The Myth of Equality in the Employment Relation

Abstract:     
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 relation, and thus, it has failed to inspire any meaningful attempt to address that inequality. By contrast, a status-based approach would motivate several common sense doctrinal changes.

The persistent myth of equality is still more paradoxical in the context of labor law. Due to political constraints and several sources of uncertainty about its future, the National Labor Relations Act was limited to a bare bones framework for collective bargaining. Later amendments and judicial interpretations entrenched a strictly procedural interpretation of the Act oriented toward the goal of minimizing commercial disruption rather than disrupting status inequality. The present regime sustains a false image of unions as equal in strength to employers, in need of only an illusive "level playing field." As a result, it does not effectively mitigate the negative dimensions of social status stemming from employment. A few modest changes would help re-orient or at least broaden the Act so that unions can play a meaningful role in mitigating status inequality.

Number of Pages in PDF File: 51

Keywords: contract, status, inequality, unions, employees, employers, national labor relations act, NLRA, leisure, bargaining power, mandatory terms, social hierarchy, labor

JEL Classification: A13, D30, D31, D63, J30, J32, J33, J38, J41, J50, K12, K31

working papers series