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A Brief History of Labor Relations in the United States (Part I)

By Dr. Gary L. Deel, Ph.D., J.D.
Faculty Director, School of Business, American Public University

This is the first of a two-part series discussing the history of labor relations in the U.S. as we approach the annual Labor Day national holiday.

(Note: This article contains content adapted from lesson material written for APUS classes.)

Although organized labor legislation has only been on the books for less than a century, the spirit of organized labor has been a staple of American culture since the nation’s beginnings. We know from social science research that dissatisfaction with the status quo leads people to long for change. And if those yearnings for change are not satisfied, the people will eventually feel compelled to take action.

As large and complex organizations grew to become more and more dependent on their human capital, workers realized intuitively that if they collectively demanded changes in circumstances such as compensation and working conditions, the threat of refusal to work en masse would coerce concessions from employers. This strategy, when successful, rebalances the power dynamics between employers and their employees, giving workers a collective seat at the table that they could never hope to gain individually.

Some of the first cases of worker uprisings resulted in rather barbaric precedents that have long since been abandoned. For example, in 1794 a group of shoemakers in Philadelphia refused to manufacture shoes for their employers unless production wages were set at acceptable standards. The employers sought relief in the courts.

Because shoes were a basic necessity, and because there were not nearly as many industry suppliers as there are today, the refusal of employees to work for less-than-satisfactory wages was viewed as a criminal conspiracy. They were construed to be holding the public hostage with their work standoff. This “conspiracy doctrine” persisted through the mid-1800s, until changing judicial opinions relaxed this strict application of criminal culpability.

Industrialization Was the Strong Focus in the Latter Half of the 19th Century

The latter half of the 19th century was focused strongly on industrialization. This push for maximized efficiency and productivity brought with it long hours, low wages, unsafe working conditions and other poor circumstances for American workers. Some employees were brave enough to speak up and begin the process of organizing labor, but most attempts at such organization were met with hostility from employers, as these movements threatened to disrupt what was a very profitable paradigm.

Furthermore, federal labor laws were nearly nonexistent, and because wealthy corporate interests heavily influenced the machinations of government and law, whenever efforts at collective influence were even the least bit effective they were quickly thwarted by injunction. In extreme instances (once in 1877 and again in 1894), the federal government actually used law enforcement and military troops to break up worker strikes and force compliance.

Employment Law in the United States Was Relatively Late in Coming

Employment law in the United States was relatively late in coming. It wasn’t until 1938, with the passage of the Fair Labor Standards Act, that the United States saw its first federal prescriptions for things like minimum wage, overtime and age requirements on workers. However, legislation in the areas of labor relations and collective bargaining actually began much earlier — as far back as the 1920s.

First, the Railway Labor Act of 1926 (later amended in 1934 and 1936) provided a means for workers in the railroad industry — and subsequently, the airline industry — to engage in dispute resolution with their employers. The main purpose of the law was to encourage alternative dispute resolution tools for strikes so as to avoid shutdowns and delays in the transportation and logistics industries that are vital to national interests.

The Railway Labor Act also prohibited what are called “yellow dog contracts” in these transportation industries. Yellow dog contracts are agreements that employers required their employees to sign, promising not to engage in union support. Before prohibiting legislation, employers would often require employees to sign these agreements as a condition of employment.

Next came the Norris-LaGuardia Act of 1932, a federal bill that precluded courts from enjoining non-violent employee organizing activities. This law effectively gave unions an affirmative right to conduct their business without interference, so long as their conduct was not violently hostile. Prior to this legal protection, powerful employer interests would commonly leverage the authority of the court systems to put a stop to any employee organizing activity, so this law was a major step forward for employee rights.

In addition, the Norris-LaGuardia Act extended the prohibition of yellow dog contracts to all industries and work environments. Although yellow dog contracts are still illegal, the use of the term to describe other types of adhesion clauses in union contracts (e.g. compulsory, binding arbitration) is still prevalent today.

In 1935, Congress passed the National Labor Relations Act (NLRA), also known as the Wagner Act, which encouraged unionizing efforts and established employee rights to peaceful and non-obstructive organizing activity. The NLRA also created the National Labor Relations Board (NLRB), which is a committee that oversees the rights of employees to organize as decreed in the NLRA. The NLRB also provides guidance to both employers and employees throughout these processes.

Under the NLRA, employee rights to form or dissolve unions, and to participate or not in union activities, are all protected regardless of the size of an organization. However, there are a few key exceptions under the law.

First, employees of federal, state or local governments are excluded from coverage. This exception was likely inspired by the 11th Amendment, constitutional immunity from suit of federal and state governments. In terms of industries, railroad, airline, and agricultural workers are also excluded; this is due to a combination of factors including other legislation such as the Railway Labor Act and the lobbying power of industries. In addition to these exclusions, independent contractors and employees working for their families are also not covered under the NLRA and related legislation.

World War II would bring a new set of dynamics to labor relations in the United States. In the second part of this series, we’ll discuss how the global conflict reshaped union-employer interactions.

About the Author

Dr. Gary Deel is a Faculty Director with the School of Business at American Public University. He holds a J.D. in Law and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for American Public University, the University of Central Florida, Colorado State University and others.

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