Taking States out of the Workplace
It is perhaps counterintuitive to respond to a call for papers on new developments in state law by arguing that there should be no developments at all. With regard to one area of law, however, that is exactly what I am going to do. More precisely, I argue for one general development—the elimination of state authority to regulate the workplace.
Current governance of the workplace originates from local, state, and federal governments. In some areas, such as private-sector labor law under the National Labor Relations Act (NLRA), there is a single source of law supported by a unified enforcement scheme. Yet much of the time a given workplace dispute will fall under the laws of different jurisdictions, each of which gives rise to multiple causes of action. I argue elsewhere that the unjustifiably complex nature of this workplace governance system undermines its own goals. Of more immediate concern is a recent movement to make this problem worse by increasing states’ power to regulate the workplace. This argument, which is the latest iteration of a long-running federalism debate, has gained more traction recently because of the justified perception that recent enforcement of federal workplace laws has been inadequate. I agree that enforcement is a serious problem, but draw the opposite inference. If the goal is to increase enforcement of existing workplace protections, we should not only resist giving states more power; we should take away the power that they currently possess.
Harvard economist Richard Freeman is among several recent advocates of enhanced state authority over the workplace, specifically with regard to labor law. Freeman argues that, overall, state regulation will be more favorable to unions than the current federal scheme. He cites, for example, the possibility that states might implement quicker union elections or require employers to recognize unions with a card-check majority. Although states possess significant authority to regulate many aspects of the workplace, extending state authority over labor matters would represent a significant shift from the NLRA’s robust federal preemption doctrine. The motivation for such a dramatic change is understandable. Anyone who takes seriously the right of employees to unionize or to engage in collective action has not enjoyed the last several years. In an extensive series of decisions, the current National Labor Relations Board (NLRB) has systematically dismantled decades of precedent, always in favor of employer interests. It is little wonder, then, that many look to states as an alternative.
Despite sharing concern over the NLRB’s recent decisions, I am skeptical that transferring authority to states would be an effective strategy to promote unionization—and outright hostile to the idea as a matter of principle. Part of the disagreement is likely a difference of geography. The union perspective of state regulation looks much better when viewed from Cambridge than from Knoxville. Proponents of state regulation dream of the pro-union changes that Massachusetts and similar states would implement. My dreams, however, envision the nightmarish pro-employer changes that other states would adopt. Freeman suggests that such fears are exaggerated because the situation cannot get much worse in states with already low levels of unionization. I am not so optimistic. It is difficult to imagine that politically powerful employers and sympathetic state legislators would do nothing when presented with new authority over the workplace. Indeed, states have already shown what they would do when unencumbered by federal labor law. A large number of state employers, which are not covered by the NLRA, have no duty to recognize unions, and their employees lack any right to engage in collective action free from employer interference. If those states regulate labor at all, it is not to restrict employer action, but to prohibit employee activity—including one of the most fundamental rights under federal labor law, the right to strike.
A further problem with expanding state authority over the workplace is that it is extraordinarily short-sighted. Freeman’s own paper is illustrative. When he released it in January 2006, the NLRB’s pro-employer tilt had no end in sight. Things look much different today, as the prospect of a Democratic President and Congress are very real. Things could shift, of course, but that is the point. Expanding state authority is a major change and not something one can reverse easily. Why, then, all the focus on near-term politics? Why not, instead, ask which jurisdiction is best-suited to regulate a given area and let the political chips fall where they may?
These problems are typical of most federalism debates—which often involve politics more than principle—and represent the crux of my objection to increased state authority over the workplace. The focus on politics is particularly unfortunate in this instance because principle—specifically, the effect of the allocation of power between state and federal governments on workplace regulations—weighs heavily in favor of federal control over labor law and other workplace issues.
For much of our country’s history, it made sense for states to regulate a workplace that was truly local in nature. The modern workplace, however, looks far different. Most employers are at least regional, if not national and international, in scope. Even many small businesses either compete or have a presence in numerous jurisdictions. States’ current authority over much of the workplace fails to acknowledge this reality, and this failure comes at a cost. At best, multiple layers of regulations create complexities and redundancies that increase compliance costs and make enforcement more difficult. At worst, inconsistencies or outright conflict make compliance and enforcement nearly impossible. Exclusive federal regulation would eliminate many of these problems and produce a more effective and economically competitive workplace governance regime.
State regulation of the workplace also appears to have created a self-defeating race-to-the-bottom in which certain states compete against each other on the basis of labor costs. Although this strategy could be successful in the short-term, its long-term prospects are doomed by the fact that no state will be able to compete internationally on the basis of labor costs. States should instead try to compete by increasing and promoting their supply of skilled workers, which represents the U.S. comparative advantage in the global labor market. A national regulatory approach is uniquely suited for this reality, as the federal government is in the best position to look beyond interstate rivalries and implement a strategy to maximize workers’ global competitiveness.
The advantages of national policymaking also include structural differences between state and federal government. Most state policymakers lack the time, resources, and expertise of their federal counterparts. Many state governments also tend to look more like a secret club than an elective body, while the federal government is relatively transparent and accessible. Although federal policymakers are far from perfect, this transparency and accessibility provide employee-side advocates a more even playing field—or at least one that is less uneven. Employers will always have the resources to lobby every governmental unit affecting their interests. Employee advocates, in contrast, are on a much tighter financial leash. By focusing policymaking in one jurisdiction, both sides will have political resources available when the need arises. Those resources may not be equal, but both sides will at least be in the game.
To be sure, eliminating state authority over the workplace may come at a cost. For example, federalism is often justified on the ground that states can act as laboratories that test the effectiveness of various policies. With a few exceptions, however, states are not experimenting with new workplace policies. They are instead picking from a menu of well-known options, and there is little evidence that state regulation has or will result in more effective workplace policies. Alternatively, state regulation is promoted as a check on federal governance. Thus, federal workplace laws could act as a floor that would allow states to provide additional protection. Although this model would be especially useful when federal officials are hostile to workplace rights, it comes with costs of its own—primarily the costs associated with increased complexity. Given the difficulty in quantifying the effects of this approach, it would not be unreasonable to conclude that the costs of complexity are outweighed by the benefits of an additional layer of regulation. Yet it seems to me that the opposite is true, particularly in the long-term. The costs of complexity will last indefinitely. In contrast, the benefits of state regulations, which exist only in states that provide more protection than federal regulations, are dependent on the actions of an ever-changing array of federal policymakers. State regulation may be beneficial at times, but its costs will always be present.
More fundamentally, our approach to federalism needs to be more disciplined. Although the Constitution gives a great deal of authority to state governments, we should not maintain that authority blindly. We have provided the federal government with exclusive regulatory power in many instances—labor law is one—and we should be willing to do so again if good reasons exist. “Good reasons” do not include ephemeral political strategies. Rather, we should adopt a pragmatic approach to federalism that asks which jurisdiction is best equipped to govern a particular area and that recognizes that the answer has a powerful effect on policy outcomes.
This pragmatic approach is lacking in today’s fragmented system of workplace regulations, which often appears to interfere with its own goals. It is time, therefore, to shift governance of the workplace to a single jurisdiction, and the only government adequately equipped to take on that task lies in Washington, D.C., rather than state capitols.
Jeffrey Hirsch is an Associate Professor at the University of Tennessee College of Law and coeditor of the Workplace Prof Blog, http://lawprofessors.typepad.com/laborprof_blog/.
Preferred citation: Jeff Hirsch, Taking States out of the Workplace, 117 Yale L.J. Pocket Part 225 (2008), http://yalelawjournal.org/forum/taking-states-out-of-the-workplace.