Lawless Law? The Subversion of the National Labor Relations Act

Loyola L.A. Law Review, Vol. 34, p. 197, 2000

25 Pages Posted: 6 Jun 2000 Last revised: 9 Mar 2010

See all articles by Ellen Dannin

Ellen Dannin

Independent

Terry H. Wagar

Saint Mary's University, Canada - Department of Management

Date Written: March 6, 2010

Abstract

In this paper, we demonstrate that the court-developed doctrine which allows an employer to implement its final offer upon reaching an impasse has now become a tool for lawlessness and that this important explanation for the decline of union membership in the United States has been wrongly ignored and overlooked. Our analysis of data collected from fifteen years of National Labor Relations Board decisions on this issue provides powerful support for the conclusion that employers are using this doctrine to create roadblocks to agreement and to end collective bargaining relationships. Not only does it permit employers to deunionize and refuse to negotiate, it actually creates an incentive for employers to use the law as a tool to deunionize. As a result, a law enacted to promote collective bargaining has, instead, become one which destroys collective bargaining.

Implementation has become anything but an obscure or rare event. Rather, it is now common and has played a part in high-profile labor disputes, including disputes at Caterpillar, the Detroit News, the National Football League, the baseball players strike, and International Paper. Unions and workers are not the only ones to suffer its destructive role. Even in less publicized cases, its impact on employers, workers, and the government, can be sizeable. In a recent case discussed in the article, the hearing lasted 60 nonconsecutive days and more than 1000 pages of briefs were filed. Approximately 450 employees, some of whom lost $17,000 a year, are entitled to back pay in addition to recompense for cutbacks in pensions, vacations, holidays, and other sorts of employee compensation. It is estimated that backpay will exceed $40 million. The back pay is so great the employers may be put out of business. Although it did not suffer personally, trying and deciding a case lasting sixty days was also enormously expensive for the government.

Our preliminary analysis of the data leads us to conclude that this labor law doctrine has advanced far down the wrong road, with direct disastrous consequences for unions and workers. However, it should be borne in mind that although they suffer the most visible losses, they are not the only victims. The government bears the cost of investigating, prosecuting, and deciding cases, the vast majority of which lead to the conclusion that employer claims of impasse are frivolous. Surely this money could be put to better uses. Employers themselves do not escape costs. They risk enormous backpay liability, and most, whether they succeed or not before the Board, must deal with extended disruption to their workforces and productivity. In the end, this may be sufficient to put the company out of business.

JEL Classification: J3, J5

Suggested Citation

Dannin, Ellen and Wagar, Terry H., Lawless Law? The Subversion of the National Labor Relations Act (March 6, 2010). Loyola L.A. Law Review, Vol. 34, p. 197, 2000 , Available at SSRN: https://ssrn.com/abstract=207748 or http://dx.doi.org/10.2139/ssrn.207748

Terry H. Wagar

Saint Mary's University, Canada - Department of Management ( email )

Halifax, Nova Scotia
Canada

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