Labor and Employment Law Commons^™

President Biden's Executive Order On Competition: An Antitrust Analysis, Herbert J. Hovenkamp

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In July, 2021, President Biden signed a far ranging Executive Order directed to promoting competition in the American economy. This paper analyzes issues covered by the Order that are most likely to affect the scope and enforcement of antitrust law. The only passage that the Executive Order quoted from a Supreme Court antitrust decision captures its antitrust ideology well – that the Sherman Act:

rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time …

A Miser’S Rule Of Reason: The Supreme Court And Antitrust Limits On Student Athlete Compensation, Herbert J. Hovenkamp

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The unanimous Supreme Court decision in NCAA v. Alston is its most important probe of antitrust’s rule of reason in decades. The decision implicates several issues, including the role of antitrust in labor markets, how antitrust applies to institutions that have an educational mission as well as involvement in a large commercial enterprise, and how much leeway district courts should have in creating decrees that contemplate ongoing administration.

The Court accepted what has come to be the accepted framework: the plaintiff must make out a prima facie case of competitive harm. Then the burden shifts to the defendant to produce …

Restoration: The Role Stakeholder Governance Must Play In Recreating A Fair And Sustainable American Economy A Reply To Professor Rock, Leo E. Strine Jr.

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In his excellent article, For Whom is the Corporation Managed in 2020?: The Debate Over Corporate Purpose, Professor Edward Rock articulates his understanding of the debate over corporate purpose. This reply supports Professor Rock’s depiction of the current state of corporate law in the United States. It also accepts Professor Rock’s contention that finance and law and economics professors tend to equate the value of corporations to society solely with the value of their equity. But, I employ a less academic lens on the current debate about corporate purpose, and am more optimistic about proposals to change our corporate governance …

The Behavioral Economics Of Multilevel Marketing, Heidi H. Liu

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Multilevel marketing companies (MLMs) - sales organizations that compensate independent consultants based on the sales and recruitment of other consultants - form a significant part of the American economy. Yet, MLMs provide little information to regulators and potential participants regarding potentially material information. Although MLMs are often compared to pyramid schemes, consultants argue that participation in a MLM allows them to make money outside of the traditional full-time labor force. This paper examines the law, economics, and psychology of MLMs, suggesting that MLMs may draw on prospective consultants' cognitive biases in persuading consultants to join and continue a MLM. Consultants …

The Progressives: Racism And Public Law, Herbert J. Hovenkamp

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American Progressivism inaugurated the beginning of the end of American scientific racism. Its critics have been vocal, however. Progressives have been charged with promotion of eugenics, and thus with mainstreaming practices such as compulsory housing segregation, sterilization of those deemed unfit, and exclusion of immigrants on racial grounds. But if the Progressives were such racists, why is it that since the 1930s Afro-Americans and other people of color have consistently supported self-proclaimed progressive political candidates, and typically by very wide margins?

When examining the Progressives on race, it is critical to distinguish the views that they inherited from those that …

The Ncaa And The Rule Of Reason, Herbert J. Hovenkamp

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This brief essay considers the use of antitrust’s rule of reason in assessing challenges to rule making by the NCAA. In particular, it looks at the O’Bannon case, which involved challenges to NCAA rules limiting the compensation of student athletes under the NCAA rubric that protects the “amateur” status of collegiate athletes. Within that rubric, the Ninth Circuit got the right answer.

That outcome leads to a broader question, however: should the NCAA’s long held goal, frequently supported by the courts, of preserving athletic amateurism be jettisoned? Given the dual role that colleges play, that is a complex question, raising …

Uncontrolled Experiments From The Laboratories Of Democracy: Traditional Cash Welfare, Federalism, And Welfare Reform, Jonah B. Gelbach

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In this chapter I discuss the history and basic incentive effects of two key U.S. cash assistance programs aimed at families with children. Starting roughly in the 1980s, critics of the Aid to Families with Dependent Children (AFDC) program argued that the program -- designed largely to cut relatively small checks -- failed to end poverty or promote work. After years of federally provided waivers that allowed states to experiment with changes to their AFDC programs, the critics in 1996 won the outright elimination of AFDC. It was replaced by the Temporary Assistance to Needy Families (TANF) program, over which …

The Knowledge Gap In Workplace Retirement Investing And The Role Of Professional Advisors, Jill E. Fisch, Tess Wilkinson-Ryan, Kristin Firth

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The dramatic shift from traditional pension plans to participant-directed 401(k) plans has increased the decision-making responsibility of individual investors for their own retirement planning. With this shift comes increasing evidence that investors are making poor decisions in choosing how much to save for retirement and in selecting among their investment options. Studies question the value of efforts to improve these decisions through regulatory reforms or investor education.

This article posits that deficiencies in workplace retirement savings cannot be adequately addressed until the reasons for poor investment decisions are better understood. We report the results of a study designed to simulate …

An Optimist's Take On The Decline Of Small-Employer Health Insurance, Allison K. Hoffman

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In their Article, Saving Small-Employer Health Insurance, Amy Monahan and Dan Schwarcz contend that the Patient Protection and Affordable Care Act (“ACA”) could be the death of small-group health insurance by incentivizing many small employers not to offer coverage. While their prediction that the ACA, after implemented, will destabilize the small-group insurance market may prove true, I argue why their prescription that it should be saved is flawed and why we may be better off without small group insurance.

The Striking Success Of The National Labor Relations Act, Michael L. Wachter

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Although often viewed as a dismal failure, the National Labor Relations Act (NLRA) has been remarkably successful. While the decline in private sector unionization since the 1950s is typically viewed as a symbol of this failure, the NLRA has achieved its most important goal: industrial peace.

Before the NLRA and the 1947 Taft-Hartley Amendments, our industrial relations system gave rise to frequent and violent strikes that threatened the nation’s stability. For example, in the late 1870s, the Great Railroad Strike spread throughout a number of major cities. In Pittsburg alone, strikes claimed 24 lives, nearly 80 buildings, and over 2,000 …

Neoclassical Labor Economics: Its Implications For Labor And Employment Law, Michael L. Wachter

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Whereas law and economics appears throughout business law, it never caught on in legal commentary about labor and employment law. A major reason is that the goals of the National Labor Relations Act (NLRA), the country’s foundational labor law, are at war with basic principles of economics. The lack of integration is unfortunate if understandable. Notwithstanding the NLRA’s normative goal to keep wages out of competition, economic analysis applies as centrally to labor markets as to any other market.

One of the NLRA’s primary goals is to equalize bargaining power. Its drafters envisioned achieving this goal through procedural and substantive …

A Preface To Neoclassical Legal Thought, Herbert J. Hovenkamp

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Most legal historians speak of the period following classical legal thought as “progressive legal thought.” That term creates an unwarranted bias in characterization, however, creating the impression that conservatives clung to an obsolete “classical” ideology, when in fact they were in many ways just as revisionist as the progressives legal thinkers whom they critiqued. The Progressives and New Deal thinkers whom we identify with progressive legal thought were nearly all neoclassical, or marginalist, in their economics, but it is hardly true that all marginalists were progressives. For example, the lawyers and policy makers in the corporate finance battles of the …

A Cost-Benefit Interpretation Of The "Substantially Similar" Hurdle In The Congressional Review Act: Can Osha Ever Utter The E-Word (Ergonomics) Again?, Adam M. Finkel, Jason W. Sullivan

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The Congressional Review Act permits Congress to veto proposed regulations via a joint resolution, and prohibits an agency from reissuing a rule “in substantially the same form” as the vetoed rule. Some scholars—and officials within the agencies themselves—have understood the “substantially the same” standard to bar an agency from regulating in the same substantive area covered by a vetoed rule. Courts have not yet provided an authoritative interpretation of the standard.

This Article examines a spectrum of possible understandings of the standard, and relates them to the legislative history (of both the Congressional Review Act itself and the congressional veto …

Book Review (Paul Frymer's Black And Blue: African Americans, The Labor Movement, And The Decline Of The Democratic Party)., Sophia Z. Lee

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No abstract provided.

The Myth Of Equality In The Employment Relation, Aditi Bagchi

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Although it is widely understood that employers and employees are not equally situated, we fail adequately to account for this inequality in the law governing their relationship. We can best understand this inequality in terms of status, which encompasses one’s level of income, leisure and discretion. For a variety of misguided reasons, contract law has been historically highly resistant to the introduction of status-based principles. Courts have preferred to characterize the unfavorable circumstances that many employees face as the product of unequal bargaining power. But bargaining power disparity does not capture the moral problem raised by inequality in the employment …

On Beyond Calpers: Survey Evidence On The Developing Role Of Public Pension Funds In Corporate Governance, Stephen Choi, Jill E. Fisch

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No abstract provided.

Varieties Of Employee Ownership: Some Unintended Consequences Of Corporate Law And Labor Law, Aditi Bagchi

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Theories of employee ownership implicitly assume that its essential features are the same in all countries. In fact, employee ownership varies considerably across institutional environments. In this paper, I compare its development in the United States, Germany, and Sweden to show that the institutional background - in particular, the existing bodies of corporate and labor law - against which a program of employee ownership arises determines its course. Background institutions determine the cost of worker control over management, the cost of collective decision-making, and the expected gains from risk-bearing. Those consequences of corporate and labor law in turn determine whether …

The Disadvantages Of Immigration Restriction As A Policy To Improve Income Distribution, Howard F. Chang

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In this Article, I argue that tax and transfer policies are more efficient than immigration restrictions as instruments for raising the after tax incomes of the least skilled native workers. Policies to protect these native workers frol1'l immigrant competition in the labor market do no better at promoting distributive justice and are likely to impose a greater economic burden on natives in the country of immigration than the tax alternative. These immigration restrictions are especially costly given the disproportionate burden that they place on households with working women, which discourages fel1'wle participation in the labor force. This burden runs contrary …

Guest Workers And Justice In A Second-Best World, Howard F. Chang

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This essay offers a defense of guest-worker programs and a critique of the objections raised by Michael Walzer and by other critics of such programs. Although critics commonly complain that guest workers are vulnerable to exploitation by employers, we can design guest-worker programs that minimize the risk of such exploitation. Ready access for relatively unskilled guest workers to citizenship and to public benefits, however, generates a fiscal burden for the public treasury. A right to equal treatment for aliens yields perverse results unless aliens are also entitled to equal concern when the host country decides whether to admit the alien …

Labor Unions: A Corporatist Institution In A Competitive World, Michael L. Wachter

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Union membership, as a percentage of the private sector workforce, has been in decline for 50 years. I argue that the cause of this unrelenting decline is a single, fundamental factor – the change in the United States economy from a corporatist-regulated economy to one based on free competition. Most labor commentators have explained the decline by a confluence of unrelated economic and legal forces. Labor economists typically stress economic explanations, which vary from compositional shifts in the job structure to increased competition both domestically and internationally. On the other hand, labor law commentators naturally focus on labor law explanations, …

The Need For A Reduced Workweek In The United States, Vicki Schultz, Allison K. Hoffman

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This paper argues that a reduced workweek offers a way to alleviate work-family conflict without exacerbating the sex-based division of labor in paid work and unpaid family work. We distinguish our position from two other approaches: (1) one that compensates unpaid family work directly (through such policies as traditional welfare provision, or alimony), policies we argue can discourage women from labor force attachment and contribute to sex-stereotyping and sex-segregated employment; and (2) an approach that spurs employers to accommodate workers' family responsibilities (through such policies as part-time work for parents), policies workers often avoid out of a well founded fear …

Theories Of The Employment Relationship: Choosing Between Norms And Contracts, Michael L. Wachter

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In this paper, I analyze three types of labor market relationships that are prevalent in the economy - the external labor market that exists outside of firms, and the union and nonunion employment relationships that exist inside firms. The parties' relationships in each of these markets are markedly different from one another with respect to their use of contracts versus norms, their enforcement mechanisms, and their reliance on external competitive market pressures. Why do these very distinct forms exist? This paper provides an answer to this question. To be successful, each of the structures has to resolve problems of match-specific …

Judging Unions' Future Using A Historical Perspective: The Public Policy Choice Between Competition And Unionization, Michael L. Wachter

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In this paper I look at unions' future using a historical perspective and focusing on the period of union ascendancy as well as the past few decades when unions have been in decline. We know trends currently in place are unfavorable to unions. What conditions would be favorable? The rise of unions from the 1930s through the early 1950s was due to the convergence of a number of events - an economic policy that attempted to restrict competition beginning in the 1930s, the twin beliefs that labor markets were inherently noncompetitive and/or that individual workplaces were exploitative, and low union …

Immigration And The Workplace: Immigration Restrictions As Employment Discrimination, Howard F. Chang

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No abstract provided.

Meeting By Signals, Playing By Norms: Complementary Accounts Of Non-Legal Cooperation In Institutions, Edward B. Rock, Michael L. Wachter

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No abstract provided.

Collective Bargaining Over Asset Restructuring, Edward B. Rock, Michael L. Wachter

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No abstract provided.

Migration As International Trade: The Economic Gains From The Liberalized Movement Of Labor, Howard F. Chang

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No abstract provided.

Liberalized Immigration As Free Trade: Economic Welfare And The Optimal Immigration Policy, Howard F. Chang

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No abstract provided.

The Enforceability Of Norms And The Employment Relationship, Edward B. Rock, Michael L. Wachter

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No abstract provided.

Union Effects On Nonunion Wages: Evidence From Panel Data On Industries And Cities, David Neumark, Michael L. Wachter

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No abstract provided.