Although the antimonopoly neo-Brandeisians and the labor movement share many goals, including a desire to reduce the power of big business, significant tensions exist, such as labor’s past support for mergers when they advance the ability of workers to unionize. Kate Andrias traces the history of labor’s relation with antitrust to show that, despite historical and contemporary tensions, there have also been deep connections between the two movements that show how they can better complement each other in the future.
Antitrust law has gained new attention in recent years as a tool to protect workers’ rights. Most prominently, the Federal Trade Commission (FTC) has proposed to prohibit non-competes: clauses that restrict workers from leaving their company to work for or create a competitor. Yet, significant tension remains between antitrust law and labor law, and friction persists even between progressive neo-Brandeisian antimonopoly advocates and labor advocates. This is in part because, although antitrust law contains a “labor exemption” for concerted action among employees, that exception has been understood by most courts not to apply to independent contractors. Thus, antitrust law continues to hamper workers who are classified as independent contractors (such as rideshare drivers) from engaging in collective action to improve their compensation. Furthermore, although labor advocates support the FTC’s non-compete ban and the general goals of neo-Brandeisians to diffuse concentrated economic power, they worry that antitrusters pay insufficient attention to the effect of their policies on workers’ ability to organize unions, and, more fundamentally, that antimonopoly advocates neglect structural obstacles to a robust labor movement. For example, prominent antimonopoly advocates have done little to urge labor law reform, and they consistently favor small business structures, even when those entities have poor employment standards and are exceedingly difficult to unionize. Conversely, antitrust advocates complain that the labor movement is short-sighted in failing to consistently oppose mergers, instead focusing on consolidating labor power as a countervailing force.
How can these tensions be resolved? A look back at history—at the forgotten antimonopoly tradition within the labor movement—offers some critical lessons for building on the efforts by the FTC and the neo-Brandeisians and ultimately for advancing an integrated antimonopoly and pro-worker agenda.
The story of the relationship between labor and antitrust policy in the twentieth century United States is largely one of conflict. Although the original purpose of the antitrust laws was to reduce the power of big business, the Sherman Act was quickly mobilized against workers. From the enactment of the Act in 1890 until the Supreme Court’s decisions in Apex Hosiery Co. v. Leader in 1940,and United States v. Hutcheson in 1941, the federal courts relentlessly subjected unions to antitrust penalties for engaging in strikes, boycotts, and other concerted activities—on the grounds that such activity is inherently anticompetitive. The government’s use of antitrust law against workers at the behest of corporations repeatedly crippled unions, destroying more than a few. As a result, the American Federation of Labor (AFL) responded with a multi-decade campaign to win an express labor exemption from the law’s prohibition against anticompetitive activity. Labor eventually won that exemption but it took decades of struggle, the enactment of several Congressional laws, and a changed Supreme Court.
In part because of this history, many observers assume that labor has never had much of an affirmative antimonopoly agenda. The conventional wisdom is that labor has largely focused on exempting itself from antitrust law’s reach. But it is not the case that obtaining a labor exemption from antitrust laws was the entirety of labor’s antimonopoly agenda—or that unions saw the “labor question” as separate from the monopoly problem. In fact, from the progressive era through the post-World War II period, the industrial and more left-leaning unions, including those who formed the Congress of Industrial Unions (CIO), advanced an ambitious antimonopoly agenda reaching far beyond the demand for a labor exemption.
The CIO labor leaders and activists shared the AFL’s commitment to exempting workers’ collective activity from antitrust law’s prohibition, but they saw this effort as part-and-parcel of a broader struggle to democratize the economy. To that end, they demanded more aggressive antitrust enforcement against monopolistic actors, while pressing for an end of governmental subsidies to big business.
At the same time, they organized workers on a mass scale to countervail economic and political power; advocated regulatory protections to curtail the power of big business over workers’ lives; urged national economic planning and industrial policy in which workers would play a co-equal role with business; and demanded public control and nationalization of certain industries. They frequently and repeatedly framed all of these demands as part of a broad antimonopoly strategy.
Three key features characterized industrial labor’s antimonopoly agenda beyond the labor exemption. First, these unions focused on problems of power and, in particular, on achieving a more equal distribution of power. They were acutely attuned to how law and policy created, reproduced, and protected concentrated political and economic power. Thus, when they opposed mergers, they did so not out of a commitment to “smallness” in business but out of a desire to limit the power of corporations vis a vis workers and citizens. They sought to shift power relationships not only by obtaining an end to injunctions against workers’ collective action or opposing particular mergers, but also by organizing industrial unions inclusive of all workers and creating pathways for those unions to exercise political power. They also advocated legislative and administrative interventions that would reduce subsidies and legal advantages granted to large corporations.
Second, the industrial unions were committed to democracy—a moreradical form of democracy than simply the use of the franchise. That is, they argued that concentrated economic power posed a threat to republican government and, more fundamentally, to political equality. Through a range of strategies such as unionization, seats for workers on corporate boards, and systems of political governance through which business and unions would set working conditions throughout an industry and co-determine industrial policy, they sought to impose democracy at the workplace, democracy over the economy, and a more democratic form of governance.
Third, and relatedly, for most of the industrial unions, the agenda was explicitly statist,or social, as well as cooperative. Specifically, in advancing their antimonopoly agenda, they recognized that the exercise of governmental power was inevitable and therefore governmental power needed to be used for democratic and egalitarian ends. That is, their goal was not only to limit state power by ending the use of antitrust injunctions against workers. They also wanted to use the power of the state to good end—to protect workers and consumers through winning new systems of social partnership or democratic industrial policy, redistributive taxation, and pro-worker and pro-consumer legislation. Industrial labor thus advanced its goals through political channels as well as through industrial action and worker cooperation, seeking to harness the power of the state against economic royalists. Labor saw all of these efforts as part of a broad antimonopoly agenda.
By broadening the perspective on labor’s antitrust efforts beyond the struggle for a labor exemption, a richer and more complicated picture of the labor antimonopoly tradition thus emerges: one that challenges both the dominant narrative about the relationship between labor and antitrust and the conventional wisdom of what a progressive antimonopoly vision might entail. That is, industrial labor’s vision was distinct from that of famous antimonopoly thinkers like Louis Brandeis. Although the early and mid-twentieth century labor leaders objected to massively concentrated industry, their ultimate goal was not to increase competition or to make business smaller but rather to develop a range of mechanisms for workers to exercise democratic control over their workplaces and the economy. After all, small, highly fissured business structures also posed a threat to workers in the early 20th century—as in the garment industry where immigrant women labored in many small factories, earning substandard wages and toiling in sweatshop conditions. These conditions required government interventions to redistribute power and enable workplace democracy; ending bigness was simply not enough.
Of course, labor’s broad economic democracy agenda was, for the most part, not enacted into law. And by the mid-1950s, labor largely abandoned its efforts to democratize the economy and settled for a private, depoliticized form of private bargaining with large oligopolistic companies, a system that some have termed “monopoly capitalism.” Industrial unions shifted to a more bureaucratic approach: they negotiated good contracts for their members, but spent less energy trying to organize new workers into unions or to create a social democracy. In subsequent years, antimonopoly rhetoric all but disappeared from the labor movement, and by the 1970s, with the rise of the economic Chicago School of thought, the hegemony of the consumer welfare model, aggressive employer action against unions, and the fissuring of the employment relationship, antitrust law once again became a potent tool against labor, as well as an increasingly weak instrument against concentrated private power.
But labor’s forgotten antimonopoly tradition offers an important resource for the newly revived antitrust movement. It should encourage those focused on workers’ rights to reject the notion that labor law and anti-monopolism are distinct or opposing endeavors. At the same time, it should inspire antitrust reformers and scholars who seek to move beyond the consumer welfare model not to limit their sights to the “curse of bigness.” Rather, the goal should be, in the words of the industrial unions, “greater democracy” in domains both political and economic. Breaking up large companies and structural separation should be seen as just two tools among many, along with labor law reform, corporate and tax regulation, economic planning with social partners, and even, the industrial unionists would have argued, public utility creation and nationalization of key social goods.
Concretely, what might this look like? As Brian Callaci has recently argued, it would include a focus on unfair competition by firms, including using antitrust law to address wage suppression by monopsonies and opposing mergers that result in even more concentrated economic power that harms both consumers and workers. Indeed, the new merger guidelines, jointly issued by the Department of Justice and the FTC, take an important step in this direction, making clear that the FTC and DOJ may challenge a merger if it will substantially lessen competition for workers in the relevant industry. It would also include expanding the labor exemption to cover workers classified as independent contractors when they are engaged in labor disputes and allowing unions to condition collective bargaining agreements on achieving sectoral standards.
But with equal vigor, neo-Brandeisians ought to support labor law reform that would enable all workers to build collective power within large monopolistic industries and highly fissured industries as well, including through a new system of sectoral bargaining to bring small and big companies alike to the bargaining table. They might also support the use of democratic industrial policy to bring worker organizations into discussions about the direction of the economy, as well as advocating strategies of public utility and ownership. Like preventing concentration of power in a few firms, these tools help democratize the economy and therefore work against monopoly power.
Today, important new efforts from a number of scholars, courts, advocates, and regulators gesture in this direction, seeking to unite labors’ needs with antimonopoly efforts. Recovering the history of labor’s antimonopoly agenda offers support for those endeavors. Antimonopoly and proworker efforts need not be distinct or in tension. Ultimately, the goal is to reinvigorate the longstanding “desire for greater democracy” and to achieve, through a range of mechanisms, a more equitable distribution of power over the economy and politics.
This post derives from Kate Andrias, “Beyond the Labor Exemption: Democratic Political Economy and Labor’s Antimonopoly Vision,” in Tobin Project, ANTIMONOPOLY TRADITION AND AMERICAN DEMOCRACY (Daniel Crane & William Novak, eds.) (Oxford University Press 2023)
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
