Fissuring and the Firm Exemption

Abstract

Workers beyond the bounds of employment and other small players are deprived of coordination rights under "fissured" business arrangements in addition to being subject to the control of relatively large, powerful firms. This absence of coordination rights is neither an inexorable force of nature as the 'economy changes' nor is it a free-standing legal fact. Rather, the conditions under which workers and small enterprises are deprived of coordination rights in these business arrangements are instead part of an overall allocation of coordination rights that is a fundamental function of antitrust law. Antitrust law affirmatively chooses hierarchy and domination, as embodied in the traditional firm and as extended under contemporary firm fissuring, as its preferred form of coordination while condemning cooperation. Barred from joint price-setting or joint bargaining themselves, workers and small firms are effectively forced to pay more powerful firms for the benefit of their license to engage in economic coordination. At the same time, the license to engage in control beyond firm boundaries that these contemporary firms claim for themselves stretches both the deep grammar of the law (the firm exemption) and its surface grammar (antitrust's law of vertical restraints and the single entity doctrine). By magnifying the contradictions that were already embodied in both areas, these business arrangements call out for a conscious re-allocation of coordination rights.