United States Labor Law

United States labor law sets the rights and duties for employees, labor unions, and employers in the United States. Labor law's basic aim is to remedy the "inequality of bargaining power" between employees and employers, especially employers "organized in the corporate 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, 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. The Family and Medical Leave Act of 1993 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, but the Employee Retirement Income Security Act of 1974 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 requires employees have a safe system of work.

A contract of employment can always create better terms than statutory minimum rights. But to increase their bargaining power to get better terms, employees organize labor unions for collective bargaining. The Clayton Act of 1914 guarantees all people the right to organize, and the National Labor Relations Act of 1935 creates rights for most employees to organize without detriment through unfair labor practices. Under the Labor Management Reporting and Disclosure Act of 1959, 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. 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 boards.

Since the Civil Rights Act of 1964, 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. Additional groups with "protected status" were added by the Age Discrimination in Employment Act of 1967 and the Americans with Disabilities Act of 1990. There is no federal law banning all sexual orientation or identity 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. Collective agreements 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 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 through monetary policy and spending on infrastructure. Trade policy has attempted to put labor rights in international agreements, to ensure open markets in a global economy do not undermine fair and full employment.

History

Modern US labor law mostly comes from statutes passed between 1935 and 1974, and changing interpretations of the US Supreme Court. However, laws regulated the rights of people at work and employers from colonial times on. Before the Declaration of Independence in 1776, the common law was either uncertain or hostile to labor rights. Unions were classed as conspiracies, and potentially criminal. It tolerated slavery and indentured servitude. From the Pequot War in Connecticut from 1636 onwards, Native Americans were enslaved by European settlers. More than half of the European immigrants arrived as prisoners, or in indentured servitude, where they were not free to leave their employers until a debt bond had been repaid. Until its abolition, the Atlantic slave trade brought millions of Africans to do forced labor in the Americas.

However, in 1772, the English Court of King's Bench held in ''Somerset v Stewart'' that slavery was to be presumed unlawful at common law. Charles Stewart from Boston, Massachusetts had bought James Somerset as a slave and taken him to England. With the help of abolitionists, Somerset escaped and sued for a writ of ''habeas corpus'' (that "holding his body" had been unlawful). Lord Mansfield, after declaring he should "let justice be done whatever be the consequence", 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 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 halted the Atlantic slave trade in 1807, and abolished slavery in its own territories, by paying off slave owners in 1833. 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 was the result. President Lincoln's Emancipation Proclamation 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. 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 was also meant to ensure equality in access to housing and transport, but in the ''Civil Rights Cases'', the Supreme Court found it was "unconstitutional", ensuring that racial segregation would continue. In dissent, Harlan J said the majority was leaving people "practically at the mercy of corporations". Even if people were formally free, they remained factually dependent on property 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 shoemakers union striking for higher wages was an illegal "conspiracy", even though corporations—combinations of employers—were lawful. Unions still formed and acted. The first federation of unions, the National Trades Union 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. 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, 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 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 and telegraphs from 1883 led to the foundation of the American Federation of Labor 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, which was intended to sanction business cartels acting in restraint of trade, was applied to labor unions. In 1895, the US Supreme Court in ''In re Debs'' affirmed an injunction, based on the Sherman Act, against the striking workers of the Pullman Company. The strike leader Eugene Debs was put in prison. In notable dissent among the judiciary, Holmes J argued in '' Vegelahn v Guntner'' that any union taking collective action in good faith 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, but was again in a minority on labor rights. In 1905, ''Lochner v New York'' held that New York limiting bakers' working day to 60 hours a week violated employers' freedom of contract. 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, Holmes J dissented, arguing that the "constitution 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'', 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 §6. This removed labor from antitrust law, 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, and abuses of employers documented by the ''Commission on Industrial Relations'' from 1915, the Supreme Court struck labor rights down as unconstitutional, leaving management powers virtually unaccountable. In this ''Lochner era'', 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 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, meaning that Eugene Debs ran as the Socialist Party's candidate for President in 1920 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. 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 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.

This led to the election of Franklin D. Roosevelt for president in 1932, who promised a "New Deal". Government committed to create full employment 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, which regulated enterprise in an attempt to ensure fair wages and prevent unfair competition