Consumer Law as Work Law
Posted: 29 Jul 2022 Last revised: 19 Sep 2022
Date Written: July 26, 2022
The traditional legal framework in the United States for the workplace was the master-servant doctrine, under which workers provide various services to their employers in exchange for benefits based on their status. That model has been largely supplanted by contract but, in recent decades, formal labor markets have experienced an even more radical transformation—from a world of lifetime jobs with a single employer to one that offers contingent work with multiple levels of employers and labor intermediaries. These attenuated relations between worker and employer reflect the “fissuring” of work, in which once-stable labor forces have been outsourced, subcontracted, and franchised. Workplace legal regimes should take a lesson from the early 20th century when the fissuring of relations between manufacturers and consumers led to the emergence of consumer protection laws.
This Article turns the tables on the traditional workplace legal framework to show how in a wide variety of areas, these firms have become providers of services to workers themselves, but without any of the typical protections afforded to the workers as ordinary consumers. Temporary staffing agencies may recruit workers with the false promise of permanent employment, while charging exorbitant fees and imposing onerous contract terms that make it practically impossible to ever work permanently in the field. Other firms require that employees sign Training Repayment Agreement Provisions (TRAPs) for fixed sums that must be repaid if employment ceases, indebting workers to their employers and making it unaffordable for many low-wage workers to move to a better job. Still others enter into Income Share Agreements (ISAs) with workers, which allow lenders to speculate in the human capital of trainees by advancing a certain amount of training on the condition that trainees repay them as a set percentage of their future income, rather than up-front. Some firms have even stepped out of the employment model altogether, enticing many low-wage and immigrant workers into franchising arrangements in which the firm offers marketing services to those who start janitorial franchises, using false promises of financial freedom.
The Article reveals how, by offering these services in workplaces, firms have crept into the jurisdiction of consumer protection laws and the agencies charged with enforcing them. Reconceiving these aspects of work law as consumer law not only more accurately describes the increasingly attenuated and exploitative relationship between firms and workers, but also offers a unique opportunity to protect workers’ rights. By relying on consumer laws like unfair or deceptive acts or practice laws and antitrust laws, workers may be able to rebalance the relationship between firms and workers, while holding firms accountable for their false promises of mobility and mobility-enhancing services in our new economy.
Keywords: contract law, consumer law, employment law, labor law, personnel economics, economic perspectives, legal theory
JEL Classification: J00, J2, J3, J4,J5, J6, M5
Suggested Citation: Suggested Citation