J Antonin Gregory Scalia (; March 11, 1936 – February 13, 2016) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1986 until his death in 2016. He was described as the intellectua ...
held (over the dissent of four justices) that if an employer shows no discriminatory intent, an employee must not only show the reason is a pretext, but show additional evidence that discrimination has taken place. Souter J in dissent, pointed out the majority's approach was "inexplicable in forgiving employers who present false evidence in court". Disparate treatment can be justified under CRA 1964 §2000e-2(e) if an employer shows selecting someone reflects by "religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise." Race is not included. For example, in ''Dothard v Rawlinson'' the state of
Alabama (We dare defend our rights) , anthem = " Alabama" , image_map = Alabama in United States.svg , seat = Montgomery , LargestCity = Huntsville , LargestCounty = Baldwin County , LargestMetro = Greater Birmingham , area_total_km2 = 135,7 ...
prohibited women from working as prison guards in "contact" jobs, with close proximity to prisoners. It also had minimum height and weight requirements (5"2 and 120 Pound (mass), lbs), which it argued were necessary for proper security. Ms Rawlinson claimed both requirements were unlawful discrimination. A majority of 6 to 3 held that the gender restrictions in contact jobs were a bona fide occupational qualification, because there was a heightened risk of sexual assault, although Stewart J suggested the result might have differed if the prisons were better run. A majority held the height and weight restrictions, while neutral, had a disparate impact on women and were not justified by business necessity. By contrast, in ''Wilson v Southwest Airlines Co'', a
Texas Texas (, ; Spanish: ''Texas'', ''Tejas'') is a state in the South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2020, it is the second-largest U.S. state by ...
District Court held an airline was not entitled to require women only to work as cabin attendants (who were further required to be "dressed in high boots and hot-pants") even if it could show a consumer preference. The essence of the business was transporting passengers, rather than its advertising metaphor of "spreading love all over Texas", so that there was no "bona fide occupational requirement". Under the ADEA 1967, age requirements can be used, but only if reasonably necessary, or compelled by law or circumstance. For example, in ''Western Air Lines, Inc v Criswell'' the Supreme Court held that airlines could require pilots to retire at age 60, because the Federal Aviation Administration required this. It could not, however, refuse to employ flight engineers over 60 because there was no comparable FAA rule. In addition to prohibitions on discriminatory treatment, Sexual harassment in the workplace in the United States, harassment, and detriment in retaliation for asserting rights, is prohibited. In a particularly obscene case, ''Meritor Savings Bank v Vinson'' the Supreme Court unanimously held that a bank manager who coerced a woman employee into having sex with him 40 to 50 times, including rape on multiple occasions, had committed unlawful harassment within the meaning of 42 USC §2000e. But also if employees or managers create a "hostile or offensive working environment", this counts as discrimination. In ''Harris v Forklift Systems, Inc'' the Court held that a "hostile environment" did not have to "seriously affect employees' psychological well-being" to be unlawful. If the environment "would reasonably be perceived, and is perceived, as hostile or abusive" this is enough. Standard principles of agency and vicariously liability apply, so an employer is responsible for the actions of its agents, But according to ''Faragher v City of Boca Raton'' an employing entity can avoid vicarious liability if it shows it (a) exercised reasonable care to prevent and promptly correct any harassment and (b) a plaintiff unreasonably failed to take advantage of opportunities to stop it. In addition, an employing entity may not retaliate against an employee for asserting his or her rights under the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
, or the
Age Discrimination in Employment Act of 1967 The Age Discrimination in Employment Act of 1967 (ADEA; to ) is a United States labor law that forbids employment discrimination against anyone, at least 40 years of age, in the United States (see ). In 1967, the bill was signed into law by Pr ...
. In ''University of Pennsylvania v Equal Employment Opportunity Commission'', the Supreme Court held that a university was not entitled to refuse to give up peer review assessment documents in order for the EEOC to investigate the claim. Furthermore, in ''Robinson v Shell Oil Company'' the Supreme Court held that writing a negative job reference, after a plaintiff brought a race discrimination claim, was unlawful retaliation: employees were protected even if they had been fired. It has also been held that simply being reassigned to a slightly different job, operating forklifts, after making a sex discrimination complaint could amount to unlawful retaliation. This is all seen as necessary to make equal rights effective.


Equal impact and remedies

In addition to disparate treatment, employing entities may not use practices having an unjustified disparate impact on protected groups. In ''Griggs v Duke Power Co'', a power company on the Dan River, North Carolina, required a high school diploma for staff to transfer to higher paying non-manual jobs. Because of Racial segregation in the United States, racial segregation in states like North Carolina, fewer Black people, black employees than White people, white employees had diplomas. The Court found a diploma was wholly unnecessary to perform the tasks in higher paying non-manual jobs. Burger CJ, for a unanimous
Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...
, held the "Civil Rights Act of 1964, Act proscribes not only overt discrimination, but also practices that are fair in form, but discriminatory in operation." An employer could show that a practice with disparate impact followed "business necessity" that was "related to job performance" but otherwise such practices would be prohibited. It is not necessary to show any intention to discriminate, just a discriminatory effect. Since amendments by the Civil Rights Act of 1991, if disparate impact is shown the law requires employers "to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity" and that any non-discriminatory "alternative employment practice" is not feasible. On the other hand, in ''Ricci v DeStefano'' five Supreme Court judges held the City of New Haven had acted unlawfully by discarding test results for
firefighters A firefighter is a first responder and rescuer extensively trained in firefighting, primarily to extinguish hazardous fires that threaten life, property, and the environment as well as to rescue people and in some cases or jurisdictions also ...
, which it concluded could have had an unjustified disparate impact by race. In a further concurrence,
Scalia J Antonin Gregory Scalia (; March 11, 1936 – February 13, 2016) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1986 until his death in 2016. He was described as the intellectua ...
said "resolution of this dispute merely postpones the evil day" when a disparate impact might be found unconstitutional, against the equal protection clause because, in his view, the lack of a good faith defense meant employers were compelled to do "racial decision making" that "is ... discriminatory." In dissent, Ginsburg J pointed out that disparate impact theory advances equality, and in no way requires behavior that is not geared to identifying people with skills necessary for jobs. Both disparate treatment and disparate impact claims may be brought by an individual, or if there is a "pattern or practice" by the
Equal Employment Opportunity Commission The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency that was established via the Civil Rights Act of 1964 to administer and enforce civil rights laws against workplace discrimination. The EEOC investigates discrimination ...
, the United States Attorney General, Attorney General, and by class action. Under the Federal Rules of Civil Procedure, Rule 23 a class of people who share a common claim must be numerous, have "questions of law or fact common to the class", have representatives typical of the claimants, who would "fairly and adequately protect the interests of the class". Class actions may be brought, even in favor of people who are not already identified, for instance, if they have been discouraged from applying for jobs, so long as there is sufficiently specific presentation of issues of law and fact to certify the action. A significant practical problem for disparate impact claims is the "Bennett Amendment" in the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
§703(h). Though introduced as a supposedly "technical" amendment by a Utah Republican Senator, it requires that claims for equal pay between men and women cannot be brought unless they fulfill the requirements of the Fair Labor Standards Act of 1938 § 206(d)(1). This says that employers have a defense to employee claims if unequal pay (purely based on gender) flows from "(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex." By contrast, for claims alleging discriminatory pay on grounds of race, age, sexual orientation or other protected characteristics, an employer only has the more restricted defenses available in the CRA 1964 §703(h). In ''County of Washington v Gunther'' the majority of the Supreme Court accepted that this was the correct definition. In principle, this meant that a group of women prison guards, who did less time working with prisoners than men guards, and also did different clerical work, would be able to bring a claim—there was no need to be doing entirely "equal work". However Rehnquist J dissented, arguing the Amendment should have put the plaintiffs in an even worse position: they should be required to prove they do "equal work", as is stated in the first part of §703(h). Nevertheless, the majority held that the gender pay provisions could be worse because, for example, an employer could apply ""a bona fide job rating system," so long as it does not discriminate on the basis of sex", whereas the same would not be possible for other claims under the
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
. Given that a significant gender pay gap remains, it is not clear why any discrepancy or less favorable treatment, should remain at all.


Affirmative action

*
Civil Rights Act of 1964 The Civil Rights Act of 1964 () is a landmark civil rights and labor law in the United States that outlaws discrimination based on race, color, religion, sex, and national origin. It prohibits unequal application of voter registration requi ...
, 42 USC §2000e-(j) * ''United Steelworkers of America v. Weber'', 443 U.S. 193 (1979) 5 to 3 held that the Civil Rights Act did not prohibit preference being given to under-represented groups as a temporary measure to correct historical disadvantage. Black workers were assured half the places in an on the job training program, pursuant to a collective agreement. Rehnquist J dissented. * ''Bushey v New York State Civil Service Commission'', 733 F2d 220 (2nd 1984) the use of a separate grading curve on the New York Civil Service Commission entrance test for minority candidates was legitimate * ''Johnson v. Transportation Agency, Santa Clara County'' 480 US 616 (1987) 7 to 2, White J and Scalia J dissenting an employer was entitled to give preference to women who possessed qualifications for a job, even if not equally qualified. * ''Local No. 93, International Association of Firefighters v City of Cleveland'' 478 US 501 (1986) a consent decree giving preference in promotions to black fireman in Cleveland was lawful under Title VII, although a District Court would not be entitled to impose a similar preference. * ''Local 28, Sheet Metal Workers' International Association v EEOC'' 478 US 421 (1986) a district court could have a goal of minority membership in a union that had a history of race discrimination in the construction industry. * ''Wygant v Jackson Board of Education'' 476 US 267 (1986) a preference for teachers to be laid off in reverse order of seniority unless this would reduce the percentage of minority teachers was collectively agreed. Held, under strict scrutiny, the preference was unlawful under the Fourteenth Amendment because it was not based on evidence of past discrimination.
Marshall J Thurgood Marshall (July 2, 1908 – January 24, 1993) was an American civil rights lawyer and jurist who served as an associate justice of the Supreme Court of the United States from 1967 until 1991. He was the Supreme Court's first African-A ...
, joined by Brennan J, Blackmun J, Stevens J dissented * ''US v Paradise'' 480 US 149 (1987) a judicially ordered preference to remedy longstanding discrimination in the Alabama Department of Public Safety hiring and promotion of state troopers was lawful. * ''City of Richmond v J.A. Croson Co.'', 488 US 469 (1989) 6 to 3, government contracting according to diversity criteria unlawful. Race preference is subject to strict scrutiny, or more difficult to justify than other remedies for discrimination. * ''Adarand Constructors, Inc. v. Peña'', 515 US 200 (1995) federal agency contracts and subcontracts * ''Piscataway School Board v. Taxman'', 91 F3d 1547 (3d Cir. 1996) case dropped, on affirmative action * ''Morton v Mancari'' 417 US 535 (1974) held preference of Native Americans in the Bureau of Indian Affairs was compatible with Title VII and the Fifth Amendment, as it was "reasonably designed to further the cause of Indian self-government and to make the BIA more responsive to the needs of its constituent groups." * EEOC, ''Guidelines on Affirmative Action'' (2009) 29 CF
§1608
* OFCCP Regulations, 41 CFR §60 based on Executive Order 11246, 3 CFR 339 * Veterans' Preference Act of 1944 * Rehabilitation Act of 1973, 29 USC §§705, 791–794e * ''Borkowski v Valley Central School District'' 63 F3d 131 (2nd 1995) burden of proof * ''Vande Zande v Wisconsin Department of Administration'' 44 F3d 538 (7th 1995) * ''Southeastern Community College v. Davis'' 442 US 397 (1979) a duty of reasonable accommodation did not apparently amount to a duty of affirmative action under §§501–3 *
Americans with Disabilities Act of 1990 The Americans with Disabilities Act of 1990 or ADA () is a civil rights law that prohibits discrimination based on disability. It affords similar protections against discrimination to Disability in the United States, Americans with disabilities ...
, 42 USC §§12101–12213 * ''Cleveland v Policy Management Systems Corp'' 562 US 795 (1999) * ''Sutton v United Airline, Inc'' 527 US 471 (1999) * ''Albertson's Inc v Kirkingburg'' 527 US 555 (1999) * ''Murphy v United Parcel Service'' 527 US 516 (1999) * ''Toyota Motor Manufacturing, Kentucky, Inc. v. Williams'' 534 US 184 (2002) * ''US Airways Inc v Barnett'' 535 US 391 (2002) bad back, request for transfer against seniority system. Breyer J saying that (apparently) seniority systems "encourage employees to invest in the employing company, accepting 'less than their value to the firm early in their careers' in return for greater benefits in later years." * ''New York City Transit Authority v. Beazer'' 440 U.S. 568 (1979) Civil Rights Act of 1964, legality of discrimination against methadone users *
Family and Medical Leave Act of 1993 The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. The FMLA was a major part of President Bill C ...
, Equality Act of 2015


Free movement and immigration

* ''Corfield v. Coryell'', 6 Fed. Cas. 546 (1823) * ''Paul v. Virginia'', 75 U.S. 168 (1869) * ''Hoffman Plastic Compounds, Inc. v. National Labor Relations Board'', 535 U.S. 137 (2002) 5 to 4, an immigrant worker, who had arrived without permission, denied effective rights under the
NLRA 1935 The National Labor Relations Act of 1935, also known as the Wagner Act, is a foundational statute of United States labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, an ...
for helping in union organizing. * History of immigration to the United States *
Immigration Reform and Control Act of 1986 The Immigration Reform and Control Act (IRCA or the Simpson–Mazzoli Act) was passed by the 99th United States Congress and signed into law by U.S. President Ronald Reagan on November 6, 1986. The Immigration Reform and Control Act altered U.S ...
, 8 USC]
§1324b
an
§1324a
"unlawful employment of aliens" * Illegal immigration to the United States * Comprehensive Immigration Reform Act of 2007


Job security

Job security laws in the United States are the weakest in the developed world, as there are no federal statutory rights yet. Any employment contract can require job security, but employees other than corporate executives or managers rarely have the Unequal bargaining power, bargaining power to contract for job security. Collective agreements often aim to ensure that employees can only be terminated for a " just cause", but the vast majority of Americans have no protection other than the rules at common law. Most states follow a rule that an employee can be terminated "at will employment, at will" by the employer: for a "good reason, a bad reason, or no reason at all", so long as no statutory rule is violated.''Cusano v NLRB'' 190 F 2d 898 (1951) citing ''NLRB v Condenser Corp'', 128 F.2d 67, 75 (3rd Cir 1942) stating "poor reason". See further ''Payne v Western & Atlantic Railroad'', 81 Tennessee 507 (1884) Most states have public policy exceptions to ensure that an employee's discharge does not frustrate the purpose of statutory rights. Although the Lloyd–La Follette Act of 1912 required that federal civil servants cannot be dismissed except for a "just cause", no federal or state law (outside MontanaMontana Code Annotated 201
Title 39 ch 2 part 9, §4
/ref>) protects all employees yet. There are now a growing number of proposals to do this. There are no rights to be given reasonable notice before termination, apart from whatever is stated in a contract or collective agreement, and no requirements for severance pay if an employer lays off employees for economic reasons. The only exception is that the
Worker Adjustment and Retraining Notification Act of 1988 The Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") is a U.S. labor law that protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance ...
requires 60 days notice is given if a business with over 100 employees lays off over 33% of its workforce or over 500 people. While a minority of theorists defend at will employment on the ground that it protects liberty and economic efficiency,e.g. R Epstein, ‘In Defense of the Contract at Will’ (1984) 57 University of Chicago Law Review 947 the empirical evidence suggests that job insecurity hampers innovation, reduces productivity, worsens economic recessions,e.g. VV Acharya and RP Baghai, 'Labor Laws and Innovation' (2013) 56(4) Journal of Law and Economics 997 and VV Acharya, RP Baghai, KV Subramanian, 'Wrongful Discharge Laws and Innovation' (2014
27(1) Review of Financial Studies 301
/ref> deprives employees of liberty and pay, and creates a culture of fear. US unemployment has historically been extremely volatile, as Republican presidents have consistently increased post-war unemployment, while Democratic presidents have reduced it. In its conduct of
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for federal funds, very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money s ...
, it is the duty of the Federal Reserve to achieve "maximum employment", although in reality Federal Reserve chairs prioritize the reducing of inflation. Underemployment from growing insecurity of working hours has risen. Government may also use fiscal policy (by taxing or borrowing and spending) to achieve full employment, but as unemployment affects the power of workers, and wages, this remains highly political.


Termination and cause

The reasons or "causes" that an employer can give to terminate employment affect everything from people's income, to the ability to pay the rent, to getting health insurance. Despite this, the legal right to have one's job terminated only for a "just cause" is confined to just three groups of people. First, in the Lloyd–La Follette Act of 1912 Congress codified executive orders giving federal civil servants the right to have their jobs terminated "only for such cause as will promote the efficiency of the service." Second, in the mid 20th century, courts in New York developed a rule that corporate directors could only be dismissed for a "just cause", requiring reasons related to the director's conduct, competence, or some economic justification. Third, since 1987, Montana has enacted a "wrongful discharge" law, giving employees the right to damages if "discharge was not for good cause and the employee had completed the employer's probationary period of employment", with a standard probation set at 6 months work. However a right to reasons before termination has never been extended to ordinary employees outside Montana. By contrast, almost all other developed countries have legislation requiring just cause in termination. The standard in the
International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...
Termination of Employment Convention, 1982 requires a "valid reason" for termination of a worker contract based on "capacity or conduct" and prohibits reasons related to union membership, being a worker representative, or a protected characteristic (e.g. race, gender, etc.). It also requires reasonable notice, a fair procedure, and a severance allowance if the termination is for economic reasons.ILO, Termination of Employment Convention, 1982]
arts 4-13
/ref> Some countries such as Germany also require that elected work councils have the power to veto or delay terminations, to neutralize the employer's potential conflicts of interest. Most countries treat job security as a fundamental right, as well as necessary to prevent irrational job losses, to reduce unemployment, and to promote innovation. An alternative view is that making it easier to fire people encourages employers to hire more people because they will not fear the costs of litigation, although the empirical credibility of this argument is doubted by a majority of scholars. Because most states have not yet enacted proposals for job security rights, the default rule is known as "at-will employment". For example, in 1872, the California Civil Code was written to say "employment having no specified term may be terminated at the will of either party", and even employment for a specified term could be terminated by the employer for a wilful breach, neglect of duty or the employee's incapacity. In the late 19th century, employment at will was popularized by academic writers as an inflexible legal presumption, and state courts began to adopt it, even though many had presumed that contract termination usually required notice and justifications. By the mid-20th century this was summed up to say that an employee's job could be terminated for a "good reason, a bad reason, or no reason at all". However, the employer's discretion to terminate could not violate any statutory prohibition, including termination for union membership, discriminatory termination based on a protected characteristic (e.g. race, gender, age or disability), and bringing claims for occupational health and safety, fair labor standards, retirement income, family and medical leave, and under a series of other specific Acts. Many state courts also added at least four "public policy" exceptions, to ensure that the purpose of statutes in general would not be frustrated by firing. First, employees will be wrongfully discharged if are discharged after they refused to act unlawfully, for instance for refusing to perjure themselves in court. Second, employees cannot be terminated if they insist on performing public duties such as serving on a jury or responding to a subpoena even if this affects an employer's business. Third, an employee cannot be discharged for exercising any statutory right, such as refusing to take a lie detector test or filing litigation. Fourth, employees will be wrongfully discharged if they legitimately Whistleblowing, blow the whistle on unlawful employer conduct, such as violating food labelling laws, or reporting unlawful standards in a nursing home. However none of these exceptions limit the central problem of terminations by an employer that are unrelated to an employee's conduct, capability, or business efficiency. Some states interpret the general duty of
good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...
in contracts to cover discharges, so that an employee cannot, for example, be terminated just before a bonus is due to be paid. However the vast majority of Americans remain unprotected against most arbitrary, irrational or malicious conduct by employers. Despite the default, and absence of job security rights in statute, a contract may require reasons before dismissal as a matter of construction. When there is a "just cause" term in a contract, courts generally interpret this to enable termination for an employee's inadequate job performance after fair warning, and job-related misconduct where the employer consistently enforces a rule, but not actions outside of the job. An employee's job may be constructively and wrongfully terminated if an employer's behavior objectively shows it no longer wishes to be bound by the contract, for instance by unfairly depriving an employee of responsibility. If a written contract does not promise "just cause" protection against termination, statements in a handbook can still be enforceable, and oral agreements can override the written contract.


Economic layoffs

Many job terminations in America are economic layoffs, where employers believe that employees are redundant. In most countries, economic layoffs are separately regulated because of the conflicts of interest between workers, management and shareholders, and the risk that workers are discharged to boost profits even if this damages the long-term sustainability of enterprise. The ILO Termination of Employment Convention, 1982 requires a severance allowance if the termination is for economic reasons, as well as consultation with worker representatives about ways to avoid layoffs. Most developed countries regard information and consultation in the event of any economic change as a fundamental right. The United States government also helped write Control Council Law No 22 for post-war Germany which enabled unions to collectively bargain for elected work councils, which would have the right to participate in decisions about dismissals. However, there are no state or federal laws requiring severance pay or employee participation in layoff decisions. Where employment contracts or collective agreements contain "just cause" provisions, these have been interpreted to give employers broad discretion, and immunity from the social consequences for the laid off workforce. The only statutory right for employees is for extreme cases of mass layoffs under the
Worker Adjustment and Retraining Notification Act of 1988 The Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") is a U.S. labor law that protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance ...
. The WARN Act regulates any "plant closing" where there is an "employment loss" of 33% of employees if that is over 50 employees, or any case of over 500 employee layoffs, and the business employs 100 persons or more. In these cases, employers have to give 60 days notice to employee representatives such as a union, or to each employee if they have none, and the State. Employment loss is defined to include reduction of over 50% of working time, but exclude cases where an employee is offered a suitable alternative job within reasonable commuting distance. Despite the absence of any duty to consult, employers can argue three main defenses for failure to give notice of mass layoff. First, an employer can argue that they believed in good faith that less notice was necessary to improve chances of a capital injection. Second, an employer may argue that business circumstances were unforeseen. Third, an employer can argue it had reasonable grounds for believing its failure was not a violation of the Act. The only remedies are pay that would have been due in the notice period, and a $500 a day penalty to the local governments that were not notified. States such as Massachusetts, Connecticut and Maine have statutes with slightly more stringent notice requirements, but none yet require real voice for employees before facing economic hardship. A common cause of layoffs is that businesses are merged or taken over, either through stock market acquisitions or private equity transactions, where new managements want to fire parts of the workforce to augment profits for shareholders. Outside limited defenses in US corporate law, corporate law, this issue is largely unregulated. However, if an employer is under a duty to bargain in good faith with a union, and its business is transferred, there will be a duty on the successor employer to continue bargaining if it has retained a substantial number of the previous workforce. This was not made out in the leading case, ''Howard Johnson Co v Detroit Local Joint Executive Board'', where the new owner of a restaurant and motor lodge business retained 9 out of 53 former employees, but hired 45 new staff of its own. The majority held there must be "substantial continuity of identity" of the business for the good faith bargaining duty to continue.


Full employment

The right to
full employment Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. F ...
or the "right to work" in a fair paying job is a universal human right in international law, partly inspired by the experience of the
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Con ...
in the 1930s. Unemployment has, however, remained politically divisive because it affects the distribution of wealth and power. When there is full employment under 2%, and everyone can easily find new jobs, worker
bargaining power Bargaining power is the relative ability of parties in an argumentative situation (such as bargaining, contract writing, or making an agreement) to exert influence over each other. If both parties are on an equal footing in a debate, then they w ...
tends to be higher and pay tends to rise, but high unemployment tends to reduce worker power and pay, and may increase shareholder profit. It was long acknowledged that the law should ensure nobody is denied a job by unreasonable restrictions by the state or private parties, and the Supreme Court said in ''Truax v Raich'' that "the right to work for a living in the common occupations of the community is of the very essence of the personal freedom and opportunity". During the
New Deal The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939. Major federal programs agencies included the Civilian Con ...
with unemployment having reached 20% after the
Wall Street Crash of 1929 The Wall Street Crash of 1929, also known as the Great Crash, was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended late in October, when share prices on the New York Stock Exchange coll ...
, the
Emergency Relief Appropriation Act of 1935 The Relief Appropriation Act of 1935 was passed on April 8, 1935, as a part of Franklin Delano Roosevelt's New Deal. It was a large public works program that included the Works Progress Administration (WPA), Public Works Administration (PWA), ...
empowered the President to create the Works Progress Administration, which aimed to directly employ people on fair wages. By 1938, the Works Progress Administration, WPA employed 3.33 million people, and built streets, bridges and buildings across the country. Also created by the 1935 Act, the Rural Electrification Administration brought electrification of farms from 11% in 1934 to 50% by 1942, and nearly 100% by 1949. After war production brought full employment, the WPA was wound up in 1943. After
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...
, the Employment Act of 1946 declared a policy of Congress to "promote full employment and production, increased real income... and reasonable price stability". However the Act did not follow the original proposal to say "all Americans... are entitled to an opportunity for useful, remunerative, regular, and full-time employment". By the 1970s, there was a growing opinion that the equal protection clause itself in the Fourteenth Amendment to the United States Constitution, 14th Amendment should also mean that "every citizen who applies for a government job is entitled to it unless the government can establish some reason for denying the employment." The Humphrey-Hawkins Full Employment Act of 1978 was passed and enabled the President to create jobs to maintain full employment: it stated "the President shall, as may be authorized by law, establish reservoirs of public employment and private nonprofit employment projects". The Act sets the goal of federal government to ensure unemployment is below "3 per centum among individuals aged twenty and over" with inflation also under 3 per cent. It includes "policy priorities" of the "development of energy sources and supplies, transportation, and environmental improvement". These powers of a job guarantee, full employment, and environmental improvement have not yet been used. While the laws for a federal or state job guarantee have not yet been used, the Federal Reserve Act 1913 does require that the Board of Governors of the Federal Reserve System should use its powers "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates." During the Great Depression it was understood that inequality in the distribution of wealth had contributed to the lack of employment, and that Federal lending policy and bank regulation should pursue a range of objectives. However, the Federal Reserve became dominated by a theory of a natural rate of unemployment, taking the view that attempts to achieve full employment would accelerate inflation to an uncontrollably high. Instead it was said by theorists such as Milton Friedman that central banks should use monetary policy only to control inflation, according to the non-accelerating inflation rate of unemployment (NAIRU). It is doubted that any natural rate of unemployment exists, because the United States and other countries have sustained full employment with low inflation before, and the US unemployment rate follows which political party is in the White House. If despite fiscal and monetary policy people are unemployed, the Social Security Act of 1935 creates unemployment insurance. One of its goals is to stabilize employment by encouraging employers to retain workers in downturns. Unlike other systems, this makes social security highly dependent on employers. It is funded through a federal payroll tax, and employers that make more layoffs pay higher rates based on past experience. A laid off employee brings a claim to state unemployment office, the former employer is informed and may contest whether the employee was laid off fairly: they are given absolute privilege to communicate information regardless of how false or defamatory it is. Employees cannot get benefits if they are laid off for misconduct, and for participation in strikes, even though the reality may be the employer's fault and there are no other jobs available. Social security claimants must also accept any suitable job. Unemployment offices usually provide facilities for claimants to search for work, but many also turn to private employment agencies. The Supreme Court has held that licensing, fees and regulation of employment agencies under state law is constitutional.


Trade and international law

*
US Constitution The Constitution of the United States is the supreme law of the United States of America. It superseded the Articles of Confederation, the nation's first constitution, in 1789. Originally comprising seven articles, it delineates the nation ...
, Article I, Section 8, Clause 3, Congress has the power: "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Article IV, Section 2, Clause 1, "The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States." * Freedom of movement under United States law * ''Gibbons v. Ogden'', 22 US 1 (1824) and ''Paul v Virginia'', 75 US 168 (1869) * Interstate Commerce Act of 1887 and Federal Trade Commission Act of 1914 *
International Labour Organization The International Labour Organization (ILO) is a United Nations agency whose mandate is to advance social and economic justice by setting international labour standards. Founded in October 1919 under the League of Nations, it is the first and o ...
and international labor standards * Bargaining power, race to the bottom, foreign direct investment, human development (humanity), human development, technological change, global workforce, immigration * Tariff Act of 1890, Smoot–Hawley Tariff Act of 1930,
Great Depression The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
* United States free trade agreements, United States International Trade Commission, 19 USC * Trade Act of 1974, Trade Agreements Act of 1979, Trade Act of 2002, Trade Preferences Extension Act of 2015 and Fast track (trade) * North American Free Trade Agreement, 19 USC ch 21, §3301 * World Trade Organization and Uruguay Round Agreements Act of 1994 * Permanent normal trade relations * Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership * Three potential views are: ** (1) expansion of trade is good because it increases the scope for division of labor and expanding markets. So, all customs, taxes, and equivalent restrictions against market access should be dismantled ** (2) free trade is bad because it exacerbates labor's inequality of bargaining power against global capital. Trade should be limited and regulated by systems of taxes and tariffs according to the state of other countries' development ** (3) trade, without barriers to movement of capital, goods and services, improves living standards if labor standards are improved in all countries. This (a) discourages emigration from poorer countries: as people's lives improve they may not want to leave (b) requires standards are improved at a rate to ensure stability in capital and labor flows (c) in turn requires that standard should not enable workers to be paid less than is necessary for human development (humanity), human development and the workers' rate of productivity.


Labor law in individual states


California

In 1959, California added the Division of Fair Employment Practices to the California Department of Industrial Relations. The Fair Employment and Housing Act of 1980 gave the division its own Department of Fair Employment and Housing, with the stated purpose of protecting citizens against harassment and employment discrimination on the basis of: age, ancestry, color, creed, denial of family and medical care leave, disability (including HIV/AIDS), marital status, medical condition, national origin, race, religion, sex, transgender status and sexual orientation. Sexual orientation was not specifically included in the original law but precedent was established based on case law. On October 9, 2011, California Governor Edmund G. "Jerry" Brown signed into law Assembly Bill No. 887 alters the meaning of gender for the purposes of discrimination laws that define sex as including gender so that California law now prohibits discrimination on the basis of gender identity and gender expression. The state also has its own labor law covering agricultural workers, the California Agricultural Labor Relations Act.


New Jersey

In 1945, New Jersey enacted the first statewide civil rights act in the entire nation. with the purpose of protecting citizens against harassment and employment discrimination on the basis of: race, creed, color, national origin, nationality, or ancestry. This has since been expanded to age, sex, disability, pregnancy, sexual orientation, perceived sexual orientation, marital status, civil union status, domestic partnership status, affectional orientation, gender identity or expression, genetic information, military service, or mental or physical disability, AIDS and HIV related illnesses and atypical hereditary cellular or blood traits.Th
New Jersey Law Against Discrimination
/ref>


Laws restricting unions

, twenty-six states plus Guam prevent trade unions from signing collective agreements with employers requiring employees pay fees to the union when they are not members (frequently called "right-to-work" laws by their political proponents). In 2010, the organization "Save Our Secret Ballot" pushed four states: Arizona, South Carolina, South Dakota, and Utah to pass constitutional amendments to ban Card check.


Enforcement of rights

* United States Department of Labor * National Labor Relations Board * ''Ford Motor Co. v. NLRB'', 305 U.S. 364 (1939) the right of the NLRB to withdraw its submissions to the Court were at the court's discretion * ''In re NLRB'', 304 U.S. 486 (1938) to enforce an order, the NLRB must file a petition and transcript with the courts *
Equal Employment Opportunity Commission The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency that was established via the Civil Rights Act of 1964 to administer and enforce civil rights laws against workplace discrimination. The EEOC investigates discrimination ...
* ''Elgin v. Department of Treasury'', 567 U.S. ___ (2012) 6 to 3, under the Civil Service Reform Act of 1978 federal employees have no recourse to the federal courts over wrongful discharge cases, but must instead go to the Merit Systems Protection Board. * ''United Mine Workers of America v. Gibbs'', 383 U.S. 715 (1966) state and federal jurisdiction in labor disputes


See also

* Labor law * European labour law * UK labour law * Social law *
Child labor laws in the United States Child labor laws in the United States address issues related to the employment and welfare of working children in the United States. The most sweeping federal law that restricts the employment and abuse of child workers is the Fair Labor Standard ...
;Organizations * American Rights at Work, a charity supporting union rights *
Congress of Industrial Organizations The Congress of Industrial Organizations (CIO) was a federation of unions that organized workers in industrial unions in the United States and Canada from 1935 to 1955. Originally created in 1935 as a committee within the American Federation of ...
* International Society for Labor Law and Social Security * National Labor Federation, an organization supporting workers outside the protection of federal labor laws * United States Department of Labor, includes a list of labor legislation


Notes

{{Reflist, 2


References

;Books * JR Commons, ''Principles of Labor Legislation'' (1916) * JR Commons, ''History of Labor in the United States'' (Macmillan 1918
vol I
an
vol II
* R Covington, ''Employment Law in a Nutshell'' (3rd edn 2009) * A Cox, DC Bok, MW Finkin and RA Gorman, ''Labor Law: Cases and Materials'' (2011) * KG Dau-Schmidt, MH Malin, RL Corrada and CDR Camron, ''Labor Law in the Contemporary Workplace'' (4th edn 2009) * MA Rothstein and L Liebman, ''Employment Law Cases and Materials'' (7th edn Foundation 2011) * G Rutherglen, ''Employment Discrimination Law: Visions of Equality in Theory and Doctrine'' (3rd edn 2010) ;Articles * JM Feinman
'The Development of the Employment at Will Rule'
(1976) 20(2) The American Journal of Legal History 118 * H Hovenkamp, 'Labor Conspiracies in American Law, 1880–1930' (1988) 66 Texas Law Review 919 * CW Summers, 'Democracy in a One-Party State: Perspectives from Landrum-Griffin' (1984) 43 Maryland Law Review 93


External links


Labor laws of Federal and State legislatures on law.cornell.edu

Synopses of US Employment Law Cases

Typical benefits of a union contract

Federal employment discrimination law office
United States labor law, Articles containing video clips