Notes From Babel

Right to Work

with 5 comments

Here’s Tim Carney on Right to Work:

Right to Work laws bar employers from imposing a different sort of condition: the requirement that all employees join a union. Thus they take away property rights and infringe on the right of contract.

There are plenty of stupid labor laws that restrict employer freedom, but none of these laws force employers to have a closed shop. Preventing employers from agreeing to a closed shop is no free-market solution.

The suggestion that Right to Work is somehow anti-conservative or anti-freedom-of-contract is about the dumbest thing I read last week. The idea that employers would, on their own, require all employees to join a union seems obviously incorrect.  Right to Work prevents unions from urging employers to adopt these restrictive policies.  It’s not as if employers on their own came up with the idea to drastically limit their work force and prevent themselves from hiring bright, qualified, willing applicants, simply because they are non-union.

Instead, what’s going on here is unions leveraging their influence against employers to use employers’ freedom of contract in an anti-competitive fashion in the aid of unions.  Right to Work, then, deprives an employer of a right that is quite useless to him—i.e., the right to limit his hiring pool—because that right is too often used by unions to anti-competitive ends.  Thus, if employers no longer have the right to limit their work force, unions can’t urge them to do it.

There’s an analogue here in the eminent domain/redevelopment context, which I wrote a law review article about some years back. Eminent domain is an important governmental tool to the extent the public needs roads and schools and parks and other public works; but it is a dangerous tool when the law permits it to be used for mere economic development. Why? Because even if the government has beneficent ends (e.g., rooting out slumlords, revitalizing an impoverished area, etc.), many businesses don’t. Costco, for example, is well known for its tactics in leveraging its economic muscle against redevelopment agencies to use their power of eminent domain to make space for them. If they don’t? Costco will move down the street to the next town and draw lots of tax revenue from the first town.  In the case of 99 Cents Only Stores v. Lancaster Redevelopment Agency in 2001, Costco threatened to close up its store at the hub of a major shopping center, and leave it shuttered and unoccupied for the remainder of its lease if the city didn’t use eminent domain to take the 99 Cents store competing with Costco.  The city gave in, and agreed to take 99 Cents’ store and give it to Costco for $1.00.  Luckily, the court ruled against this illegal power play.

Redevelopment agencies’ “freedom” to take property for economic development, then, winds up being used against them.

Same with Right to Work.  There are all sorts of laws that prevent parties from “freely” contracting where the resulting contracts are anti-competitive. Typical are agreements in which an employee “freely” agrees not to compete with his employer after his term. But because this restrains his ability to practice his profession post-employment, such agreements are routinely struck down by courts.  The law tends to disfavor the sorts of contracts that are systematically used in the aid of subverting liberty more generally.

Agreements between unions and employers in which employers purport to bargain away their freedom to hire qualified, willing applicants, simply because they are not a union member, is just this sort of anti-competitive agreement.  An employer’s “freedom” to require employees to join a union is not one that benefits employers; it is one that unions leverage against them. Right to Work, then, is typical of laws that invalidate abusive, anti-competitive contracts in the cause of greater overall liberty.

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Written by Tim Kowal

February 27, 2011 at 7:00 am

5 Responses

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  1. That quotation stuck in my craw as well. Never got around to writing a rebuttal, but then again it wouldn’t have been as good as yours anyway.

    Fear and Loathing in Georgetown

    February 28, 2011 at 4:52 am

  2. The more general point is that “freedom” from one law, such as right-to-work, is not really freedom when it is set against the entire system of union-favoring laws. It’s like keeping a wolf leashed in a sheep’s pen, and saying that removing the leash would be an improvement in freedom, without considering the fence that traps the sheep.

    jj

    February 28, 2011 at 8:35 am

  3. […] · Public employee unions lobby against laws, such as Right to Work, that prohibit coercive and anti-competitive practices. […]

  4. “Typical are agreements in which an employee “freely” agrees not to compete with his employer after his term. But because this restrains his ability to practice his profession post-employment, such agreements are routinely struck down by courts.”

    This is not a true statement. Non-compete clauses are routinely been **upheld** when employees are prohibited from competing directly with the former employer or through employment with a direct competitor.

    Riley

    March 18, 2011 at 3:00 pm

  5. As I mentioned in my response to your other comment, in California, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Bus. & Prof. Code § 16600. According to the California Supreme Court in Edwards v. Arthur Anderson, LLP, “Fairly read, the foregoing authorities suggest section 16600 embodies the original, strict common law antipathy toward restraints of trade.”

    Of course, there are limits to this doctrine, and an employee may not exploit trade secrets, loot the former employer’s clients and workforce, engage in in-term competition, or otherwise engage in unfair business practices. Short of these exceptions, post-term restraints, in California in particular, are generally void.

    Tim Kowal

    March 18, 2011 at 5:15 pm


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