The American Federation of Labor demanded that courts refrain from issuing injunctions in labor disputes. Unions also demanded exemption from the antitrust laws. Congress enacted the Sherman Antitrust Act in 1890, which outlawed every “combination in restraint of trade.” Yet while Congress’s principal concern was monopolistic producers, labor unions were every bit as monopolistic as their employers. Indeed, the antitrust laws were more effective against union conspiracies, because unions engaged in more overtly cartel-like behavior, and because union combinations could rarely be shown, like many producer combinations, to have any public or consumer benefit. So even in 1911, when the Supreme Court stated the “rule of reason,” applying the Sherman Act only to harmful combinations, unions remained in violation of the law.
Given the antitrust laws, what unions sought was immunity to engage in what would otherwise be criminal activity. The AFL found the Democratic party more receptive to its demands, and began to support that party. But even when unionists got the chance to amend antitrust law, all they managed to pass was the Clayton Act of 1914, a law so watered-down as to change nothing.
But eventually the New Deal brought unions the privileges they sought. The 1935 National Labor Relations Act (or “the Wagner Act”) is widely seen as the key to union power. But the real breakthrough had come under Herbert Hoover, in the Norris–La Guardia Act of 1932, which beefed up the Clayton Act’s language exempting unions from antitrust laws and protecting them from injunctions. The Wagner Act went further, compelling employers to bargain exclusively with whomever a majority of their employees chose. The resulting contracts could include requirements that companies hire only union members (the “closed shop”), or that they force new employees to join the union (the “union shop”).
The Supreme Court was the last obstacle; almost everyone assumed it would declare the Wagner Act unconstitutional. But the Court backed down after President Franklin D. Roosevelt threatened to “pack” it, and his new appointees interpreted the law in a pro-union fashion. In 1940 the Court held that even “a lawless invasion of [a] plant and destruction of property by force and violence of the most brutal and wanton character, under [union] leadership and direction” did not amount to a conspiracy in restraint of trade. Two years later, the Court held that federal labor law did not forbid the New York City Teamsters to hijack trucks entering the city or extort a day’s union wage from such trucks as a toll, calling it “traditional union activity.” When Congress amended the law to prohibit such mayhem, the Court effectively nullified the adjustments.
Such union tactics, and the strike wave that followed World War II, led to demands that Congress limit unions’ power. The 1947 Taft-Hartley Act preserved the fundamentals of the Wagner Act (majority and compulsory unionism), but did allow states to outlaw the “union shop” — the requirement that employees join the union or pay dues as a condition of employment. Most states in the South and West exercised this option and became “right to work” states.
Since then, new investment and jobs have been migrating from union-shop to right-to-work states — or abroad to countries with lower labor costs. Michigan alone lost 600,000 union jobs between 2000 and 2010. The number of private-sector union members has declined by half since 1973, and their percentage of the work force is about where it was before the New Deal. Michigan’s move is, in a way, a return to that freer status quo.
— Paul Moreno is the director of academic programs at Hillsdale College’s Kirby Center for Constitutional Studies and Citizenship.