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Saturday, June 30, 2018

Union-Free Contracts and the Freedom of Association

Freedom of association includes freedom to refuse association with others against one’s will.

The just-announced Janus decision that mandated union fees for government employees were unconstitutional is a blockbuster decision increasing liberty in the labor market. However, it was not this term’s only decision defending worker freedom.

In an important case, the Supreme Court just held, 5-4, in Epic Systems v. Lewis, that the 1925 Federal Arbitration Act’s explicit call for government enforcement of individual arbitration agreements for worker disputes with employers should not be over-ridden by the 1935 National Labor Relations Act, due to the fact that a clause in Section 7 granted employees “the right…to engage in other concerted activities for…mutual aid or protection.”

Yellow Dog Contracts

Liberals, union interests and many writers reacted like the ruling was a major blow against workers. Justice Ginsburg even read much of her dissent in court. She depicted the result as “take-it-or-leave-it labor contracts harking back to the type called ‘yellow dog,’ and of the readiness of this court to enforce those unbargained-for agreements.”

In fact, what she illustrates in her “yellow dog” dissent is how far American (pro-)labor union policies have transformed Americans’ shared freedom of association from what Thomas Jefferson described as “the guarantee to everyone of a free exercise of his industry and the fruits acquired by it,” based on “the equal right of every citizen in his person and property and in their management,” into far greater powers for unions that steamroller others’ freedom of association.

Yellow dog contracts (named by unions to imply being cowardly and traitorous to workers’ interests) required workers to have no union involvement as a condition of continuing their jobs. Accurately stated, it was simply a union-free contract. And such contracts had been upheld as Constitutional before the Norris-Laguardia Act (1932), which declared yellow dog contracts unenforceable.

However, In Hitchman Coal and Coke Co. v Mitchell (1917), Justice Mahlon Pitney majority opinion understood this issue better than Justice Ginsburg, writing “The employer is as free to make non-membership a condition of employment as the worker is free to join the union.” That is, both workers and employers have the freedom to determine who they will associate with. That right was “part of the constitutional rights of personal liberty and private property…not to be taken away even by legislation.”

A Tilted Playing Field

The ensuing move from jointly held freedoms of association to a playing field tilted to union powers under unique, government-granted privileges which inherently sacrifices others’ freedoms of association, is the key to this issue.

The union version of freedom of association eliminates workers’ freedom to be associated with different unions, to choose alternative forms of group representation, and to represent themselves in negotiations with employers. Since many unions have not had recertification elections since they began, in fact, they reflect no current employees’ voluntary association. It further eliminates workers’ freedom to associate with non-union employers or to resolve workplace issues directly with them (in fact, major support for yellow dog contracts came from workers who wanted to be shielded from union pressures, not supposedly abusive employers). It eliminates employers’ freedom to associate solely with workers with no union involvement. In sum, unions’ version of freedom of association means denying others their equal freedom of association.

Freedom of association includes freedom to refuse association with others against one’s will.

If freedom of association is an inalienable human right, it must be possessed by all. It can only mean freedom to associate with those who also choose to associate with us—voluntary association on both sides—which includes freedom to refuse association with others against one’s will.

Consider an analogy between marriage and employment. A suitor asking to marry a woman is practicing his freedom of association. But her equal freedom means she can say no. Further, because infidelity violates the commitments married couples made to each other, it often leads to the end of the marriage. We understand that. But similarly, a potential employer must find workers willing to accept their pay and conditions. If one condition of the employer is workers avoiding unions, both sides maintain their freedom of association. Further, since unionizing, once hired, essentially transfers “ownership” of such jobs from employers to existing workers, it harms the interests of employers who workers have already agreed to advance, cheating on their agreement with employers much like cheating on a marriage. But deterring that is called a yellow dog contract. Perhaps we should rename yellow dog contracts prenuptial employment agreements.

Freedom of association, rightly understood, has long been a bedrock American principle. Alexis de Tocqueville celebrated it, because:

“The most natural privilege of man, next to the right of acting for himself, is that of combining his exertions with those of his fellow creatures and of acting in common with them. The right of association therefore appears to me almost as inalienable in its nature as the right of personal liberty. No legislator can attack it without impairing the foundations of society.”

But unions have succeeded in twisting freedom of association into a special privilege that denies others their freedom of association. That is why understanding once-honored yellow dog contracts make them look far better than the special treatment government now routinely gives to unions alone, stripping the rest of us of what was once a core American right.

  • Gary M. Galles is a Professor of Economics at Pepperdine University and a member of the Foundation for Economic Education faculty network.

    In addition to his new book, Pathways to Policy Failures (2020), his books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).