Several legal rules and statutory interpretations in U.S. work law that entrench employer power are premised on assumptions about how the economy works, and courts rely on these assumptions to justify their decisions without subjecting them to empirical scrutiny. This paper focuses on three:

1. The assumption of balanced power

The first assumption is that there is no acute, systematic imbalance of power between an individual employee and employer. The worker’s right to quit or withhold assent to employment is comparable to, if not equal to, the employer’s power to terminate the worker or withhold employment.

Courts use the maxim of freedom of contract as shorthand for the assumption and as a circular means to legitimate the legal rules it underlies. The Supreme Court has used the assumption in several decisions ruling that the Federal Arbitration Act enables employers to require that employees waive their rights to go to court and to pursue claims collectively; other courts have used the assumption to justify decisions to narrow public policy and contractual limits on the employer’s at-will authority. Further, courts assume there is no substantial inequality of bargaining power between an employer and employee when they give employers unilateral rights to change the terms of the employment agreement to the employee’s disadvantage, for instance, by requiring employees to submit disputes to arbitration. The assumption enters into interpretations of statutes governing worker collective rights as well.

The balanced-power assumption gives rise to arguments about labor markets and market competition that then legitimate legal rules protecting employer power over workers:

• An employee can just or almost as readily walk away and find an equivalent position as the employer can terminate the employee and find an equivalent employee.

• There is power in threatening to quit, because the employee can inflict economic harm on the employer comparable to the harm that the employer can inflict on the employee by termination.

• The market disciplines employers to act rationally in the best interests of their businesses; employers are therefore unlikely to abuse their authority. Employees who perform well have little need to worry the employer will treat them badly.

• Changing the at-will rule would give employees unfair economic and legal advantages. The legal system provides an avenue of redress for employees that is not available on the same terms to employers.

2. The assumption of managerial prerogative

The second assumption is that the employer’s control over nearly all aspects of the commercial enterprise must be near absolute to prevent adverse economic consequences. Courts claim that restricting this prerogative will harm the enterprise and the economy by restricting the employer’s ability to adjust to market dynamics.

Courts assume the necessity of managerial prerogative when protecting and legitimating the employer’s power to control virtually every aspect of the enterprise—from personnel to capital allocation decisions. So powerful is the inclination to protect employer prerogative that, when presented with the opportunity to subject employers to the same contract rules as other commercial parties, the courts generally decline. Courts invoke managerial prerogative to relieve the employer of contractual limitations on the employer’s rights to terminate employees, modify the employment relationship unilaterally, and abide by job security commitments. The assumption of managerial prerogative also underlies interpretations of the National Labor Relations Act (NLRA).

The courts make several economic claims to justify these rules, all based on the assumption that managerial prerogative is necessary for economic efficiency:

• The employer must have the flexibility to adjust to dynamic market conditions.

• Contract law does not adequately protect the employer’s managerial prerogative.

• We can trust the employer—and only the employer—to exercise its business judgment in a manner beneficial to the enterprise and the economy as a whole, because employers are best positioned to understand and react rationally to market conditions.

• We should not second-guess the employer even where it appears to exercise its prerogative inscrutably, irrationally, or based on incorrect facts.

• Managerial prerogative over hiring and firing is so critical that, even where it appears the employer has relinquished some of this prerogative, courts must sometimes save an employer from its imprudent bargain.

• Courts must in particular defer to managerial prerogative when interpreting job security commitments and contractual obligations to terminate employees only for “cause.” Enforcing these can impose formidable costs on employers and lead to bankruptcy.

3. The status quo assumption

Under the third assumption, even where courts do not necessarily assume that the individual worker and employer have relatively equal bargaining power or that managerial prerogative reflects the most efficient economic system, they assume that the costs to workers and the economy of maintaining the status quo are less than the costs of altering it. 

Courts rely on these three assumptions for several purposes:

• To give employers extremely broad rights to terminate employees. Thus, courts have relied on the assumptions to justify decisions (1) maintaining the at-will presumption, which enables the employer to terminate an employee at any time, for any reason; and (2) limiting the reach of exceptions to the employer’s authority to terminate employees, such as the public policy exception, the ordinary contractual duty to act honestly (in “good faith”), and obligations that the employer had agreed to voluntarily.

• To give employers rights to alter employment terms and working conditions on a take-it-or-leave-it basis, usually leaving employees with no option but to quit if they do not want to accept the change. In particular, courts have used the assumptions to justify decisions (1) allowing employers to impose noncompete agreements and to rescind benefits; (2) allowing employers to impose mandatory arbitration agreements, under which employees waive their rights to bring employment disputes to court and to pursue employment claims collectively in other forums; and (3) allowing employers to revoke job security commitments.

• To limit employee protections under statutes that were premised on the finding that the individual worker does not have power comparable to that of the employer. In particular, courts have used the assumptions to limit workers’ collective rights under the NLRA and state collective bargaining law.

It is important to identify and critique these assumptions because, if they fail under empirical scrutiny, then much of the legitimacy of the rules and interpretations they support evaporates, with scant other sources of legitimacy to replace it, whether democratic, regulatory, or doctrinal. For instance, the at-will rule was not created by elected legislatures; judges began announcing it as the rule in the late 19th century. Nor is the at-will rule a product of regulatory processes that draw on social science or policy expertise. Some of the legal rules sustained through the assumptions cannot even claim doctrinal coherence, since they exempt employment from contractual norms. With respect to the NLRA, the Supreme Court argues or implies that its use of the assumptions is consistent with legislative intent, although it has made little attempt to excavate Congress’s precise intent and in either case has offered no empirical support for the assumptions.

In sum, these unproven assumptions about economic phenomena play a substantial role in legitimating law that devalues workers’ dignity and welfare and protects employer power over workers. By identifying how courts rely on them, this paper exposes the assumptions for empirical examination.

I. Introduction

Several legal rules and statutory interpretations in U.S. work law1 that entrench employer power are premised on assumptions about how the economy works, and courts rely on these assumptions to justify their decisions without subjecting them to empirical scrutiny. This paper focuses on three:

1. The assumption of balanced power, i.e., there is no acute, systematic imbalance of power between an individual employee and employer. The worker’s right to quit or withhold assent to employment is comparable to, if not equal to, the employer’s power to terminate the worker or withhold employment. Courts often telegraph this assumption by reciting the value of “freedom of contract.”
2. The assumption of managerial prerogative, i.e., that the employer’s control over nearly all aspects of the commercial enterprise must be near absolute to prevent adverse economic consequences. Courts claim that restricting this prerogative will harm the enterprise and the economy by restricting the employer’s ability to adjust to market dynamics.
3. The status quo assumption, i.e., even if the individual worker and employer do not have relatively equal bargaining power, and even if managerial prerogative does not reflect the most efficient economic system, the costs to workers and the economy of maintaining the status quo are less than those of altering it. 

Courts rely on these assumptions for several purposes:

• To give employers extremely broad rights to terminate employees. Thus, courts have relied on the assumptions to justify decisions (1) maintaining the at-will presumption, which enables the employer to terminate an employee at any time, for any reason; and (2) limiting the reach of exceptions to the employer’s authority to terminate employees, such as the public policy exception, the ordinary contractual duty to act honestly (in “good faith”), and obligations that the employer had agreed to voluntarily.

• To give employers rights to alter employment terms and working conditions on a take-it-or-leave-it basis, usually leaving employees with no option but to quit if they do not want to accept the change. In particular, courts have used the assumptions to justify decisions (1) allowing employers to impose noncompete agreements and to rescind benefits; (2) allowing employers to impose mandatory arbitration agreements, under which employees waive their rights to bring employment disputes to court and to pursue employment claims collectively in other forums; and (3) allowing employers to revoke job security commitments.

• To limit employee protections under statutes that were premised on the finding that the individual worker does not have power comparable to that of the employer. In particular, courts have used the assumptions to limit workers’ collective rights under the National Labor Relations Act (NLRA)2 and state collective bargaining law.

The following sections show how the legal rules and statutory interpretations protecting employer power rely on the three assumptions, and they illustrate the economic arguments that courts make based on the assumptions.

Part II examines the assumption of balanced power (see Bagenstos 2020 for a complementary analysis). It shows that courts use the maxim of freedom of contract as shorthand for the assumption and as a circular means to legitimate the legal rules it underlies. The Supreme Court has used the assumption in several decisions ruling that the Federal Arbitration Act (FAA) enables employers to require that employees waive their rights to go to court and to pursue claims collectively; other courts have used the assumption to justify decisions to narrow public policy and contractual limits on the employer’s at-will authority. Further, courts assume there is no substantial inequality of bargaining power between an employer and employee when they give employers unilateral rights to change the terms of the employment agreement to the employee’s disadvantage, for instance, by requiring employees to submit disputes to arbitration. The assumption enters into interpretations of statutes governing worker collective rights as well.

The balanced-power assumption gives rise to arguments about labor markets and market competition that then legitimate legal rules protecting employer power over workers:

• An employee can just or almost as readily walk away and find an equivalent position as the employer can terminate the employee and find an equivalent employee.

• There is power in threatening to quit, because the employee can inflict economic harm on the employer comparable to the harm that the employer can inflict on the employee by termination.

• The market disciplines employers to act rationally in the best interests of their businesses; employers are therefore unlikely to abuse their authority. Employees who perform well have little need to worry the employer will treat them badly.

• Changing the at-will rule would give employees unfair economic and legal advantages. The legal system provides an avenue of redress for employees that is not available on the same terms to employers.

Part III shows that courts assume the necessity of managerial prerogative when protecting and legitimating the employer’s power to control virtually every aspect of the enterprise—from personnel to capital allocation decisions. So powerful is the inclination to protect employer prerogative that, when presented with the opportunity to subject employers to the same contract rules as other commercial parties, the courts generally decline. Courts invoke managerial prerogative to relieve the employer of contractual limitations on the employer’s rights to terminate employees, modify the employment relationship unilaterally, and abide by job security commitments. The assumption of managerial prerogative also underlies interpretations of the NLRA.

The courts make several economic claims to justify these rules, all based on the assumption that managerial prerogative is necessary for economic efficiency:

• The employer must have the flexibility to adjust to dynamic market conditions.

• Contract law does not adequately protect the employer’s managerial prerogative.

• We can trust the employer—and only the employer—to exercise its business judgment in a manner beneficial to the enterprise and the economy as a whole, because employers are best positioned to understand and react rationally to market conditions.

• We should not second-guess the employer even where it appears to exercise its prerogative inscrutably, irrationally, or based on incorrect facts.

• Managerial prerogative over hiring and firing is so critical that, even where it appears the employer has relinquished some of this prerogative, courts must sometimes save an employer from its imprudent bargain.

• Courts must in particular defer to managerial prerogative when interpreting job security commitments and contractual obligations to terminate employees only for “cause.” Enforcing these can impose formidable costs on employers and lead to bankruptcy.

The status quo assumption, discussed in Part IV, sometimes masquerades as an argument about the separation of powers rather than an economic one. Even where courts may not subscribe to the assumptions of balanced power or the necessity of managerial prerogative, they often assume that altering the rules built on these assumptions would be more costly than maintaining the status quo, because the alteration would create commercial uncertainty and instability. Thus, courts argue that only the legislature should effect such big policy changes.3

It is important to identify and critique these assumptions because, if they fail under empirical scrutiny, then much of the legitimacy of the rules and interpretations they support evaporates, with scant other sources of legitimacy to replace it, whether those be democratic, regulatory, or doctrinal. For instance, the at-will rule was not created by elected legislatures;4 judges began announcing it as the rule in the late 19th century, following the lead of a treatise that claimed it was the rule across the U.S. without demonstrating this claim. In fact, courts rely on the at-will rule to undermine protective legislation that workers achieved through political contests (Bagenstos 2020). Nor is the at-will rule a product of regulatory processes that draw on social science or policy expertise. Some of the legal rules sustained through the assumptions cannot even claim doctrinal coherence, since they exempt employment from contractual norms. With respect to the NLRA, the Supreme Court argues or implies that its use of the assumptions is consistent with legislative intent, although it has made little attempt to excavate Congress’s precise intent and in either case has offered no empirical support for the assumptions.

In sum, these unproven assumptions about economic phenomena play a substantial role in legitimating law that devalues workers’ dignity and welfare and protects employer power over workers. By identifying how courts rely on them, this paper exposes the assumptions for empirical examination.

II. The assumption of balanced power

One of the most persistent and pervasive economic assumptions underlying the case law on work relationships is the assumption of balanced power. Courts often assume that the employee’s leverage in quitting or in withholding assent to employment is roughly equal to the employer’s power to terminate or refuse to hire the employee. An iteration of this assumption is that any disparity in bargaining power has no real bearing on individual autonomy and therefore does not negate the employee’s ability to make meaningful choices.

A. Forced arbitration

The Supreme Court assumes balanced power between employees and employers in its jurisprudence on forced arbitration in employment relationships. The Federal Arbitration Act promotes arbitration as an alternative to resolving disputes through litigation by making such agreements enforceable; however, Congress never intended the FAA to apply to employment relationships, and the statute expressly excludes them. Nonetheless, the court has several times held that the FAA allows employers to force employees to arbitrate employment-related disputes.5 In Gilmer v. Interstate/Johnson Lane Corp., in holding that an employee’s age discrimination claim was subject to compulsory arbitration, a Supreme Court majority held, “Mere inequality in bargaining power, however, is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context,” because the FAA’s “purpose was to place arbitration agreements on the same footing as other contracts.”6

Such analysis ignores the reason for anti-discrimination legislation—the legislature’s judgment that contract rights were inadequate to prevent discrimination in some relationships, particularly employment. Under a mandatory arbitration agreement, the employee must submit almost all employment-related disputes to individual arbitration and waives the right to bring these claims to court.7 Employers usually “offer” arbitration agreements to employees on a take-it-or-leave it basis, as a condition of employment. With some exceptions, employees can only “reject” the arbitration agreement by rejecting the offer of employment or, for someone already employed, by quitting. Likewise, contract law generally deems that, by accepting the job or not quitting, the employee assents to the agreement. Thus, by subjecting employment to the FAA, the court “allow[s] the very forces that had practiced discrimination to contract away the right to enforce civil rights in the courts.”8 Further, despite its “same footing” reference, the court has been hostile to state court efforts to limit arbitration on contractual grounds where the contract is characterized by an acute power imbalance.9

B. Freedom of contract

Courts often express the assumption of balanced power in the adage of freedom of contract, as illustrated by the Supreme Court’s recent case of Epic Systems v. Lewis, where the majority held that the NLRA did not prohibit employers from requiring employees to agree to mandatory, individual arbitration as a condition of employment.10 Under these agreements, the employee not only waives the right to bring disputes to court but waives the right to bring them to any forum for collective redress, such as arbitration where multiple employees bring claims together. In practice, imposing an individual arbitration agreement often leaves the employee without any recourse to pursue claims against the employer. Given the expense of litigation, one employee’s claim is often not enough to make it cost-effective for an attorney to bring the claim.

Passed in 193511 along with two other pillars of the New Deal—the Fair Labor Standards Act (FLSA) and the Social Security Act—the NLRA protects workers’ rights to associate, organize, form unions, and bargain collectively with employers. Its proponents recognized that a severe inequality in bargaining power between employers and employees was a major cause of the Great Depression and the ruinous competition it entailed. U.S. workers did not have enough spending power to sustain the economy, let alone forfend the misery of privation. The idea behind the NLRA was that, while the individual employee had little bargaining leverage, employees organized on the scale of capital could raise and stabilize wages across employers (Cobble 2010; Gross 1974).

At issue in Epic Systems was whether, by requiring an individual arbitration agreement, the employer was violating its employees’ rights under Section 7 of the NLRA to take collective action for purposes of “mutual aid or protection.”12 Despite the NLRA’s guarantee, the Supreme Court found that courts could enforce these agreements. The majority opens its opinion with a question:

Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?13

Above, the majority suggests that employees’ freedom of contract was at stake. So, what is freedom of contract, and what is its connection to the balanced-power assumption? The maxim of freedom of contract embodies several normative and empirical claims, but most relevant here is the tenet that there is no real imbalance of power between two parties who strike a deal under the auspices of contract law and without other state “interference.”

The connection between the ideas of freedom of contract and balanced power is circular. Freedom of contract is shorthand for the conflation of actual freedom with the formal freedom to transact in the market, signified by “contract” as the main legal instrument of market transactions. Thus, the maxim is often invoked not as a reference to contract law per se but as the tenet that government should not “regulate” or “interfere” with how individuals engage in market transactions (whether or not these transactions are strictly contractual).

Inscribed in freedom of contract is a theory about markets, efficiency, and individual freedom: by participating in markets (buying and selling or refraining from doing so), individuals optimize their preferences according to their true interests. Under market governance, social resources are produced and allocated according to the demand of these preference-optimizing individuals. Therefore, markets are “efficient” because they channel resources to those who value them most. The theory depends on two assumptions: market decisions are presumptively voluntary, and they provide the best evidence—and the only legitimate evidence—of how an individual values something.14

That market deals are voluntary and result in optimal contracts presupposes the absence of true power imbalances. And contract law reflects this tautology by defining most agreements as the products of voluntary choice. Where courts invoke employees’ freedom of contract and its contributions to efficiency and autonomy, they likewise assume balanced power. For example, where individuals have a formal right to engage in the market trades of their choosing, no systematic power imbalances along class or other status lines should persist—only those related to the vagaries of fortune and natural endowments. Justice Pitney captured this sentiment in a Lochner-era decision striking down a state law prohibiting yellow-dog contracts: “it is from the nature of things impossible to uphold freedom of contract and the right of private property without at the same time recognizing as legitimate those inequalities of fortune that are the necessary result of the exercise of those rights.”15 An implication is that courts and legislatures need not worry that unemployment or low wages will lead to durable social inequality, because these phenomena cannot be systematic and persistent under a free contracting regime. Their existence in any individual case is attributable to low skills, low productivity, low motivation, or some other demerit causing reduced demand for an individual’s labor.

As illustrated in Epic Systems and the following examples, courts often suggest that virtually all employment agreements are efficient because they reflect the decisions of parties who, according to contract law, act voluntarily and who would not otherwise have chosen the agreement.

Apart from the circular logic, the problem with the Supreme Court’s invocation of freedom of contract in Epic Systems is that, in passing the NLRA, Congress determined that individual employees did not enjoy “actual liberty of contract” when they faced capital in its organized form as the employer. The preamble is crystal clear on this:

The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.

The NLRA rejects the equation of liberty with formal freedom of contract. The court’s framing of the question in Epic Systems—about agreements between “employees and employers”—elides the critical issue of whether an individual employee should be required to waive collective rights, as Justice Ginsburg highlighted in her dissent.

C. The First Amendment and the assumption of balanced power

In Janus v. AFSCME, Council 3116 the Supreme Court also relies on the balanced-power assumption and purported benefits of free contracting, although more subtly than in Epic Systems. The Janus majority held that requiring an objecting public employee to pay a fee (an “agency fee”) to cover the costs of services provided by the workplace union violates the employee’s First Amendment rights. Because public-sector unions are under legal mandate to represent all employees in the bargaining unit, not just union members, Janus creates an incentive for employees to free ride rather than pay dues, in turn making it more difficult for unions to promote and protect workers’ interests.

At first blush, Janus seems to reject the premise that employees have freedom of contract, since, unlike in Epic Systems, the Janus majority finds that an employee does not make a voluntary choice when presented by the employer with a take-it-or-leave-it condition of employment: pay the agency fee or find employment elsewhere (Bagenstos 2020). Yet, the decision disregards why states enacted collective bargaining laws for public employees and why public employees form unions under these laws: the unequal power between the individual employee and the employer. The majority largely dismisses the interests expressed by a majority of workers in having an effective bargaining agent.

Janus makes little sense as a case about free expression—to strike down mandatory agency fees, the majority had to carve out an exception in First Amendment jurisprudence regarding the government’s ability to regulate public employee speech about workplace matters.17 What most stands out is the majority’s repeated suggestions that public-sector unions foist costly, inefficient agreements on states, a consequence of the “tremendous increase in power”18 they realize as employees’ exclusive representative and the “considerable windfall” that agency fees provide.19 The connotation is that, if employees were not forced to pay agency fees, unions would have less power, and governments would enter more efficient employment contracts. It seems that the majority’s concern with agency fees is that they interfere with an employee’s freedom of contract (the freedom not to contract with the union), and that this interference distorts the market, enabling the union to impose inefficient bargains on the state.

D. Assuming balanced power to protect employer power

This part next looks at a key manifestation of the assumption of balanced power—the at-will presumption. It then illustrates how the presumption underlies case law protecting the employer’s power of termination and modification more generally, even outside of the at-will context. The part concludes by illustrating how the assumption shapes NLRA jurisprudence.

1. Termination

a. Background: At-will employment and exceptions

The at-will presumption is the law in all but one state.20 This means that courts presume, in the absence of other evidence, that the employer and employee agreed either party would have a right to end the relationship for any reason at any time. Thus, the employer can terminate the at-will employee “for good reason, bad reason, or no reason at all.”21 With some exceptions, particularly for employees covered by collective bargaining agreements, employers do not have to act honestly, rationally, or fairly when making termination decisions.

As a presumption, the at-will term is formally a default term that the parties can contract around. For example, the employer and employee may alternatively agree that their relationship will last two years or that the employer may only terminate the employee for some “cause,” such as “just cause.” The party arguing that the relationship is not at-will (usually the employee) has the burden of proving in court that the parties departed from the at-will term. The vast majority of nonunion employees in the U.S. serve at will, and nonunion employees constitute the vast majority of the workforce today (Shierholz 2022).

The at-will presumption is a creature of the common law, meaning it was created and is maintained by judges. Only a few states have codified it. Scholars trace its origins to a 19th-century treatise by Horace Wood, where Wood claims, without adequate support, that the at-will presumption is the predominant legal rule in the U.S. (VanderVelde 2020). Following publication of Wood’s treatise, more courts began adopting the rule (Beermann and Singer 1988; VanderVelde 2020). Where the rule is not codified, state judiciaries could eliminate it, since it was their creation; however, no state judiciary has done so.

For a time, however, state courts were willing to impose limits on the employer’s at-will authority, mainly through two ways: the tort of wrongful discharge and the “implied-in-fact” contractual limitation.

Around the 1980s, most states began recognizing the employee claim of wrongful discharge in violation of public policy, where a termination was illegal if it undermined the state’s ability to achieve an important public policy. Examples include terminations in retaliation for the employee exercising a legal right, fulfilling a legal duty, or refusing to violate the law. The scope of the exception varies across states, but normally it is illegal for the employer to terminate an employee for filing a workers compensation claim, assuming jury duty, or refusing to commit perjury on behalf of the employer.

Further, in most states, courts have found that in some circumstances employees can hold employers to implied promises of job security, meaning a promise not expressed orally or in a written contract. Thus, in some situations, employees can enforce job security policies described by the employer in a handbook issued to all employees or a group of employees.22

This trend of recognizing tort or contract-based limits on the employer’s right to terminate basically ended in the 1980s, and the implied-in-fact exception is less relevant today: many employers now include disclaimers in their written policies stating that the employment is at-will and that nothing in its policies should be interpreted as contractually binding. Courts find a clear, conspicuous disclaimer to be strong evidence against allowing the employee to enforce the policy.23

b. Illustration

Courts have relied on the assumption of balanced power, sometimes expressed in the credo of freedom of contract, to justify decisions to keep the at-will rule, to circumscribe exceptions to the rule, and to otherwise give employers almost unlimited authority to terminate employees.

For instance, in ruling that the public policy exception did not protect a hospital employee who was terminated for reporting unsafe patient care, the Missouri Supreme Court stated that the at-will doctrine is “[r]ooted in freedom of contract and private property principles, designed to yield efficiencies across a broad range of industries.”24 The court assumes that the employee’s power is comparable to that of the employer, so that both realize “freedom of contract” and their arrangement produces an optimal allocation of social resources. The court’s inaccurate allusion to the origins of the rule suggests the potency of the assumption. As noted, we cannot trace it to a deliberate design to achieve efficiency.

Courts suggest that the symmetry in the parties’ formal rights reflects a symmetry in bargaining power. The presumption is merely the legal expression of balanced power:

The employee usually feels free to leave and take another job if it presents a more desirable opportunity. Similarly, the employer generally feels free to discharge the employee if he no longer wants his services. The at-will presumption is simply a legal recognition of the parties’ normal expectations.25

2. Keeping management rights unfettered

Within the balanced-power assumption are additional assumptions about the employee’s bargaining power and labor markets, and courts rely on them to explain why the employer must have almost unlimited rights to terminate employees and to modify employment agreements unilaterally.

a. The power of quitting

The case law tends to assume balanced power by assuming that employees can adequately protect their interests by quitting or threatening to quit. We see this assumption in legal rules regarding the employer’s right to change the employment agreement unilaterally and to impose binding obligations on employees that outlast the agreement. Most states permit the employer to modify agreements to the disadvantage of its at-will employees through unilateral action. The employer can, on a prospective basis, lower wages, decrease benefits, impose a noncompete agreement, require arbitration, or retract promises of due process regarding disciplinary action. Because courts claim that at-will employment is a contract, formally the employee must assent to the change to make it enforceable. However, the law in most states deems that the employee assents by not quitting (Arnow-Richman 2016). The reasoning is that, because the at-will employee can walk away at any time without legal penalty, by not quitting the employee accepts the change voluntarily. Thus, where the employer introduces an arbitration agreement, the employee assents by turning up for work. This was the situation in Epic Systems and how millions of U.S. workers have lost their rights to go to court and pursue claims collectively.26 Also, in most states, an arbitration agreement binds the employee even if the employer terminates the employee the next day.

b. Market discipline

Another iteration of the balanced-power assumption is the argument that employees do not need legal protection from termination because the market disciplines employers from acting irrationally or treating employees badly. Employers must compete for employees, and labor is in such demand relative to its supply that employers will not terminate employees for arbitrary or undeserved reasons: “It is, of course, not economically feasible for an employer to frequently discharge employees for purposes unrelated to the betterment of his business,”27 and “Employers pay a price if they get a reputation for tricky dealings with their employees…. Employees work under contracts of employment at will because they think it unlikely they will be fired as long as their work is satisfactory and the firm does not encounter rough weather.”28 Another court suggested that the at-will rule was not a legal rule at all but instead just a legal expression for the rigorous market discipline under which employers operated: if an employer fails to maintain a good employee, “the penalty for any mistake will be paid in the market (because the [employer] will have a harder time recruiting a quality replacement, or will need to pay more to make up for the greater uncertainty) rather than in the courts.”29 On this reasoning, some courts have found that an employer and employee who want to contract around the at-will default must articulate their intentions more clearly than parties who seek to contract around a default in other kinds of agreements.30 The possibility that an employer might terminate a well-performing employee because it could find someone else to perform the work for less, with fewer benefits, or under more onerous conditions does not enter the court’s reasoning. 

c. Changing the rules would be unfair to employers

Another kind of argument based on the assumption that the employee can readily damage the employer by walking away is the argument that changing the status quo would give employees unfair economic and legal advantages. One court cites “simple fairness” as the reason for the at-will presumption, criticizing the notion that “it leaves the ‘poor’ employee without legal protection.”31 The court argues that, if the law instead presumed that employment contracts were for a certain duration or were otherwise not at will, employers would generally be unable to recover damages from employees who breach the agreement by quitting: 

Absent the presumption, the law is naturally prone to favour the interests of the employee. The presumption may make it slightly more difficult for the employee to recover if he brings an action. But this merely serves as a partial redress of the unfair situation which would otherwise occur.32

The court remarks, “The old adage that you can not get blood from a stone is particularly apt in this situation.”33

For this situation to be unfair, it must be that the employer who loses an employee needs a legal remedy to a comparable extent as the employee who loses a job. The court is assuming that a worker can more readily leave the employer and find a new job than the employer can find a new employee. Under contract law, if an employer wants to sue an employee for quitting before the expiration of the agreement, the employer’s damages will be limited to whatever loss the employer could not avoid by hiring a replacement. The court’s argument in Greene assumes that an employer is generally unable, without difficulty, to hire someone to replace the employee who quit. Thus, for redress the employer must go to court to seek damages from the breaching employee. Since the employee is likely impecunious, however, the employer would be without real recourse under this non-at-will regime.34

3. The NLRA and balanced-power assumption

The Supreme Court has not entirely disregarded the inequality of bargaining power between the employee and employer when interpreting the NLRA; however, it has overlooked where this inequality comes from, as illustrated by its opinion in N.L.R.B. v. Bell Aerospace Co. holding that “managerial” employees were excluded from the NLRA.35 The majority adopts the rationale from the dissenting opinion in a case holding that foremen could unionize under the NLRA:

The present decision…tends to obliterate the line between management and labor…. It tends to emphasize that the basic opposing forces in industry are not management and labor but the operating group on the one hand and the stockholder and bondholder group on the other…. The struggle for control or power between management and labor becomes secondary to a growing unity in their common demands on ownership.36

Bell Aerospace excludes managerial employees from the NLRA so as not to create (expose) fault lines of class conflict between those who produce and those who possess capital, something the majority deems Congress could not have intended. The majority assumes that the opposing interests of employees and employers come from occupying different strata in an organizational hierarchy rather than class position. While the precise legislative intentions behind the NLRA are beyond the scope of this paper, the majority’s rationale ignores the preamble’s conclusion that workers needed the right to organize because of the imbalance of power between an individual and aggregated capital.

III. The assumption of managerial prerogative

Courts also protect employer power on the assumption that the employer must have nearly full authority over the commercial enterprise to promote efficiency and prevent adverse economic consequences, both at the enterprise and macroeconomic levels. Courts appeal to managerial prerogative to carve out exceptions for employers from contract law and to limit worker rights under the NLRA. Legal rules and statutory interpretations assume or state that the employer’s managerial prerogative must include the right to command nearly every aspect of the business, including hiring and firing, compensation and benefits, working conditions, investment decisions, product lines (what to produce), the labor process (how to produce it), and whom to do business with.

A core claim is that restricting managerial prerogative will harm the enterprise and economy by restricting the employer’s flexibility to adapt to changing circumstances. The courts make several economic arguments based on this claim: Employers are better positioned than anyone else to perceive and respond rationally to market conditions. So confident are we in the employer’s business judgment that we must not second-guess it and must sometimes defer to inscrutable and apparently irrational decisions. Contract law does not provide adequate protections for managerial prerogative; we cannot impose on employers the same rules we impose on other commercial parties. So critical is managerial prerogative that we must sometimes save employers from their own bargains. The costs of restricting managerial prerogative would be formidable and create chaos.

The courts’ arguments about managerial prerogative are, above all, policy assumptions about how they think the economy works and, with respect to the NLRA, how they think Congress thought the economy worked. The idea that an employer-as-business entity “owns” the enterprise as a going concern and therefore has a near absolute right to command it has achieved taken-for-granted status in the law. However, courts have never been able to articulate a sound legal foundation for this proposition, including through property rights (Atleson 1983; Racabi 2022). In cases of statutory interpretation, particularly NLRA cases, the Supreme Court has suggested that deferring to managerial prerogative is consistent with legislative intent, on the assumption that the legislature could not have meant to intrude upon the powers that companies claim for themselves.

A. Contract law exceptions

The assumption of managerial prerogative is so tenacious that courts have created exceptions within contract law for employers, sometimes without any pretence that they are conferring advantages on employers unavailable to parties in other commercial agreements.

1. Termination authority

The court’s preservation of the at-will rule relies on the assumption of managerial prerogative. As illustrated in Part II, some courts defend the employer’s at-will presumption based on freedom of contract. However, the at-will presumption is unique in contract law and hard to reconcile with it. Courts do not presume that any other kind of contract is at will, and it is hard to find another at-will agreement that courts will recognize as a contract—at a minimum, courts generally require a term providing for notice before termination (Tomassetti 2021).

The peculiar status of the at-will rule within contract law makes managerial prerogative an important source of its legitimacy. Courts contend that the employer’s prerogative over hiring and firing must be near absolute, because a “variety of unforeseen business and economic conditions that can and do arise, require the ability to adapt to prospective needs.”37 Another court notes:

…an employer is free to run his business as he sees fit. In a day-and-age when government regulation tends to act as an impediment to free enterprise, stifling initiative in the private sector, courts must be mindful to remember that freedom of contract still reins [sic]: absent contractual restrictions or federal or state laws [that] restrict management prerogatives, an employee serves at the whim of the employer.38

The assumption is so taken for granted that courts have wrongly attributed its origin to rational, “policy” reasons. Thus, a court provides that the at-will rule “reflects the nation’s historical policy favoring rapid industrial development.”39

Courts also turn to the necessity of managerial prerogative to explain why employers are not required to exercise their termination authority in good faith. Despite its peculiarity, courts claim that at-will employment is a contract, but that designation would subject employers to a duty of good faith in making termination decisions. Contract law implies a duty of good faith into every contract, and parties cannot contract out of it. However, when it comes to at-will employment, courts in every state except Montana reject this idea. The employer may act dishonestly, irrationally, and opportunistically in terminating at-will employees. Courts have invoked the assumption of managerial prerogative to explain their position, for instance, arguing that it is “unnecessary and unwarranted for the courts to become arbiters of any termination that may have a tinge of bad faith attached. Imposing a good faith duty to terminate would unduly restrict an employer’s discretion in managing the work force.”40

2. Revoking promises and protecting employers from bargaining away their prerogatives

Courts also appeal to managerial prerogative to give the employer a right to modify the terms of an employment agreement without meeting the ordinary requirements of contract law. While the courts provide the most flexibility to employers with respect to at-will employees, in most states they also permit employers to revoke promises to non-at-will employees if the employer made the promise via personnel policies.

For instance, in Asmus v. Pacific Bell, the California Supreme Court permitted an employer to unilaterally, on notice, deem non-at-will employees to be at-will employees.41 Pacific Bell had made a written promise to managerial employees that it would not terminate them unless the company ran into certain business difficulties. Years later, however, the employer terminated the employees despite conceding that the contractual condition permitting it to terminate them had not occurred. The court did not dispute that the employer’s promise was contractually binding, and the company did not dispute that the promise was clear. Under these circumstances, the court should have enforced it or required the employer to follow the usual requirements to negotiate the managers’ departure. Instead, it decided that, because the job security policy for the managers could last an indefinite time, it would be unreasonable to hold the employer to it. Without citing any case law, the court created a new rule for employers allowing them to rescind job security promises upon notice after the policy has been in place for some time. The court remarked that to rule otherwise would be “leaving the employer unable to manage its business, impairing essential managerial flexibility, and causing undue deterioration of traditional employment principles.”42 Asmus illustrates the tendency of some courts to save an employer from what the court sees as an imprudent limitation on its prerogative.

Other courts have likewise used dramatic language to describe the consequences of requiring employers to abide by job security policies or otherwise follow the usual requirements for modifying contracts. One case finds, “It would be unreasonable to think that an employer intended to be permanently bound by promises in a handbook, leaving it unable to respond flexibly to changing conditions.”43 The Michigan Supreme Court ruled that employers could unilaterally transform non-at-will employees into at-will employees by amending its policies, because otherwise, “many employers would be tied to anachronistic policies in perpetuity….”44 And, while finding in favor of a furloughed employee, a court still sympathizes with the employer’s concern about being “shackled with a workforce it is unable to reduce without fear of wrongful discharge litigation….”45

Sometimes courts find that employers should not be expected to abide by job security policies because, if the employer were to create new policies from time to time, this could leave an employer with different agreements in place for different employees. The administrative costs of keeping track of different agreements would be too high. One court explained that such a situation would “create chaos for employers who would have different contracts of employment for different employees….”46 This position seems to assume that keeping track of the policies in place for different employee cohorts is a logistical challenge beyond others inherent in managing an enterprise (like managing relationships with suppliers, customers, investors, etc.).

3. Interpreting contractual limitations on at-will authority

The case law on interpreting cause limitations on employer termination rights also assumes the necessity of managerial prerogative.47 Courts generally divide for-cause terminations into two types: (1) terminations allegedly based on the individual employee’s conduct, for instance, where the termination is allegedly based on the employee’s poor performance or misconduct; and (2) terminations unrelated to the employee’s conduct and based on “economic decisions.” In both situations, courts protect the employer’s prerogative in a somewhat anomalous manner from the perspective of contract law.

a. Employee conduct

In contractual terms, where the cause for termination is related to the employee’s conduct, the employer is essentially saying that the employee breached the employment agreement or failed to fulfill contractual obligations. An employee who disputes the termination on the basis that the conduct did not warrant termination is essentially claiming that the employer breached the agreement by terminating the employee without cause.

Courts have interpreted cause limitations to extend the employer’s managerial prerogative to what is normally the prerogative of a judge or jury. Normally, under contract law it does not matter whether a party believes it fulfilled its contractual duties if the party did not fulfill them, even if the party’s belief was reasonable. Likewise, it does not matter whether a party breaches its obligations intentionally, carelessly, or even after exercising all reasonable precautions to avoid breaching them. For instance, “a defaulting borrower’s good faith belief he or she has repaid a loan is not a defense to a lender’s claim for payment.”48 Also under contract law, the trier of fact (a judge or jury) determines whether the party breached the contract. In employment disputes, however, several courts allow the employer to avoid liability for terminating an employee without cause by showing that it had reasonable grounds to believe it had cause. The California Supreme Court has ruled that employers have a “fact-finding prerogative,” one they do not automatically “relinquish…” when agreeing to a for-cause limitation.49 Courts have suggested that this fact-finding prerogative is accessory to the employer’s at-will authority, since a right to terminate at will is a right to terminate regardless of “facts.”50 It is unclear, however, why the employer retains this accessory after it has expressly contracted away some of its at-will authority.

What seems to drive the courts’ conclusions is the assumption that only employers have been inducted to the arcana of the market and only they can be trusted to respond to its mysterious tides for the benefit of the enterprise and economy. The California Supreme Court relies on this assumption to rationalize departing from the normal position of contract law and displacing the jury’s role as a “fact-finding board”:

[A]llowing a jury to trump the factual findings of an employer that an employee has engaged in misconduct rising to the level of “good cause” for discharge, made in good faith and in pursuit of legitimate business objectives, is a highly undesirable prospect…. In effect, such a system would create the equivalent of a preeminent fact-finding board unconnected to the challenged employer…. This ex officio “fact-finding board,” unattuned to the practical aspects of employee suitability over which it would exercise consummate power, and unexposed to the entrepreneurial risks that form a significant basis of every state’s economy, would be empowered to impose substantial monetary consequences on employers whose employee termination decisions are found wanting.51

The majority extends the employer’s “broad latitude” over personnel decisions to being “factually incorrect,” a prerogative not enjoyed by other contractual parties.52

b. Economic decisions

Where the employer argues that it terminated an employee for an “economic” reason, such as a layoff or business reorganization, this reason satisfies a for-cause limitation on its termination authority.53 The employer has “complete discretion” when discharging employees for economic reasons.54 Unlike the situation where the employer alleges that the decision is based on the employee’s conduct, here the employer need not establish that it had reasonable grounds to believe the decision was justified.

As noted, normally a party has cause for terminating a contract where the other party breached the agreement, meaning the party failed to do what it promised.55 Alternatively, to be excused from its contractual obligations the party needs to show that some exception applies, such as “frustration” or “impracticability.” These doctrines relieve a party from its contractual duties where unforeseen circumstances make their performance impossible, pointless, or exorbitant, and where the contract does not itself allocate the risk of these circumstances coming to pass.56

Where the employer has an economic reason for the termination, courts treat the for-cause term differently. In these cases, nobody disputes that the employee performed the contract adequately; however, the court permits the employer to terminate the employee without liability, without requiring the employer to demonstrate one of these contractual exceptions.

Courts appeal to managerial prerogative to explain why. Their findings regarding what an employer and employee must have intended in agreeing to a for-cause limitation reflect the policy assumption that the economy works better where employers have near plenary flexibility in managing the enterprise. For instance, the Vermont Supreme Court argued:

…“history is replete with examples of technological and business innovations which have created new markets and destroyed old ones, thereby necessitating changes and shifts in the work force.” Attempting to second-guess these shifts would be self-defeating as well as an inappropriate interference in managerial discretion.57

Another court dramatizes the situation: “To hold otherwise would impose an unworkable economic burden upon employers to stay in business to the point of bankruptcy in order to satisfy employment contracts and related agreements terminable only for good or sufficient cause.”58

Above, we see courts treating employers differently than other parties to commercial contracts and justifying this disparate treatment based on the assumption of managerial prerogative. While addressing different issues, the cases share several motifs: The courts use speculative, overwrought language to describe the consequences of limiting managerial prerogative. They assume that the costs to the economy and employers of retaining employees under job security policies or for-cause provisions are formidably high and outweigh the costs of job losses. They assume that the employer’s interest in flexibility, and the contribution of this flexibility to economic dynamism, outweigh the economic benefits of job security. Unlike in the case of other commercial parties who may have sound reasons for wanting out of their agreements, the courts do not require employers to renegotiate with the other party, to show that a contractual exception relieves them from their promises, or to pay damages.

B. Statutory protections: The NLRA

Several areas of NLRA law are based on Supreme Court interpretations that argue the necessity of managerial prerogative. The court often suggests that these interpretations are required by or at least consistent with legislative intent. This article does not take a position in the debate on the congressional intent behind certain NLRA provisions. The point is that, whether as a result of legislative intent or the Supreme Court’s independent appraisal, the assumption drives much of labor law. The following discusses three areas of NLRA law where the Supreme Court has defended the necessity of managerial prerogative: (1) reserved authority, (2) mandatory bargaining subjects, and (3) interference and discrimination.

1. Reserved authority

Arbitrators often treat the employer as possessing “reserved authority,” meaning that the employer legally has default authority over the enterprise, even in the absence of contracting for such authority. Arbitrators assume that the employer “reserved” whatever prerogative the employer did not specifically contract away (Young 1963) and thus may take unilateral action in these domains without running afoul of the agreement. For instance, a text on how arbitrators should interpret collective bargaining agreements provides:

It has been said that, unless restricted by contract, management has the right “to determine what is to be produced, when it is to be produced, and how it is to be produced.” Again, unless restricted by the agreement, management has the right to determine what work shall be done; to determine what kinds of services and business activity to engage in; and to determine the techniques, tools, and equipment by which work on its behalf shall be performed. (Elkouri and Elkouri 2003, 664)

The idea of reserved authority sits uncomfortably with the notion that employment is a contract. In a contract, the parties’ duties toward one another are for the parties to determine and exist only by virtue of the parties’ agreement. This distinguishes a contract from a status relationship, where some external authority, like the state or custom, determines the existence and content of a social relationship. (Examples of status or quasi-status relationships include the obligations of parents to their minor children and the relationship between the military and a drafted soldier). The above excerpt on arbitration suggests that, even before entering an agreement, the employer has certain rights over the employee that it can bargain away if it pleases. This does not sound contractual. In fact, the National Labor Relations Board, the agency responsible for enforcing the NLRA, has ruled that employers cannot rely on “basic management prerogative” to make unilateral changes to the employment agreement where the employer did not secure a contractual provision allowing it this authority.59

2. Mandatory bargaining subjects

The Supreme Court has legitimated the employer’s managerial prerogative with respect to the subjects over which the employer must bargain with a union. The NLRA provides that the employer must bargain with its employees’ duly chosen representative “in good faith with respect to wages, hours, and other terms and conditions of employment.”60 If the employer refuses to bargain over these subjects, or makes a unilateral change regarding one of these subjects without bargaining, it breaches its duty under the NLRA.61 Further, a union may deploy what economic leverage it can in negotiations over these subjects, and the employer likewise violates the NLRA if it retaliates against employees for exerting this pressure. For instance, the employer cannot terminate employees who strike to improve their leverage at the bargaining table with respect to these issues.62 Thus, the NLRA expressly subjects employer prerogative to negotiation with the employees’ union.

Nonetheless, the Supreme Court has ruled that some decisions are too much a matter of managerial prerogative to subject to negotiation, even if they significantly impact employment. In First National Maintenance Corp. v. NLRB (FNM), the majority held that a building services company did not have to bargain over its decision to cancel its maintenance contract with a nursing home over a fee dispute and terminate the employees who worked on the contract.63 The majority ruled that, “in view of an employer’s need for unencumbered decisionmaking in the conduct of its business,” the employer must bargain where the “benefit, for labor-management relations and the collective bargaining process, outweighs the burden placed on the conduct of the business.”64 The employer “must be free from the constraints of the bargaining process to the extent essential for the running of a profitable business.”65

The FNM test assumes that the employer alone is capable of rationally assessing commercial conditions, requiring flexibility in managing the enterprise. The benefit for labor-management relations appears as a distinct objective (on the other side of the balance) and a “burden” on the “conduct of the business.” Employee interests in job security do not appear in the balance at all.

Applying the test to the facts in FNM, the court found that the “harm likely to be done to an employer’s need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union’s participation in making the decision.”66 The most that the union could hope to achieve through bargaining was to “delay or halt the closing.”67 The court dismissed the idea that bargaining could “augment [the] flow of information and suggestions” regarding alternatives, noting that the “employer also may have no feasible alternative to the closing….”68

In sum, the majority assumed that the employees could not contribute anything helpful in managing the enterprise, an assumption that, as the dissent points out, is speculative at best. As the experience with codetermination shows (see Jäger, Noy, and Schoefer in this volume), allowing worker input into these decisions does not necessarily lead to adverse economic outcomes.

The court distinguished FNM from Fibreboard Paper Products Corp. v. N.L.R.B.,69 where it ruled that an employer was required to bargain over a decision to outsource work. The court noted that the Fibreboard employer had not sought to alter its “basic operation” but simply to replace unionized employees with subcontracted workers who would produce the same services for less. Although FNM did not clearly articulate the distinction, Harper (1982) notes that one could differentiate Fibreboard and FNM on the principle that decisions about what to produce and market should be determined by consumer demand rather than employer-employee bargaining. This interpretation makes sense—the FNM majority suggested that its decision turned on characterizing the termination as an “economically motivated decision to shut down part of a business,” i.e., to cease to offer certain services for sale.70 As explored below, Harper’s insight is also consistent with NLRA jurisprudence suggesting that managerial prerogative is most out of reach of the NLRA when dealing with decisions about allocating capital between employment and other uses.

3. Anti-union interference and discrimination

Section 8(a)(1) of the NLRA makes it an unfair labor practice “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7.” In Supreme Court jurisprudence, managerial prerogative defines the limits of this prohibition. Many employer activities that prima facie would seem to interfere with, restrain, or coerce employees with respect to their associational and organizational rights are not considered to be violations of 8(a)(1). For instance, the Supreme Court ruled in NLRB v. Mackay Radio & Telegraph that employers could hire permanent replacements for striking employees without violating the NLRA, based on the assumption, for which it did not offer analysis or evidence, that the employer had the “right to protect and continue his business,” outweighing any interest in resolving the conflict with its employees.71

Likewise, if the employer decides to close its business or part of its business in response to a union drive, this is generally not a violation of the NLRA. The exception is where a closing is discriminatory under Section 8(a)(3), requiring proof that the employer’s motive was to discourage its other workers from unionizing (for instance, at other establishments the employer owns).72 As in the case where courts interpret contractual limits on an employer’s termination authority, the commercial rationality of the employer’s decision is not subject to scrutiny, because, “some employer decisions are so peculiarly matters of management prerogative that they would never constitute violations of §8(a)(1), whether or not they involved sound business judgment unless they also violated §8(a)(3).”73

While Section 8(a)(3) prohibits some employer decisions that Section 8(a)(1) would permit, the case law on Section 8(a)(3) is also limited by the assumption of managerial prerogative. Section 8(a)(3) of the NLRA prohibits employers from discriminating against workers with respect to their employment “to encourage or discourage membership in any labor organization.” To find a violation of this section, courts generally require proof of employer motive, and they distinguish between a motive to discourage union activity for its own sake and a motive to pursue “economic” interests. For example, without showing some form of anti-union animus, it is generally not a violation of Section 8(a)(3) for the employer to close a plant or shift capital to nonunionized plants, even where the employer does so because of the higher labor costs accompanying unionization.74 Where the employer claims it is acting in its economic interests, it is hard to prove discrimination (Estlund 1992). Further, in Textile Workers Union of America v. Darlington Manufacturing, the Supreme Court ruled that an employer may go out of business entirely even if its only motive is to discourage union activity.75 Making a conspicuous showing of “runaway capital” is within the employer’s managerial prerogative.

In another line of Section 8(a)(1) decisions, the Supreme Court limited employee rights to receive, on employer property, information from union organizers, on the basis of the employer’s right to control access to its property. Under Lechmere v. NLRB, an employer may usually prohibit union organizers who are not its own employees from entering the employer’s property to provide information to its employees.76 The exception is the “rare case where ‘the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels,’”77 such as a remote mining camp where employees reside on the premises. The court acknowledged that the employees had a Section 7 right to learn about the advantages of unionization.78 Nonetheless, it framed the issue as one about the rights of “non-employee union organizers,” which it held had only derivative Section 7 rights.

In this line of cases, the court distinguishes between the rights of the employer’s own employees and the rights of others: where the alleged interference with Section 7 rights involves the employer’s own employees, the court has found that the employer’s prerogative is limited by its interest in workplace “discipline.”79 This means that some employer decisions, like implementing nonsolicitation policies that apply to its employees even during nonworking times, are presumptively violations of Section 8(a)(1).80 In cases involving union organizers, however, the court views managerial prerogative as more absolute—it issues not from the employer’s interest in “discipline,” or in running a productive establishment, but from “property” rights.81 As in FNM and Darlington, where the employer qua capital owner indicates it wants more license in the use of its capital than that necessary to manage a workforce, the court’s solicitude toward managerial prerogative likewise seems to expand.

IV. The status quo assumption

Even where courts are not convinced that employers must have broad managerial prerogative to promote efficiency or that the employee and employer enjoy relatively equal bargaining power, they tend to assume that the costs of disrupting the status quo outweigh the costs of maintaining it. The core claim is that altering the status quo of expansive managerial prerogative will destabilize the economy.

Courts frame this claim as a “judicial abstention” argument—that the courts should abstain from intervening in complex policy issues and leave these to the legislature to resolve. A New York court ruling to preserve the at-will rule argued, “We have noted that significant alteration of employment relationships, such as the plaintiff urges, is best left to the Legislature…because stability and predictability in contractual affairs is a highly desirable jurisprudential value.”82 Criticizing the trend among states to recognize a public policy exception to the employer’s at-will authority, a Pennsylvania court fretted:

The at-will presumption, the citadel that once governed the field with such predictability, has been eroded of late by piecemeal attacks on both the contract and tort fronts and the entire field seems precariously perched on the brink of change…. Pennsylvania has thus far escaped the widescale turbulence so common to the field and still clings to the at-will presumption…. [W]e believe that if terminable at-will contracts are to be forbidden, the judicial process may be an inappropriate forum for such sweeping policy change.”83

In limiting terminated employees to contract remedies (rather than more generous tort remedies) for certain unlawful terminations, the California Supreme Court cited the need for “commercial stability,” arguing that to rule otherwise “has the potential to alter profoundly the nature of employment, the cost of products and services, and the availability of jobs,” issues “arguably…better suited for legislative decisionmaking.”84

V. Conclusion

While the above survey illustrates that the assumptions of balanced power and managerial prerogative in the case law are pervasive, their hold is not absolute. There have been, and are, countertrends:

• In establishing exceptions to the employer’s at-will authority for implied-in-fact contracts and discharges in violation of public policy, many courts recognized that the employee’s freedom to quit was not equivalent to the employer’s freedom to terminate, noting, for instance, that “this ‘freedom’ of the employee is largely illusory,”85 or “assures equality to the employee as does the law which forbids the rich as well as the poor to sleep under bridges.”86 Some courts rejected the alarm sounded by employers about enforcing job security policies, suggesting employers “may benefit from the increased loyalty and productivity that such agreements may inspire.”87 Others criticized the origin myth that at-will employment sprung from the head of freedom of contract.88

• Much FLSA jurisprudence on waivers and settlements also rejects the balanced-power assumption. The Supreme Court has held that employees cannot waive their rights to liquidated damages under FLSA,89 and many courts review proposed out-of-court settlements of FLSA claims to ensure that they are reasonable and fair to employees in light of the “often great inequalities in bargaining power between employers and employees.”90

• Courts sometimes strike down arbitration and noncompete agreements applicable to employees under the doctrine of unconscionability, on the basis that provisions are too unfair and too much a product of unequal power to be enforced.

• Dissenting opinions in the Supreme Court’s decisions on dispute resolution also reject the assumption of balanced power. Justice Ginsburg’s dissent in Epic Systems observed that by permitting employers to force employees to resolve employment-related disputes as individuals, the majority “ignores the reality that sparked the NLRA’s passage: Forced to face their employers without company, employees ordinarily are no match for the enterprise that hires them.”91

• In deciding whether certain individuals are employees entitled to statutory protections or independent contractors excluded from these protections, some courts (but not all) ground their analysis on the underlying legislative premise that workers require protection due to their inferior bargaining power.92

• Despite many NLRA decisions deferring to managerial prerogative, the Supreme Court has recognized that the NLRA sanctions some broad encroachments on managerial prerogative, including employee rights to protect themselves via collective action on employer property even when no union formation is contemplated.93

Nonetheless, while not unqualified, this article shows that many rules and statutory interpretations in U.S. work law rely on the assumptions that the employee and employer have relatively equal bargaining power, that employers must have near plenary control over the enterprise for the sake of efficiency, and that the costs of disrupting the status quo of expansive employer prerogative would be greater than that of maintaining it. These unproven assumptions underlie decisions that protect employer power over workers and deprive workers of economic security and autonomy. The decisions give employers broad rights to terminate employees, to force workers to arbitrate disputes as individuals, to renege on assurances of job security, to otherwise modify the terms of employment unilaterally, and to undermine workers’ collective rights.

Behind the main assumptions and the economic claims that depend on them are additional ones that courts generally leave unarticulated—assumptions about information, rationality, externalities, organizational dynamics, and competitive strategies. For example, the claim that markets discipline employers not to mistreat employees assumes that employers seek to maximize profits through long-term, product market competition and not low-wage competition or short-term financial strategies like stock price inflation. The claim that requiring employers to abide by job security commitments would impose fearsome costs on the employer and economy assumes that the costs of the current regime are less economically destructive. It also assumes that the costs of job security policies to employers outweigh their potential benefits in the form of employee productivity, initiative, loyalty, and morale. The claim that only legislatures should alter the judge-made rules protecting managerial prerogative so as not to destabilize the economy assumes away the instability that workers face under the status quo—one characterized by unemployment, dependence on the employer for one’s livelihood, and limited opportunities to make a living outside of labor markets.

By showing how much of U.S. work law rests on unproven assumptions about how the economy works, this paper sets the stage for the companion papers in this volume. In these papers, social scientists will interrogate the veracity of these assumptions, hopefully informing future court rulings and policy changes.

Acknowledgments

I am grateful to Michael Harper, Wilma Liebman, Larry Mishel, and Brishen Rogers for their invaluable feedback, and to Larry Mishel for inviting me to be a part of the Unequal Power Project.

About the author

Julia Tomassetti is an assistant professor of law at City University of Hong Kong. Please direct correspondence to jtomasse@cityu.edu.hk.

Notes

1. By “work law” I refer to a trilogy of subfields: labor law (the law dealing with worker collective action and unionization); employment law (the law dealing with individual worker rights, like minimum wage laws, the common law of employment, and contracts); and employment discrimination law.

2. By focusing on the NLRA, I do not mean to imply that this is the only legislation whose interpretation is shaped by these assumptions.

3. Given that the common law rules discussed in this paper are products of judicial law-making, the argument that courts should let the rules stand to avoid treading on legislative authority is somewhat wanting.

4. Some states have since codified the presumption, however, including Louisiana and California.

5. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991); Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001).

6. 500 U.S. at 33.

7. For a discussion of the shortcomings of forced arbitration, see Colvin 2018.

8. Gilmer, 500 U.S. at 43 (J. Stevens dissenting) (internal citation omitted).

9. AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).

10. 138 S. Ct. 1612, 1619 (2018).

11. The Supreme Court upheld its constitutionality in N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937).

12. Section 7 guarantees employees the rights “to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

13. Epic Systems, 138 S. Ct. at 1619 (emphasis added). For a similar framing of the arbitration issue as one of contractual freedom, see Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 122 (2001).

14. See Naidu and Carr in this volume for a fuller critique of this theory as applied to labor markets.

15. Coppage v. Kansas, 236 U.S. 1 (1915).

16. 138 S. Ct. 2448 (2018).

17. Ibid. (J. Kagan dissenting).

18. Ibid. at 2467.

19. Ibid. at 2462, 2473–77, 2483, 2486.

20. Montana abrogated the at-will rule via statute, and it is not the rule in Puerto Rico or the U.S. Virgin Islands.

21. Harris v. Mississippi Valley State University, 873 So. 2d 970, 987 (Miss. 2004).

22. For example, see Woolley v. Hoffmann–La Roche, Inc., 99 N.J. 284 (1985). In most of these states, however, courts permit employers to modify these policies unilaterally, including by rescinding job security assurances.

23. This and the redirection of disputes from the courts to arbitration explains why many of the cases discussed below that rely on the balanced-power assumption are from the 1980s and 1990s, and also why they represent the definitive law on these issues despite their age.

24. Margiotta v. Christian Hosp. Northeast Northwest, 315 S.W.3d 342, 346 (St. Ct. Mo. 2010) (internal citations omitted).

25. Greene v. Oliver Realty, Inc., 363 Pa.Super. 534, 547 (1987). 

26. The same applies to non-at-will employees if the employer promised the job security via a policy issued to multiple employees rather than through a contract with the individual employee.

27. Martin v. Capital Cities Media, Inc., 354 Pa. Super. 199, 213 (1986).

28. Curtis 1000, Inc. v. Suess, 24 F.3d 941 (7th Cir. 1994).

29. Garcia v. Kankakee Cty. Hous. Auth., 279 F.3d 532, 536 (7th Cir. 2002).

30. Martin, 354 Pa. Super. at 213.

31. Greene v. Oliver Realty, Inc., 363 Pa.Super. 534 (1987).

32. Ibid. at 549.

33. Ibid.

34. For another example, see Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561(1983) (J. Day, concurring).

35. 416 U.S. 267 (1974).

36. Ibid. at 278 (quoting Justice Douglas’ dissenting opinion in Packard Motor Car Co. v. NLRB, 330 U.S. 485 (1947).

37. Woolley v. Hoffmann–La Roche, Inc., 99 N.J. 284, 491 n. 8 (1985).

38. Bass v. M & S Music Co., No. 78-556, 1979 WL 1969, at *4 (S.D. Ala. Oct. 12, 1979) (internal citation omitted).

39. Riquelme v. Comcast Cellular Commc’ns, Inc., 1994 WL 273415, at *4 (D.N.J. June 14, 1994).

40. Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 569 (1983).

41. 23 Cal. 4th 1 (2000).

42. Ibid. at 13. Normally, how one enters a contract does not determine how one may get out of it. Despite its doctrinal incoherence, however, Asmus provides more protections for employees than courts that never enforce employer policies or courts that do not require employers to provide notice or wait some period before making unilateral modifications.

43. Ferrera v. Nielsen, 799 P.2d 458, 460 (Colo. App. 1990).

44. In re Certified Question, 432 Mich. 438, 456 (1989). For another example, see Dumas v. Auto Club Ins. Ass’n, 437 Mich. 521, 532 (1991), noting the “traditional reluctance of courts to interfere with management decisions and the needed flexibility of businesses to change their policies to respond to changing economic circumstances.”

45. Brooks v. Trans World Airlines, Inc., 574 F.Supp. 805, 810 (D.Colo.1983).

46. Bedow v. Valley Nat’l Bank, 5 IER cases 1678, 1680 (D. Ariz. 1988).

47. Note that the vast majority of U.S. employees are at will; they have no for-cause limits on their termination.

48. Cotran v. Rollins Hudig Hall Int’l, Inc., 17 Cal. 4th 93, 102 (1998) (internal citation omitted).

49. Ibid. (quoting Simpson v. Western Graphics Corp. 293 Or. 96, 100–101 (1982).

50. Towson University v. Conte, 384 Md. 68 (2004).

51. Cotran, 17 Cal. 4th at 104 (quoting Southwest Gas v. Vargas, 111 Nev. 1064, 1075 (1995)).

52. Ibid. at 101 (internal citation omitted).

53. Taylor v. Nat’l Life Ins. Co., 161 Vt. 457, 466 (1993). Statutory law in Montana, the only state not recognizing at-will employment, also deems that “good cause” for termination includes “disruption of the employer’s operation, or other legitimate business reason.” Mont. Code Ann. §39-2-903(5).

54. Friske v. Jasinski Builders, Inc., 156 Mich. App. 468, 472 (1986).

55. Parker v. Diamond Crystal Salt Co., 683 F. Supp. 168, 173 (W.D. Mich. 1988).

56. Restatement (Second) of Contracts §§261-64 (1981). An example of a contract becoming impracticable would be where someone books a concert hall to host performances, but the concert hall burns down before the performances take place. Taylor v. Caldwell, 122 Eng. Rep. 309 (Q.B. 1863).

57. Taylor, 161 Vt. at 467 (internal citations omitted).

58. Friske, 156 Mich.App. at 472. See Parker, 683 F. Supp. at 173 for a similar sentiment.

59. Columbian Chemicals Co., 307 NLRB 592 (1992).

60. NLRA §8(d).

61. NLRA §8(a)(5) (making it an unfair labor practice “to refuse to bargain collectively with the representatives of his employees”).

62. Employers may, however, “permanently replace” employees who strike for this purpose. N.L.R.B. v. Mackay Radio & Telegraph, 304 US 333 (1938).

63. 452 U.S. 666 (1981). However, the court held that the employer must bargain over the “effects” of the decision on its employees. “Effects” bargaining includes issues like severance and priority in re-engagements.

64. Ibid. at 679.

65. Ibid. at 678–79.

66. Ibid. at 667.

67. Ibid. at 681.

68. Ibid. at 683.

69. 379 U.S. 203 (1964).

70. FNM, 452 U.S. at 677. If the nursing home rather than FNM had cancelled the contract, the terminations would look less like the consequence of an entrepreneurial decision and more like a redundancy layoff due to a business downturn.

71. 304 U.S. 333, 345 (1938).

72. Textile Union Workers v. Darlington Mfg. Co., 380 U.S. 263 (1965).

73. Ibid. at 269.

74. NLRB v. Adkins Transfer Co., 226 F.2d 324 (6th Cir. 1955).

75. 380 U.S. 263.

76. 502 U.S. 527 (1992).

77. Ibid. (internal citation omitted).

78. Also, the NLRA states that it covers “any employee, and shall not be limited to the employees of a particular employer.”

79. Republic Aviation Corp. v. N.L.R.B., 324 U.S. 793, 798 (1945).

80. Ibid.

81. Lechmere, Inc. v. N.L.R.B., 502 U.S. 527 (1992).

82. Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 336 (1987) (internal citation omitted).

83. Martin v. Cap. Cities Media, Inc., 354 Pa. Super. 199, 208 (1986).

84. Foley v. Interactive Data Corp., 47 Cal.3d 654, 694 (1988). See also the concurrences in Dumas v. Auto Club Ins. Ass’n, 437 Mich. 521, 532 (1991) and Berube v. Fashion Centre, Ltd., 771 P.2d 1033, 1052 (Utah 1989).

85. Berube, 771 P.2d at 1045.

86. Ludwick v. This Minute of Carolina, Inc., 287 S.C. 219, 221–222 (1985). See also Pugh v. See’s Candies, Inc., 116 Cal.App.3d 311 (1981).

87. Foley, 47 Cal.3d. at 681.

88. Woolley v. Hoffmann–La Roche, Inc., 99 N.J. 284 (1985).

89. Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945).

90. Nall v. Mal-Motels, Inc., 723 F.3d 1304, 1307 (11th Cir. 2013) (quoting Lynn’s Food Stores, Inc. v. U.S., 679 F.2d 1350, 1352 (11th Cir. 1982).

91. 138 S. Ct. 1612, 1640 (2018). See also the dissenting opinions of Justice Stevens in Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) and Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991).

92. For example, see the California Supreme Court’s decision, Dynamex Operations W. v. Superior Ct., 416 P.3d 1 (Cal. 2018), which the legislature has since codified.

93. N.L.R.B. v. Washington Aluminum Co., 370 U.S. 9 (1962).

References

Arnow-Richman, Rachel. 2016. “Modifying At-Will Employment Contracts.” 57 Boston College Law Review 427.

Atleson, James B. 1983. Values and Assumptions in American Labor Law. University of Massachusetts Press.

Bagenstos, Samuel R. 2020. Lochner Lives on: Lochner Presumption of Equal Power Lives in Labor Law and Undermines Constitutional, Statutory, and Common Law Workplace Protections. Economic Policy Institute.

Beermann, Jack M., and Joseph William Singer. 1988. “Baseline Questions in Legal Reasoning: The Example of Property in Jobs.” 23 Georgia Law Review 911.

Cobble, Dorothy Sue. 2010. “The Intellectual Origins of an Institutional Revolution.” 26 ABA Journal of Labor & Employment Law 201.

Colvin, Alexander. 2018. The Growing Use of Mandatory Arbitration: Access to the Courts Is Now Barred for More than 60 Million American Workers. Economic Policy Institute.

Elkouri, Frank, and Edna Asper Elkouri. 2003. How Arbitration Works. 6th ed. Bureau of National Affairs.

Estlund, Cynthia L. 1992. “Economic Rationality and Union Avoidance: Misunderstanding the National Labor Relations Act.” 71 Texas Law Review 921.

Gross, James A. 1974. The Making of the National Labor Relations Board: A Study in Economics, Politics, and the Law. Vol. 1, 1933–1937. State University of New York Press.

Harper, Michael C. 1982. “Leveling the Road from Borg-Warner to First National Maintenance: The Scope of Mandatory Bargaining.” 68 Virginia Law Review 1447.

Racabi, Gali. 2022. “Abolish the Employer Prerogative, Unleash Work Law.” 43 Berkeley Journal of Labor and Employment Law 79.

Shierholz, Heidi. 2022. “Testimony before the House Committee on Economic Disparity and Fairness in Growth for a Hearing on the Impact of Corporate Power on Workers and Consumers.” U.S. House of Representatives, April 6.

Tomassetti, Julia. 2021. Power in the Employment Relationship: Why Contract Law Should Not Govern At-Will Employment. Economic Policy Institute.

VanderVelde, Lea. 2020. “The Anti-Republican Origins of the At-Will Doctrine.” 60 American Journal of Legal History 397.

Young, Stanley. 1963. “The Question of Managerial Prerogatives.” 16 ILR Review 240.

“At-will” employment is sometimes shorthanded as employers’ rights to fire employees (and employees’ right to quit) for a bad or arbitrary reason, or for no reason at all.  Among the bad or arbitrary reasons that employers sometimes fire workers: something the worker said, or something they didn’t say. Employees have been fired, often without legal recourse, for criticizing their companies on social media, for running for office, or even for having a bumper sticker supporting a political candidate whose election the boss opposes. The freedom of speech that so many Americans valorize is in practical effect illusory for many American workers.

This report traces the legal rules governing freedom of speech at work. Following a summary that emphasizes the scope of the problem and gives examples, it begins by discussing the background rules of at-will employment, which establish that employers may generally terminate workers for what they say. This rule has its limits—for example, employers may not fire workers in contravention of a state’s explicit public policy—but judges tend to apply these exceptions in a patchy and inconsistent fashion. Further, because the First Amendment does not constrain private actors, private-sector workers cannot fall back on the constitution at all; even public-sector employers are often free to fire or discipline workers for their speech.

Beyond common law rules, the report also discusses federal, state, and local statutes that protect certain types of employee speech. These laws tend to apply only to specific subjects and manners of expression. For example, the National Labor Relations Act protects employees’ conversations about their working conditions—but only as long as those conversations occur at the right time, in the right place, and in the right manner. For example, among other limits, the NLRA protects only those conversations or meetings that occur during “nonwork time,” and the Trump NLRB has recently held that the NLRA does not protect employees’ use of their work-issued email addresses. Likewise, some states and localities forbid employers from retaliating against employees for their political views. But each of those laws has serious limitations in coverage, enforcement, or both. Worse, employers sometimes challenge even limited protections for workers’ expression on the grounds that those protections violate the employer’s own rights under the First Amendment.

Finally, some workers have meaningful contractual protections that curb the effects of the at-will doctrine, including as it applies to their speech and expression. But workers cannot achieve these protections without either individual or collective power, both of which have eroded for many workers over the last 80 years. The result is that one real source of protection for workers who speak out—collective bargaining agreements in which employers agree to discipline or fire workers only for good cause—are increasingly out of reach, especially for private-sector workers.

This report aims to help readers understand the legal landscape that effectuates the “freedom of speech” at work. It shows how employers have come to monopolize that freedom for themselves, and why workers experience speech control instead of speech freedom.

I. Introduction

Americans are divided on any number of fundamental questions, but a recent poll shows broad support for free speech: “Seventy-one percent of Americans think that people should be able to say what they want without state or government censorship” (Gray 2016). But many U.S. workers are not really free to speak their minds, and it’s not the government censoring them but their bosses, even when the workers are off duty and even when they are outside of work. This paper discusses the reasons for—and limits of—employer control over employees’ expression.

In 49 U.S. states—every one except Montana—the default setting for private-sector, nonunion employment is “at-will,” which is often described as employment from which employees can be fired for a bad reason, an arbitrary reason, or no reason at all.1 One employment law casebook describes the at-will rule like this: “the employer [is] free to impose any conditions of employment, to discharge an employee at any time for any reason, and to effect the discharge in virtually any manner” (Rothstein, Liebman, and Yuracko 2015).2 The philosopher Elizabeth Anderson has emphasized the consequences of employers’ freedom under the at-will rule, characterizing private-sector employment as a form of “private government,” and a dictatorial one at that. Anderson rightly emphasizes that employers often have the power to fire employees because of their out-of-work speech and other off-duty activities—a reality of which many employees are unaware. Of course, private employers are not the same as government—Anderson points out that government can often impose much harsher penalties than employers can.3 Likewise, while workers often face practical barriers to changing jobs, it is still generally easier to change jobs than to immigrate to a new country. At the same time, “private governments impose a far more minute, exacting, and sweeping regulation of employees than democratic states do in any domain outside of prisons and the military” (Anderson 2017, 63). In other words, employers’ freedom to fire employees for bad or arbitrary reasons is in essence a freedom to control employees’ behavior in significant ways, even when they are off the clock.

The at-will default is nominally evenhanded, in the sense that employees are also free to quit their jobs for any reason, at any time, and in any manner. But, as other papers in the Unequal Power initiative show, workers operate under a host of constraints that limit their practical ability to quit. A weak social safety net, uncertainty about how easy it will be to find another job, and family obligations that prevent someone from moving for work can all leave employees stuck working for controlling or abusive employers—and the next employer might be just as bad (Edwards 2022). The rarity of full employment makes quitting and switching jobs problematic, especially for Blacks and workers lacking a college credential (Mishel 2022). And even when wages are cut workers do not quit to the extent that economic theory posits, indicating that employer power is pervasive (Naidu and Carr 2022).

Employees’ dependence on their employers for life’s necessities, coupled with the at-will default, means that employers can often exercise vast authority over their employees’ lives, including their speech and association. Consider the following examples:

• Unionized workers were compelled to choose between attending a Trump rally, using a day of paid time off, or staying home without pay; workers who chose to attend were apparently cautioned not to do or say anything that could be “viewed as resistance” (Allyn 2019). Of course, these choices might have been even tougher if the workers had not been protected by a union contract; in 2012, a group of nonunion mineworkers said they were ordered to “give up a day’s pay” in order to attend a Mitt Romney campaign event (Bradford 2017).

• Workers have been fired for expressing support for the political candidates not supported by their bosses. For example, a worker reported that she was fired because she had a Kerry-Edwards bumper sticker; her boss was a Bush supporter (Noah 2004). Juli Briskman, the marketing analyst who in 2017 communicated her disdain for Trump administration policies by flipping off a presidential motorcade, was fired, reportedly for violating a “company policy banning obscene content on social media” (Cassens Weiss 2018). Briskman sued, but her case was dismissed because Virginia, like nearly all states, is an at-will jurisdiction.

• Workers may also face pressure from their bosses to donate to or vote for a particular candidate. Mitt Romney famously encouraged this practice, telling business owners to “make it very clear to your employees what you believe is in the best interest of your enterprise and therefore their job and their future in the upcoming elections.” He noted that there was “nothing illegal about you talking to your employees about what you believe is best for the business, because I think that will figure into their election decision, their voting decision, and of course doing that with your family and your kids as well” (Phelan 2012). In fact, one in four private-sector employees said in a 2015 survey that they received political messages or requests from their bosses (Hertel-Fernandez 2018).

• A worker was required to take part in Bible study during working hours and was told he would be fired if he refused. This was likely illegal, but the worker, who had served time in prison, was “fearful that he wouldn’t be able to find other work,” so he “stuck with the weekly, hourlong Bible study sessions for six months” (Green 2018).

• During the COVID-19 pandemic, workers lost their jobs for raising questions about whether their workplaces were putting them (or members of the public) in danger (see, e.g., Stone 2020; Scheiber and Rosenthal 2020), and others were prohibited from revealing their own positive COVID diagnoses to their coworkers (Eidelson 2020).

On the other hand, there is some expression for which employers cannot legally fire their employees. For example, employers cannot fire employees for reporting discrimination to the Equal Employment Opportunity Commission (EEOC) or for discussing their respective salaries in the workplace breakroom; retaliating against employees in these situations would violate Title VII of the Civil Rights Act and the National Labor Relations Act, respectively. These examples reflect how the at-will default has been modified by federal, state, or local laws that protect from employer retaliation certain kinds of worker expression. Employees and employers can also modify the at-will default by contract, a reality reflected in most collective bargaining agreements—though only a small minority of American workers are covered by them.

These exceptions mean that whether an employer is constrained from firing an employee because of something the employee has said turns on three main questions. The first is whether the employee is protected by an individual contract or a collective bargaining agreement that overrides that at-will default, and instead sets out specific conditions that must exist before a worker can be disciplined or fired. The second is whether there is a legal rule that protects the employee by creating an exception to the at-will default and, if so, whether there is an enforcement mechanism that is available to the employee as a practical matter. And the third is whether individual workers have market leverage—for example, is the employee too difficult to replace, or will the employee’s coworkers go on strike?

Too often, employees will find that none of the answers to these questions works in their favor. Others will not even know which questions to ask and will instead simply decide to remain quiet, fearing that if they say something that angers the boss, they might lose their jobs. This course represents potentially a loss to workers themselves, as well as to their larger workplace and political communities (Eidelson 2020). Some of these larger losses are easy to recognize: workers who fear employer retaliation might not speak out about harassment they are experiencing; they might not learn that they have a shared workplace complaint that they could jointly raise with their boss; they might not blow the whistle about dangerous or illegal company practices; and they might not speak up about an idea that would make the workplace run more efficiently. Other harms can be harder to see; for example, Cynthia Estlund has persuasively argued that “the workplace is the location where people come together for purposive, cooperative activity and where they gain or lose much of their sense of community and of self-worth” (Estlund 1995, 108). That insight highlights the moral and political dimensions of workers’ freedom of speech.

A meaningful freedom of speech for workers could come from two places. First, workers could have enough individual or collective power to secure their employers’ commitments to discipline or fire workers only for good reasons—that is, only when the worker has meaningfully harmed the employer or the employee’s coworkers. And, as the next section of this paper discusses, some U.S. workers have done just that through unionization and collective bargaining, or even through individual negotiations. But the vast majority of workers do not have contractual protections and instead have to rely on a second pathway to freedom of speech: a combination of whatever power they can muster in the moment, their employers’ sense of propriety, and—importantly—a patchwork of legal rules that prohibit employers from taking action against employees in certain circumstances. The bulk of this paper is taken up with explaining some of these rules and illustrating why they do not add up to meaningful free speech for workers. That is, employers are often able to suppress their employees’ speech on and off the job in the private sector and, to a lesser extent, the public sector.

This paper begins by discussing workers who often do have meaningful protections against employment consequences for their speech, either because of contractual commitments or because they live in one of a small number of U.S. jurisdictions that have reversed the at-will presumption. Then, it turns to legal rules that take certain worker statuses and activities out of the at-will arena. It begins with the National Labor Relations Act (NLRA), which undergirds both unionized and nonunionized workers’ collective power by protecting private-sector employees’ “concerted activity,” including speech related to working conditions—though with significant limitations. Among those limits: the law protects only “concerted” activity involving multiple employees; it applies only to topics with a sufficient nexus to the workplace; and workers can lose protection if they pursue collective action outside approved pathways. In addition, the NLRA imposes few constraints on employers, who are free to require employees to listen to a near-constant barrage of anti-union messages as long as those messages do not rise to the level of coercion.

Next, the paper turns to particular topics that can place employees at heightened risk of employer retaliation, such as employee speech about their own working conditions, the employer’s misdeeds, or the employee’s religious, social, or political views and beliefs. Importantly, there exist legal protections that cover employees’ speech on these topics, though, as the paper discusses, these protections are full of holes. For example, a long list of statutes provides at least some protection for employee whistleblowing—provided employees tell the right audience about what they have discovered. Likewise, workplace protections such as those found in anti-discrimination law are typically coupled with protections against employer retaliation, though these protections also have limitations that can be counterintuitive.

This report focuses on types of employee speech that can have considerable social value in addition to reflecting employees’ own autonomy interests; often, that social value is reflected in the fact that Congress, state legislatures, or other government bodies have established at least a degree of protection from the harshness of the at-will default when workers engage in these types of speech. Conversely, this report does not discuss some other types of worker speech over which employers often exert significant control. For example, employees’ job duties often involve speech—for example, a fast-food restaurant might require its cashiers to attempt to upsell customers to a larger size meal. Additionally, some worker speech harms others; for example, harassing speech, which can trigger employer liability under some circumstances. But even when liability is not on the table, employees may sometimes find their coworkers’ speech to be upsetting or annoying, and employers may be called upon to mediate these disputes. This paper touches only briefly on these issues.

Some readers might be surprised that a report about workers’ freedom to speak without facing employment consequences has not yet mentioned the First Amendment. Because the First Amendment constrains only government, not private individuals or entities,4 the First Amendment is not implicated when a private employer fires employees for their speech. However, the paper does close with two observations about First Amendment law as it relates to worker speech. First, public employees have limited First Amendment protections against being fired by their government employers when they speak as citizens, though these protections rarely cover public employees’ speech about their working conditions. Second, private employers can invoke the First Amendment when the government regulates their speech, which means there is a risk that courts will strike down government regulation of employer speech even when the regulation is intended to promote employee freedom. For example, if Congress amended the NLRA to require employers to remain neutral about the possibility of employee unionization, courts might then conclude that the change violates employers’ First Amendment rights, even though it would also promote employees’ speech and association.5

For at-will employees, the threat of employment consequences for their speech is considerably greater than the threat of government censorship. There exists a list of legal rules intended to constrain employers, but a combination of employer-friendly exceptions and the difficulties of enforcing rights means that employers retain extensive practical ability to punish workers for speech of which employers disapprove. Freedoms that many Americans hold dear thus stop at the boss’s door.

II. Reversing the at-will default

What do the examples in the introduction to this report have in common? They each involve speech: an employer either pressured its employees to express or suppress certain views, or punished an employee after the fact because of something the employee said. But at a higher level of abstraction, we might say that these examples each reflect the “bad reason” prong of the standard at-will formulation.6 These employees either were fired for a bad reason, or they were told to comply with a capricious or unjust workplace rule on pain of being fired (for a bad reason). Put this way, employer control over employee speech is one manifestation of employers’ control over workers generally.

If employer control over employee speech is a symptom, and the at-will rule is the diagnosis, then the cure would be to change the at-will default to one in which workers can be disciplined or fired only for “just cause.” Or, as Cynthia Estlund put it, “[d]ue process, in the form of a ‘just cause’ requirement for discharge and a fair hearing, would both bolster the existing protections of highly valued employee speech and, incidentally, generate some protection for less exalted forms of speech that simply do not justify the extreme sanction of discharge” (Estlund 1995, 104; see also Estlund 1996).

What counts as just cause can be malleable, but two commentators described the concept like this: “Just cause…embodies the idea that the employee is entitled to continued employment, provided he attends work regularly, obeys work rules, performs at some reasonable level of quality and quantity, and refrains from interfering with his employer’s business by his activities on or off the job” (Abrams and Nolan 1985, 594). This standard does not equate to absolute protection for workers’ speech and association, but it does mean that workers cannot be disciplined or fired simply because they have expressed an opinion with which their boss disagrees. Instead, the employer will have to demonstrate that the employee has actually harmed the employers’ legitimate interests.7

For a relatively small number of private-sector workers in American workplaces, this concept is already a reality: they are covered by a contract that contains just-cause protections, or they work in one of the small number of U.S. jurisdictions that have legislatively changed the at-will default. This section briefly describes contractual and statutory just-cause protections. It offers several reasons that they can be a useful and durable source of employment protection for employees, especially when coupled with enforcement mechanisms that mean workers do not have to rely on expensive and uncertain litigation or individual arbitration to enforce their rights. This discussion will also provide a backdrop for the next section, which turns to legal protections that limit the extent to which employers can fire or discipline employees for specific categories of expression.

A. Contractual just-cause protections and employee speech

Some private-sector workers benefit from contractual protection against termination for arbitrary or bad reasons. Tenured college professors fall into this category,8 as do workers who have negotiated employment contracts that list specific grounds on which the employer can terminate the contract. But these are the exception rather than the norm; there is no requirement that an employment relationship be memorialized in a written contract, and most U.S. employees work without one. Other employees may benefit from “implied” contracts, which are created when the employer makes a unilateral promise regarding the employment relationship, but, again, these are relatively rare, especially because employers can draft employment documents to avoid making any contractual incursions on at-will employment.9 Finally some employees—though only about 6% of private-sector workers—are covered by collective bargaining agreements, which are the main focus of this section (BLS 2022).

Collective bargaining agreements commonly overturn the presumption of at-will employment by including just-cause protections from termination. These provisions can vary in their language but are often quite straightforward. For example, the United Auto Workers’ collective bargaining agreement with Ford Motor Company states simply that Ford “retains the sole right to discipline and discharge employees for cause, provided that in the exercise of this right it will not act wrongfully or unjustly or in violation of the terms of this Agreement” (UAW and Ford Motor Company 2019, 17). Further, collective bargaining agreements may require progressive discipline for lesser infractions and require that disciplinary infractions be wiped from an employee’s slate after a period of time. And they typically include procedural protections; for example, most collective bargaining agreements include a grievance process that a union or employee can use to challenge discipline imposed without justification, and labor law requires employers to allow unionized employees to have a union representative present during interviews that may lead to discipline.10

Two features make collectively bargained just-cause provisions especially meaningful. First, the employer typically has the burden to show that it had just cause. Second, primary responsibility for enforcing a collective-bargaining agreement rests with the union, rather than individual employees. Unions, unlike individual employee plaintiffs, then become repeat players with enforcement expertise developed over time. Moreover, they are usually considerably better resourced than individual employees, perhaps even employing an attorney who does nothing but handle grievances arising under the union’s collective bargaining agreements. Thus, whereas employers often violate statutory labor and employment law with impunity because of barriers to effective enforcement, the enforcement of just-cause collective bargaining agreements can and should be routine.

B. Statutory good-cause protections

A small number of U.S. jurisdictions have overturned the at-will presumption by statute. Montana is the only state to do so; in addition, Puerto Rico and the Virgin Islands have passed similar laws, as has New York City with respect to fast-food workers and Philadelphia with respect to parking attendants.11 While these laws are similar in that they restrict employers from terminating employees without a good reason, there are some important enforcement-related differences that bear on their effectiveness. This section briefly compares the Montana statute to the New York City one.

Montana’s law requires that private-sector employers have “good cause” to fire employees, with good cause defined as “any reasonable job-related grounds for an employee’s dismissal based on” the employees’ “failure to satisfactorily perform job duties”; “disruption of the employer’s operation”; “material or repeated violation of an express provision of the employer’s written policies”; or “other legitimate business reasons.”12 The law is enforced by employees through litigation in state courts or in arbitration,13 and employees can recover damages, subject to some important limits.14

New York City’s law prohibits fast-food employers from firing workers without just cause, which the statue defines as “the fast food employee’s failure to satisfactorily perform job duties or misconduct that is demonstrably and materially harmful to the fast food employer’s legitimate business interests.”15 Additionally, the law mimics many collective bargaining agreements by requiring employers to follow a written progressive discipline policy in non-“egregious” cases.16 Other provisions make it harder for employers to evade the law by, for example, using layoffs or hours reductions to disguise decisions to terminate without good cause.17 And, as to enforcement, “any person, including any organization, alleging a violation” may file a lawsuit or demand a specialized arbitration process,18 and the city’s law department can also undertake enforcement proceedings against repeat violators.19

Requiring that employers have good cause to terminate or discipline an employee can be a significant source of protection for workers. But not all good-cause provisions are created equal: as the preceding paragraphs describe, Montana’s law is weaker than New York City’s on substance, and it is also harder to enforce. In other words, New York City’s law comes closer to replicating the protections that usually come with effective union representation, which means it has the potential to do more than the Montana law to deter employers from treating employees arbitrarily or with bad cause.

The at-will default is a central reason that employers can fire workers because of their speech, even when that speech does not harm production. Contractual or statutory just-cause protections can be an effective way to get to the root of the problem, especially when their enforcement mechanism is well-designed.

III. Legal protections for (some categories of) worker speech

Another approach to protecting valuable speech by workers is for legislatures to enact (or state courts to recognize in their decisions) protections for specific categories of worker speech. For example, labor law protects workers’ rights to join together to speak out about labor conditions; employment discrimination law protects workers who oppose discrimination at work; and whistleblower laws protect workers who report corporate wrongdoing to the authorities. Where these statutes apply, employers may not leverage their economic power over employees to demand silence. However, as discussed below, there are pitfalls to this approach: these statutory protections can apply in unpredictable ways, and, even where they apply, enforcement can be difficult or ineffective.

This section is organized around several types of worker speech that have (or at least may have) social value but that many employers would like to suppress. The discussion that follows is not intended to be a comprehensive treatise on legal protections for employees but instead to illustrate two general ideas: first, that there exists tremendous variation in the extent to which law protects workers’ speech; and second, that even within protected categories of worker speech, it is easy for workers to fall through the cracks, losing statutory protection and reverting to the at-will default.

The section begins with a fairly detailed discussion of the NLRA and its protection for workers’ collective action, before moving on to other topics. The extended discussion of the NLRA is partially illustrative—an example of how even broadly drafted statutory protections can leave workers to navigate a confusing array of exceptions and qualifications. It is also intended to give readers a more complete sense of how the landmark federal statute that is aimed at increasing workers’ bargaining power functions to protect (or not) workers’ speech about their working conditions.

A. Workers’ rights to criticize their working conditions and organize for improvements in those conditions

While the COVID-19 pandemic has been disruptive for everyone, essential frontline service workers have had to cope with especially dangerous and challenging conditions, risking their health to ensure that essential services continued. While some employers moved quickly to make their workplaces safer, others took a more lackadaisical approach. Especially in the latter scenario, workers often responded by demanding that their employers do more to keep them safe and also to recognize the burdens of work during the pandemic by increasing pay, improving sick leave, and more.

But employers sometimes responded to these requests by firing the “troublemakers.” For example, when Ben Bonnema and one of his coworkers became concerned about ventilation and unmasked customers at the Trader Joe’s where they worked, they wrote a letter to the company’s chief executive officer (CEO) requesting specific improvements; Bonnema’s boss then fired him with a written termination notice that invoked Bonnema’s “at-will” status and claimed Bonnema’s suggestions were “not in line with company values” (Shammas and Knowles 2021).

Bonnema’s situation is not unique. Though particulars differ from case to case, it is distressingly common for employees who work together to try to improve their pay or other working conditions to be fired, disciplined, or reprimanded. In these scenarios, the employer’s response serves a double purpose: getting rid of a squeaky wheel, and sending a message to other employees about the costs of expressing discontent.

Bonnema’s situation had a happy ending: after he tweeted about being fired, a labor lawyer offered to help. Soon after, Trader Joe’s agreed to reinstate Bonnema and take other remedial steps. This remedy was available because the National Labor Relations Act guarantees workers, even nonunion workers, the right to act together to improve their wages and working conditions—exactly what Bonnema and his coworker did when they wrote to the CEO.

This section focuses on the NLRA and discusses statutory limits to the at-will rule that apply when private-sector workers try to improve their working conditions.20 However, there are also significant limitations to the NLRA’s protection, and workers are vulnerable to discipline or discharge when they act outside the boundaries of that protection.

One caveat: in discussing the boundaries of the NLRA protection for workers’ speech and association, this section tells only part of the story. Courts have also undermined the NLRA’s protection for workers’ collective action by limiting the remedies available when employers violate the NLRA,21 authorizing employers to counter employees’ collective action with solidarity-destroying tactics,22 and more.

1. Collective voice at work: The NLRA and its limits

The National Labor Relations Act is one of the most important protections for private-sector employees’ speech. The 1935 statute declares that “inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract” burdens the economy, including by “depressing wage rates and the purchasing power of wage earners in industry.”23 The NLRA’s solution—employee organizing and collective bargaining—is rooted in employees’ abilities to communicate about their working conditions with each other, their employers, and the public. Thus, § 7 of the NLRA states that employees have the right to engage in “concerted activities” for “mutual aid or protection,”24 and § 8(a)(1) of the act makes it illegal for employers to “interfere with, restrain, or coerce”25 employees who are exercising their § 7 rights. Importantly, this provision applies to both union and nonunion employees, making the NLRA an important source of protection for covered employees’ organizing to improve their own working conditions.26

At the same time, the NLRA’s limitations are many and varied. The statutory language is limited to employees’ “concerted activities for…mutual aid or protection,” meaning that workers’ speech can fall through the cracks if it is not collective, if it is targeted at a concern that is not workplace-related, or if it is not action-oriented. And courts interpreting the NLRA have sided with employer interests on some critically important questions,27 blunting the statute’s potential to level the playing field between employers and employees. Taken together, these limitations also make it virtually impossible for workers to rely on their intuitions about when or how the NLRA might protect them.28

a. The ‘connectedness’ requirement

In general, the NLRA protects only “concerted activity,” that is, activity that involves at least two employees.29 This might look like Ben Bonnema and his coworker sending their letter, a strike or picket line, a petition expressing dissatisfaction with a new company policy, or two employees revealing their salaries to one another, perhaps because they suspect the employer is systematically underpaying workers of color. But an employee’s individual workplace advocacy usually will not qualify as collective action,30 though there are some exceptions.31

Surprisingly, some conversations between multiple employees also do not qualify as concerted if the board feels the employees were merely “griping.” This caveat might seem unimportant, but low-stakes workplace social interactions can set the stage for other forms of collective action. As Michael Oswalt put it, workers generally need to develop relationships and build trust before they will pursue collective action: “the subtle shift from ‘I hate this,’ to ‘We hate this’ [could] prompt a worker to think about starting a petition drive before barging into a supervisor’s office alone” (Oswalt 2017, 1002). And an employer who disciplines a worker for griping unmistakably sends a message about workplace control; it would take considerable bravery for a worker to engage in protective concerted activity after seeing a coworker fired for griping.32

b. The ‘for mutual aid or protection’ requirement

The NLRA’s second requirement focuses on employees’ goals, asking whether employees are trying to “improve terms and conditions of employment or otherwise improve their lot as employees.”33 Many topics obviously qualify—for example, collective action that relates to pay, workplace safety, or employer discrimination all meet this requirement.

Political issues that relate to working conditions are also in bounds: in the foundational decision Eastex v. NLRB,34 the Supreme Court agreed that the NLRA protected distribution of a union newsletter that urged workers to oppose a “right-to-work” amendment to the Texas Constitution, highlighted President Nixon’s recent veto of a minimum wage increase, and generally encouraged workers to “defeat our enemies and elect our friends” at the ballot box. The court deferred to the NLRB’s assessment that these political initiatives could have indirect effects on working conditions, writing that “[t]he Board was entitled to note the widely recognized impact that a rise in the minimum wage may have on the level of negotiated wages generally,” as well as that a constitutionally enshrined right-to-work law would be harder to change than a statutory one.35

This relatively broad approach to defining “mutual aid” means that employees’ collective action related to political topics can be protected by the NLRA as long as there is a tie between the topic and working conditions. Immigration law is a salient example, as illustrated by “Day Without Immigrants” protests that took place in 2006 and 2017.36 These protests were intended to highlight the importance of immigrant workers to the functioning of the U.S. economy; workers from all over the country missed work to participate, some with their employers’ permission and some without.

Following each protest, the NLRB’s general counsel (GC) analyzed whether employers had violated the NLRA when they fired workers for missing work to join the protests. (The board’s GC is its chief prosecutor; a GC’s views are important in part because they guide what cases the office will take and what arguments the GC’s office will make. However, the GC’s views do not bind the board or the public.) Importantly, both GCs (a Republican-appointed GC analyzing the 2006 protests and a Democratic GC analyzing those in 2017) agreed that workers’ advocacy on immigration policy did fall within the scope of the mutual aid or protection clause. But they disagreed about whether employers were nonetheless free to enforce their attendance rules when workers missed work to attend the protests. The first analysis (conducted by the Republican GC) concluded that employers could enforce their attendance rules because the demonstrations were not strikes over an issue that the employer could remedy.37 The second memo (issued by the Democratic GC) reached the opposite conclusion.38 Thus, while at least some forms of collective action related to immigration are protected by the NLRA, there is risk that that this protection will not extend to all tactics.39

While Eastex is relatively broad, some issues of great importance to workers can nonetheless fall outside the NLRA’s bounds. For example, the Fifth Circuit Court of Appeals held that workers who were members of an “outside” political advocacy group were not protected by the NLRA when they distributed the group’s literature at work, even though the group’s goals—ending mandatory workplace drug testing—related to a disputed issue at the workplace in question.40 And in another case, the NLRB decided that employees were not protected when they advocated for the employee stock option plan to acquire a majority share in the employer’s parent company, writing that the proposal did “not advance employees’ interests as employees but rather advances employees’ interests as entrepreneurs, owners, and managers.”41 This distinction between managerial interests and working conditions may also arise in a case against Google, which involves two worker-organizers who were fired after circulating a petition regarding the company’s potential collaboration with the U.S. Customs and Border Control agency.42 The case was pending as of this writing; it seems likely that the board will have to resolve whether the NLRA protects advocacy aimed at influencing an organization’s direction or choice of clients.

2. Concerted activity that loses NLRA protection

The discussion in the previous section illustrates how the NLRA provides meaningful-but-limited protection for workers’ collective action related to working conditions. But workers can lose NLRA protection if they choose the wrong place, the wrong time, or the wrong manner in which to express themselves. In particular, courts interpreting the NLRA have allowed employers to insist on loyalty, decorum, and productivity, reflecting what James Atelson has described as “deeply held judicial feelings about the contractual or status obligations of employees as well as the rights of property” (Atelson 1983, 5).

Because of these limitations, employees often have no recourse if they are fired for collective action that falls into any of the following categories:

• The message is deemed “disloyal, reckless, or maliciously untrue”
• The message is expressed using “opprobrious” language
• The employees use materials belonging to the employer, possibly even including the employer’s computer or email system, to express their message
• An employee solicits another employee to sign a union card during “working time”
• Employees picket in order to seek support from a “secondary” employer, that is, a company that does business with the workers’ employer.

This section briefly discusses these limitations, each of which can impede workers from effectively building solidarity with each other or with potential allies, such as consumers of the products the workers create. Despite the NLRA’s stated protections, there remain many situations in which courts defer to employer authority, allowing workers to be disciplined for their speech.

a. Disloyalty

The disloyalty doctrine comes from a case known as Jefferson Standard,43 which arose out of a breakdown in collective bargaining negotiations between the union representing a group of technicians and their employer, a television and radio broadcaster. The employees picketed (but did not strike) for about six weeks, and then began to circulate a new handbill, which the Supreme Court later characterized as a “vitriolic attack.”44 It read:

Is Charlotte A Second-Class City?

You might think so from the kind of Television programs being presented by the Jefferson Standard Broadcasting Co. over WBTV. Have you seen one of their television programs lately? Did you know that all the programs presented over WBTV are on film and may be from one day to five years old. There are no local programs presented by WBTV. You cannot receive the local baseball games, football games or other local events because WBTV does not have the proper equipment to make these pickups. Cities like New York, Boston, Philadelphia, Washington receive such programs nightly.

Why doesn’t the Jefferson Standard Broadcasting Company purchase the needed equipment to bring you the same type of programs enjoyed by other leading American cities? Could it be that they consider Charlotte a second-class community and only entitled to the pictures now being presented to them?

WBT Technicians

The company fired 10 technicians because of this handbill. In the letter of termination, the employer did not contest the handbill’s factual statements; instead, it took the view that “[c]ertainly we are not required by law or common sense to keep you in our employment and pay you a substantial salary while you thus do your best to tear down and bankrupt our business.”45

The NLRB acknowledged that the technicians’ statements in the handbill either were true or at least were not known to be false.46 But the board nonetheless decided that the technicians lost NLRA protection because their conduct was “indefensible,” analogizing to union tactics such as sit-down strikes, sabotage, and strike-related violence.47 The Supreme Court agreed, writing that the “company’s letter shows that it interpreted the handbill as a demonstration of such detrimental disloyalty as to provide ‘cause’ for its refusal to continue in its employ the perpetrators of the attack. We agree.”48

There is much to criticize about the court’s reasoning, but the bottom line is that the Jefferson Standard rule continues to leave workers engaged in collective action vulnerable to discipline or termination by their employers. The recent case Miklin Enterprises, Inc. v. NLRB shows how.49 The case began when a group of employees placed posters on “community bulletin boards” in the employer’s restaurants. These posters showed two identical pictures of Jimmy Johns sandwiches, indicating that one was made by a healthy worker and the other by a sick worker. The text at the bottom of the poster read:

CAN’T TELL THE DIFFERENCE? THAT’S TOO BAD BECAUSE JIMMY JOHN’S WORKERS DON’T GET PAID SICK DAYS. SHOOT, WE CAN’T EVEN CALL IN SICK. WE HOPE YOUR IMMUNE SYSTEM IS READY BECAUSE YOU’RE ABOUT TO TAKE THE SANDWICH TEST.50

Following that and other speech along similar lines, the company then fired six employees who, as the Eighth Circuit put it, “coordinated the attack,” and issued warnings to three others.51

While the NLRB concluded that the workers had engaged in protected concerted activity because they did not have a “malicious motive,” the Eighth Circuit disagreed. In an en banc ruling—that is, a decision issued by the full Eighth Circuit rather than a panel of three judges—the court concluded that employee speech was “disloyal” if it “indefensibly disparaged the quality of the employer’s product or services,”52 characterizing the workers’ health-related statements as “equivalent of a nuclear bomb.”53

This rule can get in the way of the kinds of worker-consumer coalitions that can be critical to workers achieving their goals. An important way to generate community support is to show how working conditions affect consumers’ experiences in a business.54 This was the gist of the Jimmy Johns campaign—that making it difficult or impossible for workers to take time off work when they were sick was bad for workers and consumers alike. Yet this kind of argument will often focus on the product or service that the workers make or provide, meaning that workers will run the risk that decisionmakers will ultimately find the criticism was “disloyal”—causing them to lose NLRA protection and allowing them to be fired.

b. Opprobrious speech

Collective action sometimes takes the form of a spontaneous, outraged response to something the employer has just said or done. But with emotions running high, employees might use profane or insulting language, in which case an employer might insist that it has a right to terminate the employee for breaching workplace civility rules. As with disloyalty, there is not a bright-line definition of what counts as opprobrious—there is no list of words that are out of bounds. Instead, until recently, the NLRB addressed these cases by focusing on the setting and the circumstances of employee speech. However, in 2020, the Trump NLRB announced a new approach that is more deferential to employers regardless of setting, permitting them to prioritize workplace civility over employees’ concerted activity. This case, known as General Motors, will likely be reversed by the Biden board. Still, it is worth further discussion for two reasons: first, it reflects the instability of even relatively well-established legal protections for employee speech; and second, it illustrates how employers can weaponize workplace civility rules when they create upsetting situations and then punish workers for becoming upset.

Up until 2020, the NLRB used rules developed in three different contexts: picket-line speech,55 speech on social media,56 and workplace conversations with management.57 The particulars differed, but these cases generally recognized both that fraught workplace situations can lead to heightened emotions and intemperate comments, and also that managers cannot always be trusted to act in good faith—for example, an employer looking to fire a strike organizer might feign offense at language usually tolerated in the particular workplace. Under this approach, employees would generally lose the protection of the NLRA only if their speech crossed the line from heated to threatening or abusive.

However, the Trump board’s General Motors decision replaced these three separate approaches with a test that is considerably less protective of employee speech and more deferential to employer concerns.58 The case involved three suspensions of an employee, Robinson, who also served as a union committeeperson. (There were some disputes about the underlying events that led to these suspensions; this discussion relies on the board’s statement of those events.) In the first incident, Robinson swore at a manager during a dispute about whether the manager had gone back on an agreement to pay overtime to a group of employees participating in a training. In the second, a manager told Robinson that he was speaking too loudly during a meeting about subcontracting out work; Robinson reportedly responded by saying “’Yes, Master, Your Master Anthony,’ ‘Yes, sir, Master Anthony,’ ‘Is that what you want me to do, Master Anthony?,’ and also stated that the supervisor wanted him ‘to be a good Black man.’” In the third incident, Robinson said he would “mess [a manager] up” during a disagreement that arose in a meeting about shift and staffing changes, and later in the meeting played loud music that the NLRB described as “profane, racially charged, and sexually offensive.”59

Rather than analyzing the circumstances surrounding each exchange, the NLRB asked whether Robinson was fired because his employer objected to his profanity or instead because of his union affiliation or workplace advocacy.60 The reasoning in support of this change relied in part on “tension” between labor and anti-discrimination law; the problem, according to the board, was that the board’s existing rules tied employers’ hands, preventing them from responding to speech that could ultimately result in a hostile workplace.61 But the General Motors rule goes beyond racist or sexist harassment, conflating harassment with uncivil speech and using the specter of anti-discrimination law to empower employers to police employees’ legitimate grievances that are expressed using rude, profane, or obnoxious language. 

Consider Robinson’s second suspension, which the company said was imposed because of Robinson’s response to a manager’s comment that Robinson should lower his voice. First, the context was apparently fraught. Robinson testified that management was proposing to subcontract work while also stonewalling Robinson’s requests for information about the subcontractors’ costs and “work hours and shifts for the bargaining unit employees.”62 And, to be sure, Robinson’s response to the request that he lower his voice was sarcastic—perhaps he thought the supervisor was “tone policing,” or perhaps he thought the supervisor would not have been so concerned about the volume of a white employee’s voice.63 Despite this, the NLRB used the phrases “racially offensive” and “racially charged” to characterize Robinson’s comments, obscuring the likelihood that Robinson was disciplined in part because he used sarcasm to indicate that he thought he was being treated poorly because of his race.

This chain of events reflects how deference to employers can disproportionately harm workers of color, notwithstanding the General Motors board’s stated concern for hostile work environments. First, workers of color are more likely that white workers to be subjected to bad treatment (including racist treatment) by their bosses, resulting in more occasions where an employee might (understandably) respond to a situation in anger. Second, managers are more likely to misperceive workers of color to be behaving aggressively as compared to white workers, and they may then impose discipline based on this misperception.64 And even managers who believe themselves to be enforcing civility rules in an even-handed manner may be acting on implicit biases. Thus, while workplace civility rules are sometimes justified based on workers’ rights to be free of abusive or harassing treatment while at work, they can also be weaponized against workers who are trying to respond to upsetting situations.

c. Collective action in the ‘wrong’ time or place

In addition to the substantive limitations on protected concerted activity, there are also limits on where and when that activity may occur. These limits fall into two general categories. The first category concerns employees who are trying to organize inside their own workplace: workers may engage in protected concerted activity during breaks and other downtime, but employers can also insist that “working time is for work.”65 The second category concerns workers who engage in collective action on the premises of a company that does not employ them, including labor organizers who work for unions, as well as “fissured” employees,”66 i.e., those who are not technically employed at the place where they spend their work days because of subcontracting and other contractual relationships. Both sets of rules reflect assumptions that prioritize employers’ property and managerial interests, leaving holes in the NLRA’s protections for worker speech.

i. Space and time limitations on organizing at work

It only makes sense for workplace organizing to take place at work. This organizing might take the shape of conversations between coworkers; handing out union cards and other written material; or wearing union buttons or T-shirts. The NLRA protects all of these activities—but with limitations. The rules consist primarily of a set of default presumptions that govern different types of activity. Under these defaults, workers can wear union T-shirts or insignia at any time;67 they can solicit their coworkers’ support for unionization and have other § 7-protected conversations only during nonwork time;68 and they can distribute union cards or other literature only during nonwork time and in nonwork areas of the workplace.69 But employers may impose more restrictive rules if they can prove “special circumstances” justifying them.70

Employers have even more freedom to control how workers use supplies that the employer owns. For example, employees generally have no right to use the office photocopier to produce flyers about an upcoming union rally, nor may they appropriate space on the office bulletin board to post one of these flyers. This rule might seem intuitive as applied to scarce or expensive supplies, but the board has also applied it to computers, servers, and even employees’ work-issued email addresses. (This is another issue on which the board has oscillated, with the Obama board holding that employees who had access to their employer’s email system had a presumptive right to use that system for concerted activity during nonwork time,71 only to be reversed by the Trump board in 2019.72)

There is a caveat that pertains to the solicitation and distribution presumptions as well as to the rule that employers can restrict the use of their own equipment: employers may not discriminate against union speech. At a minimum, this means that while an employer may broadly insist that “working time is for work,”73 it may not (for example) allow workers to express anti-union viewpoints while simultaneously prohibiting pro-union viewpoints. But the board has historically taken this nondiscrimination rule further, to reach employers who ban any union-related communication while allowing similar expression on other topics.74 Note, though, that even this broader nondiscrimination rule did not require parity between employers and employees: an employer that barred its employees from talking about unionization or any other cause over company email could still send its own anti-union message via email.

These space-and-time limitations have only become more significant during the coronavirus pandemic. For example, when the Trump board held that employees’ use of their work email addresses was not protected by § 7, it suggested that in-person communication would be “adequate” to allow workers to communicate with each other about their working conditions. That assumption was already flawed for workers who did not routinely share space with their coworkers; now, those consequences are multiplied because so many more employees work from home. Moreover, even workers who go into the office may find that in-person communication has become more difficult, especially where employers have closed breakrooms or changed schedules because of social-distancing concerns. Despite the NLRA’s broadly drafted protection for concerted activity, these employees may find themselves with few workable methods of communicating with each other about their working conditions.

ii. Workplace fissuring and NLRA protections for workers’ speech

The rules discussed in the previous subsection apply to workers whose collective action takes place on their own employers’ premises. But many people spend their working time at job sites with which they do not have an employment relationship. For example, consider janitors who clean a downtown building each night: the building’s management may employ the janitors directly, or it may have contracted for their services. If the latter is true, then another company formally employs the janitors and bears responsibility for paying wages and complying with employment law.75 “Fissured” arrangements like this one can contribute to worsening working conditions while also limiting employees’ recourse to NLRA-protected collective action to improve their situations.

Whether subcontracted employees have the same § 7 rights at their worksite as do traditional employees is another issue where the board has oscillated: the Obama board answered this question “yes”;76 the Trump board said the opposite,77 allowing property owners to exclude off-duty subcontracted employees from their worksite. The latter approach means that a property owner may bar subcontracted employees from coming to the worksite when they are not scheduled to work, effectively preventing them from talking to their coworkers on other shifts about working conditions.

Further, workers can be left unprotected when their collective action under § 8(b) of the NLRA counts as “secondary”—that is, picket lines or strikes aimed at influencing an entity other than the employer with whom there is a labor dispute. § 8(b) is mainly about restrictions on unions, but whereas unions that violate these provisions can face injunctions and money damages, participating workers can also lose the NLRA’s protection. Precisely what counts as prohibited secondary activity is beyond the scope of this paper, but it is worth noting that this prohibition can leave subcontracted employees with less protection than their peers in traditional employment relationships. For example, if hotel cleaners who technically work for a subcontractor become irate about harassment and low pay, they may want to picket in front of the hotel where they work, but if they run afoul of the byzantine secondary activity rules they could be fired without recourse. In contrast, housekeepers who are employed directly by the hotel would be on firmer footing. In other words, an employer’s decisions about how to structure its workforces have a direct bearing on workers’ rights to organize for better treatment.

The NLRA is a significant exception to the at-will default; it was intended to level the playing field between workers and employers by protecting workers’ ability to band together to demand better working conditions. But, as this section has discussed, there are significant gaps in the NLRA’s coverage, and employers can sometimes override the NLRA’s protections if employee speech is deemed too disruptive of employer interests. Thus, while of the various statutes discussed in this section the NLRA provides the most comprehensive protection for worker speech, it does not undo the effects of the at-will default: workers are still often vulnerable to employer domination when they advocate for better treatment from their employers.

B. Workers’ rights to report employer wrongdoing

One significant category of worker speech that employers might wish to suppress concerns the employer’s own wrongdoing. This wrongdoing might involve customers or regulators, as when a company suppresses information that its products might make people sick or that it is using dubious accounting practices to hide financial losses from investors. It could also involve employees’ complaints that the employer’s treatment of them is illegal—for example, that the workplace is unsafe, or that the employer has discriminated based on an employee’s race or gender, or that the employer has failed to pay required overtime.

The three subsections that follow discuss two main topics. The first two concern legal protections for employee whistleblowers and statutory anti-retaliation provisions that protect workers when they complain about their employer’s unlawful treatment of them or their coworkers. (This is not intended to suggest that these are the only legal protections that employees could invoke in these circumstances; for example, the NLRA will often protect workers who band together to report their employers’ unlawful treatment of them, and some state courts will treat retaliatory terminations of whistleblowers as wrongful discharges in violation of public policy.) The third subsection turns to employers’ ability to contract for employees’ future silence through nondisclosure agreements (NDAs). These agreements are an important reason that legal protections for some types of employee speech may not be enough to encourage employees to speak up. Even though NDAs are sometimes unenforceable—including when they purport to override nonwaivable rights to report corporate misconduct to relevant authorities—employees who believe their NDAs to be enforceable will be reluctant to breach them.

1. Whistleblower protections

There are dozens of whistleblower laws that apply to different kinds of employer conduct in different jurisdictions. These statutes usually protect employees under specifically defined circumstances, such as when they have reported a certain variety of corporate wrongdoing to the right audience, such as a government regulator. For example, the federal financial-fraud law known as Sarbanes-Oxley protects employees who provide information about suspected violations to law enforcement, members of Congress, or their own supervisors, as well as employees who participate in enforcement proceedings.78 Of course, Sarbanes-Oxley was drafted to guard against financial misdeeds, not to promote broader employee voice.79 Similarly, while state and federal law contains numerous anti-retaliation provisions—the Occupational Safety and Health Administration alone enforces 25 such provisions, which are found in statutes ranging from the Affordable Care Act to the Federal Water Pollution Control Act to the Taxpayer First Act80—it would be a mistake to think of them as mechanisms for general worker empowerment.

Still, whistleblower protections are useful where they apply, and their scope of application can be broad or narrow. For example, consider New Jersey’s whistleblower statute, the Conscientious Employee Protection Act. The specifics of the law are less important than a sense of its breadth: it reaches employer retaliation against employees who report a wide range of problematic or illegal practices by their employers to a list of listeners that includes the employee’s supervisor, the government, entities that contract with the employer, shareholders, and so on.81 In contrast, New York’s whistleblower statute was, until 2021, comparatively narrow; it covered only employees who reported violations of New York labor and employment law, substantial public health threats, and a few other specific categories of information. (New York recently amended its statutes to closely track the New Jersey statute.)

Whistleblowing is a category of speech where it is easy to see the connection between the employee’s interest and the public interest. However, whistleblower protections are inconsistent across jurisdictions and can turn on the subject of the report and the audience who receives it, making it hard for employees who are not advised by an attorney to know when they are on solid ground.

2. Anti-retaliation protections for employees who oppose workplace discrimination

Suppose an employee believes the employer has discriminated against a coworker based on that person’s race or gender. The employee might take action, for example, by filing a charge with the EEOC or a similar state agency. Alternatively, an employee might try to solve the problem internally, perhaps taking an employer up on its promise of an “open door policy.” What happens if the employer’s response is to retaliate?

If the employee takes action together with at least one coworker, then the NLRA likely protects them both. But employees who act without help from coworkers might still find protection. Anti-discrimination laws generally prohibit employers from retaliating against employees who report potential violations, either to the employer or an enforcement agency. Indeed, many federal, state, and local statutes intended to set baseline working conditions also prohibit employer retaliation against employees who report violations; the Fair Labor Standards Act, the NLRA, the Occupational Health and Safety Act, and their various state analogues are just a few examples. It would be impossible to canvas the various rules that apply to retaliation claims under all of these statutes; instead, this section uses Title VII as an example to illustrate how, even when they are backed by anti-retaliation protections, workers can still fall through the cracks.

Title VII prohibits employers from retaliating “because [an employee] has opposed any practice” that violates Title VII’s nondiscrimination provisions or “because [an employee] has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing” under Title VII.82 The first clause is referred to as the “opposition clause” and the second as the “participation clause.” (Near-identical provisions are found in the Americans with Disabilities Act and the Age Discrimination in Employment Act.83)

The participation clause protects employees who take part in EEOC proceedings (or those of a parallel state agency), including by filing a charge of discrimination or providing witness testimony. This protection is robust; the statute’s model of agency enforcement works only if employees are willing to come forward, and Congress and the courts have taken the view that when employees do come forward they should be protected (see Green 2014, 766). For example, the protection applies even if the agency ultimately decides not to take action based on a charge of discrimination.

But the opposition clause does not offer the same broad protection; instead, courts have interpreted the clause to cover only “reasonable” opposition. “Reasonableness” encompasses two important limitations: that the opposition be expressed in a reasonable manner, and that the complaining employee could reasonably believe the employer had violated Title VII.

With regard to the first limitation, many courts have held that employers may discipline or fire workers who express their opposition to workplace discrimination in a disruptive or insubordinate fashion, as well as those who merely “gripe” about discrimination;84 these cases have clear parallels to the Trump NLRB’s approach to protected concerted activity in General Motors—though perhaps with even more troubling effects on workers with marginalized identities. As Susan Carle points out, this rule gives employers an incentive to act badly, because they have “higher chances of prevailing in discrimination suits when their conduct is so infuriating that it causes employees to lose their temper” (Carle 2016, 186).

As to the second limitation, Title VII’s opposition clause protects employees only when they oppose employer conduct that they reasonably and in good faith believe violates Title VII. In evaluating whether an employee could reasonably believe that the employer’s conduct violates Title VII, courts assume that a “reasonable person” is aware of the vagaries of federal case law. In other words, it is not enough for an employee to have a genuine belief that an employer has discriminated in some fashion, because Title VII does not cover every incident of discrimination. The statute also fails to protect employees from retaliation when they advocate for their employers to do more than just refrain from violating Title VII: an employee who advocates for a workplace affirmative action policy or anti-bias training, for example, would not be protected from retaliation under the opposition clause (see Smith 2003, 555–56).

To see how the reasonableness requirement plays out, consider the Supreme Court’s decision in Clark County School District v. Breeden.85 The case arose out of a meeting between Shirley Breeden, her (male) supervisor, and another (male) employee, to review job applicants’ psychological evaluations. One evaluation revealed that an applicant had made a harassing remark to a coworker: “I hear making love to you is like making love to the Grand Canyon.”86 Breeden’s supervisor “read the comment aloud,” looked at Breeden, and said, “I don’t know what that means.”87 “The other employee then said, ‘Well, I’ll tell you later,’ and both men chuckled.”88 Breeden complained about this exchange to two school district assistant superintendents, after which she alleged she was punished by having her job duties revised and being transferred to a different job location.

The Supreme Court held that the district had not violated Title VII even if it did retaliate against Breeden for her complaint. It concluded that Breeden could not have reasonably believed that her coworkers’ discussion of the “Grand Canyon” remark violated Title VII, because Title VII prohibits only harassment that is so “severe or pervasive” that it “alter[s] the conditions of employment and create[s] an abusive working environment.”89 The exchange that prompted Breeden’s complaint, the court continued, was “at worst an ‘isolated inciden[t]’ that cannot remotely be considered ‘extremely serious,’ as our cases require.”90

In other words, it did not matter whether Breeden genuinely believed the conduct violated Title VII, whether she genuinely felt harassed because of the exchange, or whether the exchange that prompted her complaint was recognizable as harassment as that concept is colloquially understood. But most nonlawyers have little grasp of the vagaries of Title VII;91 they are more likely to have a very general sense of what that statute prohibits, gleaned from sources such as general news stories, representations in popular media, and the employer itself—and none of these sources is likely to provide detailed or accurate information about topics such as what conduct does and does not rise to the level of sexual harassment. In fact, one study of sexual harassment training materials that are supplied by employers to employees found that these materials “tend to suggest that relatively trivial slights could give rise to harassment-related liability” (Tippett 2018, 481)—precisely the type of belief that the Breeden court characterized as unreasonable, leaving the employee unprotected from employer retaliation.

Anti-retaliation provisions are an important source of protections for workers who invoke their rights under Title VII and other employment statutes. However, these protections are not absolute: workers who expect to be protected will sometimes find that they are not, either because they expressed themselves in a heated manner or because they opposed conduct that they saw as discriminatory but that was not actually covered by anti-discrimination law.

3. When may employers buy employees’ silence?

Much of this paper discusses statutory responses to employer power, that is, legal limits intended to prevent employers from exercising their leverage over employees in ways that harm the employees or society. But employers also contract for employee silence in advance, in the form of nondisclosure agreements. NDAs have legitimate uses, such as protecting company trade secrets, but their reach often extends far beyond this type of information, sometimes purporting to restrict employees from revealing anything learned in the course of their employment. These broad NDAs reflect employees’ unequal bargaining power but they can also perpetuate it in at least two ways: by making it harder for employees to criticize their current or former employers, and by limiting employees’ abilities to get new jobs in their fields (see Lobel 2018).

Nondisclosure agreements (and their close relatives, nondisparagement agreements) came to widespread public attention in the wake of the #MeToo movement, which is synonymous with disclosures of sexual assault and harassment by powerful—and often serial—offenders. By using a combination of industry influence and payoffs, numerous abusive bosses and their enablers were able to buy current and former employees’ silence, shielding sexual harassers and abusers from exposure and allowing them to go on to harm others. For example, consider Zelda Perkins, a former assistant of film producer Harvey Weinstein. Perkins signed a nondisclosure agreement when she left her job in 1998; she later explained that she had been harassed by Weinstein for years but quit after a colleague said Weinstein had sexually assaulted her (Garrahan 2017). In exchange for 125,000 pounds and other provisions aimed at preventing Weinstein from harming others, Perkins agreed to a very restrictive set of terms—remarkably, she was not even allowed to keep a copy of the agreement itself; nonetheless, Perkins broke the agreement in light of rape allegations made against Weinstein in 2017, but even then she feared “crushing legal and financial repercussions” (Perman 2018).

The NDA that Perkins signed was negotiated as she was leaving her job, and she was represented by counsel—but Perkins still felt acutely the imbalance between her power and Weinstein’s, later saying that she felt her credibility would be “destroy[ed]” if she rejected the agreement and reported Weinstein (Garrahan 2017).92 Other NDAs are imposed at the beginning of an employment relationship, before employees even know what information they might learn or whether or why they might want to disclose it. These agreements are often imposed as a condition of employment, and they can be drafted in exceedingly broad language. For example, one recent California case involved nondisclosure and nondisparagement agreements that collectively committed employees to keep confidential virtually all information about their work, including “information disclosed by the Company to Employee and information developed or learned by Employee during the course of employment with Company,” as well as “all information of which the unauthorized disclosure could be detrimental to the interests of the Company.”93 Signing these agreements, which were recently challenged in court, resulting in a settlement, was a mandatory condition of employment for all employees. Of course, when faced with the choice of signing or going elsewhere for work, many employees will simply sign without seeking legal advice or attempting to negotiate.

NDAs are not always enforceable. For example, an ex-employee alleged to have violated an NDA might later argue successfully that the agreement was signed under duress or that its enforcement would violate public policy. Further, agreements as broad as the one in the previous paragraph may violate state or federal law, either on their face or in specific applications. For example, whistleblower protections can override NDAs,94 and one court enjoined an NDA that purported to bar an employee from participating in an EEOC investigation.95 California courts have also treated very broad nondisclosure agreements as attempts to skirt legal limits on the use of noncompete agreements—the idea being that an NDA that makes it impossible for employees to bring their general knowledge and skills to a new employer will prevent an employee from landing a new job in the same field.96 And nondisclosure and nondisparagement agreements can violate the National Labor Relations Act,97 especially when they bar employees from criticizing their employer or disclosing information about their wages and working conditions either to each other or to “outsiders,” such as reporters. Finally, several states have responded to #MeToo disclosures by passing new laws limiting in various ways the use of nondisclosure agreements as they apply to allegations of sexual assault or harassment (see Spooner 2020, 355-63; Johnson 2019, discussing eight state statutes limiting the use of nondisclosure agreements in the context of harassment or assault). These laws cover not just NDAs that are imposed at the beginning of an employment relationship but also settlement or severance agreements like the one Perkins signed; other state laws take a similar approach to settlement agreements that conceal “public hazards.”98

Of course, even unenforceable NDAs can have effects on the employees who sign them. The legal reality that a given NDA is unenforceable may make little practical difference to employees who fear the repercussions if they break their word. Employees (and their potential future employers) may fear being sued by their previous employer, and employees may also fear repercussions from future employers. Thus, employees may have little power to resist agreeing to an NDA, and even an unenforceable NDA can be enough to silence employees.

C. Workers’ social media, political, and religious speech

What happens when workers disagree with the boss (or with each other) about sensitive topics, including politics and religion? Workplace conflicts over these issues can raise thorny problems, especially if one employee holds views that another finds hurtful or dehumanizing. But, as the introduction to this paper discusses, employers sometimes coerce employees’ political or religious speech in contexts that have nothing to do with maintaining workplace harmony; in these situations, the employer simply wishes to control employees’ views and beliefs for its own purposes. As the next two subsections discuss, there are some exceptions to the at-will rule that are sometimes relevant to these situations—but employees are often left unprotected.

1. Political expression

Several states protect employees from discrimination based on specific political activities such as voting or affiliating with a political party.99 Some of these statutes are of relatively recent vintage, but others date either to the 1700s or to Reconstruction, when they were passed in recognition of the likelihood that employers would use their control over workers’ livelihood to coerce their votes against anti-slavery Republicans.100 New York’s law is representative of many of these statutes in that it is limited to a specific set of activities—running for office, campaigning, or fundraising for a candidate, party, or political advocacy group101—and New York courts have dismissed cases involving employees who were fired for other types of political expression.102

A few other states, however, have statutory protections for “political activities” or “political opinions” more generally.103 California is one example; its labor code prohibits employers from threatening to fire employees in order to try to “coerce or influence” the employee into “adopting or following any particular course or line of political action or political activity.”104 Like many of the other state statutes discussed in this section, this law has not resulted in many reported decisions interpreting its meaning, but a 1979 decision by the California Supreme Court concluded that, in addition to partisan political activity, the statute covered political views and civil rights advocacy, including the plaintiffs’ participation in the gay liberation movement.105 Additionally, two states—New Jersey and Oregon—prohibit employers from compelling employees’ participation in meetings held for the purpose of allowing the employer to communicate its views about “religious or political matters.”106

In addition to laws specifically protecting employees from retaliation based on their political activity, a handful of states including California, Colorado, and North Dakota have broader protections for employees’ out-of-work “lawful activities” that could encompass politics. (New York has a more limited protection for off-duty “recreational activities.”)107 But even in those states, employees’ real-world protection is limited because of a combination of statutory exceptions and narrow interpretations by courts. For example, courts have narrowed nearly out of existence California’s law protecting employees’ off-duty activities.108

As with the NLRA and Title VII’s retaliation provision, courts may read an implied duty of loyalty into lawful activities statutes. Consider Colorado’s statue, which provides a damages remedy for employees who are fired for “engaging in any lawful activity off the premises of the employer during nonworking hours,” unless a statutory exception applies.109 Statutory exceptions include employment decisions that “relate . . . to a bona fide occupational requirement,” or that are “reasonably and rationally related to the employment activities and responsibilities of a particular employee or a particular group of employees,” or that are “necessary to avoid a conflict of interest with any responsibilities to the employer or the appearance of such a conflict of interest.”110 Echoing the Jefferson Standard decision from the NLRA context, courts have read these statutory exceptions to permit employers to fire employees whose lawful off-duty activities are “disloyal.” For example, a district court upheld an employer’s decision to terminate a baggage handler with 26 years of service because he published a letter to the editor that criticized his employer for replacing full-time employees with hourly contract workers.111 Writing a letter was plainly “lawful off-duty activity,” but the court went on to read an “implied duty of loyalty” into the statute, limiting its reach to off-duty activities that were “personally distasteful” to the employer but “legal and unrelated to an employee’s job duties.”112 Then the court concluded that the employee breached the duty of loyalty when he went straight to the public without first “attempt[ing] to solve his grievance through Delta’s grievance system.”113 Of course, in the context of a business decision affecting tens of thousands of Delta employees, making an individual internal complaint is obviously futile, and so no aggrieved employee would be likely to take that step.

Finally, there is the possibility that narrow, judge-made exceptions to the at-will rule will apply when employees are fired for their political speech. One of these exceptions, the tort of “wrongful discharge in violation of public policy,” reflects that “certain discharges that contravene well-established norms of public policy harm not only the specific employee but also third parties and society as a whole.” That means that employees can file a civil lawsuit when they are fired for a reason that is not just bad or arbitrary but also violates an established public policy. Given that description, one might envision broad protections for employee speech premised, for example, on the democratic ideal that each member of the polity should share equal footing to participate in public discourse on matters of shared concern.

The most well-known decision that reflects this sort of speech-protective approach to the wrongful discharge tort is Novosel v. Nationwide Insurance Co.114 In that case, the plaintiff alleged that he was fired from his job as a district claims manager because he refused to participate in his employer’s lobbying the Pennsylvania legislature to reform no-fault insurance law. The U.S. Court of Appeals for the Third Circuit agreed that the plaintiff stated a claim for wrongful discharge in light of “the importance of the political and associational freedoms of the federal and state Constitutions.”115

However, the Novosel decision has been criticized, and it reflects at best a minority approach. The main problem is that courts in wrongful termination cases generally require employees to point to “well-established” public policy, and most require a high level of specificity—for example, that the employee was discharged for refusing to violate a law or regulation or for invoking rights under a workers’ compensation program. But a list of courts have held that the First Amendment is not sufficient to demonstrate that there is a well-established public policy against political coercion by private-sector employers, because the First Amendment constrains only government actors.116 Edmondson v. Shearer Lumber Products reflects the dominant approach;117 there, the Supreme Court of Idaho upheld the termination of a 22-year employee because he opposed a political initiative spearheaded by the employer’s owner.

Freedom of political belief is at the core of the idea of freedom of speech. But when private-sector employees face political coercion, they can fall back on legal protections only to a limited extent. Statutory protections, where they exist, tend to focus on protecting employees from retaliation in connection with their own political activity—voting or running for office. These statutes generally do not speak to what is likely a more common scenario, in which employers simply push their own political views, and employees say nothing because they fear being fired if they express disagreement.

2. Religious expression at work

Conflicts over religious expression at work can arise both when religious employers try to impose their faiths on employees and when religious employees bring their faith to work in ways that offend their bosses or coworkers. For example, employees hired to work for a secular employer might be dismayed to be asked to participate in the boss’s Bible-study group. Conversely, a religious employee might want to take breaks at set times in order to pray or might want to put a religious message like “have a blessed day” into an email signature or keep an anti-abortion message in a designated workspace. Unsurprisingly, law has something to say about the extent to which employers can regulate religious expression at work. These rules seek to balance employers’ and employees’ interests—although the balance struck weighs heavily in favor of employers, especially when the issue involves accommodating an employee’s religious practice.

Employers’ legal obligations surrounding their own or their employees’ religious speech vary with the employer’s own mission and character. For example, an employer with a religious mission, like a church or a religious school, has a large amount of leeway to require employees to adhere to a set of religious views. Religious institutions have constitutionally protected “independence…in matters of ‘faith and doctrine,’” including “internal management decisions that are essential to the institution’s central mission.” Importantly, this independence reaches “the selection of the individuals who play certain key roles”118—that is, who will be hired to convey a religious message and who will be fired from such a role. This principle has resulted in a kind of supercharged at-will doctrine that applies to employees who qualify as “ministerial.”119 Ministerial employees generally cannot invoke the protections of anti-discrimination law,120 probably are not covered by the NLRA,121 and may be precluded from relying on other statutory employment protections as well.122 And even nonministerial employees who work for religious institutions can lawfully be required by their employers to remain a member in good standing of the employers’ faith—a rule that can effectively turn adherence to a religion’s rules for personal comportment into job requirements.123

Conversely, public employers are constrained by both the Establishment Clause and the Free Exercise Clause; they cannot require employees to participate in religious programs or to belong to a particular faith, nor can they discriminate against employees because of their religious exercise. However, public employers also must guard against employee religious expression that would give the impression that the government itself prefers some religious views over others. For example, a public employer cannot permit its librarians or groundskeepers to create public displays that give the impression of a religious endorsement,124 nor may it allow an employee addressing the public to use the opportunity to proselytize.125

For both public- and private-sector employers that have a secular mission, statutory law modifies the at-will default in two important ways.126 First, these employers may not discriminate based on religion or allow harassment of employees based on whether, where, or how they worship on their own time. Second, they must accommodate employees’ religious beliefs or practices, at least where doing so will not impose an undue hardship.127 A reasonable accommodation might involve an employer partially waiving a uniform requirement so that an employee can wear a religious head covering,128 allowing the employee to take breaks at set times to pray, or changing an employee’s work schedule to allow attendance at religious services. However, the catch is that employers can refuse to provide such accommodations if they would impose more than a “de minimis” cost.129

The reasonable accommodation requirement relates to employees’ bargaining power in several ways. First, it bars an employer from dismissing a request for a religious accommodation out of hand, which means that even employees who lack any form of individual bargaining power are supposed to be able to secure an employer’s agreement to no- or low-cost religious accommodations.

Second, an employee’s request for a religious accommodation might lead to a form of workplace bargaining. The EEOC and some courts have concluded that, when faced with an employee request for a religious accommodation, an employer must embark on an “interactive process”—a back-and-forth dialogue to determine whether there exists an accommodation that would meet the employee’s religious exercise needs without unduly burdening the employer.130 But, as Professor Shirley Lin has described in an analogous context, power imbalances between employers and employees can easily lead to a failure to accommodate, either because the employee does not ask for the accommodation in the first place or because the employer steamrolls the employee in the interactive process.131

Third, other employees may also be interested in the outcome of an accommodations process, including because they might be asked to bear some or all of the costs of the accommodation. For example, an employer might respond to an employee’s request to not be scheduled to work on the sabbath by requiring another employee to work every Saturday. Or an employee’s desire to display religious materials might be accommodated even though the display upsets a coworker.132 But the accommodation requirement does not require employees to take into account the views of the burden-bearing employees; whether they do anyway can depend on a host of factors including whether the prospective accommodation would conflict with a collective bargaining agreement,133 the employer’s own views about the desirability of the accommodation, the likelihood that either employee will quit, and so on. In other words, whether an employer agrees to an employee’s request for a religious accommodation depends to an extent on the scope of legal protections—but can also depend on the employee’s (and maybe coworkers’) bargaining power.

3. Employee speech on social media

As discussed briefly above, the NLRA reaches concerted activity that takes place over social media. This means that if two employees interact on social media about their working conditions (or even if one employee posts a workplace concern that is intended to be an overture to coworkers), the NLRA may protect them against employer retaliation. But in addition, several states prohibit employers from demanding access to an applicant’s or employee’s social media posting. These statutes are privacy protections rather than speech protections; they do not prohibit employers from acting on an employee’s social media content that they see because of the employee’s own privacy settings or because other employees show the employer their colleague’s posting. However, they prohibit employers from requesting an employee’s or applicant’s social media username or password, implicitly providing some protection for workers’ expression, at least for workers who have privacy protections in place on their accounts.134 In addition, some states also bar employers from requiring employees to promote the company on social media or to add the employer to a social media contact list.135

D. A note on the First Amendment and public employees

This paper focuses mainly on private-sector workers who cannot rely on the Constitution’s free speech guarantee. But what about public-sector workers? First, the good news: public employees are covered by many of the statues discussed above, such as the anti-retaliation provisions of Title VII and various whistleblower protections. Further, many public employees are covered by some version of just-cause, rather than at-will, employment. Just over one-third of public employees are covered by a union contract,136 and others may enjoy similar tenure or civil-service protections. These substantive protections are also backed up by constitutionally required procedural protections; public employees who have a reasonable expectation of continued employment are entitled to notice and an opportunity to respond before they can be fired, plus a more formal post-termination hearing.137 (These procedural protections do not apply to at-will public employees.)

The bad news is that public employees often cannot rely on the First Amendment to protect them against employment consequences levied in connection with on-the-job speech. Like private-sector employers, public-sector employers may want to control their at-will employees’ speech for reasons that range from plausible to capricious. One might expect that courts would engage in closer scrutiny of public-sector employers, but they often do not. Instead, the Supreme Court has concluded that “government has significantly greater leeway in its dealings with citizen employees than it does when it brings its sovereign power to bear on citizens at large.”138

Public-sector employers may exercise near-total control over how their employees do their jobs without violating the Constitution. This is true even when an employee’s job involves expression and even when the employer has previously delegated to the employee some degree of discretion to shape the message.139 Courts reach similar results when employees, speaking outside of their employment capacity, express views on matters that are not of “public concern.”140 Moreover, the court usually does not view public employees’ own working conditions as a matter of public concern, unless those working conditions touch directly on the provision of public service.141

Public-sector employees receive somewhat more First Amendment protection when they speak as citizens—at least when their speech involves a matter of public concern. In that event, the court balances the public employer’s First Amendment interests against the public employer’s need for “orderly . . . administration.”142 Though the burden of proof is on the employer, this standard is very deferential to the government as compared to how courts approach other kinds of First Amendment cases.143 Moreover, the court defines “disruption” broadly, allowing public employers to rely on predicted (not actual) disruption144 and treating even such nonevents as having to respond to a lawsuit as “disruptions.”145 Thus, even when the First Amendment applies to a public employee’s speech, courts will still often defer to public employers’ assertions that their reactions were justified by disruption.

This framework applies to public employees’ speech generally, but there are also two special contexts that are treated differently. First, the court has held in a series of cases that political patronage is mostly unconstitutional: as long as a job does not involve policymaking, public employers may not require membership in a political party or support for a particular candidate or incumbent as a condition of employment.146 Conversely, the court has upheld restrictions on public employees’ political campaigning established by the Hatch Act and similar state laws.147 In these cases, the court has deferred to legislative judgments that public employees’ overt support for a particular political party or candidate might undermine public faith in government.148

These two lines of cases are related to each other inasmuch as Congress passed the Hatch Act in part to prevent political coercion in the form of pressure exerted on public employees by their supervisors or coworkers to campaign on behalf of a particular candidate or party.149 But their mechanisms are quite different: whereas the political patronage cases constrain employers, the Hatch Act constrains employees. It also reflects a big difference between public and private employees: the state and local statutes discussed above—patchy and incomplete as they are—often protect private-sector employees’ rights to engage in some of the same activities that the Hatch Act forbids for public employees.

IV. How the Constitution can undermine legal protections for employees

This report mainly focuses on the limited extent to which law protects workers from speech coercion by their employers. But there is also another angle to consider: employers’ arguments that certain workplace regulations designed to protect employees unconstitutionally infringe employers’ own constitutional rights. These arguments have gained traction in recent decades, and our increasingly conservative federal judiciary has proven receptive to them. Thus, there is a real risk that the Constitution itself will become an effective tool to undermine statutory protections for workers’ speech.

For example, suppose Congress were to try to increase unionization, which would in turn likely increase the number of workers covered by just-cause provisions in collective bargaining agreements. Suppose further that Congress went about this by increasing unions’ access to employees while they are at work and by barring employers from making some of the borderline-threatening statements that are currently permitted. Both changes can be understood as speech- and association-enhancing; the first would give employees more information about unions, and the second would allow employees to make their choice in a less-constrained environment. However, a conservative federal judiciary might strike down both changes, the first as an uncompensated taking of employer property and the second as a violation of the employer’s First Amendment rights.

To see how employers’ constitutional litigation could undermine workers’ rights, it helps to have a grasp of the basic structure of a First Amendment claim. Recall that the rights contained in the Bill of Rights are protections against government intrusions, and not private intrusions. (This is also why private-sector employees cannot bring successful First Amendment claims against their employers.) But when employers are regulated by the government, they can argue that those regulations unconstitutionally infringe their liberty; likewise, public-sector employees can bring constitutional claims because their employer is the government.

It is not inevitable that the Constitution will undo worker-protective legislation, but our current conservative-leaning federal judiciary and Supreme Court are likely to be receptive to such arguments. For proof, one need look no further than the decisions in Janus v. AFSCME and Cedar Point Nursery v. Hassid.150 In Janus, the court held that public-sector employees had a First Amendment right to refuse to pay union representation fees, notwithstanding that the union had a duty to fairly represent them. And in Cedar Point Nursery, the court struck down as an uncompensated taking of property a California regulation giving union organizers access to growers’ property for three hours per day, 120 days per year, for the purpose of speaking with farmworkers. In both cases, the court adopted a formalistic approach to interpreting the Constitution that placed little value on workers’ interests in associating with unions.151

V. Conclusion

At-will employment leaves workers vulnerable to losing their livelihoods for arbitrary reasons, including that they have offended their employer. Workers have been fired because they criticized their working conditions; because their political views were different than their employer’s; and because they let off steam on social media. These workers can rely on legal protections that are intended to protect certain types of speech—sometimes. But legal protections are limited and patchy, making it impossible for workers to know when they will be protected and when they will not be, and this degree of uncertainty is only compounded by the difficulties of enforcing one’s rights in court, post-discipline or termination. Employees are left to speak up at their own peril, undoubtedly making silence seem the safer choice.

Notes

1. See Feinman 1976 for a discussion of the origins of the at-will rule.

2. See also Restatement (Third) of Employment Law § 2.01 (Am. Law Inst. 2015): “Either party may terminate an employment relationship with or without cause unless the right to do so is limited by a statute, other law or public policy, or an agreement between the parties, a binding employer promise, or a binding employer policy statement.”

3. At the same time, state power can become intertwined with employer power, such as when work is made a condition of parole or probation (Zatz 2020).

4. The principle that neither the Constitution’s Bill of Rights nor the 14th or 15th Amendments constrain private citizens is known as the “state-action” requirement. There are a limited number of situations in which courts will treat nominally private actors as government entities for constitutional purposes. For example, in Marsh v. Alabama, the U.S. Supreme Court held that the owner of a “company town” should be treated as a government actor for purposes of evaluating a religious proselytizer’s claim that she had a First Amendment right to stand on a sidewalk to distribute religious literature, just as she would in a regular town. 326 U.S. 501, 509 (1946). More recently, the court has construed exceptions to the state action requirement narrowly, meaning that there are few situations in which employees would be able to argue successfully that their private-sector employer should be required to comply with constitutional standards. For a discussion of the role that the state-action requirement has played in the development of U.S. work law, see generally Lee 2014.

5. In the early days of the NLRA, the National Labor Relations Board (NLRB) adopted a version of this rule. Then, in 1941, the Supreme Court addressed an employer’s contention that the First Amendment protected its right to express its views that its employees should not unionize. The court wrote that employers were free to express their “view[s] on labor policies or problems,” although it also wrote that “[t]he mere fact that language merges into a course of conduct does not put that whole course without the range of otherwise applicable administrative power. In determining whether the Company actually interfered with, restrained, and coerced its employees the Board has a right to look at what the Company has said as well as what it has done.” NLRB v. VA Elec. & Power Co., 314 U.S. 469, 478 (1941). Then, in the 1947 Taft-Hartley amendments, Congress adopted what is known as § 8(c) of the NLRA, which states that the “expressing of any views, argument, or opinion . . . shall not constitute or be evidence of an unfair labor practice under any of the provisions of this subchapter, if such expression contains no threat of reprisal or force or promise of benefit.” In 2013, the D.C. Circuit relied on § 8(c) to strike down a rule requiring employers to post a notice informing employees of their rights under the NLRA.

6. This section mainly focuses on situations in which the at-will rule is reversed because employees have statutory protections. However, there are also a small number of judge-made exceptions to the at-will rule. Professor Lea VanderVelde enumerated five common-law limitations on the at-will rule: “1) implied in fact [contract], 2) promissory estoppel, 3) covenant of good faith and fair dealing, 4) public policy considerations that override private orderings, and 5) torts of abusive or outrageous conduct, such as intentional infliction of emotional distress” (VanderVelde 2012, 374).

7. On the other hand, collective bargaining agreements (CBAs) also often waive workers’ rights to engage in collective action. For example, no strike clauses are commonly included in CBAs, so that employers are essentially trading better wages and working conditions for “labor peace.” See Emporium Capwell Co. v. Western Addition Cmty Org., 420 U.S. 50 (1975).

8. In private-sector colleges and universities, tenure is, at minimum, a contractual guarantee that a tenured professor will not be dismissed without cause; in the public sector, tenure is often backed by a statutory guarantee. In addition to the substantive aspect of just-cause protection, tenured faculty usually have a right to due process before they can be disciplined or terminated. See Neumann 2017.

9. Some courts have treated employee handbooks as establishing an employment contract. However, these claims are tenable only when a handbook promises continued employment; as employers (and their lawyers) realized that a handbook could be construed as a contract, they could and did redraft handbooks to include disclaimers and emphasize employment at will. See Porter 2008, 67, and Pincus and Gillman 1983, 1009.

10. NLRB v. J. Weingarten, Inc., 420 U.S. 251 (1975).

11. The New York law was seemingly passed at least in part in response to reports of fast-food employers firing workers for their expression or self-presentation. See Eidelson 2021 (discussing a Chipotle worker who reported being fired because she wasn’t smiling at work, who then worked “with union organizers and local officials” on New York’s law).

12. Mt. St. 39-2-903.

13. Montana courts have interpreted the good-cause statute to protect whistleblowers, though they have also expressed unwillingness to micromanage employers’ decisions and emphasized that employers retain discretion, especially when deciding whether to fire manager-level employees. See Krebs v. Ryan Oldsmobile, 843 P.2d 312, 316 (1992) (good-cause statute protects employees who report employer’s illegal activity to police); Moe v. Butte-Silver Bow Cty., 371 P.3d 414, 427 (Mont. 2016); Bird v. Cascade Cty., 386 P.3d 602, 609 (Mont. 2016). For a comprehensive discussion of Montana’s law, including its procedures and limitations, see generally Corbett 2005.

14. MT. Stat. § 39-20905 (allowing employees to recover up to four years of lost wages and benefits, subject to the employee’s obligation to mitigate damages, and allowing punitive damages if the employee can prove by clear and convincing evidence that the employer “engaged in actual fraud or actual malice” in firing the employee).

15. NYC Int. 1396-A.

16. Id.

17. Id.

18. Id.

19. Id.

20. Occasionally, state law will duplicate the NLRA’s protection for specific types of activity. For example, the NLRA protects workers who disclose their wages to each other in order to advocate for fairer pay policies—but in addition, a few states have adopted statutes that also protect workers’ pay disclosure. E.g., VT. Stat. Ann. Tit. 21 § 495(a)(8)(B).

21. E.g., Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) (holding that undocumented workers are covered by the NLRA but ineligible for backpay remedies).

22. E.g., NLRB v. Mackay Radio & Tel. Co., 304 U.S. 333 (1938).

23. 29 U.S.C. § 151.

24. 29 U.S.C. § 157. The full text of § 7 states that “[e]mployees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in” § 8(a)(3).

25. 29 U.S.C. § 158(a).

26. The NLRA excludes some significant categories of workers, including agricultural workers, public-sector workers, some domestic workers, independent contractors, managers, and supervisors. Employees who are categorically excluded from the NLRA may be covered by another law; for example, many states have established collective bargaining rights for public-sector workers, and a few states have established collective bargaining rights for agricultural workers. In addition, railway and airline workers are covered by the Railway Labor Act.

27. This argument has been made forcefully by others. Key works in this vein include Klare 1978; Atelson 1983; Pope 2004; and Getman 2016.

28. Finkin (1985) evocatively illustrates how labor law can leave workers unprotected for arbitrary and unpredictable reasons.

29. See Fresh & Easy Neighborhood Market, Inc., 361 NLRB 151 *4 (2014) (concerted activity is “that which is ‘engaged in with or on the authority of other employees,’” including “’where individual employees seek to initiate or to induce or to prepare for group action’” (citing Meyers Indus., 268 NLRB 493 (1984) & Meyers Indus., 281 NLRB 882 (1986)).

30. Compare Alleluia Cushion Co., 221 NLRB 999 (1975) (employee engaged in protected concerted activity when he advocated for safety measures that would benefit all employees, even though he had not “discussed the safety problems with the other employees, solicited their support in remedying the problems, or requested assistance” in preparing a letter to regulators), with Meyers Indus., Inc., 268 NLRB 493 (1984) (overruling Alleluia Cushion, and holding that individual employee’s effort to address unsafe trucks was not protected concerted activity).

31. First, individual employees are acting concertedly when they make an appeal on behalf of a group, such as when workers discuss a problem together and then designate one member of the group to discuss the issue with the boss. Meyers Indus., 281 NLRB 882, 887 (1986) (“Meyers II”). Second, individual employees act concertedly when they attempt to initiate group activity or make a statement that implicitly seeks support from coworkers, even if the attempt falls flat. Id. Third, individual employees retain NLRA protection when they continue earlier concerted activity, as when one employee asserts rights under a collective bargaining agreement. NLRB v. City Disposal Systems, 465 U.S. 822 (1984) (holding that employee was engaged in concerted activity when he refused to drive a truck that he thought was unsafe, where he reasonably believed that the applicable collective bargaining agreement gave him the right to do so).

32. Even when single employees have not yet engaged in protected concerted activity—perhaps they have griped with their coworkers but have not yet moved toward action—an employer can still violate the NLRA if it fires or disciplines that employee in order to nip potential collective action in the bud. See Parexel Int’l, 356 NLRB 516 (2011).

33. Eastex, Inc. v. NLRB, 437 U.S. 556 (1978)

34. 437 U.S. 556 (1978).

35. Id. at 569–70.

36. Earlier examples also exist. In Kaiser Engineers, the NLRB agreed that a group of engineers was protected by the NLRA when the members wrote a letter to several legislators opposing a request by the company Bechtel that the Department of Labor authorize resident visas for engineers recruited outside the country. 213 NLRB 752 (1974) (enf’d Kaiser Engineers v. NLRB, 538 F.2d 1379 (9th Cir. 1976).

37. Ronald Meisburg, Memorandum GC 08-10, Office of the General Counsel NLRB, July 22, 2008.

38. Jayme Sophir, EZ Industrial Solutions, LLC, Case 07-CA-193475, Office of the General Counsel NLRB, Aug. 30, 2017.

39. For a thorough discussion of legal risks that confront workers and unions participating in Days Without Immigrants and similar protests, see Duff 2007.

40. NLRB v. Motorola, Inc., 991 F.2d 278, 285 (5th Cir. 1993) (“Employees acting as members of outside political organizations cannot demand the same § 7 rights as employees engaged in self-organization, collective bargaining, or in self-representation in disputes with management simply because the organization focuses on a workplace issue”).

41. Harrah’s Lake Tahoe Resort Casino, 325 NLRB 1244 (1992).

42. Second Amended Complaint and Notice of Hearing, Google & Communications Workers of Am., Case No. 20-CA-252802.

43. NLRB v. Local Union No. 1229, IBEW, 346 U.S. 464 (1953) (“Jefferson Standard”).

44. Id. at 468.

45. Id.

46. The board stated that the technicians “did not misrepresent, at least willfully, the facts they cited to support their disparaging report.” 94 NLRB 1507, 1511 (1951).

47. Id. at 1509–10.

48. NLRB v. Local Union No. 1229, supra, at 472.

49. 861 F.3d 812 (8th Cir. 2017).

50. Id. at 816.

51. Id. at 817.

52. Id. at 822.

53. Id. at 825 (quoting Diamond Walnut Growers, Inc. v. NLRB, 113 F.3d 1259 (D.C. Cir. 1997)).

54. The “bargaining for the common good” approach, for example, is based on the principle that unions can “use contract fights as an opportunity to organize with community partners around a set of demands that benefit not just the bargaining unit, but also the wider community as a whole.” This kind of approach looks beyond working conditions to consider how an employer affects the larger community in which it is situated, and therefore could involve criticism of the employer’s products or services.

55. In Clear Pine Mouldings, Inc., the board adopted an objective test that protects picketers’ speech unless “the misconduct is such that, under the circumstances existing, it may reasonably tend to coerce or intimidate employees in the exercise of rights protected under the Act.” 268 NLRB 1044, 1046 (1984) (citing NLRB v. W.C. McQuaide, Inc., 552 F.2d 519, 527 (3d Cir. 1977). “Coerce or intimidate” is a high bar: under this standard, the board had held that strikers do not lose the protection of the NLRA even when they use racist or sexist epithets, provided they do not overtly or impliedly threaten violence.

56. This line of caselaw is relatively new, and the board began by taking a flexible approach. Still, the board’s cases in this area tended to side with employers only where the employee’s speech was “egregious.” See, e.g., Pier Sixty LLC, 362 NLRB 505 (2015) (employee did not lose NLRA protection after venting on social media that his supervisor was “a nasty mother fucker,” in context of workplace where “vulgar language” was “rife”).

57. In Atlantic Steel, the board announced four factors to determine if an employee could be discharged for opprobrious speech in a conversation with management: “(1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.” 245 NLRB 814, 816 (1979). One might characterize the Atlantic Steel factors as a way of getting at whether the employee’s outburst was understandable under the circumstances: an employee’s profane outburst would be understandable in a workplace where profanity is common; or in response to an unfair labor practice; or because the employee believes the employer has made a consequential employment decision based on arbitrary or discriminatory criteria.

58. General Motors, 369 NLRB No. 127 (July 21, 2020).

59. Id. at *3.

60. Similar to the court’s reasoning in Jefferson Standard, the board relied on § 10(c) of the NLRA to conclude that the act did not change employers’ baseline “right” to fire employees for uncivil speech. The board held that it would apply the Wright Line standard, which is typically applied in “mixed motive” cases—those in which the employer argues that although it retaliated against an employee in part because of the employee’s § 7-protected activity, it would have made the same decision even in the absence of the activity. There are two important aspects to this change. First, under the new rule, the NLRB general counsel has to prove that the employer had “animus” against the § 7 activity, rather than simply proving that the employer took action against the employee because of protected concerted activity. Proving a mindset can be considerably more difficult than proving a sequence of events, making even strong cases harder to win. Second, the new standard gives employers more leeway to set rules governing employee speech—including speech that qualifies as protected concerted activity—although employers still may not apply stricter civility rules to § 7-protected speech than speech on other topics.

61. Id. at *10–11.

62. Id. This may have been a violation of the NLRA, which, as part of the duty of good faith bargaining, requires employers to provide economic information about subcontracting decisions that relate to labor costs.

63. “Tone policing” occurs when a listener dismisses the substance of a speaker’s questions or comments by focusing on the style of their delivery.

64. Studies show that people tend to perceive Black men as “larger, more threatening, and potentially more harmful in an altercation than a white person” (Lopez 2017). Although one cannot know for sure, this dynamic could have been present in the incident that led to Robinson’s first suspension. That incident began with a heated conversation in which Robinson accused a manager of going back on his word to pay overtime for certain employees. The manager testified that “Robinson’s behavior ‘was too aggressive not to allow…some sort of disciplinary action to occur,’” and that his “‘fight or flight mechanism kicked into high gear.’” A key question—though one without an answer—is whether the manager would have felt the same if Robinson had a different racial and/or gender identity.

65. This section focuses on the rights of an employer’s own employees, but other board- and court-constructed rules also impose strict limits on outside union organizers’ access to employer property. See, e.g., Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992) (holding that in nearly all circumstances, employers may bar union organizers from the employer’s property). For further discussion of the relationship between property rights and the NLRA, see Pope 2004, 521–22.

66. Workplace “fissuring” occurs when “lead firms that collectively determine the product market conditions in which wages and conditions are set…become separated from the actual employment of the workers who provide goods or services,” and “the direct employers of low wage workers operate in far more competitive markets that create conditions for noncompliance” (Weil 2011, 34).

67. Republic Aviation v. NLRB, 324 U.S. 793 (1945).

68. Id. at 803; see also Peyton Packing Co., 49 NLRB 828, 843.

69. Stoddard-Quirk Mfg. Co., 138 NLRB 615, 619 (1962).

70. “Special circumstances” could relate to safety, business operations, or potentially other reasons. For example, the board accepted that special circumstances justified a rule prohibiting employees from wearing a union logo on a nonbreakaway lanyard that posed a safety risk. Sam’s Club, 349 NLRB 1007 (2007). Less plausibly, the Trump board accepted Wal-Mart’s explanation that it needed to ban employees from wearing large union buttons while they were on the selling floor for a combination of “customer satisfaction” and security reasons—specifically that the buttons might distract from the employee’s name badge. Wal-Mart Stores, Inc., 368 NLRB Bo. 146 *4 (Dec. 16, 2019). It is notable an employer’s public image can sometimes count as a “special circumstance” that justifies restricting employees from wearing union insignia; in one case, the board wrote that special circumstances exist where employees wearing union insignia or clothing would “unreasonably interfere with a public image that the employer has established as part of its business plan, through appearance rules for its employees.” Boch Imps., Inc., 362 NLRB No. 83 at *2 (2015), enf’d 826 F.3d 558 (1st Cir. 2016).

71. Purple Communications, 361 NLRB No. 126 (2014). This decision reversed an earlier decision that reached the same decision as Caesar’s Entertainment. Register Guard, 351 NLRB 1110 (2007). For an insightful discussion of the Purple Communications decision, see Hirsch 2015.

72. Caesar’s Entertainment d/b/a/ Rio All-Suites Hotel & Casino, 386 NLRB No. 143 (2019). The decision prioritized employer property rights over employees’ § 7 rights, reasoning that in-person solicitation and distribution were “adequate avenues of communication” and that employees could always supplement those avenues by using their personal email, phone, or social media accounts.

73. Republic Aviation, supra, at 803 n.10 (quoting Peyton Packing).

74. Compare Sandusky Mall Co., 329 NLRB 618 (1999), enforcement denied, Sandusky Mall Co. v. NLRB, 242 F.3d 682 (6th Cir. 2000) (board held employer could not prohibit union solicitation where it had allowed nonunion promotional activities on its premises), with Kroger Lt. P’Ship, 368 NLRB No. 64 (2019) (holding employer could eject union solicitors from premises while allowing “access for a wide range of charitable, civic, and commercial activities that are not similar in nature to protest activities). In First Amendment terms, the difference is that previous boards prohibited employers from engaging in content discrimination, whereas the Trump board viewed the nondiscrimination principle as reaching only viewpoint discrimination.

Even when the board took a broader view, circuit courts sometimes refused to enforce the board’s orders. For example, in 6 West Ltd. Corp. v. NLRB, 237 F.3d 767 (7th Cir. 2001), the court refused to enforce a board order finding that the employer had committed an unfair labor practice when it allowed employees to sell Girl Scout cookies and Christmas ornaments but barred employees from soliciting union membership. The court put its conclusion in terms of the employer’s freedom: “A restaurant in the United States of America should be free to prohibit solicitation on the premises that interfere with or bother employees or customers, and allow those solicitations which neither interfere with nor bother employees or customers.” Id. at 780.

75. It is possible for an employee to be “jointly employed”—for example, it can be appropriate to treat both an entity that signs employees’ paychecks and a client that directs their day-to-day work as employers of the employees.

76. New York New York Hotel & Casino, 356 NLRB 907, 916 (2011), enf’d. 676 F.3d 193 (D.C. Cir. 2012), cert. denied 133 S.Ct. 1580 (2013).

77. Bexar Cty. Performing Arts Ctr Fdn., 368 NLRB No. 46 (2019).

78. 18 U.S.C. § 1514A.

79. See generally Tippett 2007.

80. Those statutes are listed on the agency’s website.

81. Even here, though, there is a prerequisite: for the statute to protect employees who disclose to a public body, employees must first report the problem to their supervisor.

82. 42 U.S.C. § 2000e-3(a).

83. 42 U.S.C. § 12203(a) (“No person shall discriminate against any individual because such individual has opposed any act or practice made unlawful by [the ADA] or because such individual made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under [[the ADA].”); 29 U.S.C. § 623(d) (“It shall be unlawful for an employer to discriminate against any of his employees or applicants for employment…because such individual…has opposed any practice made unlawful by this section, or because such individual…has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or litigation under [the ADEA].”)

84. For discussion and critique of this rule, see Carle 2016 and Eisenstadt and Geddes 2017.

85. 532 U.S. 268 (2001).

86. Id. at 269.

87. Id.

88. Id.

89. Id. at 270 (quoting Faragher v. Boca Raton, 524 U.S. 775, 786 (1998)).

90. Id. at 272 (alteration in original).

91. In a study that is now nearly 25 years old, Professor Pauline Kim surveyed “330 unemployed workers in the St. Louis metropolitan area,” and found that they “consistently overestimate the degree of job protection afforded by law, believing that employees have far greater rights not to be fired without good cause than they in fact have” (Kim 1997, 110).

92. Describing that Perkins’s lawyers told her that “he and his lawyers would try to destroy my credibility if I went to court. They told me he would try to destroy me and my family.”

93. Hamilton v. Juul Labs, Inc., No. 20-cv-03710, 2021 WL 5331451 (N.D. Cal. Nov. 16, 2021).

94. E.g., Cal. Labor Code § 1102.5. For a discussion of how nondisclosure agreements can potentially violate whistleblower laws, see Moberly, Thomas, and Zuckerman 2014; Rose and Rush 2020; and Lobel 2017 (discussing whistleblower protections under the Defend Trade Secrets Act).

95. EEOC v. Astra USA, Inc., 94 F.3d 738, 745 (1st Cir. 1996).

96. E.g., Brown v. TGS Management Co., 57 Cal.App. 5th 303 (Ct. App. 4th Div. 2020) (concluding that sweeping nondisclosure provision violated state restriction on noncompete agreements, because its breadth would “plainly bar Brown in perpetuity from doing any work in the securities filed, much less in his chosen profession of statistical arbitrage”).

97. E.g., Relco Locomotives, Inc., 358 NLRB 229 (2012) (affirming that nondisclosure agreement violated the NLRA because it “barred employees from disclosing to any third party information concerning ‘compensation, payments, correspondence, job history, reimbursements, and personnel records’” without authorization from “‘Relco’s Chief Legal Officer or Chief Administrative Officer,’” among other provisions).

98. Fla. Stat. § 69.081; see also Hemel 2017.

99. See generally Volokh 2012 (cataloging state laws protecting political activity).

100. Id. at 297–98.

101. NY Labor § 201-d(2).

102. See Wehlage v. Quinlan, 55 A.D.3d 1344 (N.Y. App. Div. 2008) (dismissing political discrimination claim where plaintiff alleged she was fired because of her political affiliation because plaintiff had not engaged in any of the activities enumerated in the definition of “political activities”); but see Richardson v. City of Saratoga Springs, 246 A.D.2d 900 (N.Y. App. Div. 1998) (stating, without discussion, that an employee had stated a claim for political discrimination when plaintiff alleged he was fired after wearing a sticker supporting a political candidate).

103. See Volokh 2012, 313–20.

104. Cal. Lab. Code § 1102.

105. Gay Law Students Ass’n v. Pacific Tel. & Tel. Co., 595 P.2d 592 (Cal. 1979).

106. N.J. Rev. Stat. § 34:19-10; Or. Rev. Stat. § 659.785.

107. “Lawful activities” statutes are offshoots of “lawful products” statutes. The latter protect employees’ consumption of products such as cigarettes and alcohol—though employees sometimes attempt to invoke these laws in new contexts, albeit generally without success. See, e.g., McGillen v. Plum Creek Timber Co., 964 P.2d 18 (Mont. 1998) (lawful products law did not protect employee who placed prank classified urging prospective buyers of a used truck to phone the employee’s boss at home late at night). For further discussion of these statutes, see Sprague 2008, 412–16; Melzer and Barth 2020; Bodie 2017; Finkin 2006; and Pagnattaro 2004.

108. § 96(k) of the state’s Labor Code allows the labor commissioner to take assignments of claims for “demotion, suspension, or discharge from employment for lawful conduct during nonworking hours away from the employer’s premises.” Cal. Lab. Code § 96(k). Then, § 98.6 of the Labor Code states that an employer “shall not discharge” or discriminate against employees because of “conduct described in” § 96(k). Taken together, one might read these provisions as establishing broad, unqualified protection for employees’ off-duty “lawful conduct” protection. But California courts have read this language to establish no new substantive right and instead to have only created an enforcement mechanism with respect to rights “otherwise protected by the Labor Code.” Grinzi v. San Diego Hospice Corp., 120 Cal.App.4th 72, 86–87 (Cal.App.Ct. 2004).

109. Colo. Rev. Stat. Ann. § 24-34-402-5.

110. Id.

111. Marsh v. Delta Air Lines, Inc., 952 F.Supp. 1458 (D. Colo. 1997); see also Oransky v. Martin Marietta Materials, Inc., 400 F.Supp. 3d 1143 (D. Colo. 2019) (employer did not violate the law by firing a sales employee who protested potential oil and gas exploration in her community because the oil and gas company that was the subject of the protest was also a client of the employer). In Watson v. Pub. Serv. Co. of CO, a Colorado court of appeals observed that “No Colorado appellate opinion has approved the Marsh court’s analysis.” 207 P.3d 860 (Colo.App. 2008).

112. Id. at 1462 (emphasis added).

113. Id. at 1463.

114. 721 F.2d 894 (3rd Cir. 1983).

115. Id. at 899.

116. See, e.g., Grinzi v. San Diego Hospice Corp., 120 Cal. App. 4th 72, 81-82 (2004) (citing cases from various jurisdictions); see also Restatement (Third) of Employment Law, supra, § 5.02 (“Most courts do not recognize wrongful-discharge claims against private employers based on free-speech rights because the federal and most state constitutional free-speech protections constrain governments, and thus do not apply to private-sector employers”).

117. 75 P.3d 733 (Idaho 2003).

118. Our Lady of Guadalupe Sch. v. Morrissey-Berru, 140 S.Ct. 2049, 2060 (2020).

119. The category of “ministerial employee” is broader than the phrase suggests; in addition to clergy, it includes other employees of religious institutions who play a role in shaping or communicating religious doctrine, including teachers in religious schools.

120. Id. (“Under [the ministerial exception] courts are bound to stay out of employment disputes involving those holding certain important positions with churches and other religious institutions.”)

121. See NLRB v. Catholic Bishop of Chicago, 40 U.S. 490, 504 (1979) (construing the NLRA to exclude parochial-school teachers from the act’s coverage).

122. See, e.g., Shaliehsabou v. Hebrew Home of Greater Wash., Inc., 363 F.3d 299 (4th Cir. 2004) (applying statutory ministerial exemption in wage-and-hour case and stating that the Fair Labor Standards Act’s ministerial exemption was coextensive with the constitutional ministerial exemption).

123. 42 U.S.C. § 2000e-1 (stating that Title VII does not apply to religious organizations “with respect to the employment of individuals of a particular religion to perform work” for the organization); Corp. of the Presiding Bishop v. Amos, 483 U.S. 327 (1987) (gymnasium run by religious entities associated with the Latter Day Saints church did not violate Title VII when it fired building engineer who “failed to qualify for…a certificate that he is a member of the Church and eligible to attend its temples”).

124. See McCreary Cty. v. ACLU, 545 U.S. 844 (2005) (upholding injunction requiring county to take down a courthouse display that included the Ten Commandments, where the surrounding context suggested an intent to promote a religious viewpoint).

125. Cf. Greece v. Galloway, 572 U.S. 565 (2014) (observing that government may not “proselytize or force truant constituents into the pews,” but upholding the legislative prayer practices at issue in the case because they were noncoercive).

126. This section discusses Title VII, but many states have analogous statutes, which may offer religious employees stronger protections.

127. 42 U.S.C. § 2000e(j).

128. See EEOC v. Abercrombie & Fitch Stores, Inc., 575 U.S. 768 (2015) (observing that while employers may have general “no headwear” policies, “when an applicant requires an accommodation as an ‘aspec[t] of religious…practice,’ it is no response that the subsequent ‘fail[ure]… to hire’ was due to an otherwise-neutral policy.”).

129. The statute requires employers to provide accommodations that do not impose “undue hardship,” but the Supreme Court interpreted that language to reach accommodations that would impose “more than a de minimis cost” on the employer. Trans World Airlines, Inc. v. Hardison, 432 U.S. 63, 77 (1977).

130. See Flake 2019, 83–87 (describing EEOC guidance and court decisions about whether employers must engage in an interactive process when responding to religious accommodation requests).

131. Lin 2021, 1828, 1836 (describing the “bargaining-based assumptions” embedded in the interactive process required under disability accommodations law and critiquing the model for failing to account for power imbalances between workers and employers). As Lin also points out, these problems with a bargaining-based approach to accommodations are likely to be especially serious where the employee lacks power for reasons including position in the workplace hierarchy, or marginalized personal identities.

132. See Wilson v. U.S. West Comm’ns, 58 F.3d 1337 (8th Cir. 1995) (holding employer satisfied its accommodation obligation when it allowed a worker to display religious materials at work but directed her to stop wearing (or cover up) an anti-abortion pin that included a color photograph of a fetus, which had been the subject of a complaint by another employee).

133. See Hardison, supra, at 79 (“we do not believe that the duty to accommodate requires TWA to take steps inconsistent with the otherwise valid [collective bargaining] agreement”).

134. See, e.g., MD Lab. & Empl. Code § 3-712; Cal. Lab. Code § 980; 820 Ill. Comp. Stat. 55/10.

135. See, e.g., Or. Rev. Stat. § 659A.330; Me. Rev. Stat. 26 § 616.

136. BLS 2022.

137. See Bd. of Regents v. Roth, 408 U.S. 564 (1972); Perry v. Sindermann, 408 U.S. 593 (1972).

138. Enquist v. Or. Dep’t of Agric., 553 U.S. 591, 599 (2008); see also NASA v. Nelson, 562 U.S. 134, 152 (2011) (“Like any employer, the Government is entitled to have its projects staffed by reliable, law-abiding persons who will efficiently and effectively discharge their duties” (internal quotations omitted).).

139. Garcetti v. Ceballos, 547 U.S. 410 (2006).

140. Connick v. Myers, 461 U.S. 138, 146 (1983) (“When employee expression cannot be fairly considered as relating to any matter of political, social, or other concern to the community, government officials should enjoy wide latitude in managing their offices, without intrusive oversight by the judiciary in the name of the First Amendment.”).

141. Id. at 148–49 (lawyer who distributed to her colleagues in the Orleans Parish District Attorney’s office a questionnaire about their shared working conditions was not speaking on matters of public concern when she asked about her coworkers’ confidence in supervisors, office morale, grievance procedures, and transfer policy; conversely, question about whether employees felt “pressured to work in political campaigns on behalf of office supported candidates” was of public concern); see also Waters v. Churchill, 511 U.S. 661, 665 & 680 (1994) (O’Connor, J.) (plurality opinion) (criticisms of hospital obstetrics department as a bad place to work would not qualify as a matter of public concern).

142. Pickering v. Bd. of Educ., 391 U.S. 563, 569 (1968).

143. For example, one way that speech could disrupt public service is if a lot of listeners assemble at a government building to protest. A standard that focuses on disruption thus allows for what the Supreme Court has called a “heckler’s veto”—a form of de facto viewpoint discrimination in which government gives in to listeners’ angry reactions and silences a speaker rather than incurring the costs necessary to protect an unpopular speaker, and which the court has said is not a basis to restrict speech in other contexts. See Forsyth Cty. v. Nationalist Movement, 505 U.S. 123 (1992) (striking down parade permit fee that varied based on expected costs of maintaining public order).

144. Waters v. Churchill, supra, at 674.

145. Borough of Duryea v. Guarnieri, 564 U.S. 379, 390 (2011).

146. Elrod v. Burns, 427 U.S. 347, 367-68 (Opinion of Brennan, J.) (patronage dismissals violate the First Amendment, except in the case of “policymaking positions”); Branti v. Finkel, 445 U.S. 507 (1980) (assistant public defenders could not be fired based on their political affiliations because “whatever policymaking occurs in the public defender’s office must relate to the needs of individual clients and not to any partisan political interests”). The court has also held that it violates the First Amendment for public employers to fire employees because of their perceived political affiliation. Heffernan v. City of Paterson, 16 S.Ct. 1412, 1416 (2016) (employer violated police officer’s First Amendment rights by firing him based on misperception that the officer supported a challenger to the incumbent mayor). Finally, the court has held that it violates the First Amendment for public employers to demand that employees take a “loyalty oath” indicating that the employee is not, and has not been within five years, a member of a communist or subversive organization. Wieman v. Updegraff, 344 U.S. 183 (1952).

147. United Public Workers of Am. v. Mitchell, 330 U.S. 75 (1947) (upholding Hatch Act’s prohibition on executive branch employees taking “any active part in political management or in political campaigns”); U.S. Civil Service Comm’n v. Nat’l Ass’n of Letter Carriers, 413 U.S. 548 (1973) (upholding Hatch Act, and stating that Congress may bar executive branch employees from a list of political activities, including “holding a party office, working at the polls, and acting as party paymaster for other party workers,” and also “organizing a political party or club; actively participating in fund-raising activities for a partisan candidate or political party; becoming a partisan candidate for, or campaigning for, an elective public office; actively managing the campaign of a partisan candidate for public office; initiating or circulating a partisan nominating petition or soliciting votes for a partisan candidate for public office; or serving as a delegate, alternate or proxy to a political party convention”).

148. Letter Carriers, supra, at 565–67 (Hatch Act prevents “machine politics” and promotes “confidence in the system of representative Government,” among other purposes).

149. Id. at 566–67.

150. 141 S.Ct. 2063 (2021).

151. A thorough criticism of these cases is beyond the scope of this report. However, there exists a substantial academic commentary on both cases, as well as on the deregulatory Constitution more generally. See, e.g., Bowie 2021 and Andrias 2018.

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The purpose of the Occupational Safety and Health Act of 1970 is to ensure that workplaces are free of hazards that kill or injure workers. To further this goal, the law empowers workers with specific rights, including the right to request inspections by the Occupational Safety and Health Administration (OSHA) and to participate in those inspections, to petition OSHA to promulgate workplace standards and to challenge those standards if they are not adequately protective, to obtain information about the hazards workers are exposed to and the protections they are supposed to have from those hazards, and to complain about unsafe working conditions. These rights, when actually available and exercisable, can reduce the power disparity that exists between employers and workers.

This paper focuses on the legal constraints on employers created by the Occupational Safety and Health Act of 1970 (OSH Act) and use some common examples to explore how, despite these constraints, employers retain considerable powers over their workers’ abilities to protect themselves from injury, illness, death, and loss of human dignity. From being able to decide when—or whether—to use the bathroom to protecting themselves from toxic substances, refusing to perform particularly hazardous tasks, learning about the hazards at their workplaces, or obtaining appropriate medical care for occupational injuries, workers are at the mercy of potentially dictatorial employers.

The consequences to employers for harming their employees may be much less severe than the consequences would be for harm occurring outside of the employment relationship. The costs to workers for standing up for themselves are likely to be far greater than the pain their actions would cause their employers. Workers who opt to quit as a way to protect themselves lose not only their paychecks but also their eligibility for unemployment insurance, frequently at a time or place in which there are few other employment opportunities. These structural imbalances are amplified by the fact that many of the most dangerous jobs in this economy are disproportionately held by some of the most vulnerable and lowest-paid workers.

This paper discusses the deficiencies in both the act and its implementation that have prevented it from fully empowering workers. Although workers would be worse off without the protections the act provides, it is now clear that they still lack an effective right to control their exposure to hazards that threaten life and health. Some of these deficiencies have become starkly obvious during the COVID-19 pandemic:

• Many workers who have complained about the lack of protections from the virus have faced discipline or termination for expressing concern. This problem has been aggravated by OSHA’s almost complete failure during the crisis in 2020 to use the act’s tools to provide workers with meaningful protection. It refused to issue an emergency standard to address the most significant workplace hazard in its history, and it made minimal attempts to enforce the rules it does have. As a result, workers have had to fend for themselves, sometimes by filing lawsuits that courts have dismissed because it should be OSHA’s job to enforce workplace protections. Moreover, OSHA lacks the resources it would need to enforce the act effectively, even without a pandemic.
• One of the act’s goals was to improve record-keeping related to work-related injuries, illnesses, and deaths, and to allow workers access to those records so they can better protect themselves. But employers have undermined that protection, in part by opening onsite “clinics” that workers are required to use for injury or illness treatment. The clinics often seem to exist primarily to make sure that workers do not receive the level of treatment that would require the injuries and illnesses to be recorded.
• OSHA has many built-in challenges to carrying out its mandate. It is a tiny agency, and its current contingent of compliance officers is the smallest in its history, even though there are now twice as many workers as there were in the early 1970s. Although OSHA uses various methods to focus its resources on the most endangered workers, many workplaces and hazards inevitably evade enforcement.
• The act contemplated a relatively expeditious method for adopting and updating safety and health standards addressing the hazards that injure, sicken, and kill workers. But subsequent legislation, court-imposed requirements, new analyses required by the executive branch, steadfast industry opposition to any new restraints, and the anti-regulatory biases of many administrations have made it almost impossible for OSHA to issue more than one or two standards a year.

Though there have been some notable successes under the OSH Act, the lack of adequate resources and political support, combined with structural weaknesses in the statute and the changing nature of work in the 21st century, have resulted in dashed hopes and a continuing stream of powerless, injured, and ill workers.

Introduction

The American tradition venerates freedom, and, although definitions of the word vary, personal autonomy is usually a part of it. Having control over our own person and being able to protect ourselves from injury, illness, and death seem to most of us to be fundamental rights. But once we become employees all that changes; at that point, employers gain substantial control over our ability to protect ourselves from harm. This arrangement can be best understood through Elizabeth Anderson’s concept of workplaces as “private governments,” places where “[t]he dictator is the chief executive officer…, superiors are managers, subordinates are workers” (Anderson 2015). In this environment, called the employer–employee relationship, employers have vast power to create the “laws” governing worker behavior, to decide whether workers have violated those laws, and to set and enforce the penalties for such violations. Subject to minimal legal and contractual restraints, this employer power applies to worker behavior both inside and outside the workplace, though its exercise is particularly prevalent within the workplace.

This paper will focus on the legal constraints on employers created by the Occupational Safety and Health Act of 1970 (OSH Act)1 and use some common examples to explore how, despite these constraints, employers retain considerable powers over their workers’ abilities to protect themselves from injury, illness, death, and loss of human dignity.

From being able to decide when—or whether—to use the bathroom to protecting themselves from toxic substances, refusing to perform particularly hazardous tasks, learning about the hazards at their workplaces, or obtaining appropriate medical care for occupational injuries, workers are at the mercy of potentially dictatorial employers. And the consequences to employers for harming their employees may be much less severe than the consequences would be for harm occurring outside the employment relationship. As Anderson has pointed out, the costs to workers for standing up for themselves are likely to be far greater than the pain their actions would cause their employers. Workers who opt to quit as a way to protect themselves lose not only their paychecks but also their eligibility for unemployment insurance, frequently at a time or place in which there are few other employment opportunities. These structural imbalances are amplified by the fact that many of the most dangerous jobs in this economy are disproportionately held by some of the most vulnerable and lowest-paid workers.2

Fifty years ago, these concerns contributed to passage of the OSH Act, which created OSHA, the Occupational Safety and Health Administration. The act is an acknowledgement that market forces are not adequate to provide workers with decent working conditions and thus constitutes a significant rebuke to the idea that workers and employers create employment contracts from positions of equal power and knowledge. The act not only created working standards and empowered the secretary of labor to create and enforce others, it also explicitly empowered workers in several important ways. These include the right to request OSHA inspections and to participate in those inspections, the right to petition OSHA to promulgate workplace standards and to challenge those standards if they are not adequately protective, the right to information about the hazards workers are exposed to and the protections they are supposed to have from those hazards, and the right to complain about unsafe working conditions. Most notably, of course, the act created the right to workplaces free of the hazards that killed and injured so many workers before its passage.

All of these provisions were intended to enhance workers’ ability to manage their own safety and health or, in contemporary terms, to raise their voices to protect themselves from hazards in the workplace. By creating mechanisms intended to provide workers and their representatives with information about hazards in their workplaces and the means to correct them, as well as the explicit right to call out dangerous conditions, the act was intended to free workers from total dependence on their employers’ determinations that conditions were safe enough to work in. Workers’ abilities to make complaints about unsafe conditions and to protect themselves from those conditions without fear of retaliation are crucial to workers’ autonomy and self-protection. By also allowing workers to seek more protective workplace safety and health standards, and to participate in their creation, the act acknowledged workers’ abilities to recognize which hazards were in greatest need of amelioration. Taken together, these provisions were intended to empower workers to take more control of the work conditions that placed them at risk.

Unfortunately, a combination of factors, including the changing structure of work over the last half-century, a lack of enforcement and regulatory resources, and a judiciary and multiple administrations hostile to workers’ rights, have limited those rights in ways that the drafters of the act did not anticipate. This paper looks primarily at four limitations impacting the effectiveness of the OSH Act:

• Workers’ limited ability to avoid or correct dangerous conditions. Many workers who complain about lack of protections face discipline or termination for expressing concern. This problem has been aggravated recently by OSHA’s almost complete failure to use the act’s tools to provide workers with meaningful protection. It has refused to issue an emergency standard to address COVID-19—the most significant workplace hazard in its history—and it has made minimal attempts to enforce the rules it does have. As a result, workers have had to fend for themselves, sometimes by filing lawsuits that courts have dismissed because it should be OSHA’s job to enforce workplace protections. Moreover, OSHA lacks the resources it would need to enforce the act effectively, even without a pandemic.
• Workers’ limited access to information about hazards and ability to receive treatment. One of the act’s goals was to improve record-keeping related to work-related injuries, illnesses, and deaths, and to allow workers access to those records so they can better protect themselves. But employers have undermined that protection, in part by opening onsite “clinics” that workers are required to use for injury or illness treatment. The clinics often seem to exist primarily to make sure that workers do not receive the level of treatment that would require the injuries and illnesses to be recorded.
• Structural limitations at the agency. OSHA has many built-in challenges to carrying out its mandate. It is a tiny agency, and its contingent of 862 compliance safety and health officers at the beginning of 2020 was the smallest in its history, even though there are now twice as many workers as there were in the early 1970s. Although OSHA uses various methods to focus its resources on the most endangered workers, many workplaces and hazards inevitably evade enforcement.
• The roadblocks slowing the creation of workplace safety standards. The act contemplated a relatively expeditious method for adopting and updating safety and health standards addressing the hazards that injure, sicken, and kill workers. But subsequent legislation, court-imposed requirements, new analyses required by the executive branch, steadfast industry opposition to any new restraints, and the anti-regulatory biases of many administrations have made it almost impossible for OSHA to issue more than one or two standards a year.

OSHA’s challenges began at the beginning. To jump-start the process of promulgating safety and health standards, the act gave OSHA the ability, during a two-year window ending in April 1973, to adopt, with minimal notice and comment, “national consensus standards” and “established Federal standards” as mandatory OSHA standards.3 National consensus standards are exactly what their name implies—standards adopted by consensus of parties “interested [in] and affected by [them].”4 They were not necessarily based on evidence that they would create safe working conditions, but most often simply required conditions or practices that the affected parties believed were achievable. These standards were often also the basis for the established federal standards adopted under earlier statutes.5

The case of regulating harmful chemicals illustrates how the shortcuts allowed under this process limited the ability of the standards to protect workers’ health. The established federal standards for potentially harmful chemicals were based on threshold limit values (TLVs) that had been adopted by the American Council of Governmental Industrial Hygienists (ACGIH) in 1945 and that industry had believed were achievable in the 1930s and 1940s (Markowitz and Rosner 1995). In the case of silica dust, for example, to be discussed more fully later in this paper, the initial recommended limit was developed in 1936 by silica-using industries in large part to shield employers from liability for their workers’ silica disease. The creators acknowledged that they did not know that exposures below the recommended level were safe, only that levels above that amount were dangerous, and that they believed it was the lowest level then-modern manufacturing methods could achieve. Nonetheless, both before and after ACGIH adopted the value, it was widely promoted as a “safe” level of exposure, and it remained in effect for about 90% of silica-exposed workers until 2017 (Markowitz and Rosner 1995).

Most of the other national and federal standards adopted during that two-year window, often referred to as 6(a) standards, are also still in effect, despite being based on knowledge and technology current in the 1930s through the 1960s and not having been developed to be enforceable at all. But OSHA has had a hard time updating them. In fact, in the 50-plus years since the act took effect, OSHA has adopted or updated standards for only 27 of the 500 chemicals regulated through 6(a) standards and has promulgated not many more significant standards addressing other hazards. In setting out the process for promulgating standards, Congress anticipated relatively expeditious action by OSHA—a maximum of nine months in cases where no party requested a public hearing, and not much more when there is a hearing.6 This alacrity has proved to be illusory.

There are many reasons for this slow pace, starting with the addition by the courts, Congress, and the executive branch of new procedural and analytical steps before any rule may be issued, and including shifting priorities within the agency, especially following changes in administrations. Subsequent to 1970, Congress itself passed a number of additional statutes applicable to OSHA that increased the time and complexity of rulemaking. One of the most significant is the Small Business Regulatory Enforcement and Fairness Act (SBREFA) of 1996, which requires that, before OSHA can even propose a new rule, it must convene a panel, comprising OSHA, the Office of Information and Regulatory Affairs in the Office of Management and Budget, and the Small Business Administration’s chief counsel for advocacy, to collect the advice and recommendations of representatives of small entities likely to be affected by the rule, and then to modify the rule and related analyses in accord with those recommendations.7 Although OSHA has sometimes said it finds the information it obtains through these panels helpful, there is no question that they lengthen the rulemaking process, and the same information, with appropriate outreach, could be obtained through the regular rulemaking process.8 Other requirements not included in the statute come from executive orders, other statutes such as the Regulatory Flexibility Act,9 and case law.10

This increased time and complexity for creating new standards is particularly unfortunate because OSHA has a hard time enforcing the old ones. Its actions under the standards have been subject to constant challenges, often over issues arising from the fact that national consensus standards were not intended to be enforceable when they were written.11

In addition, resource limits prevent OSHA from enforcing its standards to provide even the reduced levels of protection they offer. So, when workers seek government enforcement, the protection they receive is not guaranteed to be effective and may result in retribution, which is illegal but not susceptible to prompt remedies. Thus, although the act has improved work conditions and workers would be much worse off without OSHA protections, workers still rely to a large extent on competitive market forces (the threat of quitting) to obtain safe working conditions, and they have not been empowered to the extent once hoped (see, e.g., Rinehart 2008; Michaels and Barab 2020). As the following examples illustrate, this lack of worker power and protection became particularly clear in 2020, as the COVID-19 pandemic surged.

Workers’ abilities under the OSH Act to avoid or correct dangerous conditions at their workplaces

Most of us consider the ability to avoid obvious danger to be a basic human right. In some cases, though, that right can conflict with what employers consider their own right to determine how their employees will perform their work. In Anderson’s language, the private governing entities make “laws” that require worker exposure to danger. As a result, for workers in some hazardous jobs, avoiding danger can come at the cost of those jobs. This devil’s bargain has come into stark focus during the COVID-19 pandemic. Enormous numbers of essential workers, from doctors and nurses to grocery and meatpacking workers, have been unable to take simple, appropriate protective measures such as pointing out the hazards they face, using appropriate personal protective equipment (PPE), refusing to perform dangerous work assignments, and obtaining OSHA assistance to make their worksites safer. Many endangered workers have suffered retaliation for their efforts, and they have received little help from OSHA for reasons related both to resource limitations and to a lack of political will.

Ability to refuse to perform dangerous tasks

The problem of retaliation is not new. In a step that was unusual in 1969, Congress included a whistleblower provision in the OSH Act that allowed workers who were retaliated against for expressing concerns about unsafe conditions to complain to the secretary and, if the secretary accepted the complaint and successfully prosecuted the case in court, to obtain relief.12 In implementing that provision, OSHA promulgated a rule that interpreted the provision to include certain failures to perform dangerous tasks as protected activities.13 But although the act’s whistleblower protections were innovative for their time and have provided protection for workers in a number of situations,14 their effects have not been as dramatic or as effective as the drafters hoped.

In a particularly important example that occurred shortly after the OSH Act took effect, two workers at a Whirlpool manufacturing plant in Ohio were instructed to stand on a wire mesh screen 20 feet above the factory floor to perform maintenance.15 Several workers had fallen through the screen in the past, and recently a worker performing a similar task had been killed after such a fall. The workers had complained to the plant’s safety superintendent that working on the mesh was unsafe, and they told him they intended to complain to OSHA as well. Although the employer promised to replace the mesh and nominally instituted interim work procedures that would keep workers off the mesh, only 12 days after their colleague’s death the workers’ foreman told them to walk onto the mesh and disciplined them when they refused to do so.

The workers complained to OSHA about the discipline, and OSHA filed suit on their behalf. OSHA relied on its regulation implementing the whistleblower provision to argue that the act protects workers who, with no reasonable alternative, refuse to perform an assignment because of a reasonable apprehension that the assignment could cause death or serious injury. This regulation applies, OSHA said, in situations like this one, where there is insufficient time to allow the act’s normal enforcement provisions to work. A unanimous Supreme Court agreed, and it affirmed the proposition that the OSH Act allows workers to protect themselves by refusing to work in these circumstances.16

This OSH Act right to refuse to perform dangerous job assignments is quite limited, however. Workers have a right only to refuse to expose themselves to “a real danger of death or serious injury,” and only if they have already sought abatement of the danger from their employer and there is not enough time to obtain an OSHA inspection and allow the OSH Act’s “regular statutory enforcement channels” to work.17 Workers have somewhat more protection if they are disciplined for complaining about inadequate protections, but even those protections are not sufficient in many instances.18 Most important, the structure of the OSH Act’s protection does not allow it to provide effective or real-time protection (see, e.g., Spieler 2016), for two reasons.

First, the act requires that workers file complaints with OSHA within 30 days of suffering any retaliation. This is a prohibitively short time for workers who may not know all the facts surrounding their discipline when it occurs, or who may not even realize that they have a right to protection. As a result, a large proportion of the complaints that OSHA receives are dismissed because they do not meet this 30-day deadline. In contrast, more modern whistleblower statutes generally allow complainants up to 180 days to file complaints (OSHA 2019a). Second, once a complaint is filed, workers are likely to face years of delay before receiving any relief. Once OSHA receives a complaint, it must perform an investigation to decide whether to accept the complaint. But although OSHA receives about 2,000 OSHA whistleblower complaints a year, it has fewer than 150 whistleblower investigators, and they are also responsible for investigating complaints filed under more than 20 other statutes. If OSHA determines that the complaint has merit, and if it convinces both the Office of the Solicitor of Labor and the Department of Justice that the case is worth taking forward, the solicitor may file a complaint in federal district court. This process alone can take up to five years, but the courts are also overwhelmed, and it can take another two to three years for a case to come to trial.19 And, of course, the whole system is completely dependent on OSHA’s willingness to play its role.

The whistleblower provisions of the Mine Safety and Health Act of 1977 (Mine Act)20 provide a useful contrast. The Mine Act was enacted only seven years after, and was modeled in large part on, the OSH Act. But it also corrected some of the earlier act’s weaknesses, including the whistleblower provision. Among other improvements, the Mine Act expanded the list of protected activities explicitly named in the statute, authorized the temporary reinstatement of miners during adjudication of their whistleblower complaints, and—probably most important—provided an independent right of action for miners whose complaints were not prosecuted by the secretary. Miners have used this right successfully on many occasions.21 The right to refuse to work is also broader under the Mine Act than under the OSH Act. Miners need only show that they have a reasonable, good faith belief that performing the assigned task would be unsafe.22 Over the decades, a number of bills have been introduced to amend the OSH Act in a similar direction, but with no success.

During the COVID-19 pandemic, thousands of essential workers have tried mightily to reduce their risk of exposure, many times against the wishes of their employers. As a result, the news has been full of reports of workers being disciplined, or threatened with discipline, for trying to protect themselves. Some of the most exposed workers are involved in caring for infected patients, and many of them have struggled to obtain necessary PPE. For example, on March 27, 2020, a doctor in Washington state—where the first U.S. coronavirus case was reported—was fired for social media posts trying to help secure more PPE for workers at his hospital (Judd 2020). This was at a time when there was a real shortage of appropriate respiratory protection, and many health care workers had gone public with their concerns about the workaround methods their employers were using to cope with that shortage (Padilla 2020). In April, a group of nurses in California were suspended after they refused to care for COVID-19 patients unless the employer provided the caregivers with protective N95 respirator masks—this after one of their colleagues came down with the disease while wearing the type of surgical mask that their employer insisted was all that was necessary (Associated Press 2020b).

Warehouse workers are another essential group who have even more work as the pandemic has caused many consumers to stay away from retail stores and instead rely heavily on online ordering. As early as March 2020, workers at an Amazon warehouse on Staten Island, N.Y., staged a lunch-hour walkout after one of their colleagues was diagnosed with COVID-19. They wanted Amazon to do a better job of cleaning the facility and to provide them with more virus protections. Amazon’s first reaction was to fire the worker who led the walkout, a move currently being investigated by the state attorney general (Bellafonte 2020; Palmer 2020).

How does OSHA play into this situation? Workers facing retaliation for their complaints about COVID-19 hazards, or their refusal to work without appropriate protection, are clearly within the scope of the OSH Act’s whistleblower provision. And as of Sept. 30, 2020, workers had filed 3,041 coronavirus-related whistleblower complaints with OSHA. However, OSHA had closed half of those without a full investigation, had “docketed” for investigation only 653 complaints, and of those had resolved only 231 (OSHA 2020a).23 In a report issued in August 2020 examining whistleblower activity during the first four months of the pandemic, the Department of Labor’s inspector general concluded that the pandemic had resulted in a 30% increase in OSHA’s whistleblower caseload, and that coronavirus-related complaints made up 40% of the total whistleblower caseload (Department of Labor 2020). However, the agency had fewer investigators available to handle those cases than it had available the previous year, and it had made no special provisions to handle the pandemic-related complaints. This short-handedness resulted in significant processing delays, which the inspector general found “could leave workers to suffer emotionally and financially.” Although OSHA responded that it was taking steps to improve the situation, the data for September and October 2020 did not show much change (Department of Labor 2020).

OSHA enforcement in response to COVID-19 hazards

COVID-19 is obviously an occupational hazard for many essential workers, and, under the OSH Act, one way for workers to protect themselves from occupational hazards is to notify their employers and OSHA of the hazards they face. The act requires OSHA to perform an inspection if a worker or a worker’s representative files a signed written complaint,24 but, despite having received 9,160 COVID-related complaints (and 1,228 referrals, e.g., from other federal and state agencies) by the end of September 2020, OSHA had closed more than 80% of those cases and had opened only 199 complaint (and 86 referral) inspections and only 996 COVID-related inspections in all (OSHA 2020c). The higher number includes fatality investigations (more than 60% of the total), employer reports (presumably of hospitalizations), and a relatively small number related to other inspections. Shortly thereafter, OSHA changed its interpretation of its reporting rule so that employers are no longer required to report COVID-19 hospitalizations. This move resulted in OSHA vacating its first, and until July its only, COVID-related enforcement action. Most startling, through July OSHA had cited only one other employer for violations related to the pandemic (OSHA 2020d).

OSHA signaled early on that its response to the pandemic would not include robust enforcement. In April 2020, OSHA announced that, outside of high-risk medical facilities, it would not perform physical inspections in response to most reports of COVID-19 hazards (OSHA 2020e). Instead it would use its “phone/fax” process to notify employers of the alleged hazard and ask the employers to report on how they had addressed that hazard. At the same time it told employers that in areas where there was “ongoing community transmission,” only employers involved in health care or emergency response and correctional institutions needed to record most cases of COVID-19 related to workplace exposures (OSHA 2020h). OSHA eventually reversed the recording policy and amended the enforcement policy to allow for a somewhat higher number of inspections (OSHA 2020g; 2020i). But it continued to insist that the nonmandatory guidance documents it was issuing, recommending that employers “consider” implementing COVID-19 safeguards “if feasible,” were a forceful response to the pandemic (OSHA 2020j). OSHA also refused to issue an emergency temporary standard, authorized under 29 U.S.C. 655(c), to protect workers from a new “grave danger,” despite several petitions asking it to do so. Such a standard would have given much clearer information to businesses on how to protect their workers and provided OSHA with many more enforcement options. When the AFL-CIO challenged this decision in court, a judicial panel including the former head of the Trump administration’s deregulatory efforts denied it.25

Workers in crowded indoor workspaces are at particularly high risk of contracting COVID-19. One of the first recommendations for avoiding infection is “physical distancing”—that is, remaining at least six feet away from others (CDC 2020a)—but workers in many industries have not been able to do this. The most notorious example is meat and poultry processing, where workers on processing lines often work shoulder to shoulder on each side of a moving belt. These are some of the most dangerous places to work at any time, and the workers, often refugees and immigrants, have some of the least ability to protect themselves (Waltenburg et al. 2020).

One of the first examples of unchecked workplace spread of COVID-19 occurred at a Smithfield Foods pork plant in South Dakota. The plant was eventually shut down under pressure from the state and the Centers for Disease Control and Prevention (CDC), but not before more than a thousand workers were infected and four died.26 To add insult to illness, both the company and government officials refused initially to accept that the disease was being spread at the Smithfield facility, asserting instead that the problem was the workers’ living conditions (Schlosser 2020). There are many other similar examples—another Smithfield plant in St. Charles, Ill., eventually closed by a county health department (Freishtat 2020); a Tyson plant in Iowa where at least a thousand out of 2,400 workers have tested positive for the virus and more than five have died (Associated Press 2020a); and several poultry plants on the Eastern Shores of Maryland and Virginia (Dance 2020). Overall, as of Oct. 15, 2020, according to the Food and Environment Reporting Service (FERN), meat- and poultry-processing workers had experienced more than 45,588 cases of COVID-19 and at least 215 deaths (Douglas 2020).

In September 2020, OSHA finally began issuing citations, generally at the very end of the six months it is allowed to take. One of those citations was to the South Dakota Smithfield plant described above, for exposing workers to COVID-19 in March (OSHA 2020h). Another was to a JBS meatpacking plant in Colorado (OSHA 2020k). Those two citations comprise the only times OSHA has alleged violations of its general duty clause,27 which requires employers to provide their workers with a workplace “free of recognized hazards that are causing…death or serious physical injury.” The availability of this clause was the primary basis on which the D.C. Circuit Court upheld OSHA’s refusal to issue an emergency temporary standard. OSHA proposed civil penalties of under $14,000 for each of the two general duty clause violations, amounts that would not even be noticed by these multibillion-dollar firms.28 The other citations OSHA has issued have all been to health care facilities, mostly nursing homes, and mostly for violations of its respiratory protection standard or its record-keeping regulations (OSHA 2020b).

This near-total abdication of responsibility by OSHA for keeping workers safe highlights one of the primary limitations of the OSH Act. It can only be as effective as the political actors running it allow it to be. As the pandemic crisis of 2020 made clear, when political actors are unwilling to use their authority to the extent necessary to protect workers, the workers are left to their own devices. For example, the Amazon workers at the Staten Island warehouse later tried another tactic, filing a “public nuisance” action arguing that Amazon’s failure to take appropriate steps to keep virus spread to a minimum exposed not only them but also their families and other community members to unnecessary risk.29 They alleged further that Amazon’s actions not only created a public nuisance but also violated provisions of New York state law.30 This “public nuisance” theory has been tried in a few other cases around the country, including one in Missouri, where a judge dismissed the case based mostly on the fact that OSHA had “primary jurisdiction” to enforce safe practices at the meatpacking facility at issue there. According to the court, “only deference to OSHA/USDA [U.S. Department of Agriculture] will ensure uniform national enforcement….”31 This decision could be seen as a cruel irony in light of OSHA’s general inaction on this issue. Other workers’ families have brought wrongful-death actions against the employers of workers who have died from the virus (Hussein and Diaz 2020).

After their complaints to OSHA of an imminent danger of COVID-19 exposure at their meatpacking plant garnered no response, one group of workers took the unprecedented step of filing a lawsuit to require OSHA to issue an imminent danger injunction (Yeung and Grabell 2020; U.S. District Court Middle District of Pennsylvania 2020). In proceedings in the case, OSHA acknowledged that it was not treating any complaints at meatpacking plants as imminent dangers.

Of course, workers with union representation are better able to obtain the protections they need. First, virtually all union contracts include safety and health provisions and provide workers with representation to help them challenge discipline. Thus, unionized workers are in a better position to insist that their employers take the precautions necessary to protect them, although even this advantage is not always enough. One worker at a New Jersey meatpacking plant wrote a New York Times op-ed explaining how her union, the Food and Commercial Workers union, had demanded better safety protections, and how the JBS plant where she worked had then shut down to remodel the processing floor and obtain more PPE, so that the workers could “feel a bit more secure” (Dominguez 2020). Unfortunately, these changes came too late for two of her colleagues who died of infections they had contracted before the restructuring. Other unions, representing auto workers, telecommunications workers, delivery workers, and more, have also been able to negotiate protections for their members (Engdahl 2020).

But few workers, currently about 7% of the private labor force, are members of unions and able to take advantage of this ability; the rest remain at the mercy of OSHA enforcement or the lottery of private litigation. It should also be obvious that competitive market forces—employers competing for workers and workers quitting unsafe workplaces—have not disciplined employers who fail to protect workers.

Workers’ access under the OSH Act to accurate information about injuries and illness at their workplaces and to appropriate medical treatment

To be able to complain about or avoid hazards at their workplaces, workers need to know where those hazards exist. Employers also need this information to meet their obligation to provide safe workplaces, and OSHA needs it to decide how best to allocate its enforcement and regulatory resources.32 In cases involving a highly contagious infectious disease and widespread common-sense protections against it, the hazards may be obvious. In other situations, they are not. To address these concerns, Congress directed OSHA to promulgate rules requiring employers to maintain accurate records of all work-related deaths, injuries and illnesses “other than minor injuries requiring only first aid treatment,” and worker exposures to hazardous substances, and to provide workers with information from those records.33 Much of the collection, compilation, and analysis is carried out by the Bureau of Labor Statistics, another Department of Labor agency; OSHA only recently began requiring some of these data to be submitted to it directly.34

OSHA’s record-keeping regulations explain that reportable injuries and illnesses are those that require medical treatment or time away from work.35 Unfortunately, there are many incentives for employers to keep their reported injury rates low. The first, unsurprisingly, is money. Employers are required to pay for treatment of work-related injuries, either themselves or through their workers’ compensation insurance, with insurance rates likely to rise as more claims are made. There are also less obvious incentives. Large corporations, particularly those owned by shareholders or associated with public-facing brands in competitive industries, want to appear responsible and humane. Reputational capital has a value, even if it is not as easily monetized as medical treatment. One of the casualties of these incentives is the ability of workers to receive prompt and appropriate treatment for their injuries.

Clearly, the best way for employers to keep reported injury rates low is to keep actual injury rates low by improving safety conditions. But that requires major investments (in equipment, training, or even additional staff), and some employers figure out ways to take shortcuts that shortchange their workers’ health and safety.36

Another way to keep reporting low is to cow workers into silence. Some of the best-documented uses of intimidation to reduce reporting of worker injuries existed in the railroad industry for many years. These practices were so pervasive and well-recognized that they led in 1989 to a government report recommending that the Federal Railroad Administration (FRA) promulgate regulations to improve injury reporting (General Accounting Office 1989). The FRA proposed such rules in 1994,37 and promulgated and reaffirmed them after reconsideration in 1996.38 The final rule explained that the “FRA has become increasingly aware that many railroad employees fail to disclose their injuries to the railroad or fail to accept reportable treatment from a physician because they wish to avoid potential harassment from management or possible discipline that is sometimes associated with the reporting of such injuries.”39 These rules helped but did not solve the problem, and it became the subject of investigations by both the Department of Transportation and the House of Representatives Committee on Transportation and Infrastructure. According to a congressional committee report, “employees generally perceive intimidation to the extent that those who are injured in rail incidents are often afraid to report their injuries or seek medical attention for fear of being terminated or severely disciplined. Many of the reports compiled by staff suggest that railroad employees often find themselves the targets of a higher degree of management scrutiny immediately after filing an injury report.”

As a result, in 2009 Congress enacted the Federal Railroad Safety Act (FRSA),40 which responded to Congress’ explicit recognition that workers feared that reporting injuries to their employers would threaten their jobs: “[E]mployees generally perceive intimidation to the extent that those who are injured in rail accidents are often afraid to report their injuries or seek medical attention for fear of being terminated or severely disciplined.”41 The act said that railroad employers could not “deny, delay, or interfere with the medical or first aid treatment” of an injured railroad worker, or “discipline, or threaten discipline to, an employee for requesting medical or first aid treatment, or for following orders or a treatment plan of a treating physician.”42

The FRSA has been a great benefit to railroad workers, but they are not the only workers whose employers try to limit their ability to report injuries or to obtain appropriate medical treatment. The intimidation tactics the railroads used are also used by other types of employers, often with the assistance of onsite medical personnel. Because injuries requiring only first-aid treatment are not “recordable,”43 there is a long history of misclassifying many of the medical services employers provide as first aid.

This misclassification is particularly the case in industries involving the types of awkward and repetitive movements and heavy lifting that are likely to result in musculoskeletal disorders (MSDs), the type of strains, sprains, and similar injuries that make up almost one-third of reported injuries in American workplaces.44 OSHA has been aware for decades that businesses with high levels of ergonomic stressors have tried to reduce their rates of recorded injuries, sometimes through questionable means. As long ago as the 1980s, during the Reagan and George H.W. Bush administrations, OSHA citations for ergonomic hazards included allegations of medical mismanagement of the resulting injuries. These citations, issued in a variety of industries including poultry, meatpacking, and manufacturing, were frequently combined with record-keeping citations containing similar allegations. Virtually all of these cases were settled, with the settlements including explicit requirements for appropriate medical management. According to reports, at least some of these settlements resulted in vastly improved conditions.45

When the Clinton administration took office in 1993, it undertook more systemic regulatory approaches to ergonomic hazards and record-keeping deficiencies. Unfortunately, neither its ergonomics standard nor the musculoskeletal injury provisions of its record-keeping rule survived the George W. Bush administration, which also gave ergonomic enforcement a low priority. It was not until the 2010s, during the Obama administration, that OSHA again began to examine these issues as part of its focus on vulnerable workers. In doing so, OSHA discovered some particularly pernicious employer practices.

In many large workplaces, employers maintain onsite health clinics at which injured or ill workers are required to report occupational injuries and receive initial treatment. Some of these clinics undoubtedly provide excellent care. Others, however, are inadequately staffed by licensed practical nurses (LPNs), emergency medical technicians (EMTs), or even athletic trainers, none of whom are licensed to practice independently or are supervised appropriately; their work often appears intended primarily to limit reportable injuries.46 There is a long history of employers misclassifying all of the activities at these clinics as first aid, even though many of the services provided are medical services and not first aid.

Workers are captive patients at these clinics, sometimes risking disciplinary action if they seek other medical care. For example, workers have been required to sign documents acknowledging that they may be discharged for seeking independent medical care for workplace injuries. And although many of these facilities are neither staffed nor supervised by appropriately licensed medical personnel, they nevertheless provide actual medical care, including diagnosis, evaluation, and treatment, and do not refer injured workers for appropriate care in a timely manner. They generally follow some kind of protocols, usually prepared by physicians, but not physicians with an ongoing relationship with the clinic and sometimes not even licensed in the appropriate jurisdictions (Tustin et al. 2018).

In the 2010s, OSHA inspected a number of these workplaces, one of the first of which was a Wayne Farms poultry-processing facility in Alabama. Workers at the plant were required to sign a statement acknowledging that they must seek medical care for any workplace injury through an onsite “nursing station.” During the investigation, which was initiated in response to a complaint filed by the Southern Poverty Law Center, OSHA discovered that when workers went to the nursing station, which was staffed only by two LPNs, they were generally given aspirin or other nonsteroidal anti-inflammatory drugs (NSAIDs) such as ibuprofen (Motrin, Advil) or naproxen (Aleve), and discouraged from seeking further medical treatment. They were also disciplined for reporting injuries and for leaving work to obtain appropriate medical care. For example, one worker went to the nursing station while suffering a heart attack; the LPN on duty gave her aspirin but refused the worker’s request to send her to an emergency room. The worker later left work with her daughter (a fellow employee) to go to a hospital, and despite the hospital agreeing that she needed emergency care, she and her daughter were both disciplined for leaving work early (SPLC 2014).

OSHA found numerous other instances in which nursing station staff failed to refer workers for appropriate care, either in a timely manner or at all, especially for MSDs. In one case a worker visited the nursing station 94 times for the same disorder before being referred to a physician (OSHA 2014a). The in-house treatment these workers received in the meantime was based on medical directives and algorithms that were out-of-date, contrary to good medical practice, and potentially harmful to the workers. It included protracted courses of NSAIDs, which pose their own risks, including gastrointestinal bleeding, heart attacks, and strokes, if they are used too long, and treatment with pyridoxine (vitamin B6), which has been determined to be ineffective for the conditions for which it was used. Workers were also sent back to the precise job tasks that had caused their injuries, preventing the injury from healing and possibly leading to even worse injuries (OSHA 2014a).

In addition, during the two months OSHA compliance officers were inside the facility performing their inspection, OSHA documented eight separate instances in which Wayne Farms failed to record injuries of its workers; the citation also included allegations of numerous ergonomic hazards that were responsible for the many musculoskeletal injuries the workers suffered (OSHA 2014b).

The actions of the nursing unit at Wayne Farms were not unique, or even unusual. In 2016, OSHA issued a citation to Pilgrim’s Pride Corporation alleging similar actions, or nonactions, at a poultry-processing plant in Live Oak, Fla. According to OSHA, the Pilgrim’s Pride Occupational Health Services unit (also staffed only by LPNs and a paramedic, without medical supervision) “failed to make timely medical referrals for employees with injuries related to chronic and acute exposures and incidents, heavy lifting and persistent and continuous pain…to prevent the development and/or minimize the severity of musculoskeletal disorders.” A Mountaire Farms processing plant in Delaware was also found to have excessive delays in physician referrals and to have required its staff of LPNs and EMTs to perform medical services beyond the scope of their licenses. Thus, as well as endangering the health of their line workers, these employers also put at risk the licensure and ability to make a living of their medical workers.

Similar conditions exist at warehouses and fulfillment centers, where the work is similar to poultry processing in many ways. Both are generally low-skilled operations, placing a premium on speed, lifting, and awkward postures, conditions almost guaranteed to produce high levels of musculoskeletal injuries. At Amazon warehouse and fulfillment centers, workers injured on the job must first seek care from Amazon’s AmCare onsite medical units. Generally staffed by EMTs and athletic trainers, these units are described as first-aid centers, but, like the health rooms at poultry-processing plants, they perform a significant amount of medical care and delay worker visits to doctors. Amazon workers have filed a number of complaints about the care they receive at these clinics, and OSHA has investigated several of them. The problems found are strikingly similar to those found at the poultry plants.

During a 2015 inspection of an Amazon fulfillment center in Robbinsville, N.J., OSHA found that, during a four-month period, Amazon failed to record at least 26 injuries, nearly all of them MSDs (OSHA 2015b). Unsurprisingly, OSHA also found numerous ergonomic hazards and warned Amazon of the need to correct them (OSHA 2015c). It also found that the facility’s AmCare unit, staffed entirely by EMTs, was “providing medical care beyond first aid,” including “clinical history, physical examination, assessment and management plan” (OSHA 2015a). This, OSHA pointed out, was “outside [the staff’s] licensing and certification.” Despite being directed to respond to these concerns, Amazon “blew off” the suggestions (Brown 2019). A subsequent inspection in 2019 found the same problems at the same AmCare unit, by now staffed with athletic trainers as well as EMTs but still without appropriate supervision (Brown 2019). OSHA’s new hazard alert letter pointed out six specific cases, during the four-month span covered by the inspection, in which the AmCare staff had not only delayed referrals for appropriate medical care but had denied specific requests by injured workers for referrals. In fact, the only significant change in the years since the 2015 inspection was that the AmCare “conservative care protocols” guiding the AmCare staff now allowed the staff to treat injuries for 21 days before referral to a licensed health care provider, instead of the 14 in effect in 2015.

This facility was in no way an outlier. OSHA found similar practices at facilities in Florence, N.J., and Lebanon, Tenn., although it noted that the AmCare protocols in place in Tennessee limited the time staff could treat injuries without a referral to only 10 days. A former AmCare employee in Arizona alleged that he was discharged because he was unwilling to delay referring workers for appropriate medical care; in one case he had sent a worker with chemical burns to a hospital (Brown 2019). A number of former workers have filed complaints with the California Department of Fair Employment and Housing, alleging that AmCare refused to send them for appropriate medical treatment; two claimed they were fired either because of the request or because of missing work as a result of the untreated injury (Brown 2019). And many workers and former workers have described the lengths Amazon managers would go to in order to avoid recording injuries (Evans 2019).

Workers at both warehouses and poultry plants have described feeling as though their employers consider them “disposable”—that the companies use them up and then discard them when they can no longer work (Riley 2019; SPLC 2014). This can indeed be the case because musculoskeletal injuries can have long-term consequences and render those afflicted less employable. Workers suffering from MSDs, especially untreated ones, frequently end up permanently disabled and having a hard time with even the activities of daily life—much less those required by another job with heavy physical demands. And for the low-skilled workers who work at these facilities, there are likely to be few other decently paid jobs available. Nor is workers’ compensation likely to afford these injured workers adequate recompense.47 And given OSHA’s reluctance during the Trump administration to enforce employers’ obligations to provide workplaces free of recognized ergonomic hazards and not to mismanage workers’ medical treatment, workers had little ability to reduce hazards or to obtain appropriate medical care. This lack of protection is in marked contrast to the protections railroad workers have. And the reason is clear: The railroad workers are represented by powerful unions, powerful enough to have access to both Congress and executive branch officials. But Amazon’s hostility to unions is well-known, and only a few of the poultry workers have union representation (Wingfield 2016; Bray and Hoffman 2020). On the other hand, these employers have enormous economic and political power. Amazon is currently the second-largest employer in the U.S., and 80% of poultry production is now concentrated among only 10 companies, many with significant political influence (Mayer 2020).

Structural limits on OSHA enforcement

In the context of the federal government, OSHA is a tiny agency. It has a total staff of about 2,000 at the best of times, of whom fewer than half are assigned to inspect workplaces.48 The number of inspectors—referred to as compliance safety and health officers, or CSHOs—has fluctuated over the decades, reaching highs of more than 1,400 in the late 1970s, remaining around 1,000 most of the time, and declining significantly over the last few years. OSHA began 2020 with 862 CSHOs, the lowest number in its history. At the same time, the number of workers OSHA is expected to protect has continued to grow with the economy, and employment has doubled between 1970 and 2019;49 there are now twice as many workers as there were in the early 1970s. This means that, even when OSHA has the political will to engage in robust enforcement, there will always be practical limits on how many workplaces it can affect directly.

Although OSHA has used various methods to focus its resources on the most endangered workers, many workplaces and hazards will inevitably evade enforcement. Often these are small workplaces, which slip through regulatory and reporting cracks; other times they are workplaces that employ workers who feel too vulnerable to report hazards. These workers include refugees and other immigrants, documented or not, whose limited English abilities leave them less aware than others of their rights in this country.

The employers who do not comply thus often exploit the most vulnerable workers. One particularly horrific example occurred in Houston in the 1990s. A businessman named Eric Ho bought an abandoned hospital that he intended to convert into apartments. At the time of purchase, he was notified that the building contained a substantial amount of asbestos and that removal of the asbestos could cost as much as $400,000. Ho then obtained an abatement estimate of $325,000 from a licensed asbestos abatement contractor. He rejected even that bid as too high, and instead hired his sometime handyman and another man to supervise the project. They in turn hired 10 undocumented immigrants to do the actual work. Ho visited the building every day himself.50

OSHA’s asbestos standard requires specific actions to protect asbestos-exposed workers.51 Among other things, employers must train the workers on the hazards of asbestos exposure and how to protect themselves, must provide the workers with appropriate protective clothing and respiratory protection, must use appropriate ventilation and wet methods to reduce asbestos dust, must monitor asbestos levels regularly, must conduct medical surveillance of the exposed workers, and must dispose of asbestos waste properly. Neither Ho nor his “supervisors” ever even told the workers at this project that they were exposed to asbestos, nor did they comply with any of the other provisions of the standard. About a month into the job, a Houston building inspector visited the site and issued a stop-work order; instead of stopping work completely, however, Ho stopped it only during the day; he had the workers move into the building and continue working at night for the next five weeks. There was no running water in the building and only one portable toilet. Ho and one of his supervisors brought the workers food (and collected money from them for it).

More than two months into the project, when the asbestos removal work was complete, Ho told one of his supervisors to open what he believed was a water valve on the outside of the building and (finally) wash down the inside. But the valve was actually for a gas line, and when the supervisor started a truck he had parked next to it, the gas exploded, injuring him and two of the workers. Adding insult to injury, the next day Ho called the workers to his office where he had them sign documents “acknowledging receipt of $100 to release Ho from any claims that might arise from the explosion and fire.”52 Nonetheless, both OSHA and the Environmental Protection Agency were able to take enforcement actions, and Ho was eventually assessed a civil penalty by OSHA and sentenced to prison for the environmental violations. Neither of these actions, however, ameliorated the danger to the workers’ health caused by Ho’s violations.

The Ho case is not unique. A few years later Joe Kehrer, a roofing contractor in Ohio, bought an abandoned school, which he planned to convert to residential use. Like Ho, he also used a group of Mexican nationals, although in this case the workers were in the country legally under temporary work visas to work for Kehrer’s roofing company. Nonetheless, most spoke no English and, like the Houston workers, they were not told about the hazards of asbestos removal, they were not provided with appropriate ventilation or protective equipment, they were required to use dry methods to remove the asbestos, and they were not provided with medical monitoring.53 In this case, though, one Kehrer worker was concerned enough to contact OSHA, so the conditions were discovered within only one month. Like Ho, Kehrer was eventually sentenced to prison for environmental (not OSHA) violations (Muslic 2018).54

Another example involved Fiberdome, a company that hired prisoners to perform work alongside its regular employees at a fiberglass manufacturing facility. The workers were exposed to the highly hazardous chemical styrene while working in unventilated booths, and at least two prisoners ended up in the hospital suffering symptoms of overexposure (Berzon 2013; see also OSHA 2013a and Hosier 2013). Although OSHA has a standard for styrene, it is one of the original permissible exposure level (PEL) standards and is widely regarded as out of date, even by the Styrene Information & Research Center, an industry trade association. Fiberdome was complying with the PEL, but its workers were still exposed to concentrations that sickened them, and OSHA only learned of these conditions because a doctor who treated the hospitalized prisoners contacted the agency. Prisoners may be the nation’s most vulnerable workers—they have virtually no ability to file complaints or take self-help actions. In this case, OSHA also heard that the employer supplied respirators to its own employees but not to the prisoners. After issuing a citation, OSHA eventually reached a settlement in which the employer agreed to limit exposures to the level recommended by its trade association (Daily Jefferson County Union 2014).

Businesses are also able to avoid OSHA enforcement of rules relating to worker use of bathrooms. The ability to relieve oneself when necessary seems to most Americans a basic human right, and the vast majority of us would be appalled at the idea of having to ask permission to visit a restroom or having to wear a diaper to work because we are not allowed timely use of a toilet. OSHA standards explicitly only require employers to have adequate toilet and handwashing facilities for their workers, and for many years that’s all that OSHA enforced.55 Eventually, however, OSHA recognized that the standards were meaningless unless workers were allowed to use these facilities when necessary. Thus, for the last quarter century OSHA has interpreted the standard to mean that employers may not impose unreasonable restrictions on restroom use and that they must ensure that necessary restrictions, such as the use of a key or a signaling system to allow workers to be replaced at their work stations, may not cause the workers extended delays. Workers at mobile or outdoor worksites must have access to sanitary facilities within a 10-minute drive (construction workers) or a quarter mile (agricultural workers) (OSHA 2020l).

Despite these rules, it has been difficult to make toilet access an enforcement priority, at least partly because of embarrassment on the part of both workers and inspectors to raise the issue. But in recent years, OSHA became aware of significant evidence that many workers are not allowed adequate access to sanitary facilities, particularly in the poultry- and meat-processing industries. In one poultry plant, 79% of workers on the processing line reported being unable to take bathroom breaks when they needed to (SPLC 2014). Workers said they were often afraid to insist on their requests because they had seen their colleagues disciplined for making safety and health complaints. In addition, many workers in this low-paid industry are immigrants, some undocumented, who feel particularly vulnerable to retaliation, especially in an era of increased immigration enforcement; as a result, these workers feel that they have no choice but to relieve themselves on the line or risk kidney and urinary tract infections (Jordan 2019).

In rare cases, OSHA learned of these situations and addressed them. The most recent example is Secretary v. Swift Pork Co.,56 which was initiated when OSHA cited Swift Pork for imposing, in a new “Time Away from Line” policy, unreasonable restrictions on its meat-processing workers’ use of toilet facilities. Among other things, workers had to seek permission to use a restroom and wait for their supervisor to approve the request. There was no requirement that supervisors do so, and workers often waited for a long time before receiving permission, if they did. In addition, asking for permission more than once a day could subject workers to discipline. Swift Pork responded to the citation by seeking a pretrial ruling that OSHA’s 20-year-old interpretation of the standard to allow reasonable access to toilet facilities was an improper amendment by the secretary (OSHA 1998). After an administrative law judge ruled against it,57 Swift Pork agreed to settle the case by, inter alia, amending the policy to make clear that workers who sought to use the toilet must be allowed to do so within 20 minutes.

This situation arises not only in meat and poultry facilities: OSHA has also issued citations to several manufacturing facilities, although these have generally not been contested and so did not result in reported cases. Workers at Amazon fulfillment centers describe having time they spent on bathroom breaks marked as “time off task,” too much of which may lead to discipline;58 one worker described suffering from urinary tract infections in order to meet her productivity goals (Evans 2019). (For an exhaustive review of this issue, see Linder 2003).

And the problem arises in many situations that OSHA never discovers. In another example of how little power low-level workers have over their own working conditions, a recent This American Life (2018) episode described how female airport security workers were routinely harassed by their male supervisors by being denied access to toilet facilities. Some of the workers eventually filed private harassment lawsuits, but there is no indication that they ever realized they also had a legal right to bathroom access.

Employers like the ones discussed above may be in the minority, but we have no real idea how often these situations occur. Only Swift Pork and the Kehrer asbestos case involved a worker complaint; none of the others would have been discovered by OSHA in the normal course of business. It was also no accident that many of the affected workers in these instances were particularly vulnerable: undocumented, working on a visa linked to their employer, or in prison. Their employers felt no compunction about failing to train them or to provide appropriate protective equipment, most likely in large part because the employers did not believe the workers would have the resources to complain or seek redress from authorities or have the freedom to speak up since doing so would put their jobs at risk.

The arduous task of creating or updating OSHA standards

As noted above, a significant contributor to OSHA’s failure to achieve its potential has been its inability to promulgate new and updated safety and health standards. This inability is most pronounced in the case of standards intended to protect against occupational diseases caused by chemical exposure, which kill up to 100,000 American workers and retirees every year, a number that dwarfs the 5,000-6,000 who die in accidents (Takala 2014). The substances workers are exposed to include such well-known hazards as asbestos, lead, and silica, as well as less recognized chemicals such as bisphenol A (BPA) and isocyanates. There is a huge disparity of knowledge about these hazards between workers and employers, with workers much less likely to realize that their exposures are dangerous. But industry knows about the hazards of the chemicals it uses, and it often tries to keep this knowledge from its employees.

Many of these substances, especially dusts, harm workers in a particularly cruel manner. Inhaling certain respirable dusts causes a class of lung diseases known as pneumoconioses—progressive, irreversible diseases that often lead to lung impairment, disability, and premature death. They manifest gradually, so that workers are often unaware of what is happening to them and what is causing it. They may first notice only mild shortness of breath on slight exertion, but the diseases progress to the point at which the workers are unable to exert themselves at all and need supplemental oxygen to breathe. Sufferers describe the frustration of being unable to perform normal life activities such as playing with their children and grandchildren (OSHA 2013b). According to the National Institute for Occupational Safety and Health (NIOSH), the occupational conditions causing these diseases are entirely man-made and can be avoided through appropriate dust control (CDC-NIOSH 2011). Coal workers’ pneumoconiosis, better known as black lung disease, is probably the best-known of these diseases, but silicosis, caused by exposure to silica dust, is more widespread. Because the diseases are disabling, the affected workers are less able to find a new job free from the dangerous exposures. Occupationally caused cancers may have an even longer latency period, making it difficult to link any case to a specific earlier exposure and helping employers avoid liability.

OSHA standards to limit workers’ exposure to many hazardous chemicals and provide workers with information on how to protect themselves from harmful exposures59 have had a positive effect. Lead poisoning, asbestosis, and asbestos-caused mesothelioma used to be common occupational illnesses but have become much less so. But OSHA’s effect on occupational disease is at best mixed. The 27 health standards it has adopted over 50 years have generally been successful in reducing harm caused by the hazardous substances they regulate; the problem is that there are so few standards.

The story of occupational silica exposure provides one of the best examples of both the limits and the benefits of OSHA regulation, and also of the ways in which entrenched business interests are able to leverage their power to delay and weaken OSHA regulation of harmful chemicals. Exposure to airborne silica causes a number of harmful effects, most recognizably acute and chronic silicosis but also lung cancer and other lung diseases. Acute silicosis, which results from extremely high exposures, may develop and lead to death within months. Much more common are chronic silicosis, a disabling lung disease that develops over years of exposure, and lung cancer, which may take decades to manifest. We have known about the danger of silicosis since at least the time of the Greeks, although in the early 20th century the discovery of the tuberculosis bacilli caused many cases to be misdiagnosed as tuberculosis60 (Markowitz and Rosner 2006). In the first third of the 20th century, as pneumatic tools and other dust-generating technologies became more widely available, instances of silicosis began to rise.61

Silicosis first came to widespread attention in this country in the 1930s as a result of the construction of Union Carbide’s Hawk’s Nest tunnel in Gauley Bridge, W.Va. The Hawk’s Nest story is a perfect example of how an unregulated labor market exploits workers, particularly in a period of high unemployment and without much of a social safety net (Cherniak 1986).62 The tunnel went through rock that was almost pure silica, and in the depths of the Great Depression thousands lined up for jobs. The workers were not provided with any protective equipment and they used dry drill bits, even though it was well-known at the time that this practice increased the amount of dust.63 Black workers (about 60% of the 5,000-man workforce) were not only paid significantly less than their white colleagues, they were also more likely to be assigned the most dangerous drilling jobs, and they died in disproportionately high numbers (about 75% of the total deaths).64 The exact number of workers who died of acute silicosis during the less than two years of construction is unknown but is generally believed to be over 700. Many more (one estimate is 1,500) developed chronic silicosis, which doubtless shortened their lives, but their conditions and outcomes were not tracked. In all, more than half the workers at this project suffered the effects of silica exposure.65

When the Hawk’s Nest death toll was brought to the public’s attention during congressional testimony in 1936, then-Secretary of Labor Frances Perkins initiated the federal government’s first Stop Silicosis campaign. It included recommendations for reducing silica exposure, primarily by using water and ventilation, the same control methods used today (Xo Safety 2018). The Labor Department also convened two national silicosis conferences in 1936 and 1938 that resulted in the department’s Bureau of Labor Standards adopting a standard that fell short of providing adequate protection; it was derived from an industry recommendation originally developed to help shield employers from liability. In the 1930s, the government lacked the regulatory authority to require compliance by most employers even with this standard, so workers continued to suffer the consequences of exposure to even higher levels of silica. And despite improved technology and growing evidence of the damage silica exposure causes, this standard provided the only legal protection to 90% of silica-exposed workers until 2017. At the same time, industry promoted the idea, through the 1940s and beyond, that silicosis was “a disease of the past,” that current techniques and equipment kept exposure under control, and that only workers who had been exposed to dusty conditions earlier in their careers would suffer from it (Markowitz and Rosner 1998). This industry and medical community complacency in these decades meant that the disease was rarely recorded on death certificates, and so there is no way to know exactly how widespread it was.66 Nonetheless, in 1968, the American Council of Governmental Industrial Hygienists updated its silica threshold level values to reduce its recommended exposure by 50-75% and to eliminate the TLVs’ reference to an obsolete sampling method.

Silica returned to national consciousness at about the same time the OSH Act took effect in 1970 and gave birth to OSHA and its sister agency NIOSH. The institute was created to be a research body, and one of its earliest tasks was to develop “criteria documents” that would provide OSHA with information on hazardous chemicals so that OSHA could regulate them. One of NIOSH’s first studies, of sandblasting and silica exposure, revealed extensive silicosis among workers involved in these activities and found that “the protection afforded [workers by their protective equipment] is, on the average, poor” (Blair 1974).

At the same time, OSHA was adopting its startup standards, which included the original silica limits. Due to a quirk of timing, however, only the standards applicable outside of the construction and maritime industries included the updated 1968 TLVs. The construction and maritime standards, which covered 90% of the country’s silica-exposed workers, remained at the original 1936 levels.67

In 1974, NIOSH issued a criteria document recommendation that OSHA reduce its silica standards to 50 µg/m3 (half of the then-existing level for general industry and 12-25% of the level for construction and maritime) and adopt various ancillary provisions, including exposure monitoring and medical surveillance for exposed workers (CDC-NIOSH 1974). Based on the NIOSH recommendation, OSHA published an advance notice of proposed rulemaking.68 Silica-using industries responded by creating a new industry group called the Silica Safety Association; its stated purpose was to “investigate and report on possible health hazards involved in [the] use of silica products and to recommend adequate protective measures considered economically feasible,” but its true purpose, as made clear in its fundraising solicitations, was to ensure that OSHA did not adopt the NIOSH-recommended standard (Markowitz and Rosner 1998, 306). The group was successful enough that no proposal or final rule was issued in the 20th century, a result helped significantly by the anti-regulatory bias of the Reagan and Bush I administrations.

Although silica fell out of the regulatory spotlight after 1980, it did not stop sickening workers, and in the 1990s, under the more worker-friendly Clinton administration, OSHA again began to pay attention to the substance by convening, along with NIOSH and the Mine Safety and Health Administration,69 the 1997 Conference to Eliminate Silicosis. At the same time, OSHA increased enforcement of its existing silica standards and announced plans to begin rulemaking on more up-to-date ones.70 The industry responded with the creation of yet another new group, the Silica Coalition, formed in anticipation “of OSHA rulemaking to control worker exposure to crystalline silica dust in the not-too-distant future” (Markowitz and Rosner 1998, 311). OSHA’s work over the next few years included holding stakeholder meetings and beginning preparation of the analyses needed for any new standard. Again, though, politics intervened. When the George W. Bush administration came into office in 2001, regulatory activity slowed across the board. Indeed, a high-level appointee at the Labor Department was heard to say that the Bush administration would propose a silica standard “over my dead body.”71

Work on a silica standard resumed when the Obama administration came into office in 2009, but, because of the resource-consuming analyses that OSHA must perform before it can promulgate a health standard, it was not until September 2013 that the proposal was published72 and the rulemaking kicked into high gear. That process involved three weeks of public hearings and the review of more than 2,000 separate comments from industry, public health experts, and unions and other worker-protection advocates supporting the proposed standard, opposing it, or suggesting modifications. Analysis of this massive record and preparation of the final rule involved the full-time work of more than 50 scientists, engineers, lawyers, economists, and other professionals in OSHA and other Labor Department agencies as well as the department’s political leadership. The resulting standard and partial analyses consumed more than 600 pages of the Federal Register.73 Additional analyses of equal length performed to comply with executive orders, the Small Business Regulatory Enforcement and Fairness Act, and the Regulatory Flexibility Act were not published but are available in the record. Even then the standard was not official; it needed to undergo review by the Office of Information and Regulatory Affairs, a process that took three months.74

Promulgation of the standard was a victory, but not a final one. Industry opponents challenged the standard in court as the Trump Administration was about to take office. However, approximately a year later, in December 2017, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision rejecting all of the industry challenges and upholding the standard completely.75

The standard is now fully in effect, protecting almost 7 million76 U.S. workers from overexposure to silica. How long the process took depends on what one considers the start date to be: nine years if it’s 2009, the beginning of concentrated work on the proposal during the Obama administration; 20 years if it’s 1997, the year OSHA’s announced it would issue a proposal; 43 years if it’s 1974, the year of NIOSH’s recommendation and OSHA’s advance notice of rulemaking; or 80 years if it’s 1937, the year of Frances Perkins’s promise to “stop silicosis.”

The impact of the standard on the construction industry has been dramatic. Construction trade shows and websites are filled with ads for equipment that will enhance compliance (see, e.g., Construction Equipment Guide 2018), and a casual observer of demolition and construction sites will see much more use of water sprays to suppress dust.

Outside of construction the standard did not take full effect until 2018, but that turned out to be particularly timely. The CDC recently reported a significant rise in the number of acute silicosis cases, concentrated among workers exposed to silica while manufacturing “stone” or “quartz” countertops (Rose et al. 2019), and affected workers quoted in news reports on the CDC analysis pointed out that work practices have improved in the last two years, i.e., after the OSHA standard took effect (Greenfieldboyce 2019). Still, many of the employers fabricating these materials are the kind of very small businesses that have historically been slower to comply with OSHA standards.

Most employers, however, comply with OSHA’s health standards. After insisting during rulemaking proceedings that the costs of compliance will destroy their industries, employers nearly always find a way to comply, often discovering that the adjustments needed to meet a standard’s requirements have the additional effect of making their operations more effective (see, e.g., OSHA 2000). Business is often bolstered because equipment manufacturers see new standards as marketing and sales opportunities, as they design new equipment to make compliance by employers easier, if not automatic (OSHA 2000). As is true of most OSHA standards, once this one took effect, complaints about its requirements dropped dramatically.

Conclusion

Although the OSH Act became law with the highest of hopes, it has not succeeded in empowering workers to secure their freedom from injury, illness, or death associated with work. There have been some notable successes under the law, but the lack of adequate resources and political support, combined with structural weaknesses in the statute and the changing nature of work in the 21st century, have resulted in dashed hopes and a continuing stream of powerless, injured, and ill workers. Many workers still do not have a meaningful right to refuse to accept dangerous assignments or even to protect themselves when they accept those assignments, they are still sickened by exposure to dangerous chemicals, they still must accept the indignity of not being able to take bathroom breaks when necessary, and they still struggle to obtain adequate medical care for work-related injuries and illnesses. If it’s true that workers possess the market power to quit unsafe jobs and find better work, that power has not been sufficient to deliver their most basic demand: safe working conditions.

Endnotes

1. 29 U.S.C. 651 et seq.

2. The more conventional view that workers in high-risk occupations receive some sort of hazard bonus pay for their willingness to do these jobs is belied by evidence that the lowest-paid workers are the most likely to be injured on the job. See, e.g., Baron et al. 2013, showing that more than half the workers in the highest-risk occupations (for nonfatal injuries) in the United States earn low wages; and Marsh et al. 2013. See also the paper in this series by Peter Dorman and Leslie I. Boden, “Risk Without Reward: The Myth of Wage Compensation for Hazardous Work.”

3. 29 U.S.C. 655(a).

4. 29 U.S.C. 652(9).

5. Most of these statutes applied only to employers who were government contractors or performed work under federal grants. They include the Walsh-Healey Public Contracts Act, 41 U.S.C. 6501; the Service Contract Act, 41 U.S.C. 6701 et seq.; the Contract Work Hours and Safety Standards Act (Construction Safety Act), 40 U.S.C. 3701; and the National Foundation on the Arts and Humanities Act, 20 U.S.C. 951. The Longshoremen’s and Harbor Workers Compensation Act, 33 U.S.C. 901-950, applies more broadly, but to a fairly small number of workers.

6. 29 U.S.C. §§ 655(b)(1)–(b)(4).

7. 5 U.S.C. § 609. This requirement applies only to three agencies: OSHA, the Environmental Protection Agency, and the Consumer Financial Protection Bureau; 5 U.S.C. § 609(d). Not coincidentally, these are all agencies to which large business interests are particularly hostile.

8. Another part of the SBREFA statute is the Congressional Review Act, 5 U.S.C. 801-808, which gives Congress the ability to disapprove agency regulations, under expedited procedures, within 60 “session days” (a complicated calculation that may result in the 60 days taking as long as eight months) of its promulgation. The act then prohibits the agency from promulgating a rule that is “substantially the same” as the disapproved rule without explicit congressional authorization. As a practical matter, this disapproval is only likely to occur shortly after an election that results in both Congress and the White House being controlled by a different party than that of the president under whom the rule was promulgated. Before 2017, this procedure had been used only once, to vacate OSHA’s 2000 ergonomics standard. To avoid this fate, in 2016 the Labor Department under President Barack Obama promulgated a disproportionate number of important rules in March and April.

9. 5 U.S.C. 601 et seq.

10. See especially the Supreme Court’s decisions in the benzene, IUD v. API, 448 U.S. 607 (1980), and cotton dust, American Textile Mfrs. Institute, Inc. v. Donovan, 452 U.S. 490 (1981) cases and Presidential Documents, Fed. Reg. 58 1-10 (October 4, 1993).

11. See, e.g., Marshall v. Pittsburgh-Des Moines Steel Co., 584 F.2d 638 (3rd Cir. 1978): (“We have not found, however [that the cited construction crane provision] was mandatory; thus the Secretary could not adopt that rule as a national consensus standard and give it mandatory effect”); Noblecraft Industries, Inc. v. Secretary of Labor, 614 F.2d 199 (9th Cir. 1980) (determining that the secretary may have tried to apply a consensus standard to a broader category of work than it was written for).

12. 29 U.S.C. 660(c).

13. 29 C.F.R. 1977.9.

14. See, e.g., Reich v. Hoy Shoe Co., Inc., 32 F.3d 361 (8th Cir. 1994) (worker illegally discharged for complaining to OSHA about chemical leaking into an electrical box); Perez v. Clearwater Paper Corp., 184 F.Supp.3d 831 (D. Idaho 2016) (same; complaint about wood dust); Perez v. Fayad, 101 F.Supp.3d 129 (D. Mass 2015) (same; complaint about dental office’s needle disposal method).

15. Whirlpool Corp. v. Marshall, 445 U.S. 1 (1980).

16. Whirlpool Corp v. Marshall, 445 U.S. at 22.

17. 29 CFR 1977.12(b)(2).

18. 29 USC 660(c), 29 CFR 1977.9.

19. Partly for this reason, both OSHA and the Office of the Solicitor put a significant emphasis on trying to resolve cases before trial. Most whistleblower complaints found to have merit are resolved through settlement.

20. 30 U.S.C. 815(c).

21. See, e.g., Simpson v. Federal Mine Safety and Health Review Com’n, 842 Fed.2d 457 (D.C. Cir. 1988).

22. Unlike the rights enumerated above, the right to refuse to work is not explicitly stated in the Mine Act. However, it was recognized by courts under a predecessor statute governing coal mine safety, and Congress made clear in both debate on the act and the Senate report that “[t]he Committee intends the scope of protected activities to be broadly interpreted…and intends it to include…the refusal to work in conditions which are believed to be unsafe or unhealthful.” S.Rep. No. 181, 95th Cong., 1st Sess. 35 (1977), U.S.Code Cong. & Admin. News 1977, 3401, 3435 (Sen. Report); Simpson, supra at 458.

23. OSHA also referred 683 complaints to state agencies.

24. 29 U.S.C. § 657(f).

25. In re: AFL-CIO, No. 20-1158 (June 11, 2020).

26. See, e.g., Dickerson and Jordan 2020.

27. 29 U.S.C. 654(a)(1).

28. OSHA claimed that was the highest amount possible, but that is true only because OSHA cited each of the companies for what it called the single hazard of exposing employees to COVID-19. It ignored the fact that this hazard existed at each production line and on each floor of the facilities, which doubtless had different configurations and exposed workers in different ways. In fact, at least in the Smithfield citation, OSHA did not mention the actual conditions at the facility at all. Moreover, although the author has seen a copy of the Smithfield citation, OSHA has changed its long-standing practice and is no longer providing public access to its citations, making it more difficult for the regulated community to know what the precise conditions are that OSHA believes constitute violations.

29. Palmer et al. v. Amazon, E.D.N.Y. Case 1:20-cv-02468.

30. Shortly before this paper was published, the court dismissed the Amazon workers’ case, relying in part on the “primary jurisdiction” ground that was also the basis of the decision in the Smithfield case discussed later in this paragraph.

31. Rural Community Workers Alliance v. Smithfield Foods, 459 F.Supp.3d 1228 (W.D. Mo. 2020). See also Scheiber and Corkery 2020.

32. See, e.g., 80 Fed. Reg. 45116, 45118-45119 (July 29, 2015); 66 Fed. Reg. 5916, 5916-5917 (Jan. 19, 2001).

33. 29 U.S.C. 857(c). See also 29 U.S.C. § 673(a), requiring the creation and maintenance of “an effective program of collection, compilation, and analysis of occupational safety and health statistics.” Similar if more narrowly focused requirements already existed for discrete industries, including railroads (49 U.S.C. § 20901) (Accident Reports Act), and mines (30 U.S.C. § 813(h)) (Mine Safety and Health Act).

34. 29 U.S.C. 1904.41. Employers are required to keep records for five years, and until recently OSHA cited employers for deficiencies in those records at any time in that five-year period. But several years ago, the D.C. Circuit held that the record-keeping rule permitted OSHA to cite an employer only within six months of the date the employer should have recorded an injury, illness, or death. AKM LLC v. Sec’y of Labor, 675 F.3d 752 (D.C. Cir. 2012). OSHA amended the rule to make the continuing obligation clear, but Congress reversed that provision under the Congressional Review Act in 2017 (Rules and Regulations, 81 Fed. Reg. 91792-91810 (Dec. 19, 2016)), Public Law 115-21. This creates yet another impediment to effective record-keeping enforcement.

35. 29 C.F.R. 1904.7.

36. See, e.g., Fagan and Hodgson 2017.

37. 59 Fed. Reg. 42880 (August 19, 1994),

38. 61 Fed. Reg. 30940 (June 18, 1996), 61 Fed. Reg. 67477 (December 23, 1996).

39. Id. at 30943.

40. 49 U.S.C. 20109.

41. H.R. Report 110-936 at 78-79.

42. 49 U.S.C. at 20109(c). Subsection (d) assigns enforcement authority for these protections to the secretary of labor, who has delegated them to OSHA’s Office of Whistleblower Protection, discussed above. The provision is an example of the more robust protections provided in whistleblower statutes newer than the OSH Act. Unlike the 30 days provided in the OSH Act, workers under FRSA have 180 days to file a complaint, have the right to temporary reinstatement during litigation if the secretary finds a violation, have the right to bring an action on their own behalf if the secretary has not resolved their complaints within 210 days, and have the right to appeal an adverse decision by the secretary. None of these rights exist for the far greater number of workers whose only protections are found in the OSH Act.

43. 29 C.F.R. 1904.7(b)(5).

44. See, e.g., Cartwright et al. 2014; Jakobsen et al. 2018.

45. See, e.g., settlement agreements with the meatpacking employer John Morrell & Company (OSHA 1990), the poultry processor ConAgra Poultry Company (OSHA 1992a), and the auto manufacturer General Motors Corporation (OSHA 1992b).

46. The companies also try to limit visits to the clinics. NIOSH observed pain reliever dispensers in the cafeteria of one poultry plant, which it noted made it less likely that workers would seek medical care (Musolin et al. 2014).

47. A discussion of the inadequacy of workers’ compensation is beyond the scope of this article; suffice it here to say that the system is essentially a trade-off for workers, in which they accept the certainty of low compensation for injury or illness and give up the right to sue their employers for more meaningful restitution. See, e.g., Michaels 2015.

48. Others are involved in creating standards, providing technical support, investigating whistleblower complaints, overseeing the OSHA state plans that supplant federal enforcement in about half the states, providing “consultation services” to employers, developing policies, and performing the various administrative tasks involved in running a federal agency.

49. Based on total employment rising from 78.7 million to 157.5 million in the household-based Current Population Survey, series LNU02000000.

50. U.S. v. Ho, 311 F.3d 589 (5th Cir. 2002); Chao v. OSHRC, 401 F.3d 355 (5th Cir. 2005).

51. 29 C.F.R. 1926.1101.

52. Chao at 360.

53. See, e.g., OSHA 2015d; Downs 2015.

54. The criminal convictions were not for OSHA violations because the OSH Act does not have the kind of criminal provision that could serve as a meaningful deterrent. It allows only a misdemeanor conviction in cases where an employer’s willful violation of a standard causes the death of a worker. 29. U.S.C. 666(e). Although there have been a few convictions under this provision, it does not apply in very many cases, and does not have much effect against corporate employers who cannot be jailed and may see criminal fines, like civil penalties, as just another cost of doing business.

55. 29 C.F.R. §§ 1910.141, 1926.51, 1928.110.

56. OSHRC docket 16-0510.

57. Order, March 28, 2017.

58. See also Burgett 2016, a blog post by an Amazon worker.

59. OSHA’s hazard communication standard, 29 C.F.R. 1910.1200, sometimes called a right-to-know rule, requires chemical manufacturers or importers to label the chemicals they produce or import with information about the hazards of those chemicals and to provide purchasers with safety data sheets that provide more information about hazards, including recommended protective measures and first aid. Employers must create and maintain a hazard communication program describing how they will provide information and training to their employees about the hazardous chemicals to which they are exposed, including how to recognize the chemicals and protect themselves from overexposure. If employers comply fully with the standard, workers are armed with significant protective information. Unfortunately, violation of the standard is among the violations most frequently cited by OSHA; last year it was the second most frequently cited (OSHA 2019b).

60. This misdiagnosis was particularly useful to employers, because if their workers were suffering from an infectious disease rather than an occupational disease, the disease was not the employers’ fault, and they bore no liability for it. This excuse has been used by some employers during the current pandemic, as noted above.

61. Silica has been called the “king of occupational diseases” (Markowitz and Rosner 1998) and has served as a template for how society, in both this country and others, addresses occupational diseases.

62. See also Hubert Skidmore, Hawk’s Nest, originally published in 1941 by Doubleday and Doran and currently available from the University of Tennessee Press, for a fictional but very accurate account of life for the Hawk’s Nest workers.

63. Hearings Before a Subcommittee of the House of Representatives Committee on Labor, January and February, 1936, reprinted in West Virginia Heritage, Volume 7, Comstock, ed., 1972.

64. Ibid.

65. During the same period, thousands of workers laid off in other industries during the Depression and suffering the effects of silica exposure filed lawsuits against their employers, and their actions also contributed to public awareness of silica hazards (Markowitz and Rosner 1995).

66. 81 Fed. Reg. 16328-16330 (2016).

67. ACGIH does not meet the OSH Act definition of a consensus organization, therefore OSHA could only adopt the TLVs under Section 6(a) of the act to the extent they had been adopted as “established federal standards.” By the time OSHA adopted its startup standards, the updated 1968 TLVs had been adopted under several of the procurement statutes the department enforces but not under the Construction Safety Act or the Longshoremen’s and Harbor Workers Compensation Act.

68. An advance notice is not a necessary rulemaking step; it is usually a way for an agency to signal its regulatory intention and seek information from the public.

69. The latter was involved because miners, particularly those working in underground coal mines, also suffer from silica exposure.

70. See 1998 Regulatory Plan of the United States, 63 Fed. Reg. 61284 (Nov. 9, 1998).

71. Personal recollection of author.

72. 78 Fed. Reg. 36274-56504 (Sept. 12, 2013).

73. 81 Fed. Reg. 16,285-16,890 (March 25, 2016).

74. The rulemaking process is described in greater detail in The Triumph of Doubt, by Dr. David Michaels (Michaels 2020), who was OSHA’s assistant secretary throughout most of the Obama administration.

75. N. America’s Bldg. Trades Unions v. Occupational Safety & Health Admin., 878 F.3d 271 (D.C. Cir. 2017).

76. 58 Fed. Reg, 16285, 16427 and 16432 (March 25, 2016).

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Judd, Ron. 2020. “ER Doctor Who Criticized Bellingham Hospital’s Coronavirus Protections Has Been Fired.” Seattle Times, August 2.

Linder, Mark. 2003. Void Where Prohibited Revisited: The Trickle-Down Effect of OSHA’s At-Will Bathroom Break Regulation. Iowa City: Fanpihuá Press.

Markowitz, Gerald, and David Rosner. 1995. “The Limits of Thresholds: Silica and the Politics of Science, 1935 to 1990.” Public Health Then and Now 85, no. 2: 253-62.

Markowitz, Gerald, and David Rosner. 1998. “The Reawakening of National Concern About Silicosis.” Public Health Reports 113, no. 4: 302-11.

Markowitz, Gerald, and David Rosner. 2006. Deadly Dust: Silicosis and the On-going Struggle to Protect Workers’ Health. Ann Arbor: University of Michigan Press.

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Mayer, Jane. 2020. “How Trump Is Helping Tycoons Exploit the Pandemic.” New Yorker, July 13.

Michaels, David. 2015. Adding Inequality to Injury: The Costs of Failing to Protect Workers on the Job. Occupational Safety and Health Administration.

Michaels, David. 2020. The Triumph of Doubt. Oxford, England: Oxford University Press.

Michaels, David, and Jordan Barab. 2020. “The Occupational Safety and Health Administration at 50: Protecting Workers in a Changing Economy.” American Journal of Public Health, May.

Muslic, Hana. 2018. “Construction Company Owner from Clinton County Sentenced for Illegal Asbestos Removal.” Belleville News-Democrat. August 16.

Musolin, Kristin, Jessica G. Ramsey, James T. Wassell, David L. Hard, and Charles Mueller. 2014. Evaluation of Musculoskeletal Disorders and Traumatic Injuries Among Employees at a Poultry Processing Plant. Health Hazard Evaluation Program, Report No. 2012-0125-3204. March.

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Introduction

Over a half century after transformative civil rights laws such as Title VII of the Civil Rights Act of 1964 made discrimination illegal, our nation is still grappling with its history of racial injustice and the profound impact of ongoing systemic discrimination. Although America’s anti-discrimination laws have led to substantial progress in tackling egregious discrimination, many structural forms of discrimination remain entrenched in our employment systems. The promise of these laws has not been fully realized because the nation’s enforcement system does not effectively confront the fundamental power imbalance underpinning the employment relationship. Many of the legal doctrines and organizational practices that predominate today fall short of creating meaningful accountability for discrimination. Because workers encounter a vast information asymmetry, along with economic vulnerability, the predominant complaint-driven system of enforcement often creates insurmountable hurdles for challenging systems that perpetuate discrimination. An extreme resource imbalance between employers and workers undergirds a legal system that has empowered employers to write contractual rules that strip away employee rights and undermine accountability for discrimination. In addition, federal anti-discrimination laws create gaps in coverage for many of our most vulnerable workers, leaving them without fundamental civil rights protections.

Workplace discrimination plays a persistent and central role in the social and economic inequalities facing our nation. The COVID-19 crisis has exacerbated the harm of long-standing occupational segregation and deep economic inequality. Black, Latinx, Native American, and Asian American workers are facing disproportionately higher rates of unemployment than white workers.1 Moreover, Black and Latinx workers are overrepresented in hazardous and low-paying jobs deemed essential and face greater economic and health insecurity from COVID-19 than white workers.2 The pandemic has also ignited racism against Asian Americans who have faced increased xenophobia, harassment, and hate crimes.3 Workers of color, particularly Black men, are experiencing a slower recovery of jobs than white workers.4 Workers with disabilities likewise are facing disproportionately higher unemployment and slower recovery of jobs.5 Women, and especially women of color, have been disproportionately hit by unemployment and a growing child care crisis impacting both caregivers and those who rely on them to work.6

The surge in economic insecurity and job loss raises new and unprecedented concerns as workers, particularly low-income workers, are increasingly fearful of filing complaints in an unstable job market and are already facing retaliation for organizing.7 Even more troubling, research indicates that Black workers are twice as likely as white workers to report that they or someone at work may have been punished or fired for raising safety concerns about COVID-19.8

These conditions have magnified inequities. The momentum building for racial justice in response to police killings of Black Americans has put a sharp focus on inequality and the role of structural racism in perpetuating discrimination across the nation’s social and economic systems. Thus, we are in a critical moment to reexamine employment discrimination, our current enforcement system, and the power imbalances in the employment relationship that undermine workers’ civil rights. This paper explores multiple ways that the imbalance of power between employers and workers drives organizational structures and legal doctrines that weaken civil rights protections and then considers policy solutions to create a more effective and just system.

First, this paper highlights the persistence of employment discrimination in reinforcing long-standing patterns of occupational segregation and the problems with our current enforcement system. Second, this paper examines how the asymmetry of power and information between employers and employees perpetuates inequities throughout the employment process, from recruitment, hiring, pay, and promotion to complaint reporting. Technology has intensified information and power imbalances as employers adopt hiring screens driven by artificial intelligence (AI) and subject workers to increasing surveillance. Our civil rights enforcement system places a heavy burden on workers to come forward to file a formal complaint to report discrimination to their employer or a government enforcement agency. These structures fail to recognize the vast power and information disparities between workers and employers. Indeed, by some estimates 99.8% of workers facing sexual harassment do not file a complaint due to concerns of retaliation or harm to their career.9 This underscores the need to shift enforcement systems to promote greater action from entities—including employers, enforcement agencies, unions, worker centers, and community organizations—that have the capacity to advance systemic change. These institutions must play a more vigorous role in tackling employment discrimination in the workplace while also providing workers with more effective protections against retaliation.

Third, this paper examines how our legal system and doctrines have impeded workers’ access to the courts by enabling employers to write rules that undermine accountability. These rules include anti-discrimination laws that have historically excluded many of the most vulnerable workers, particularly women and people of color working as domestic or farm workers. Increasingly, companies are evading accountability under workplace laws by classifying workers as independent contractors, outsourcing work to subcontractors, and relying on staffing agencies to provide temporary workers. Many of these workers face gaps in protection under federal anti-discrimination laws, only further exacerbating the power imbalance and the lack of employer accountability for discrimination. In addition, the legal system has empowered employers to write contractual rules, including forced arbitration clauses, nondisclosure agreements, and “no rehire” clauses, that undermine workers’ power and access to the courts. Even when workers do go to court, they face substantial barriers to achieving justice from a judiciary that lacks diversity and disproportionately consists of those who have spent careers representing corporate interests. Many legal standards developed by the judiciary, such as class certification and criteria for surviving motions for dismissal or summary judgment, create insurmountable hurdles for plaintiffs challenging employment discrimination in court. To increase access to justice, we need a more balanced judiciary—one that includes those who have represented workers—to ensure that legal doctrines effectively root out discrimination by counteracting rather than reinforcing extreme power disparities between employers and workers.

At a time when our nation is grappling with staggering inequalities that leave the most vulnerable workers at greater risk of exploitation, discrimination, and retaliation, there is an urgent need to restructure our enforcement system to shift the power imbalance between employers and workers and ensure meaningful accountability for discrimination.

The problem of employment discrimination and our current enforcement system

As our country confronts systemic racism and economic injustice, it is critical that we tackle employment discrimination and its role in perpetuating economic inequality. Structural racism, gender stereotypes, and bias based on national origin, religion, age, and disability are embedded in many employment practices that lead to discrimination and hostile work environments. Decades of research show that job applicants with “nonwhite-sounding” names (like Jamal or Mei Chen) are substantially less likely to obtain an interview when compared with those with “white-sounding” names (like Peter and Emily) with the same qualifications.10 In the corporate sector, women remain underrepresented at every level, and women of color and women with disabilities report facing more barriers to advancement and receiving less support and sponsorship from managers than other women.11 Notably, people of color and white Americans report stark differences in their understanding of these issues. For example, while nearly two-thirds of Black professionals believe that Black employees need to work harder than their colleagues to advance in their careers, only 16% of white professionals agree with that statement.12

The costs and harm of employment discrimination are immense and multilayered with personal, societal, and business costs. Discrimination causes lower job satisfaction, productivity, and job performance; higher turnover; and negative physical and mental health outcomes, including stress, depression, and lower self-esteem.13 In a recent study of people of color employed in professional occupations, the majority of respondents across all racial and ethnic minority groups reported paying an “emotional tax” of feeling “highly on guard,” due to anticipating racial bias, gender bias, and other biases in the workplace.14 Research has also shown that experiences with discrimination and racism increase stress and cause negative health outcomes, such as higher rates of hypertension and infant mortality for Black women and increased cardiovascular stress for Latinas.15

Occupational segregation—where one demographic group is over- or underrepresented among types of jobs—has persisted for decades and is a key driver of racial and gender gaps in earnings and income. Differences in education or skills explain only a small part of these inequities. Its origins stem from slavery and Jim Crow laws that explicitly excluded Black people from nearly all occupations but for a handful of low-paid ones, such as laborers, domestic workers, and agricultural workers. Black people who did become professionals were prohibited from serving white clientele. In addition, labor markets have devalued work performed by immigrants and women in such industries as agriculture and domestic work.16 In the decade following the passage of the Civil Rights Act of 1964, which outlawed employment discrimination, occupational segregation declined dramatically. However, progress on integrating jobs stalled in the 1980s, and millennial workers today experience nearly as much racial and ethnic segregation in the workplace as prior generations.17

Today many long-standing practices, such as segregated job recruiting and referral networks and subjective hiring and promotion criteria, operate to perpetuate occupational segregation. In addition, structural changes in the economy—including the increasing proportion of Black and Latinx workers in temporary and precarious jobs—exacerbate inequality. The COVID-19 pandemic has highlighted the harms of occupational segregation, as Black and Latinx workers are overrepresented in hazardous and low-paid “essential” jobs and are the least likely to be able to work from home.

Given the staggering personal, societal, and business costs of employment discrimination, it is critical that we rethink our enforcement system. Our anti-discrimination laws have been weakened by an enforcement system that does not create meaningful accountability or incentivize employers to identify structural barriers to prevent discrimination. At the root of the problem is a system that places far too much of the burden, responsibility, and risk of addressing discrimination on workers without confronting the inherent power and information asymmetries between workers and employers.

Currently, the primary means of enforcing our anti-discrimination laws is for individual workers to come forward and file complaints with their employer or a government agency. Under Title VII and most federal employment discrimination laws, workers must first file a formal charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) or a state or local fair employment agency before they can sue their employer in court. Even before employees reach the EEOC, most employers rely on a formal complaint process in which employees are expected to file an internal complaint. Although our enforcement structures are premised on the notion that it is the employee’s responsibility to file a complaint accusing an employer of discrimination, research shows this rarely leads to a satisfactory result for employees, and instead forces many to leave their employment.18

Further exacerbating this problem, workers must contend with gross asymmetries of information and power as compared to employers, a situation that often creates insurmountable barriers for employees to raising complaints. The operation of anti-discrimination laws and institutional structures fail to confront these vast information and power imbalances; instead, they often act to tip the scales further in favor of employers. The few workers who speak up do so at great risk and with a small chance of success. As a result, many workers do not come forward to report discrimination, and, with little chance of accountability for harm, organizations often do not prioritize addressing discrimination.

To confront these information and power asymmetries, our current enforcement system must be restructured so that the responsibility of enforcement does not fall almost entirely on workers. Instead, employers—who have the information and power to address discrimination—should bear a greater responsibility to prevent discrimination and to audit their policies and processes for disparities and bias. Furthermore, government enforcement agencies need sufficient resources to counter the power imbalance between workers and employers through effective enforcement of the law, especially on behalf of the most vulnerable workers. And government agencies can strengthen enforcement by developing stronger relationships with stakeholders, including with worker and community organizations, to educate workers on their rights, better understand problems on the ground, and identify patterns of violations to inform enforcement.

Power and information asymmetries weaken workers’ rights and undermine employer accountability

Workers’ lack of access to information

The asymmetry of power and information between employers and employees in all aspects of the employment relationship, from hiring to pay and complaint reporting, makes it challenging for workers to discover and prove discrimination. Before workers can bring a complaint, they must first have some evidence that they have been subjected to discrimination. Yet, under our employment structures, most workers have little or no access to the information needed to identify discrimination. As a result, employers are unlikely to be held accountable for discrimination, which further incentivizes inaction to address or prevent it.

Information about recruitment and hiring discrimination

The asymmetry of information and power between workers and employers is perhaps nowhere more apparent than in the recruitment and hiring process. Hiring discrimination continues to be a pervasive problem. Researchers have found that hiring discrimination against Black and Latinx workers has declined little or not at all over a 25-year period, with white applicants receiving 36% more callbacks than Blacks and 24% more callbacks than Latinx applicants.19 Another study found that Asian-named applicants were 20% less likely to receive callbacks from large employers and nearly 40% less likely to receive callbacks from smaller employers.20 Researchers also found that Black and Asian applicants who submitted résumés for entry-level jobs that had been “whitened” by being stripped of racial clues received callbacks at a much higher rate than those that clearly indicated an applicant’s racial identity.21 Moreover, workers of color also report significant experiences of discrimination. In a 2018 nationwide survey, 56% of Black Americans, 33% of Latinx respondents, 31% of Native Americans, 27% of Asian Americans, 31% of women, and 20% of LGBTQ people responded that they had experienced discrimination in applying for jobs because of their race, ethnicity, gender, sexual orientation, or gender identity.22

Organizational and cultural factors play a critical role in amplifying workplace discrimination.23 Subjective decision-making has long been known to allow biases to influence workplace decisions.24 Additionally, in the hiring and promotion processes, employers often consider cultural “fit” in hiring,25 yet employers may use this subjective assessment to replicate the current workforce and leadership team.26

In a 2014 study on hiring discrimination by fine-dining restaurants, testers who were people of color had a lower likelihood of receiving a job interview and, if interviewed, a lower likelihood of receiving a job offer, resulting in a 22% net rate of discrimination for applicants of color.27 Restaurant employers often relied significantly on assessments of an applicant’s personality or other “soft skill” criteria, but these criteria were significantly influenced by gender and race bias, resulting in the exclusion of workers of color and female workers.28

In recruitment, discrimination manifests in commonly adopted structures such as referrals based on social networks and personal connections to identify applicants. A 2017 survey of 53,000 employees, in which about one-third of those surveyed had received a referral, found that referrals overwhelmingly benefit white men, with white women, men of color, and women of color much less likely to receive referrals.29

Job applicants typically have little or no information regarding employers’ recruiting practices, résumé screening decisions, and other hiring-related decisions and processes. Applicants are rarely provided with an explanation as to why they were denied a job. Nor do they have information regarding the qualifications of other applicants or the decision-making process of the employer. Without this information, applicants cannot assess the legitimacy of employers’ hiring decisions. The asymmetry of information between workers and employers in detecting discrimination is particularly problematic in light of studies suggesting that “targets of discrimination often underestimate the significance of discrimination in their own lives, even as they recognize it as a problem facing their group.”30 As a result, many instances of hiring discrimination go undetected. Moreover, employers often have little incentive to collect, analyze, or disclose information about their hiring process to employees and may even oppose disclosure to avoid public scrutiny and litigation.

Employers’ increasing use of technology-driven hiring assessments, including those driven by artificial intelligence, has heightened the problem of worker and employer information asymmetry. To identify and screen job applicants, major employers across industries are using data-driven, predictive hiring tools such as online job advertisements, gamified selection assessments, and video-based interviews that measure facial expressions and voice patterns.31

Hiring assessment technology can operate to replicate and deepen existing inequities by relying on inaccurate, biased, or unrepresentative data that can produce discriminatory decisions. Even the most sophisticated tech companies struggle to ensure their AI systems are not discriminatory. Two years ago, Amazon abandoned an AI screening program because the system is reported to have taught itself to prefer male candidates over women, based on the company’s past hiring patterns.32 In 2019, Facebook settled several lawsuits which alleged that advertisers, including employers, had used Facebook-provided targeting tools and algorithms to direct ads based on race, national origin, disability, gender, and age.33

Hiring assessment technology has the potential to help expand the applicant pool by measuring abilities rather than relying on proxies for talent, such as an elite college degree, employee referrals, or recruitment from competitors, all of which may exclude qualified workers who have been historically underrepresented. By moving away from traditional criteria, employers could potentially hire from a more diverse pool of qualified candidates. But without sufficient oversight to ensure systems are designed to prevent and monitor for bias, automated systems create a substantial risk of making potentially discriminatory decisions virtually unchecked.

As a result of the complex and opaque nature of these systems, workers—particularly those who are screened out without their knowledge—often have little or no information about these systems, making it difficult to challenge discrimination.34 Vendors often refuse to disclose essential information about the system’s design and operation, asserting intellectual property protections. Workers are thus unable to obtain sufficient information about the operation of the screen to file a case. Where there is little likelihood that workers will have sufficient information to challenge the operation of a system, employers may not prioritize investments in ensuring that these systems do not operate in a discriminatory fashion. Because technology provides a sense of objectivity and scientific analysis, discriminatory decisions can become magnified and rapidly expanded.

Information about pay and wage discrimination

Employees’ lack of access to information also contributes to pay discrimination, which continues to be a problem for many workers, including women, people of color, older workers, and workers with disabilities.35 In a 2018 nationwide survey on experiences with discrimination, 57% of Black Americans, 32% of Latinx respondents, 33% of Native Americans, 25% of Asian Americans, 41% of women, and 22% of LGBTQ people reported that they had personally experienced discrimination with respect to equal pay or promotion in the workplace.36 Another study found that the wage gaps between white men and three different groups—Black men, Black women, and white women—existed throughout their careers, with the gap widening over time for the majority of the three groups.37

As with other employment decisions, many workers lack access to their co-workers’ pay information. Most employers do not make this information available and do not report this information to enforcement agencies. According to a 2017 report by the Institute for Women’s Policy Research, only about 17% of private companies practice pay transparency (making employee pay information public). In fact, 41% of private companies discourage and 25% explicitly prohibit discussion of salary information among their employees,38 even though the National Labor Relations Act prohibits employers from retaliating against nonsupervisory employees and job applicants who discuss wages with other employees.39 Without this information, workers and enforcement agencies are unable to detect pay discrimination and challenge pay disparities. This lack of information also undermines workers’ ability to negotiate for fair pay. Often, employers withhold information from workers not only about employee pay but also about an employer’s pay-setting practices and processes. In fact, in pay discrimination lawsuits, employers frequently oppose discovery of information or seek to seal documents regarding their pay practices. As a result, pay disparities remain difficult to challenge. Given the low likelihood of accountability, employers are often incentivized not to conduct regular pay audits or to proactively evaluate pay-setting processes to minimize bias.

Women and people of color are particularly disadvantaged by a lack of access to pay information, because employers often offer them lower pay than men and white workers hired for the same role.40 For instance, a 2019 study of tech industry workers found that 63% of women in the tech industry had been offered a lower salary than men for the same job at the same company.41 Moreover, women and Blacks are more likely to face backlash in pay negotiations.42

In 2016, to promote greater accountability for pay equity the EEOC required employers with 100 or more employees and federal contractors with at least 50 employees to report aggregate compensation data by race, gender, and ethnicity in an annual filing called the Employer Information Report (EEO-1). Employers have opposed the EEO-1 pay data collection, questioning its utility and arguing that it creates an administrative burden.43 In 2017, the Trump administration’s Office of Management and Budget halted implementation of the pay data collection with little explanation. The National Women’s Law Center and the Labor Council for Latin American Advancement sued, and a federal court ruled in their favor, directing the EEOC to collect pay data for 2017 and 2018. However, in September 2019, the EEOC announced that it would not be renewing its request for authorization to collect pay data.44

Information about discrimination in promotions and work conditions

Employees also face information asymmetries with respect to discrimination in promotions, performance evaluations, and discipline. This is particularly the case where the discrimination at issue is more subtle or when a pattern of behavior or culture of discrimination may be difficult for employees to prove. For instance, women face harsher discipline for workplace misconduct than men do.45 One recent study of a financial advisory industry found that following an incident of misconduct, female advisers were 20% more likely to lose their jobs and 30% less likely to find new jobs relative to male advisers. Female advisers also faced harsher outcomes despite engaging in misconduct that was 20% less costly and having a substantially lower propensity toward repeat offenses.46 This type of discrimination is difficult for an individual employee to identify and challenge since a worker is unlikely to have access to data on disciplinary actions against other employees.

Similarly, research shows that Black workers receive extra scrutiny from their bosses, are more likely to have their job performance monitored, and are disproportionately punished for mistakes on the job.47 Black customer service workers are also rated lower by customers and supervisors on evaluations than white workers, even when their performance is the same.48 Again, this type of discrimination, which can lead to disparities in pay, raises, promotions, terminations, and performance reviews, may be difficult for workers to identify and prove, because detecting such discrimination requires access to company wide data.

As with hiring decisions, employers are increasingly relying on data and technology-driven tools to evaluate worker performance, raising the risk of biased decisions without accountability. Customer ratings have become an increasingly important performance measure for workers as employers and technology platforms seek to incorporate customers’ feedback in determining pay and access to work. Yet these systems, while appearing neutral, can operate with bias that adversely impacts workers based on protected categories. For example, studies have found evidence of bias along racial and gender lines in online marketplace platforms.49 On Fiverr, a freelance services platform, researchers found evidence that Black and Asian American workers received lower ratings than white workers. Again, this type of discrimination is difficult for employees to identify and prove, since employees do not have access to system wide data.

Retaliation undermines workers’ power

One of the greatest barriers for workers in bringing a complaint of discrimination is the risk of retaliation and harm to their career. This well-founded fear leads to only a small fraction of employment discrimination concerns ever being reported. Employers may conclude that they do not have discrimination problems because they have not received complaints, when in fact the absence of complaints can be a symptom of a lack of trust in the process. Although employers are prohibited from retaliating against employees under all federal employment discrimination laws, data show employers frequently retaliate against employees who report discrimination. In 2019, 53% of private-sector charges filed with the EEOC included an allegation of retaliation.50 A 2018 report by the Center for Employment Equity found that 68% of sexual harassment charges during 2012-2016 included a retaliation charge and 64% of those who filed sexual harassment charges reported losing their job as a result of their complaint.51

Retaliation can take many forms, including termination, discipline, negative evaluations, department or shift changes, demotion, increased surveillance, hostility or ostracization by co-workers, and blackballing and adverse job references if the employee wants to find a job elsewhere. Employers often react to internal discrimination complaints by attacking those who complain in order “to isolate the charging party and to send a message to other workers that the cost of pursuing legal remedies to discrimination will be prohibitively high.”52

People of color, women, and others in marginalized groups are particularly at risk of retaliation in the form of interpersonal costs, such as being ostracized by their co-workers or experiencing damage to their reputation.53 In one study, a Black job candidate who attributed rejection to race discrimination was perceived by participants as more of a “troublemaker” than a Black job candidate who attributed the rejection either to his or her interviewing skills or to job competition, even when the discrimination was blatant.54 Similarly, studies have found that women who label conduct toward them as harassment are evaluated negatively.55 Women who experience sexual harassment also do not report because they fear being blamed for the harassment.56 Although these types of social costs present a significant barrier to workers coming forward, courts have often found that ostracization by co-workers is not sufficient to rise to an “adverse action” by the employer, which an employee must prove to win on a claim of retaliation.57

The prevalence of overt retaliation by employers despite legal prohibitions on retaliation reflects the significant power imbalance between employers and employees and fundamentally undermines enforcement of the law. Most employees who file discrimination complaints are not motivated primarily by monetary damages; rather, they want to improve working conditions, have their job back, see the perpetrator punished, or prevent future discrimination against themselves and their co-workers.58 In deciding whether to bring a complaint, workers will often determine that the risks that they will likely lose their job, face hostility or negative work conditions that will force them to leave their job, or be blackballed in their industry, outweigh the benefits, particularly where it is unlikely the employer will take effective action to address the problem.

Moreover, the costs and risks of coming forward are often greater for vulnerable workers, including low-wage and immigrant workers. Research has shown that workplace harassment is more likely to occur in organizations that are male-dominated and highly hierarchical, with a significant power imbalance among employees.59 Because power imbalances are often severe in the workplaces of low-wage workers who are disproportionately women of color and immigrant women, these workers are at heightened risk for discrimination and especially harassment. Yet they are the most likely to keep silent, due to greater barriers in coming forward. In particular, many cannot afford to risk losing their jobs.60 Undocumented immigrant workers may not come forward out of fear of disclosure of their immigration status. Immigrant workers face language and other barriers to learning their rights. Placing the overwhelming burden of enforcement on these workers fails to reckon with the reality created by power imbalances. As one author writes: “If power imbalances leave those at the bottom of the hierarchy vulnerable, more needs to be done to even out the scales.”61

Power imbalances undermine workers’ access to complaint systems

Even when workers come forward to raise concerns of discrimination in their workplaces, they confront a lack of accountability fueled by the vast power disparities between workers and employers. Employers’ human resources staffs and internal grievance processes often serve to protect employers from liability rather than address and prevent discrimination faced by employees. As a result, employees are often reluctant to report issues internally.

The #MeToo movement has brought national attention to the prevalence of workplace harassment and other forms of discrimination. It has highlighted how power imbalances between employers and workers shape internal reporting structures, such as in human resources (HR) operations. Even in 2016, before the #MeToo movement went viral, the co-chairs of the EEOC’s Taskforce on the Study of Harassment in the Workplace found that HR trainings and procedures are “too focused on protecting the employer from liability.”62 As a result, HR systems often respond to complaints as a threat to the organization. Especially when perpetrators are star employees viewed as having high economic value, organizational leaders often do not support meaningful disciplinary action.63 Workers who report discrimination through formal complaint mechanisms often find that their employer seeks to discredit them and fails to investigate complaints promptly and thoroughly.64 Rather than take meaningful steps to address and prevent discrimination, organizations frequently respond by attempting to establish that conduct did not meet legal standards for actionable harassment.65 Companies rarely punish perpetrators, and instead more often transfer the victim to a different department or location.66 Many companies will even keep the outcome of a complaint or investigation secret, resulting in the victims feeling frustrated or defeated when they do not see the perpetrators facing consequences.67

In the 30 years since Anita Hill, testifying at Clarence Thomas’s Supreme Court confirmation hearings, brought national attention to workplace sexual harassment, HR departments have been accepted as having primary responsibility for an organization’s efforts to prevent and address concerns of discrimination.68 Yet there is an inherent tension in the structure of most HR departments, which are not designed to serve the needs of employees who experience discrimination but rather to function primarily to protect the company from liability. In most organizations HR is given multiple roles with often conflicting interests, including to recruit and maintain top talent, protect employers from discrimination complaints and liability, run an internal complaint process and conduct investigations, and prevent discrimination and improve workplace culture.

The #MeToo movement has put in sharp focus a long-standing problem: HR structures can reinforce existing power disparities by protecting powerful actors in organizations rather than advocating for the rights of the most vulnerable workers. To ensure that the needs of employees are protected, organizations should consider separating these functions, providing employees their own advocates in internal complaint systems and establishing neutral and independent mechanisms to help resolve concerns.69 HR personnel cannot change workplace climate and culture on their own; institutional change requires support, resources, and buy-in from the top.70 As the EEOC report stated, “in working to create change, the leadership must ensure that any team or coalition leading the effort to create a workplace free of harassment is vested with enough power and authority to make such change happen.”71

The challenges of current employer complaint systems must be examined in the context of their development in response to two Supreme Court decisions, issued over 20 years ago, on the same date, that established an affirmative defense—the Faragher-Ellerth defense—for employers against Title VII claims for harassment that creates a “hostile environment.” Employers have structured their complaint processes and discrimination policies to ensure that they can shield themselves from liability through this defense.72

In Faragher v. Boca Raton and Burlington Industries, Inc. v. Ellerth, the Supreme Court held that an employer could raise an affirmative defense to liability for damages in cases alleging harassment amounting to a “hostile environment” actionable under Title VII by proving two elements: (1) “that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior,” and (2) “that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise[.]”73

Federal courts have subsequently interpreted the Faragher-Ellerth test to require very little of employers in demonstrating the efficacy of their anti-harassment measures. Specifically, courts have consistently held that employers satisfy their duty to prevent harassment under the first prong of the defense by merely having an anti-harassment policy and grievance procedure in place, rather than actually assessing whether the policies and procedures are effectively implemented.74 Moreover, under the second prong of the defense, federal courts have routinely held that when an employer has a grievance procedure in place, an employee’s delay in reporting or failure to report is per se unreasonable. Thus, courts have transformed the issue of reasonableness in both prongs of the defense from a fact-intensive inquiry into one that can be easily satisfied through symbolic compliance efforts, where organizations adopt policies and procedures on paper that do little to protect employees from harassment.75

However, a recent appeals court decision provides an important approach to the application of the Faragher-Ellerth test in recognition of the power asymmetries between workers and employers. In Minarsky v. Susquehanna County, the U.S. Third Circuit Court of Appeals overturned the lower court’s dismissal of the case, holding that the fact that the employer had an anti-harassment policy was insufficient in and of itself to show that the employer had exercised reasonable care to prevent sexual harassment. The court found that the plaintiff’s failure to report the sexual harassment internally may have been reasonable in light of evidence that the employer did not respond effectively to prior complaints.76 Notably, the court recognized “national news regarding a veritable firestorm of allegations of rampant sexual misconduct that has been closeted for years, not reported by the victims.”77 This decision reflects an important shift to look beyond an employer’s assertions and require employers to show effective action, rather than merely having harassment policies and procedures, in order to satisfy their legal obligations.

Enforcement strategies to address power imbalances

As discussed above, workers face vast information and power imbalances throughout the employment process that undermine enforcement of worker rights and shield employers from accountability for employment discrimination. In order to create a more effective enforcement system, we must confront head-on the fundamental problem of a system that places the primary burden of enforcement on workers. Instead, we need to address and correct the power disparities and create enforcement mechanisms that place a greater responsibility on entities with the most information and power to address discrimination in the workplace.

Under this approach, rather than primarily focusing on proving discrimination after the fact, our laws would create more powerful incentives for employers to adopt practices designed to prevent discrimination, audit systems for bias, and proactively correct problems. In addition, to counter the power imbalance between workers and employers, government enforcement agencies would have greater resources to investigate and prosecute cases, especially on behalf of the most vulnerable workers. To root out problems while protecting workers, greater collaboration with worker organizations, including unions and worker centers, would help enforcement agencies identify patterns of violations to inform government action. Finally, to provide workers with an effective private right of action, our courts should interpret and enforce our anti-discrimination laws with a much deeper understanding of the power and information imbalances in the employment relationship.

The solutions to the problems of information asymmetries and unequal bargaining power must work together. These solutions include (1) policies that encourage greater employer transparency and require data collection to support accountability; (2) investments that give workers, advocates, and government agencies the tools and resources that they need to take action against harassment and discrimination; and (3) revitalized legal doctrines and frameworks that align with the language and broad purpose of Title VII and other anti-discrimination laws.

Data collection, transparency, and accountability

To address information and power asymmetries that make it difficult for workers to identify and prove discrimination, employers should be required to collect data regarding their employment practices and decisions and disclose certain information to enforcement agencies, workers and their unions, and the public to create greater transparency and accountability for their policies and practices. Employers are in the best position to collect data and monitor the impact of their recruiting, hiring, employment, and pay practices and decisions.

Studies have shown that when companies set up transparency and accountability structures, such as collecting and tracking data, identifying gender and racial disparities, and devising hiring and promotion plans to address disparities, the diversity of employees at the management level improves.78 Moreover, greater pay transparency can help to hold managers accountable and reduce pay disparities by gender and race.79 Greater transparency and accountability also ensure that employers establish policies and procedures to guide employment decisions that are fairly and consistently applied. A 2019 study of the San Francisco-area restaurant industry found that working with restaurants to implement standardized hiring processes and thus decrease informal processes contributed to greater racial equity in hiring and less racial segregation across restaurants.80

The growing use of hiring assessment technology has heightened the need for greater transparency and accountability in hiring screens. Without adequate safeguards, algorithmic assessments can perpetuate patterns of systemic discrimination already present in the workforce. 81 Civil rights leaders have released an important set of “civil rights principles” to guide tech developers, employers, and policymakers in the development, use, and auditing of hiring assessment technologies.82 These principles recognize that to prevent discrimination and advance equal opportunity, hiring assessment technologies must be explainable, job-related, and audited.

Improving internal complaint systems

Even when employers are more transparent about their decision-making, that transparency is only effective at combating discrimination if it is coupled with effective accountability mechanisms. Employers need to strengthen their internal complaint systems to move from a compliance and liability avoidance mindset to a commitment to preventing discrimination and retaliation. Leadership must ensure that human resources departments have the resources and leadership backing to support anti-discrimination efforts and that dispute resolution mechanisms are designed to address power imbalances.83 Employers also need to ensure that discrimination complaints are investigated in a prompt and thorough manner, and that effective accountability mechanisms consistently hold perpetrators and the organization accountable for their actions. Human resources departments should regularly reinforce employee education and training regarding workplace civil rights in order to increase employees’ comfort with using the complaint process. Employers should also track discrimination complaints and outcomes to identify potential patterns and implement solutions to improve outcomes and build employee trust.84 In addition, employers should monitor potential retaliation against those filing complaints, by tracking employee turnover rates, pay, and time to promotion.85

In order to create more effective systems for resolving concerns and to better protect employees from retaliation, employers should also provide alternative mechanisms to report discrimination. One potential model is the ombuds office, which acts as a neutral party that helps to facilitate options for resolving concerns.86 Another potential model is an employee assistance plan, which provides free, confidential assistance to employees with issues in and outside of work that affect workers.87 Confidential and/or anonymous reporting mechanisms, such as telephone hotlines or websites to report complaints, enable employees who fear retaliation to come forward. Some employers have embraced tech-enabled third-party complaint and ombuds processes88 that can serve as early warning systems by using anonymous and aggregated data to reveal trends and identify systemic issues within an organization. Regular workplace climate surveys can also aid employers in identifying problem areas and ensuring that concerns of discrimination are being addressed proactively.

Increased enforcement by federal, state, and local agencies

Greater transparency is an important first step, but meaningful access to civil rights protections requires consistent enforcement with reliable anti-retaliation protections. The government plays a fundamental role in rebalancing the power disparities between workers and employers. More robust government enforcement is particularly critical because of the information asymmetry facing workers and the high costs of bringing a private lawsuit. The EEOC has the power to investigate charges of discrimination, including the ability to subpoena employer information that may be necessary to support the filing of a complaint.

Employees—particularly low-wage workers—rarely have the resources to take on a much-better-resourced employer. Workers face difficulty in finding lawyers willing to represent them given the high costs and hurdles involved in prevailing in court.89 Even if a worker is able to retain an attorney, the worker must then pay attorney fees and other legal expenses, as well as expend time and energy to advance the case. Federal litigation can drag on for months and years, and the costs and stress of prolonged litigation only increase over time. Increased enforcement by federal agencies alleviates these costs to individual workers by confronting the vast resource asymmetry between workers and employers.

In order for enforcement agencies to play a greater role in enforcement, the agencies need adequate resources to meet the demand for their services. In particular, the EEOC’s budget should be doubled so that the agency has the resources and staffing it requires for enforcement. Since 1980, the U.S. workforce has increased by 50%, but the EEOC has a smaller budget today than in 1980, adjusted for inflation, and 42% fewer staff.90 This means investigators have larger caseloads, and the agency does not have the ability to pursue many meritorious charges or proactively challenge systemic practices that perpetuate discrimination. As a result, there is a significant delay in investigating and resolving charges, and the agency must make difficult choices on where to focus limited investigatory resources. Frequently, information needed to prove an employee’s allegation of discrimination is in the hands of the employer, and the EEOC is uniquely well-situated to obtain this information through an investigation.91 Thus, while the EEOC plays a critical enforcement role, the need for the agency’s investigation and enforcement power to address the 70,000 to 100,000 discrimination charges filed each year far outstrips the resources allocated. To make matters worse, the Trump administration’s February 2020 budget request slashed funding for 14% of staff at the EEOC.92

Even where employees do not feel comfortable coming forward to file a charge of discrimination, commissioners of the EEOC have authority to open a commissioner’s charge under Title VII and the Americans with Disabilities Act, and EEOC district offices may open a directed investigation under the Age Discrimination in Employment Act and the Equal Pay Act where concerns arise. Commissioner’s charges often address claims of systemic discrimination93 and are an important tool for the EEOC to root out problems in cases where workers may fear retaliation for filing a charge of discrimination.

Commissioner’s charges and directed investigations also enable the EEOC to investigate and address discriminatory practices in cases where workers are unlikely to have information such as hiring. During 2011-2015, 75% of commissioner’s charges focused on discrimination in hiring.94 With additional resources, the EEOC could also strengthen its ability to analyze and utilize its EEO-1 data to understand the workforce demographics of an employer, industry, or region. This information could inform commissioner’s charges or its investigations and identify potential systemic issues, such as barriers to hiring that lead to occupational segregation.95

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) plays a significant role in ensuring the government does business with companies that adhere to nondiscrimination and affirmative action requirements. With oversight responsibility for 200,000 federal contractors96 employing over 20% of the labor force,97 OFCCP needs a budget that is at least double its current levels to ensure effective oversight of contractors’ compliance with their affirmative action and nondiscrimination obligations. Despite its critical enforcement role and the vast number of federal contractors, OFCCP’s capacity is limited, with current staffing levels well below that during the Obama administration. OFCCP has enforcement authority over Executive Order 11,246, signed in 1965 by President Johnson, which requires the inclusion of an equal opportunity clause in each government contract and subcontract.98 Importantly, government contractors must take “affirmative action” to address employment discrimination and must have affirmative action plans that outline the steps that an employer has taken and will take to ensure equal employment opportunity.99 Thus, unlike the EEOC, which operates under a primarily complaint-driven system to enforce anti-discrimination laws after a violation, OFCCP’s work has a proactive focus on conducting audits to review and evaluate contractors’ compliance with affirmative action requirements and other anti-discrimination laws. OFCCP also has a mandate to promote proactive efforts to promote hiring and equal pay for underrepresented groups.100

In addition to the EEOC and OFCCP, state and local enforcement agencies play a critical role in filling enforcement gaps by providing alternative avenues to address discrimination in the workplace.101 Because some states and local jurisdictions have anti-discrimination protections that are broader than federal anti-discrimination laws in terms of protected groups, employer size, and legal standards,102 agencies in these states and municipalities may be in a better position to robustly enforce workers’ civil rights. States and municipalities may also have more flexibility to spearhead new initiatives and innovate policy solutions to identify and combat workplace discrimination at the local level. It would be beneficial for the EEOC to proactively engage state and local enforcement agencies that are leading strong enforcement efforts to increase collaboration, data sharing, and learning between federal and state enforcement agencies.

Enforcement and accountability through greater collaboration with worker organizations

Unions, worker centers, and other worker organizations have played a critical role in ensuring that workers’ civil rights are protected, and those efforts can be further strengthened. Our country has a renewed opportunity to build greater racial and gender equity into its practices, and unions can help lead that effort.103 Although some unions have had a history of discriminatory practices, which requires intentional focus to overcome,104 unions have historically played an important role in driving down racial wage gaps105 because Black workers have been more likely to be in unions, and those in unions have benefitted from the largest increase in wages.106 Wages for union jobs are, on average, 16% higher than for nonunion jobs107 because of union workers’ ability to bargain collectively for higher pay and more transparent hiring and promotion policies, and because of the existence of grievance procedures for addressing pay discrimination and other issues.108 Research has found that Black workers have historically sought union jobs in order to protect themselves from discriminatory treatment in nonunion sectors.109 The significant decline in the unionized workforce over the last several decades,110 which has resulted in growing wage inequality and poorer working conditions,111 has particularly impacted Black workers.112 A 2012 study found that if union representation had remained steady over the last several decades, the weekly wage gaps between Black and white workers would be nearly 30% lower for women and 3-4% lower for men.113

At the same time, this is a critical moment for unions to accelerate efforts to build a more inclusive and diverse movement with a focus on advancing equity. Hiring halls—job placement organizations, typically run by unions, that refer jobs from various employers out to workers—have been a powerful organizing tool for unions in achieving the bargaining strength to obtain better pay and working conditions. Yet hiring halls can also serve as barriers to opportunity for underrepresented groups, including Black, Latinx, and Asian American workers as well as women in trades.114 Ensuring promising practices to achieve fair and equitable referral procedures and recruit diverse apprenticeship candidates are vital steps to promote equity.115 There has been progress in some locales such as New York City, where apprenticeship programs in construction have become increasingly diverse.116

Unions can enhance their role in enforcement and addressing discrimination in the workplace by pursuing justice for members facing discrimination and by bargaining with employers for concrete measures to protect workers’ civil rights; examples of the latter include establishing pay transparency and making raise and promotion processes clearer.117 Through such collective action, unions help rebalance power disparities both by supporting individual workers and by negotiating for more equitable employment practices for all workers. For example, UNITE HERE successfully bargained for contract language requiring employers to provide its members with “panic buttons” that can be used to get immediate assistance if an employee is being assaulted or harassed.118 The union’s efforts yielded legislation throughout the country requiring hotels to provide room attendants with panic buttons and other protective measures.119

Given the information and power asymmetries for workers, unions continue to play an important role in protecting workers through collective bargaining agreements that contain anti-discrimination language that workers can enforce through a grievance process—which is usually faster and less expensive than legal proceedings. Unions can also obtain information and demographic data regarding employer hiring, pay, and other employment practices as part of the collective bargaining process. Unions have a legal duty to fairly represent all members, and investigation of discrimination is a legitimate purpose related to a union’s collective bargaining duties and a legitimate basis for an information request.120 In a 2018 decision, the National Labor Relations Board held that “[a] union may…be entitled to information that is relevant and necessary to determining whether a particular employment action is discriminatory, even if the employment action itself is not a mandatory subject” of bargaining, because “the elimination of race and sex discrimination is a mandatory subject of bargaining.”121

Another approach is for government enforcement agencies to better focus resources on industries and workplaces where violations are most likely to occur; agencies can gain insight into problems on the ground by engaging with community organizations, unions, and worker centers.122 Building these relationships can help the government educate workers on their rights and promote greater employer compliance.123 Worker centers and community organizations can also assist by preparing charges of discrimination on behalf of workers, since organizations, to protect an employee’s identity, may file charges with the EEOC on the employee’s behalf.124 Several cities have implemented successful programs to build collaborative models.125

Farmworkers in Florida established the Coalition of Immokalee Workers, which has created a groundbreaking worker-driven social responsibility model to address sexual harassment and other workplace discrimination and abuses faced by farmworkers.126 The Fair Food Program has constructed a partnership among farmworkers, growers, and major retail buyers that purchase from the growers. Through organizing efforts, the coalition obtained buyers’ commitments to consider farmworkers’ working conditions when making purchases. This arrangement provided the coalition with the power to hold growers accountable for abusive working conditions, including sexual harassment and assault.127 The program provides for regular audits by the Fair Food Standards Council (FFSC), an independent investigation and enforcement body funded by buyers; in the audits at least 50% of the workforce must be interviewed each season.128 The program also set up an alternative complaint system, through which workers can file complaints with the FFSC and have access to investigators; the investigators look into complaints, seek to resolve them, and enforce against retaliation.129

Legal system creates gaps in protections and enables employers to write rules that undermine accountability

Gaps in legal protections for many workers prevent enforcement and undermine employer accountability

The efficacy of our current enforcement scheme in protecting workers’ civil rights is undermined by significant gaps in Title VII coverage that leave many workers, particularly low-wage workers and workers of color, without protection. Title VII’s protections apply only to employers with 15 or more employees, which means that employees of organizations with fewer than 15 employees have no federal anti-discrimination rights. The number of employees affected by this gap is considerable: As of 2017, over 12 million workers worked for firms with fewer than 10 employees.130 Across all industries in the U.S., Title VII consistently excludes about 14% of the workforce from its protections.131

One group of workers largely left unprotected under our federal anti-discrimination laws are 2.2 million domestic workers who work as home care aides, child care workers, and house cleaners in private homes.132 Over 91% of these workers are women and 52% are Black, Asian American and Pacific Islander, or Latinx.133 Because they are isolated and work out of public view, domestic workers are particularly vulnerable to harassment, discrimination, and exploitation; at the same time, most are not protected under our federal anti-discrimination laws. Migrant farmworkers on H-2A visas are also highly vulnerable as workers; they are isolated and confront abuses such as dilapidated housing, illegally low wages, and even forced labor.134 Nationally, 22% of farmworkers on H-2A visas are left uncovered by Title VII, with an even higher rate of 31% in the South due to the lack of protection under state laws.135

In addition, the increasing reliance on business models that outsource labor through independent contractors or subcontracts, such as through temporary staffing agencies, is weakening worker power and undermining enforcement. In the past two decades, companies have shed jobs as well as accountability for workers by classifying workers as independent contractors, outsourcing work to subcontractors, and relying on staffing agencies to provide temporary workers. Independent contractors face exclusion from most federal anti-discrimination laws.136 Businesses are increasingly outsourcing labor through layers of contracting and subcontracting, including franchising and reliance on temporary staffing agencies to reduce labor costs and responsibility for workers.

Almost 10 million U.S. workers are treated as independent contractors for their primary job. Many are in low-wage jobs—in home care, nail salons, construction, cleaning, and landscaping—held disproportionately by immigrants, women, and people of color.137 Internal Revenue Service data show that low-income earners represent the fastest-growing population of independent contractors.138 Between 10% and 30% of audited employers misclassified workers, according to federal and state studies.139 Online platform companies have accelerated the shift toward precarious work by classifying their workers as independent contractors and not employees. By doing so, companies create major hurdles for workers who must first prove their employee status to avail themselves of anti-discrimination protections.

Temporary workers are disproportionately people of color: Black workers account for approximately 13% of the overall workforce but nearly 26% of the temporary workforce. Latinx workers make up nearly 17% of all workers but 25% of temporary workers.140

Discrimination in hiring has been a problem for many temporary staffing agencies,141 which refer applicants based on client preferences for workers by race, color, sex, national origin, age, or absence of a disability. As litigation by the EEOC has documented, many agencies either refuse to hire Black workers or send them to the least desirable jobs, while hiring Latinx workers and subjecting them to hazardous working conditions, harassment, and lower pay.142 Discriminatory steering patterns have persisted because, under temporary staffing models, there is often a lack of clarity around when a host company will be deemed a joint employer of the workers procured by a staffing agency. Where a staffing agency adheres to the discriminatory preferences of a client company, workers face the additional hurdle of proving that the host company is a joint employer responsible for the discriminatory hiring decisions.

Although businesses may rely on temporary workers for flexibility to expand or contract their workforce, it can also be a strategy for avoiding responsibilities as an employer and keeping workers from organizing a union. Host companies may deny temporary employees access to their anti-discrimination complaint procedures, and temporary workers face obstacles in identifying the appropriate contact point to report violations. These outsourcing arrangements have eroded worker power and contributed to declining wages, benefits, and health and safety conditions.143 The heightened insecurity of temporary work, where assignments can end at any moment, with little recourse, exacerbates the imbalance of power and makes it difficult for workers to organize and challenge discrimination.144

Addressing gaps in coverage

To address these significant gaps, states have passed legislation to expand worker protections. A number of states and the District of Columbia have already enacted measures to ensure that their anti-discrimination laws cover employers with fewer than 15 employees at various size thresholds.145 States and cities have also passed legislation explicitly protecting domestic workers under state anti-discrimination law, often as part of broader legislation called the Domestic Workers Bill of Rights.146 States have also passed laws to protect independent contractors from discrimination in employment or contracting147 and have enacted legislation to address the misclassification of employees as independent contractors.148

For temporary workers, greater transparency by staffing agencies on the demographics of those they hire would be a first step to identifying patterns of discrimination. Private employers with more than 100 employees (and federal contractors with at least 50 employees) are required to report the demographic data of their workforces to the EEOC on annual EEO-1 surveys. Temporary staffing agencies file this survey for their internal staff positions but are exempt from reporting on their temporary worker employees referred out to host companies. This leaves a significant gap in understanding patterns of discriminatory steering by staffing agencies. During the Obama administration, the EEOC identified the need to study the issue of collecting these data from temporary staffing agencies to enable the government enforcement agencies to use those data to inform enforcement.

Ensuring anti-discrimination protections for all workers is a critical component of restructuring our current enforcement system to more effectively address workplace discrimination. Gaps in legal protections leave far too many workers vulnerable and unprotected from discrimination. Changing workplace structures are only increasing the lack of accountability for employers. These gaps significantly exacerbate the power imbalance between workers and employers, allowing employers to structure their employment relationships in ways that shield them from accountability and leave many workers with no legal recourse when they face discrimination in the workplace.

Power imbalances in employer practices undermine accountability

Employers have exploited their vast information and power to set terms of employment that are favorable to their own interests and that further undermine workers’ ability to enforce their civil rights and hold employers accountable. Often buried in a stack of onboarding paperwork, “click through” online contracts, or a long employee handbook, these provisions force employees to give up federally protected rights as a condition of employment or in settlement of a claim. These terms of employment or conditions of settlement can strip employees of important workplace rights. They are also used to intimidate employees from reporting problems to enforcement agencies, initiating complaints with their employer, or sharing their experiences with other workers who may have experienced similar forms of discrimination. Legal protections for workers are essential to ensure that employers do not exploit power asymmetries to coerce workers to contract away their rights.

Forced arbitration

One of the most potent strategies employers have adopted to limit their accountability is the use of forced arbitration clauses. These clauses, often concealed as a provision in a “dispute resolution program,” now cover over 55% (60 million) of American workers.149 The clauses typically require that employees bring “any dispute” arising out of the employment relationship exclusively to the employer’s dispute resolution program, which culminates in a binding arbitration decision in a private and confidential forum.

This trend has been a major force undermining many legal rights, including civil rights protections previously afforded to workers. Research suggests that where employers impose forced arbitration, claims are suppressed, with fewer than 2% of claims expected to enter arbitration ever actually doing so.150 Arbitration claims are less likely to succeed and the damages awarded are likely to be significantly lower than those awarded in court.151 In addition, attorneys may decline to represent workers in arbitration. By enabling employers to compel employees to agree to arbitration as a condition of employment, the legal system has eroded access to justice, thereby allowing companies to shield themselves from legal accountability.152

The EEOC and other government enforcement agencies maintain authority to investigate charges and challenge a pattern or practice of discrimination regardless of whether an aggrieved party may be subject to a forced arbitration provision.153 Yet, when workers are barred from going to court, they are often deterred from reporting discrimination to the EEOC.154 If concerns are never brought to enforcement agencies, and instead confined to confidential arbitration proceedings, enforcement agencies are deprived of critical information to help identify patterns of discrimination.

Distorted judicial doctrine fueled adoption

A series of Supreme Court decisions have shifted power away from workers and propelled employers toward an increasing use of forced arbitration clauses in employment contracts.155 The court has grounded this shift in an expansive interpretation of the Federal Arbitration Act (FAA), passed in 1925. For decades the FAA was understood to apply only to commercial disputes, not employment disputes.156 The Supreme Court’s first major ruling expanding the applicability of the FAA to employment contracts was issued in 1991, when only about 2% of workers were bound by such clauses.157 This share increased to nearly 25% by the early 2000s, when another Supreme Court ruling held that arbitration can be a condition of employment.158

Lack of power to bargain over arbitration

Any notion that typical workers have the ability to bargain over whether they are subject to arbitration clauses is illusory. Contract law has many examples in which courts have identified bargaining power imbalances as a reason to invalidate a contract, such as on the basis of unconscionability. Arbitration has become a unique exception to these doctrines because of the expansive interpretation of the FAA. Even when workers are aware of their rights forfeited by forced arbitration, their attempts to bargain have been undermined by a legal doctrine favoring arbitration. In the case of Fonza Luke, in Luke v. Baptist Medical Center, the United States Court of Appeals for the Eleventh Circuit found that the employee was still bound by an arbitration clause, although she had twice refused to sign it, because she continued to work as a nurse at the hospital that employed her for nearly 30 years. The court found that even if a worker explicitly refuses to agree to arbitration, the employer can impose it.159

Repeat player bias

Another disturbing aspect of forced arbitration is “repeat player bias.” Employers generate considerable business for arbitrators, and so arbitrators have a financial incentive to maintain favorable relationships with the employers. Research shows that companies overwhelmingly prevail in arbitration.160 Unlike the public judicial system, which is funded by taxpayers, the arbitration system is funded by paying clients, who are typically large employers who have set up dispute resolution programs that culminate in binding arbitration. The employer or company has full discretion in how its arbitration program operates, with little judicial oversight for fairness. In employment cases, typically an outside dispute resolution organization administers the process, and the parties agree upon the arbitrator. Because the employer is a party to arbitration more frequently than the worker, this arrangement leads to more favorable results for the employer. The competition among dispute resolution organizations can create a “race to the bottom” for protections offered to workers. One Harvard Law School professor, testifying publicly about her experience as a consumer dispute arbitrator, perceived that she was effectively blacklisted for issuing a single decision favorable to a consumer after having issued many decisions favorable to the industry.161

Lack of judicial review and transparency

One of the most dangerous aspects of forced arbitration is that it creates a cloak of secrecy by requiring that employees keep every aspect of the arbitration confidential. For example, where an employee experiences significant harassment at work and attempts to raise the alarm by filing a complaint, a forced arbitration program would bar this claim from ever going to court, shuttle it directly into private arbitration, and effectively silence the worker. This procedure hides problems from public view and prevents workers from learning about colleagues who experience similar concerns. The current standard for judicial review of arbitral decisions is “one of the narrowest standards of judicial review in all of American jurisprudence.”162 Forced arbitration removes one of the most powerful incentives for employers to correct problems by preventing workers’ from holding companies publicly accountable. Also troubling is the fact that forced arbitration clauses typically state that they apply to “any dispute” arising out of the employment relationship. Therefore, even the enforceability of other suspect contract provisions, such as class action bans, nondisclosure agreements, and noncompete and no-rehire provisions, discussed below, are never evaluated by a court or made public, further undermining accountability.

Bans on class and collective actions

Provisions waiving workers’ rights to pursue a class action are common in arbitration agreements. Prior to AT&T v. Concepcion, courts generally found that a clause purporting to forfeit a worker’s right to join a class action was unenforceable. In Concepcion, the Supreme Court found that because the class action ban was part of an arbitration program, and the FAA precludes efforts to constrain arbitration, the class action ban was valid.163 The Supreme Court’s 2018 decision upholding the use of employment class action bans in Epic Systems164 has all but settled the question of whether the rule in Concepcion extends to employment cases and will potentially trigger an increase in class action bans in employment contracts.

The problem of class action bans affects all workers, but low-wage workers in particular. The time and expense needed to bring individual claims makes it all but impossible for low-wage workers to file individual lawsuits, whereas proceeding as a collective action allows workers to pool their resources and reduces the burden on participants.165 Further, because the financial claims of lower-wage workers are inherently smaller on an individual basis, it is particularly difficult to secure an attorney who can successfully bring such claims absent multiple plaintiffs.166

Class action bans also deprive workers of the ability to come together collectively to demonstrate the existence of widespread problems. The prospect of a class action can help keep employers vigilant in monitoring for systemic problems. Alternatively, the use of class action bans allows employers to largely insulate themselves from class cases, thus removing one important tool workers can deploy for accountability.

Nondisclosure agreements

The use of nondisclosure agreements (NDAs) has been a long-standing practice as both a condition of employment and in settlements of a dispute. A 2017 study found that nearly one in three workers is bound by an NDA.167 NDAs are particularly common in the tech industry, where 65% of workers have them with their employers, and 38% of those workers say that their NDA prevents them from speaking out about “injustices in the workplace.”168 Although certain types of NDAs can serve a legitimate business purpose, such as prohibiting the disclosure of trade secrets or protecting employee privacy, there is also a public interest in learning about discriminatory conduct. This is particularly true for repeat offenders such as Harvey Weinstein, Roger Ailes, and Bill O’Reilly, who attempt to shield 169 themselves from accountability after multiple credible accusations of sexual assault and harassment.

In reality, most workers do not have the ability to bargain regarding NDAs since employers have the power to condition terms that may be vital to workers, such as a severance payment or a positive reference, on a promise to not speak out about their experience. Even if years pass, and victims find themselves in better positions professionally or financially to speak out, most are afraid to violate the NDA because of often severe financial penalties. Thus, the power of the employer to maintain a victim’s silence may extend in perpetuity. Troublingly, courts have limited oversight over these matters. Although courts have the power to void confidentiality agreements in civil cases in which disclosure benefits the public interest,170 NDAs are often covered by an arbitration agreement, and so disputes about the NDA must go before a private arbitrator rather than a public court. Given that an NDA may implicate important public interests, workers should have a choice as to whether to pursue their claims in court or in arbitration.

No-rehire and noncompete clauses

Two additional contract mechanisms that have become common— no-rehire clauses and noncompete clauses—have the effect of deterring worker complaints and exacerbating the power imbalance between workers and employers. Employers often include no-rehire clauses in settlement agreements to bar a departing worker’s ability to apply for a position with the employer in the future. In addition, employers have increasingly included noncompete clauses in employment agreements that restrict an employee’s ability to work for rival companies in the same industry after they leave a job. Because these clauses limit employment opportunities, particularly in “one company towns” or in industries that are heavily dominated by one or two large companies, they can intimidate workers into staying at companies in which they may be facing discrimination or other workplace problems. If workers know that any settlement will prevent them from working for the same company again or that they will be foreclosed from employment by competitors, they may be deterred from raising concerns of discrimination.

As with forced arbitration agreements and NDAs, workers rarely have the power to limit the scope of no-rehire clauses and noncompetes. This is particularly the case with the latter. Nearly all workers who are asked to sign a noncompete agreement sign it, and only one in 10 workers seek legal counsel to review the contract.171 Also, the timing of noncompete agreements decreases the likelihood of negotiation: 70% of workers with noncompete agreements were asked to sign only after receiving their job offer.172

An issue of growing concern is the increased use by employers of noncompete agreements for low-wage workers.173 One study found that 29% of responding employers where the average hourly wage was less than $13.00 use noncompete agreements for all their workers.174 For example, one sandwich chain settled litigation brought by two state attorneys general in 2016 challenging their practice of requiring low-level employees to sign contracts with noncompetes that prohibited them from taking jobs at competitor sandwich businesses within a two- to three-mile radius of any of their franchises for a period of two years.175 Courts can and do strike down noncompete agreements that are unnecessarily restrictive,176 but low-wage workers typically cannot afford to seek legal advice and have little bargaining power to negotiate these terms.

Ultimately, these nonnegotiable contracts—arbitration programs, class action bans, NDAs, noncompetes, and no-rehire provisions, often used together, work to undermine workers’ rights and bargaining power, reducing their freedom to leave a job or access the courts. The Supreme Court’s failure to acknowledge the inherent power imbalance between workers and employers in interpreting the FAA to have supremacy over other federal laws makes arbitration programs a formidable mechanism to bar workers from exercising their federally protected rights.

Legislation limiting NDAs, no-rehire provisions, and forced arbitration clauses

To address problematic employer practices, such as forced arbitration and NDAs, that have undermined workers’ rights, new legal protections are needed to ensure that employers cannot use their power to force workers to relinquish critical rights as a condition of employment or the resolution of disputes. Given the FAA’s broad preemption of state and local efforts to curb these practices, federal reform is needed to pass a comprehensive bill to amend the FAA and clarify its scope. The Forced Arbitration Injustice Repeal (FAIR) Act177 is proposed legislation that would prohibit pre-dispute forced arbitration and class action bans primarily by amending the FAA. A number of states, including New Jersey, New York, California, Tennessee, and Washington, have passed legislation in recent years restricting the use of nondisclosure agreements in some types of employment situations.178 Vermont was the first state to address no-rehire provisions when it passed legislation in 2018.179

Legal standards and doctrines fail to confront information and power asymmetries in the employment relationship

Even if workers are able to navigate the complaint process and are not bound by a forced arbitration clause, workers who file lawsuits face substantial barriers in succeeding on their claims in court due to onerous legal standards such as heightened proof requirements for filing a complaint, surviving summary judgment, certifying a class, and proving a claim. These rules create enormous evidentiary hurdles for workers and disregard the reality of extreme information asymmetry where workers often lack access to the evidence that courts require to support employment discrimination claims.180 As a result, employment discrimination plaintiffs face an extremely low success rate in pretrial adjudications: During the period from 1979 to 2006, employment discrimination plaintiffs won fewer than 4% of pretrial adjudications in federal court, while other plaintiffs won 21%.181

Pleading standard

Employment discrimination plaintiffs face hurdles at the outset of a case in defeating employers’ motions to dismiss their complaints, due in part to two decisions by the Supreme Court in the late 2000s that heightened pleading standards for complaints. Prior to these decisions, a defendant could succeed on a motion to dismiss based on a failure to state a claim only if “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”182 This standard was consistent with the Federal Rules of Civil Procedure, which require that a complaint set forth “a short and plain statement of the claim showing that the pleader is entitled to relief.”183 In Bell Atlantic Corp. v. Twombly and Aschcroft v. lqbal, the Supreme Court, while claiming to be merely interpreting the requirements under Rule 8a(2), held that a complaint must set forth allegations sufficient to make the appearance of a violation “plausible on its face” in order to withstand a motion to dismiss the complaint.184 The court further stated that “naked assertion[s] devoid of ‘further factual enhancement,’” were insufficient.185 In both decisions, the court appeared to be most concerned with the burden of discovery and litigation on defendants.186

The heightened pleading standard presents a significant hurdle in employment discrimination cases, given the information asymmetries discussed above. In discrimination cases, plaintiffs generally must allege sufficient facts to plausibly support that the plaintiff is a member of a protected class, was qualified, and suffered an adverse employment action, and that the employer had a discriminatory motivation.187 Very often, plaintiffs are unable to access critical information regarding their claims until the discovery process, where employers are required to provide information. Thus, a dismissal of their complaints for a lack of sufficient factual allegations at the outset prevents them from obtaining the necessary evidence in the discovery process. For this reason, many workers do not even file a lawsuit, because they do not have sufficient information to survive a motion to dismiss.188

Summary judgment standard

Plaintiffs who survive the motion to dismiss stage face an even greater hurdle at the summary judgment stage before a full trial. The judge makes the determination as to whether the case goes to the jury, and in order to defeat an employer’s motion for summary judgment and allow the case to go before a jury, an employee must show that a genuine dispute as to a material fact exists, based on the discovery record and affidavits. In employment discrimination cases, summary judgment motions are the “tool of choice” for employers to defeat workers’ claims.189 Such motions are extremely difficult for employees to defeat, because courts have established legal standards that place a high burden of proof on employees. Specifically, if an employer alleges a nondiscriminatory reason for its action, the plaintiff then has to present enough evidence to show that the reason put forth by the employer is a “pretext” or a “coverup for a racial discriminatory reason.”190 Often, plaintiffs’ claims are dismissed at this stage. The employer’s burden is minimal—once the employer merely articulates a nondiscriminatory business reason for its action, the employee then bears the burden of providing sufficient evidence to show that the employer’s reason is false or should not be believed. Thus, courts have essentially converted the statutory inquiry of disparate treatment discrimination into an inquiry on whether the plaintiff has met his or her burden to disprove a reason strategically asserted by the employer,191 a standard that heavily favors employers.

Demonstrating that an employer’s reason is pretextual places an enormous evidentiary burden on plaintiffs in employment discrimination cases. Employers are unlikely to express discriminatory intent explicitly, so plaintiffs rarely have direct evidence of discriminatory intent and must instead rely on circumstantial evidence, which is difficult for plaintiffs to obtain given the informational asymmetries described above. Moreover, employers are not required to provide a reason for their action until the summary judgment stage, so they are able to exploit information asymmetries to ensure success on their motion for summary judgment:

[B]y finding out through admissions in discovery what a plaintiff does not know, the employer can orchestrate the factual mosaic so as to make the employer’s legitimate business decision to be undisputed by positing it based on what plaintiff admits it does not know—and what the employer can then craft knowingly without opposition—thereby preventing a plaintiff from mounting a pretext case[.]192

The “intent” standard

One of the most fundamental hurdles for workers is the intent standard that courts have created in disparate treatment cases. This standard essentially requires victims of discrimination to show that the person who fired or failed to hire them was motivated by discriminatory animus, ill will, or malice.193 In race and sex discrimination cases, it leads courts down a rabbit hole in search of evidence of racist or sexist comments or even a pattern of racist or sexist conduct. But the language of Title VII does not impose an intent standard. Title VII prohibits an employer from discriminating against an employee “because of” the employee’s race, sex, or other protected status.194 The statute does not speak to “intent” or the particular mental state or motivation of the employer.

This judge-made intent standard exacerbates the information asymmetry between employers and employees by creating an often-insurmountable hurdle for plaintiffs to prove a specific state of mind of their supervisor or employer that is infected with bias. It also ignores the reality of contemporary discrimination in the workplace, which often involves more subtle forms of implicit bias or stereotyping and structural forms of discrimination, rather than overt and explicit discrimination.195 Legal scholars have long criticized this judicially created intent standard, arguing that the “because of” language in Title VII does not require proof of animus or specific “intent” and instead requires a showing of a causal link between the adverse employment action and the employee’s membership in a protected class.196 Such a standard is not only more consistent with the plain language of Title VII, but also would better serve the purpose of the law to prevent discrimination.

The Supreme Court’s recent landmark decision in Bostock v. Clayton County, holding that Title VII prohibits employment discrimination on the basis of sexual orientation or transgender status, provides a promising opening to rethink the intent standard.197 In an opinion authored by Justice Neil Gorsuch, the court methodically explained that Title VII’s language “to discriminate because of” establishes a “but-for causation” standard in which liability is “established whenever a particular outcome would not have happened ‘but for’ the purported cause.”198 The court described but-for causation as a “sweeping standard” that permits “multiple but-for causes.”199 The court held that “[i]f the employer intentionally relies in part on an individual employee’s sex when deciding to discharge the employee—put differently, if changing the employee’s sex would have yielded a different choice by the employer—a statutory violation has occurred.”200

The Bostock decision provides an opportunity to reconsider the application of a causation standard that is consistent with the plain language of Title VII.201 Bostock recognizes that an unlawful action is “because of” sex when it made a difference in the outcome—without requiring evidence of specific animus to establish a violation of the law. Courts should focus on the outcome: whether an employee suffered adverse treatment “because of” a protected basis, which could be demonstrated through data showing a disparity based on a protected basis and evidence of policies that caused the disparity. The statutory language and the court’s interpretation of the statute focus on the act, not the actor’s specific mental state that drove the action. While evidence of the employer’s animus could be offered to support causation, it is not necessary, because the employee only needs to show that the employer treated the employee differently based on a protected basis. The court construed the meaning of “discriminate against a person” as “intentionally treat[ing] a person worse because of sex.”202 In this context, “intentionally” does not require animus or a bias, but an action that harms someone because of sex or another covered basis under Title VII.203 Employers should be responsible when their policies harm employees “because of” a protected basis. This would shift responsibility for Title VII where it should be—on employers to conduct pay audits and analyze data on hiring and promotions to prevent discrimination, rather than taking the approach of avoiding knowledge of problems and arguing “good intentions,” despite a failure to proactively identify discriminatory practices.

Judicial doctrines such as “stray remarks” and “business judgment rule”

Courts have effectively heightened the burden of proof for plaintiffs through a number of judicially created tools that essentially convert factual issues that should be decided by a jury at trial into questions of law that courts can use to dispose of cases at summary judgment. For example, courts have found that evidence of discriminatory statements made by supervisors and other employees, particularly those that are made on an “infrequent basis” or by non-decision makers,204 are “stray remarks” that should not be considered as evidence of discrimination to defeat summary judgment motions.205

A frequent criticism of the “stray remarks” doctrine is that judges use it to improperly exclude evidence, particularly at the summary judgment stage. In addition, judges often use it to make essentially factual findings that should be left to the jury.206 For instance, recently in Eaglin v. Texas Children’s Hospital,207 the Fifth Circuit Court of Appeals upheld the district court’s grant of summary judgment on the plaintiff’s employment discrimination claims, finding that her supervisors’ conduct towards her, including “flipp[ing]” her hair and asking how much she paid for it, asking the plaintiff if she ate watermelon and fried chicken on holidays, referring to plaintiff and a co-worker as the “black girls” and questioning whether it was professional to wear braids in the medical field, and making comments indicating that someone in the hospital’s administration wanted to replace the plaintiff with a Hispanic employee, constituted “stray remarks” that were insufficient to constitute direct evidence of intentional discrimination.

A number of federal courts have also adopted a “business judgment rule” in employment discrimination cases under which they defer to business management decisions unless employers act in a manner that cannot be attributed to any rational business purpose, even if the decision is unreasonable or unwise. The United States Court of Appeals for the First Circuit has emphasized that courts “do not assume the role of a ‘super personnel department,’ assessing the merits or even the rationality of employers’ nondiscriminatory business decisions.”208 The problem with the business judgment rule is that courts have relied on it to limit the type of evidence plaintiffs can raise to establish pretext and to prevent a pretext case from going to a jury by deferring to the employer, even when the stated reason is implausible. This practice essentially undermines plaintiffs’ ability to present evidence to show that the employer’s stated reason is not worthy of belief and simply a pretext for discrimination. Moreover, this doctrine also denies the plaintiff the benefit of all favorable inferences, which a court must grant a nonmoving party when deciding a summary judgment motion.209

Class certification standards

Heightened standards for employees to bring class actions have also made it harder for workers to band together to share resources and challenge systemic problems. In 2011, the Supreme Court in Wal-Mart v. Dukes210 held that a class of nearly 1.5 million female employees could not be certified in a sex discrimination case against Wal-Mart, because the employees had failed to demonstrate a common issue of law or fact that would satisfy the “commonality” requirement of Rule 23(a), the federal procedural rule governing class actions.211 The court held that because the inquiry under Title VII focuses on the reason for an employment decision, plaintiffs needed to show “glue” holding together the reasons for all of the class members’ employment decisions. The court further found that because Wal-Mart had a policy of allowing discretion by local managers over employment decisions, plaintiffs’ statistical and anecdotal evidence was insufficient to show that Wal-Mart had a general policy of discrimination or a common mode of exercising managerial discretion. The court also found that the plaintiffs’ claims for backpay were not properly certified under Rule 23(b)(2) and needed to meet the more stringent and onerous requirements of Rule 23(b)(3).212

While courts continue to certify employment discrimination cases,213 the Wal-Mart decision placed additional hurdles for employees seeking to challenge systemic employment discrimination.214 In particular, plaintiffs challenging employer policies involving decentralized, discretionary decision-making have faced difficulties in obtaining class certification.215 Moreover, even in cases where plaintiffs are successful in obtaining class certification, employer defendants continue to aggressively challenge certification motions on the basis of Wal-Mart.216 In this way, Wal-Mart has allowed employers to drag out lawsuits through excessive litigation over class certification. By further delaying the progress of class action lawsuits, which already take years to resolve, Wal-Mart has served to disincentivize plaintiffs and their lawyers from pursuing employment discrimination class actions, particularly those cases where it may be difficult to obtain certification. Indeed, research suggests that fewer employment discrimination class action lawsuits are being filed after Wal-Mart.217

Attacks on Title VII plaintiffs’ ability to sue on a class-wide basis further increase the power imbalance between employees and employers in enforcing Title VII. Class actions play a critical role in ensuring Title VII enforcement because they enable employees to identify and expose widespread discriminatory conduct that is much easier for an employer to hide and justify when it is challenged at an individual level.218 Class actions also allow individual employees with small claims and limited resources to pool their resources and share risks and burdens in order to pursue a lawsuit, which they would be unlikely able to do if they had to bring it individually. Class actions also allow for remedies and injunctive relief that are much broader and more likely to ensure systemic change than relief obtained in individual cases.219 Moreover, a finding of class-wide liability in a case alleging a pattern or practice of employment discrimination shifts the burden of proof in favor of the plaintiff, creating a rebuttable presumption that the employer discriminated against each class member.220 By creating more hurdles to class certification in employment discrimination cases, courts have made it only more difficult for employment discrimination plaintiffs in vindicating their claims.

Challenging harmful judicial doctrines

As discussed above, the recent Bostock decision promisingly opens the door for courts to apply a standard that focuses on causation, based on the “because of” language in Title VII, rather than applying a disparate treatment “intent” standard that has often been interpreted to require evidence of animus by an employer—a requirement that poses an often insurmountable evidentiary hurdle for plaintiffs. Applying a standard that focuses on causation would also eliminate the problem of inconsistent application by courts of the intent standard and the numerous judicially created ancillary doctrines that have forced plaintiffs to try to fit their claims into judicially created legal frameworks, rather than Title VII’s prohibition of adverse treatment based on protected bases.221

Judicial skepticism and lack of diversity

Workers who file lawsuits face the significant hurdle of judicial skepticism toward employment discrimination claims. Compared to the population it serves, the federal judiciary lacks diversity and consists disproportionately of those who have spent careers representing corporate interests. Plaintiffs in federal employment discrimination cases have long experienced extremely low success rates, much lower than plaintiffs in other types of civil lawsuits. Between 1979 and 2006, federal plaintiffs won only 15% of employment discrimination cases compared to a 51% win rate in other civil cases.222 In cases that went to trial before a judge, plaintiffs in federal employment discrimination cases won less than 20% of the time, whereas plaintiffs in all other civil cases won over 45% of the time.223 Plaintiffs in employment discrimination cases also do not fare well on appeal, with federal appellate courts reversing plaintiffs’ wins far more often than they reverse defendants’ wins in trial courts.224

Judicial skepticism toward employment discrimination cases is a major factor in the low success rates of employment discrimination plaintiffs in federal courts. Courts’ attitudes are influenced by the widespread misperception that employment discrimination cases are easy to win and that the high volume of employment discrimination cases reflects an excessive number of plaintiff nuisance suits.225 Similarly, the low success rate for plaintiffs on appeal is likely due to an “anti-plaintiff effect” in which appellate judges perceive—or more accurately, misperceive—trial courts to be pro-plaintiff and as a result show favoritism for defendants.226

Judges are influenced by their experiences and can develop various biases based on the nature of the claim.227 In race discrimination cases, which are generally the most difficult cases to win,228 judges frequently exhibit the belief that the claims generally have no merit.229 Judges are often reluctant to infer racial discrimination on the basis of circumstantial evidence, even though courts have long recognized that racial discrimination is subtle and can be inferred from circumstantial evidence.230 Judges’ views have likely been shaped by broader perceptions, particularly among whites,231 that racism in contemporary society has significantly decreased.232 Recent polls have shown dramatic shifts in attitudes concerning systemic racism in response to the COVID-19 crisis and protests against police killings of Black Americans, with the majority of Americans saying that racism and race relations are major problems facing our country.233 This moment presents an important opportunity to re-evaluate legal doctrines and judicial precedents with a deeper understanding of systemic forms of discrimination.

Judges’ decisions are also influenced by the reality that the federal judiciary is not professionally diverse, drawing disproportionately from lawyers whose prior legal experiences are as corporate lawyers or criminal prosecutors who have served large institutional actors, rather than individuals.234 Few federal judges possess any legal experience representing plaintiffs in labor, employment, or civil rights cases, and few have substantial legal experience working for nonprofit organizations, organizations or government agencies that enforce civil rights, or organizations that represent low-income clients.235

A lack of racial and gender diversity on the federal bench also impacts outcomes in employment discrimination cases. As of August 2019, 80% of sitting federal judges were white and 73% were male.236 Studies have found that plaintiffs in workplace harassment cases are more likely to succeed on their claims if they appear before a judge of the same race as themselves, as “[j]udges of each racial group can more readily identify with injustices that happen to their racial group.”237 Plaintiffs who claim racial workplace harassment are 2.9 times more likely to succeed before Black judges than before judges belonging to other races and ethnicities.238 Female plaintiffs with workplace sex discrimination claims are also much more likely to have positive outcomes before female judges.239 A recent study found that the presence of even one female judge on a three-judge federal appellate panel influences male co-panelists to be more likely to vote for a female plaintiff in Title VII sex discrimination cases.240 Another study found that judges with daughters are more likely to rule in favor of women on gender claims than judges with only sons,241 suggesting that judges’ personal experiences and relationships can impact decision-making.

Given the critical role that courts play in enforcing workers’ civil rights, much more work needs to be done to ensure a fair and diverse judiciary, including the appointment of federal judges with more legal experience representing workers and litigating civil rights cases.

Conclusion

As workers come together to demand greater workplace equity, and America’s institutions make powerful statements in support of Black Lives Matter and racial justice, we have reached a pivotal moment for revitalizing the nation’s anti-discrimination laws and enforcement systems. By rebalancing the extraordinary power disparities that have contributed to the under-enforcement of our civil rights laws and reforming decades of legal doctrines and employer practices that minimize employer liability, we can rebuild our enforcement systems to empower workers to stand up and confront civil rights violations in their workplaces. This rebuilding requires strong legal protections for workers with meaningful opportunities to enforce their rights and obtain remedies for harm. For employers, our enforcement structures should create accountability mechanisms and incentives to identify and address the root causes of discrimination within their workplaces and to prevent discrimination before it harms workers. To do this, laws should require greater transparency of employment decisions such as hiring and pay setting, as well as disclosures on the demographics of each workplace to promote public awareness and create momentum to evaluate and eliminate bias from current employment processes. Our nation must also invest in greater enforcement resources for government agencies as well as worker organizations to balance the vast resource and information asymmetries between workers and employers.

About the authors

Jenny R. Yang served as commissioner, vice-chair, and chair of the U.S. Equal Employment Opportunity Commission from 2013 to 2018. Under her leadership, the commission launched the Select Task Force on the Study of Harassment in the Workplace. Ms. Yang led efforts to tackle systemic discrimination, including enhancing the EEOC’s annual data collection to include employer reporting of pay data. After her service on the EEOC, as a senior fellow at the Urban Institute, Ms. Yang worked to revitalize anti-discrimination laws and dismantle systemic barriers to opportunity. In addition, as a strategic partner with Working IDEAL, Yang assisted employers in comprehensive harassment and anti-discrimination prevention efforts; independent investigations; and the design of employment practices to promote diversity, inclusion, and equality of opportunity. Prior to joining the EEOC, Ms. Yang spent a decade representing workers in civil rights actions nationwide as a partner at Cohen Milstein Sellers & Toll PLLC. From 1998 to 2003, she served as a senior trial attorney with the U.S. Department of Justice, Civil Rights Division, Employment Litigation Section.

Jane Liu has litigated public interest and civil rights cases, including employment discrimination cases, for over 13 years. Currently, as senior litigation attorney at the Young Center for Immigrant Children’s Rights, she advocates for the rights and best interests of immigrant children. Prior to joining the Young Center, she was the legal director of the National Asian Pacific American Women’s Forum (NAPAWF), where she established the nation’s first legal program dedicated to advancing the rights of Asian American and Pacific Islander (AAPI) women and girls. At NAPAWF, Ms. Liu spearheaded advocacy on the issue of workplace sexual harassment of AAPI women and provided legal services to AAPI women facing employment discrimination. In 2019, Ms. Liu testified before the U.S. Commission on Civil Rights on the issue of workplace sexual harassment in federal government workspaces and its impact on AAPI workers. Previously, Ms. Liu was a partner at Terris, Pravlik & Millian, LLP, a public interest law firm in Washington D.C., where she litigated public interest and civil rights class actions. She began her legal career as a public defender in Boston; she graduated from the University of Pennsylvania Law School and Princeton University.

Acknowledgments

The authors thank Cathy Ventrell-Monsees, Peach Soltis, and Jamil Irvin for their contributions to this paper.

Endnotes

1. Jacob Jarvis, “U.S. Unemployment Rate Falls Despite Pandemic—But Not for Blacks and Asians,” Newsweek, June 5, 2020; Keith M. Phaneuf, “New Analysis: Pandemic Unemployment Hit Minorities, Young Workers Hardest,” Connecticut Mirror, June 1, 2020; Tracy Jan and Scott Clement, “Hispanics Are Almost Twice as Likely as Whites to Have Lost Their Jobs Amid Pandemic, Poll Finds,” Washington Post, May 6, 2020.

2. Elise Gould and Valerie Wilson, Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus—Racism and Economic Inequality, Economic Policy Institute, June 2020; Steven Brown, “How COVID-19 Is Affecting Black and Latino Families’ Employment and Financial Well-Being,” Urban Wire (Urban Institute blog), May 6, 2020.

3. Erin Donaghue, “2,120 Hate Incidents Against Asian Americans Reported During Coronavirus Pandemic,” CBS News, July 2, 2020; Neil G. Ruiz, Juliana Menasce Horowitz, and Christine Tamir, “Many Black and Asian Americans Say They Have Experienced Discrimination Amid the COVID-19 Outbreak,” Pew Research Center, July 1, 2020.

4. Jonelle Marte, “Gap in U.S. Black and White Unemployment Rates Is Widest in Five Years,” Reuters, July 2, 2020.

5. Erin Mulvaney, “Pandemic Exposes Ongoing Job Challenges for Disabled Workers,” Bloomberg Law, July 24, 2020.

6. Alisha Haridasani Gupta, “Why Some Women Call This Recession a ‘Shecession,’” New York Times, May 9, 2020; Alicia Sasser Modestino, “Coronavirus Child-Care Crisis Will Set Women Back a Generation,” Washington Post, July 29, 2020.

7. See, e.g., Malea Martin, “Rancho Laguna Farms Workers Allegedly Faced Retaliation for Striking,” Santa Maria Sun, June 3, 2020; Suzy Khimm, “The Forgotten Front Line: Nursing Home Workers Say They Face Retaliation for Reporting COVID-19 Risks,” NBC News, May 19, 2020.

8. National Employment Law Project, Silenced About COVID-19 in the Workplace, June 2020.

9. Carly McCann, Donald Tomaskovic-Devey, and M.V. Lee Badgett, Employer’s Responses to Sexual Harassment, University of Massachusetts–Amherst Center for Employment Equity, December 2018.

10. Marianne Bertrand and Sendhil Mullainathan, “Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination,” American Economic Review 94, no. 4 (September 2004): 991-1013 (fictitious résumés with white-sounding names received 50% more callbacks than those with Black-sounding names); see also Sonia Kang, Katy DeCellesa, Sora Jun, and András L. Tilcsika, “Whitened Resumes: Race and Self-Presentation in the Labor Market,” Administrative Science Quarterly 61, no. 3 (September 2016): 469-502; Katherine L. Milkman, Modupe Akinola, and Dolly Chugh, “What Happens Before? A Field Experiment Exploring How Pay and Representation Differentially Shape Bias on the Pathway into Organizations,” Journal of Applied Psychology 100, no. 6 (2015): 1678-1712.

11. McKinsey & Company and LeanIn.Org, Women in the Workplace 2019, 2019.

12. Pooja Jain-Link and Julia Taylor Kennedy, “Being Black in Corporate America,” Coqual, 2019.

13. Chai R. Feldblum and Victoria A. Lipnic, Report of Co-Chairs of Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission, June 2016; Margaret Shih, Maia J. Young, and Amy Bucher, “Working to Reduce the Effects of Discrimination: Identity Management Strategies in Organizations,” American Psychologist 68, no. 3 (April 2013): 145–157.

14. Dnika J. Travis and Jennifer Thorpe-Moscon, “Day-to-Day Experiences of Emotional Tax Among Women and Men of Color in the Workplace,” Catalyst, 2018.

15. Ruqaiijah Yearby, “The Impact of Structural Racism in Employment and Wages on Minority Women’s Health,” American Bar Association Human Rights Magazine.

16. Shelly Steward, “Imagining a Workplace Safety Net Rooted in Equity” (blog post), Aspen Institute website, June 12, 2020.

17. Kim A. Weeden, “State of the Union: Occupational Segregation,” Pathways, 2019.

18. Frank Dobbin and Alexandra Kalev, “Making Discrimination and Harassment Complaint Systems Better,” in What Works: Evidence-Based Ideas to Increase Diversity, Equity, and Inclusion in the Workplace.

19. Lincoln Quillian, Devah Pager, Ole Hexel, and Arnfinn H. Midtbøen, “Meta-Analysis of Field Experiments Shows No Change in Racial Discrimination in Hiring Over Time,” Proceedings of the National Academy of Sciences 114, no. 41 (October 10, 2017): 10870-875.

20. Rupa Banerjee, Jeffrey G. Reitz, and Phil Oreopoulos, “Do Large Employers Treat Racial Minorities More Fairly? An Analysis of Canadian Field Experiment Data,” Canadian Public Policy 44, no. 1 (2018): 1-12.

21. Sonia Kang, Katy DeCellesa, András Tilcsika, and Sora Jun, “Whitened Résumés: Race and Self-Presentation in the Labor Market,” Administrative Science Quarterly 61, no. 3 (March 17, 2016): 469-502. See also Mason Ameri et al., “The Disability Employment Puzzle: A Field Experiment on Employer Hiring Behavior,” ILR Review 71, no. 2 (June 23, 2017), 329-64 (résumés that disclosed a disability that would not impact job productivity 26% less likely to receive an employer response than those that did not mention a disability).

22. National Public Radio, Robert Wood Johnson Foundation, and Harvard T.H. Chan School of Public Health, Discrimination in America: Final Summary, January 2018.

23. Tristin K. Green, “Work Culture and Discrimination,” California Law Review 93, no. 3 (2005): 623-84.

24. Melissa Hart, “Subjective Decisionmaking and Unconscious Discrimination,” Alabama Law Review 56, no. 3 (2005): 741-91. See also Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 990 (1988) (discussing “the problem of subconscious stereotypes and prejudices” when employment decisions left to discretion of supervisors; “facially neutral practice, adopted without discriminatory intent, may have effects that are indistinguishable from intentionally discriminatory practices”).

25. Wharton School, “Is Cultural Fit a Qualification for Hiring or a Disguise for Bias?” Knowledge@Wharton website, 2015.

26. Jamillah B. Williams, “Accountability as a Debiasing Strategy: Testing the Effect of Racial Diversity in Employment Committees,” Iowa Law Review 103, no. 4 (2018): 1593-638.

27. Restaurant Opportunities Center United et al., The Great Service Divide: Occupational Segregation & Inequality in the US Restaurant Industry, October 22, 2014.

28. Restaurant Opportunities Center United et al. 2014.

29. PayScale, The Impact of Job Referrals: Effects on Pay, Engagement, Diversity.

30. Devah Pager and Bruce Western, “Identifying Discrimination at Work: The Use of Field Experiments,” Journal of Social Issues 68, no. 2 (June 2012): 221–37.

31. Drew Harwell, “A Face-Scanning Algorithm Increasingly Decides Whether You Deserve the Job,” Washington Post, November 6, 2019; HireVue, “How Delta Disrupts Talent Acquisition With Assessments” (web page), accessed August 3, 2020.

32. Jeffrey Dastin, Amazon Scraps Secret AI Recruiting Tool That Show Bias Against Women, Reuters, October 9 2018.

33. American Civil Liberties Union, “Summary of Settlements Between Civil Rights Advocates and Facebook” (web page), accessed July 7, 2020.

34. Manish Raghavan and Solon Barocas, Challenges for Mitigating Bias in Algorithmic Hiring, Brookings Institution, December 6, 2019.

35. Jocelyn Frye and Kaitlin Holmes, “Wage Discrimination: Behind the Numbers,” Center for American Progress, July 5, 2017.

36. National Public Radio, Robert Wood Johnson Foundation, and Harvard T.H. Chan School of Public Health, Discrimination in America: Final Summary, January 2018.

37. David J. Maume Jr., “Wage Discrimination over the Life Course: A Comparison of Explanations,” Social Problems 51, no. 4, (Nov. 2004): 505–27.

38. Jeff Hayes, “Private Sector Workers Lack Pay Transparency: Pay Secrecy May Reduce Women’s Bargaining Power and Contribute to Gender Wage Gap,” Institute for Women’s Policy Research, December 20, 2017.

39. The NLRA does not cover all employees. For instance, it does not protect supervisors, managers, agricultural workers, and employees of rail and air carriers.

40. Hired, The Weight of Expectations: The 2020 State of Wage Inequality in the Workplace, 2020; Yoni Blumberg, “Race Doesn’t Impact How Job-Seekers Negotiate Salaries—But It Does Affect How Much Money They Get,” CNBC, November 13, 2018.

41. Hired 2020.

42. Jenny R. Yang, “Paycheck Fairness Act (H.R. 7): Equal Pay for Equal Work,” testimony before the U.S. House Committee on Education and the Workforce, Civil Rights and Human Services Subcommittee and Subcommittee on Workforce Protections, Washington, D.C., February 13, 2019; see also Hannah Riley Bowles, Linda Babcock, and Lei Lai, “Social Incentives for Gender Differences in the Propensity to Initiate Negotiations: Sometimes It Does Hurt to Ask,” Organizational Behavior and Human Decision Processes 103, no. 1 (2007): 84-103; Morela Hernandez et al., “Bargaining While Black: The Role of Race in Salary Negotiations,” Journal of Applied Psychology 104, no. 4 (2019): 581–92.

43. Jena McGregor, “An Obama-Era Rule to Collect Worker Pay Data Is Headed for the Chopping Block,” Washington Post, September 13, 2019.

44. Notice of Information Collection—Request for New Control Number for a Currently Approved Collection: Employer Information Report (EEO–1) Component 1; Revision of Existing Approval for EEO–1 Component 2, 84 Fed. Reg. 177, 48,138 (Sept. 12, 2019).

45. Abhishek Parajuli, “The Punishment Gap: How Workplace Mistakes Hurt Women and Minorities Most” (blog post), World Economic Forum website, June 18, 2019.

46. Mark Egan, Gregor Matvos, and Amit Seru, “When Harry Fired Sally: The Double Standard in Punishing Misconduct,” Harvard Business School Working Paper No. 19-047, August 2018.

47. Gillian B. White, “Black Workers Really Do Need to Be Twice as Good,” Atlantic, October 7, 2015; Ashleigh Shelby Rosette and Robert W. Livingston, “Failure Is Not an Option for Black Women: Effects of Organizational Performance on Leaders with Single Versus Dual-Subordinate Identities,” Journal of Experimental Social Psychology 48, no. 5 (2012): 1162-7.

48. Alicia Grandey, “Black Employees in the Service Industry Pay an Emotional Tax at Work,” The Conversation, April 30, 2018.

49. Anikó Hannák et al., “Bias in Online Freelance Marketplaces: Evidence from Taskrabbit and Fiverr,” Proceedings of the 2017 Association for Computing Machinery Conference on Computer Supported Cooperative Work and Social Computing, Portland, Ore., February 2017.

50. U.S. Equal Employment Opportunity Commission, “Charge Statistics (Charges Filed with EEOC) FY 1997 Through FY 2019” (web page), accessed July 7, 2020.

51. Carly McCann, Donald Tomaskovic-Devey, and M.V. Lee Badgett, Employer’s Responses to Sexual Harassment, University of Massachusetts–Amherst Center for Employment Equity, December 2018.

52. McCann, Tomaskovic-Devey, and Badgett 2018.

53. Chai R. Feldblum and Victoria A. Lipnic, Report of Co-Chairs of Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission, June 2016.

54. Cheryl R. Kaiser and Carol T. Miller, “Derogating the Victim: The Interpersonal Consequences of Blaming Events on Discrimination,” Group Processes & Intergroup Relations 6, no. 3 (2003): 227–37.

55. L. Camille Hibert, “Why Don’t ‘Reasonable Women’ Complain About Sexual Harassment?” Indiana Law Journal 82, no. 3 (2007): 711-42.

56. Hibert 2007 (targets of sexual harassment are frequently blamed for sexual harassment, with men being more likely than women to attribute blame to a female victim of harassment).

57. Parkins v. Civil Constructors of Ill., Inc., 163 F.3d 1027 (7th Cir. 1998); Drake v. Minnesota Mining & Mfg. Co., 134 F. 3d 878 (7th Cir. 1998). But see Knox v. Indiana, 93 F.3d 1327 (7th Cir. 1996) (allegations that the plaintiff’s co-workers retaliated against her by making insults and demeaning statements about her and letting it be known that they intended to make her life “hell” and “to get her” sufficed as adverse employment actions).

58. Carly McCann, Donald Tomaskovic-Devey, and M.V. Lee Badgett, Employer’s Responses to Sexual Harassment, University of Massachusetts–Amherst Center for Employment Equity, December 2018.

59. Chai R. Feldblum and Victoria A. Lipnic, Report of Co-Chairs of Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission, June 2016; Alieza Durana et al., Sexual Harassment: A Severe and Pervasive Problem, New America, September 2018; Women’s Initiative, “Gender Matters,” Center for American Progress website, August 2018.

60. National Women’s Law Center, What Works at Work: Promising Practices to Prevent and Respond to Sexual Harassment in Low-Paid Jobs, May 5, 2020; Feldblum and Lipnic, 2016.

61. Marianne Cooper, “The 3 Things That Make Organizations More Prone to Sexual Harassment,” Atlantic, November 27, 2017.

62. Chai R. Feldblum and Victoria A. Lipnic, Report of Co-Chairs of Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission, June 2016.

63. Feldblum and Lipnic 2016.

64. Laurie Ruettimann, “Why HR Is Powerless to Effectively Handle Sexual Harassment Claims,” Vox, October 3, 2019.

65. Frank Dobbin and Alexandra Kalev, “Making Discrimination and Harassment Complaint Systems Better,” in What Works: Evidence-Based Ideas to Increase Diversity, Equity, and Inclusion in the Workplace, 2020.

66. Frank Dobbin and Alexandra Kalev, “Why Sexual Harassment Programs Backfire and What to Do About It,” Harvard Business Review, May-June 2020.

67. Frank Dobbin and Alexandra Kalev, “Making Discrimination and Harassment Complaint Systems Better,” in What Works: Evidence-Based Ideas to Increase Diversity, Equity, and Inclusion in the Workplace, 2020.

68. Caitlin Flanagan, “The Problem with HR,” Atlantic, July 2019.

69. Flanagan 2019.

70. Joan C. Williams and James D. White, “Update Your DE&I Playbook,” Harvard Business Review, July 15, 2020; Chai R. Feldblum and Victoria A. Lipnic, Report of Co-Chairs of Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission, June 2016.

71. Feldblum and Lipnic 2016.

72. Lauren B. Edelman, “How HR and Judges Made It Almost Impossible for Victims of Sexual Harassment to Win in Court,” Harvard Business Review, August 22, 2018.

73. Faragher v. City of Boca Raton, 524 U.S. 775, 807 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 765 (1998).

74. Anne Lawton, “Operating in an Empirical Vacuum: The Ellerth and Faragher Affirmative Defense,” Columbia Journal of Gender & Law 13, no. 2 (2004): 197-273.

75. Lauren B. Edelman and Jessica Cabrera, “Sex-Based Harassment and Symbolic Compliance,” Annual Review of Law and Social Science 16 (October 2020): 361-83.

76. Minarsky v. Susquehanna County, 895 F.3d 303 (3d Cir. 2018).

77. Minarsky v. Susquehanna County, 895 F.3d 303, 313 n. 12 (3d Cir. 2018).

78. Elizabeth Hirsh and Donald Tomaskovic-Devey, “Metrics, Accountability, and Transparency: A Simple Recipe to Increase Diversity and Reduce Bias,” in What Works: Evidence-Based Ideas to Increase Diversity, Equity, and Inclusion in the Workplace, 2020.

79. Hirsh and Tomaskovic-Devey 2020.

80. Restaurant Opportunities Centers United et al., Building the High Road to Racial Equity: Addressing Implicit Bias in the San Francisco Bay Area Restaurant Industry, May 2019.

81. Jenny R. Yang, “Ensuring a Future that Advances Equity in Algorithmic Employment Decisions,” testimony before the U.S. House Committee on Education and Labor, Civil Rights and Human Services Subcommittee, Washington, D.C., February 5, 2020.

82. Jenny R. Yang, “New Civil Rights Principles Mark First Step to Make AI Hiring More Equitable,” Urban Wire (Urban Institute blog), July 23, 2020.

83. Chai R. Feldblum and Victoria A. Lipnic, Report of Co-Chairs of Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission, June 2016.

84. Elizabeth Hirsh and Donald Tomaskovic-Devey, “Metrics, Accountability, and Transparency: A Simple Recipe to Increase Diversity and Reduce Bias,” in What Works: Evidence-Based Ideas to Increase Diversity, Equity, and Inclusion in the Workplace, 2020.

85. Jenny R. Yang and Batia Katz, “Promising Practices for Addressing Harassment in the STEM Workplace: How to Lead in Today’s Environment,” April 15, 2020.

86. Jenny R. Yang and Batia Katz, Promising Practices for Addressing Harassment in the STEM Workplace: How to Lead in Today’s Environment, Urban Institute, March 2020; Frank Dobbin and Alexandra Kalev, “Making Discrimination and Harassment Complaint Systems Better,” in What Works: Evidence-Based Ideas to Increase Diversity, Equity, and Inclusion in the Workplace, 2020.

87. Dobbin and Kalev 2020.

88. “What We Do,” tEQuitable (website), accessed August 3, 2020. See also Jenny R. Yang and Batia Katz, Promising Practices for Addressing Harassment in the STEM Workplace, Urban Institute, March 2020.

89. Race Forward, Confronting Racial Bias at Work: Challenges and Solutions for 21st Century Employment Discrimination, Nov. 2016 (in survey of worker advocates, 40% of respondents considered “difficulty securing a lawyer” to be major barrier for workers of color in filing formal Title VII charge against their employers).

90. Maryam Jameel, “More and More Workplace Discrimination Cases Are Closed Before They’re Even Investigated,” Center for Public Integrity and Vox, June 14, 2019.

91. Jameel 2019.

92. Paige Smith and Jaclyn Diaz, “White House’s EEOC Staff Cut Plan Highlights Dwindling Workforce,” Bloomberg Law, February 27, 2020.

93. U.S. Equal Employment Opportunity Commission, “Commissioner Charges and Directed Investigations” (web page), accessed July 7, 2020.

94. U.S. Equal Employment Opportunity Commission, Advancing Opportunity: A Review of the Systemic Program of the U.S. Equal Employment Opportunity Commission, July 7, 2016.

95. U.S. Equal Employment Opportunity Commission 2016.

96. Cindy Brown Barnes, “Equal Employment Opportunity: Progress Made on GAO Recommendations to Improve Nondiscrimination Oversight, but Challenges Remain,” testimony before the Subcommittee on Civil Rights and Human Services, Committee on Education and Labor, House of Representatives, Washington, D.C., September 19, 2019.

97. U.S. Department of Labor, Wage and Hour Division, How Do I Know if I Am Working on a Federal Contract Under Which I Am Entitled to Accrue and Use Paid Sick Leave? (fact sheet), September 2016.

98. Office of Federal Contract Compliance Programs, “History of Executive Order 11246,” (web page), accessed October 16, 2020.

99. Office of Federal Contract Compliance Programs, “Executive Order 11246 – Equal Employment Opportunity” (web page), accessed October 16, 2020.

100. U.S. Commission on Civil Rights, Are Rights a Reality? Evaluating Federal Civil Rights Enforcement, November 2019.

101. See, generally, Los Angeles Black Worker Center in conjunction with the National Employment Law Project, Ensuring Equality for All Californians in the Workplace: The Case for Local Enforcement of Anti-Discrimination Laws, October 5, 2017.

102. See, e.g., New York State Division of Human Rights, “New Workplace Discrimination and Harassment Protections” (web page), accessed July 10, 2020 (in 2019, New York State Human Rights Law updated to, inter alia, protect domestic workers from harassment on any protected basis, clarify that harassment does not need to be severe or pervasive for employer to be found liable, and clarify that harassment complainant does not need to identify similarly situated person that was treated more favorably to establish liability); Beth Avery, “Ban the Box: U.S. Cities, Counties, and States Adopt Fair-Chance Policies to Advance Employment Opportunities for People with Past Convictions,” National Employment Law Project, July 1, 2019 (35 states and over 150 cities and counties have adopted “ban the box” and “fair chance” laws or policies that remove the criminal conviction history question from job applications and delay background checks until later in the hiring process); D.C. Code § 2-1401.11 (prohibiting employment discrimination on the basis of “personal appearance” and “political affiliation”).

103. Kate Bronfenbrenner and Dorian Warren, “Race, Gender, and the Rebirth of Trade Unionism,” New Labor Forum 16, no. 3/4 (Fall 2007): 142-8; Luster Howard, Maricruz Manzanarez, and Seth Newton Patel, “How We’re Setting Our Contract Bargaining Tables to Advance Racial Justice,” Labor Notes, March 25, 2017; AFL-CIO, Overcoming Barriers to People of Color in Union Leadership, October 2005.

104. Jake Rosenfeld and Meredith Kleykamp, “Organized Labor and Racial Wage Inequality in the United States,” American Journal of Sociology 117, no. 5 (March 2012): 1460-502; Emily White, “’Not Our Problem’: Construction Trade Unions and Hostile Environment Discrimination,” City University of New York Law Review 10, no. 1 (2006): 245-76 (2006); U.S. Equal Employment Opportunity Commission, “City of Jacksonville Agrees to Pay $4.9 Million to Settle Class Race Discrimination Lawsuit” (press release), February 14, 2019; EEOC v. Local 28 of the Sheet Metal Workers’ Int’l Ass’n, 478 U.S. 421 (1986).

105. Jake Rosenfeld and Meredith Kleykamp, “Organized Labor and Racial Wage Inequality in the United States,” American Journal of Sociology 117, no. 5 (March 2012): 1460-502.

106. Natalie Spievack, “Can Labor Unions Help Close the Black-White Wage Gap?,” Urban Wire (Urban Institute blog), February 1, 2019; see also Josh Bivens et al., How Today’s Unions Help Working People, Economic Policy Institute, August 2017.

107. Cherrie Bucknor, Black Workers, Unions, and Inequality, Center for Economic and Policy Research, August 2016.

108. Bucknor 2016.

109. Jake Rosenfeld and Meredith Kleykamp, “Organized Labor and Racial Wage Inequality in the United States,” American Journal of Sociology 117, no. 5 (March 2012): 1460-502.

110. Niv Elis, “Union Membership Falls to Record Low of 10.3 Percent,” The Hill, January 22, 2020 (percentage of salaried workers in unions declined from 20.3% in 1983 to 10.3% in 2019).

111. Josh Bivens and Heidi Shierholz, What Labor Market Changes Have Generated Inequality and Wage Suppression? Economic Policy Institute, December 12, 2018; Washington Center for Equitable Growth, “How Strong Unions Can Restore Workers’ Bargaining Power” (fact sheet), May 1, 2020.

112. Natalie Spievack, “Can Labor Unions Help Close the Black-White Wage Gap?” Urban Wire (Urban Institute blog), February 1, 2019.

113. Jake Rosenfeld and Meredith Kleykamp, “Organized Labor and Racial Wage Inequality in the United States,” American Journal of Sociology 117, no. 5 (March 2012): 1460-502.

114. See, e.g., Daniels v. Pipefitters’ Ass’n Local Union 597, 945 F.2d 906 (7th Cir. 1991) (affirming finding that union had operated hiring hall in racially discriminatory manner).

115. Ariane Hegewisch, “Forging Gender Equity in the Sheet Metal Workers Local 28: The Importance of Leadership, Goals and Regular Review,” Institute for Women’s Policy Research, January 1, 2018.

116. Lawrence Mishel, Diversity in the New York City Union and Nonunion Construction Sectors, Economic Policy Institute, March 2017 (“Minorities accounted for 61.8 percent of all New York City residents’ union apprenticeships in 2014, far higher than the 36.3 percent share in 1994. Black apprentice participation roughly doubled, rising from 18.3 percent in 1994 to 35.1 percent 20 years later in 2014”; “Black workers are far more represented in the union construction workforce (where they account for 21.2 percent of employment) than in the nonunion construction workforce (where they account for 15.8 percent) and minorities overall now make up 55.1 percent of NYC blue-collar union construction workers”).

117. Josh Bivens et al., How Today’s Unions Help Working People, Economic Policy Institute, August 24, 2017.

118. See Julia Jacobs, “Hotels See Panic Buttons as a #MeToo Solution for Workers. Guest Bans? Not So Fast,” New York Times, November 11, 2018.

119. See Julia Jacobs 2018; Diana Boesch, Jocelyn Frye, and Kaitlin Holmes, Driving Change in States to Combat Sexual Harassment, Center for American Progress, January 15, 2019. See also Bernice Yeung, “How a Group of Janitors Started a Movement to Stop Sexual Abuse,” KQED, January 16, 2018 (SEIU West, union that represents janitors in California, bargained for new contract provisions to protect workers from sexual harassment, which included requiring cleaning companies to improve how they conduct sexual harassment investigations, and requiring employers to provide information about a confidential hotline so that workers could seek help if they’ve been harassed).

120. Colorado Symphony Association, 366 N.L.R.B. No. 60 (2018); see also Westinghouse Electric Corp. 239 NLRB 106 (1978)

121. Colorado Symphony Association, 366 N.L.R.B. No. 60 (2018).

122. Workers centers are “community-based and community-led mediating institutions that provide support to low-wage workers.” See Janice Fine, Worker Centers: Organizing Communities at the Edge of the Dream, Economic Policy Institute, December 13, 2005.

123. Janice Fine, “New Approaches to Enforcing Labor Standards: How Co-Enforcement Partnerships Between Government and Civil Society Are Showing the Way Forward,” University of Chicago Legal Forum 2017, no. 7 (2018): 143-76; Seema Patel and Catherine L. Fisk, “California Co-Enforcement Initiatives That Facilitate Worker Organizing,” Harvard Law & Policy Review.

124. U.S. Equal Employment Opportunity Commission, “Who Can File a Complaint” (web page) and “Confidentiality” (web page), accessed July 27, 2020.

125. Janice Fine, Co-Production: Bringing Together the Unique Capabilities of Government and Society for Stronger Labor Standards Enforcement, LIFT Fund.

126. Chai R. Feldblum and Victoria A. Lipnic, Report of Co-Chairs of Select Task Force on the Study of Harassment in the Workplace, U.S. Equal Employment Opportunity Commission, June 2016; National Women’s Law Center, What Works at Work: Promising Practices to Prevent and Respond to Sexual Harassment in Low-Paid Jobs.

127. National Women’s Law Center 2020.

128. Fair Foods Standard Council, Fair Food 2018 Update, 2019.

129. Fair Foods Standard Council 2019.

130. Alexia Fernández Campbell, “Housekeepers and Nannies Have No Protection from Sexual Harassment Under Federal Law,” Vox, April 26, 2018.

131. Anna B. Roberson, “The Migrant Farmworkers’ Case for Eliminating Small-Firm Exemptions in Antidiscrimination Law,” Texas Law Review 98, no. 1 (2019): 185-214.

132. Julia Wolfe et al., Domestic Workers Chartbook, Economic Policy Institute, May 14, 2020.

133. Wolfe et al. 2020.

134. Anna B. Roberson, “The Migrant Farmworkers’ Case for Eliminating Small-Firm Exemptions in Antidiscrimination Law,” Texas Law Review 98, no. 1 (2019): 185-214.

135. Roberson 2019.

136. The Reconstruction-era statute, Section 1981 of the Civil Rights Act of 1866, prohibits discrimination in contracting based on race and ethnicity, but it does not protect against other forms of discrimination, such as sex, and it only allows claims of intentional discrimination.

137. Jenny R. Yang and Steven Brown, “Will the Pandemic Encourage Policymakers to Implement Stronger Workplace Protections for Independent Contractors?” Urban Wire (Urban Institute blog), April 3, 2020.

138. Katherine Lim, Alicia Miller, Max Risch, and Eleanor Wilking, Independent Contractors in the U.S.: New Trends from 15 years of Administrative Tax Data, Internal Revenue Service, July 2019.

139. National Employment Law Project, Independent Contractor Misclassification Imposes Huge Costs on Workers and Federal and State Treasuries, October 2020.

140. Katherine Lim, Alicia Miller, Max Risch, and Eleanor Wilking, Independent Contractors in the U.S.: New Trends from 15 years of Administrative Tax Data, Internal Revenue Service, July 2019.

141. Llezlie L. Green, “Outsourcing Discrimination,” Harvard Civil Rights-Civil Liberties Law Review 55 (2020): 915-50.

142. EEOC v. East Coast Labor Solutions, No. 4:16-CV-01848-ACA (N.D. Ala. consent decree entered February 19, 2019) (four related staffing agencies under common ownership agreed to pay $475,000 in lawsuit alleging harassment and discrimination against Latinx workers and failure to accommodate disabilities); EEOC v. Source One Staffing, Inc., No. 15-cv-1958 (N.D. Ill. consent decree entered May 6, 2015) (alleging failure to refer applicants for “temp to hire” jobs based on sex, unlawful pre-employment medical inquiries; resolved for $800,000 for more than 7,300 individuals); EEOC v. Renhill Staffing, No. 08-cv-82 (N.D. Ind. consent decree entered Apr. 15, 2008) (alleging failure to refer to temporary jobs based on race and age; resolved for $575,000 for 764 individuals); EEOC v. Paramount Staffing, No. 06-cv-2624 (W.D. Tenn. Aug. 19, 2010) (alleging failure to refer black applicants and preferential referrals of Hispanic applicants for temporary jobs; resolved for $585,000 for 800 individuals); EEOC v. Real Time Staffing Corp., No. 13-cv-2761 (W.D. Tenn. consent decree entered Dec. 5, 2014) (alleging failure to refer Black applicants and preferential referrals of Hispanic applicants for temporary jobs; resolved for $580,000 for 60 individuals).

143. See David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It (Cambridge, Mass.: Harvard University Press, 2014).

144. Urban Institute, Aspen Institute, and A Better Balance, Reimagining Workplace Protections: A Policy Agenda to Meet the Needs of Independent and Temporary Workers, December 2020 (forthcoming).

145. See National Conference of State Legislatures, “State Employment-Related Discrimination Statutes” (web page), July 2015.

146. See National Domestic Workers Alliance, “States and Cities Where We’ve Won Victories for Domestic Workers” (web page), accessed July 10, 2020; Anna Orson, “Law Protecting Philadelphia Domestic Workers Takes Effect as They’re Losing Jobs in Droves,” Philadelphia Inquirer, May 1, 2020.

147. Maryland Fair Employment Practices Act, MD State Govt § 20-601(c) (2019); New York State Human Rights Law, N.Y. Exec. L. § 296-d (2019); Minnesota Human Rights Act, Minn. Stat. Ann. §§ 181.145, 363A.03 (Subd. 14) (West); Rhode Island Civil Rights Act, RS ST § 42-112-1. Three other states, California, New Jersey, and Washington, provide some protections for independent contractors, and Pennsylvania provides protections for certain licensed contractors. See California Government Code, Cal. Gov’t Code § 12940(j)(4); New Jersey Law Against Discrimination, § 12(l); Washington Law Against Discrimination, RCW 49.60.030; Pennsylvania Human Relations Act, 43 Pa. Stat. Ann. § 954(x).

148. California has passed legislation to place the burden on the hiring entity to demonstrate all three prongs of the “ABC” test are met for individuals to be properly classified as independent contractors; see Sophie Nieto-Munoz, “Murphy Signs Gig Economy Worker Bills to Revamp N.J. Labor Laws,” NJ.com, January 20, 2020. See also AB-5, “Worker Status: Employees and Independent Contractors,” California State Assembly (2019-2020).

149. Alexander J.S. Colvin, “The Growing Use of Mandatory Arbitration,” Economic Policy Institute, April 6, 2018.

150. Cynthia Estlund, “The Black Hole of Mandatory Arbitration,” North Carolina Law Review 96, no. 3 (2018): 679-709.

151. Alexander J.S. Colvin, “The Growing Use of Mandatory Arbitration,” Economic Policy Institute, April 6, 2018.

152. Jean R. Sternlight, “Disarming Employees: How American Employers Are Using Mandatory Arbitration to Deprive Workers of Legal Protection,” Brooklyn Law Review 80, no. 4 (2015): 1309-56.

153. EEOC v. Waffle House, Inc., 534 U.S. 279 (2002).

154. For example, in EEOC v. The Doherty Group, the employer, an operator of Applebee’s franchises, required all employees to sign an arbitration agreement that required all employment-related claims to be submitted to and determined exclusively by binding arbitration. As a result, employees believed that they were precluded from filing charges with federal enforcement agencies. Brief for Plaintiff-Appellant at 5, EEOC v. The Doherty Group, No. 18-11982-AA (11th Cir. Aug. 27, 2018).

155. Alexander J.S. Colvin, “The Growing Use of Mandatory Arbitration,” Economic Policy Institute, April 6, 2018.

156. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 124 (2001).

157. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). See also Alexander J.S. Colvin, “The Growing Use of Mandatory Arbitration,” Economic Policy Institute, April 6, 2018.

158. Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001).

159. Luke v. Baptist Medical Center-Princeton, 99 Fed. Appx. 887 (11th Cir. 2004).

160. Alexander J.S. Colvin, “The Growing Use of Mandatory Arbitration,” Economic Policy Institute, April 6, 2018.

161. Elizabeth Bartholet, “Courting Big Business: The Supreme Court’s Recent Decisions on Corporate Misconduct and Laws Regulating Corporations,” testimony before the U.S. Senate Committee on the Judiciary, Washington, D.C., July 23, 2008.

162. Lattimer-Stevens Co. v. United Steelworkers of America Dis. 27, 913 F.2d 1166, 1169 (6th Cir. 1990). See also Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2002) (courts cannot review an arbitrator’s decision on the merits even if the fact-finding was “silly”); DiRussa v. Dean Witter Reynolds, Inc., 121 F.3d 818, 823 (2d Cir. 1997) (severely restricted judicial review of arbitrator’s decision requires “conscious disregard” of the law).

163. AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).

164. Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018).

165. Nantiya Ruan, “What’s Left to Remedy Wage Theft: How Arbitration Mandates That Bar Class Actions Impact Low-Wage Workers,” Michigan State Law Review 2012, no. 4 (2012): 1103-47.

166. Ruan 2012.

167. Orly Lobel, “NDAs Are Out of Control. Here’s What Needs to Change,” Harvard Business Review, January 30, 2018.

168. Emily Birnbaum, “A Wall of Silence Holding Back Racial Progress in Tech: NDAs,” Protocol, July 1, 2020.

169. Matthew Garrahan, “Harvey Weinstein: How Lawyers Kept the Lid on Sexual Harassment Claims,” Financial Times, October 23, 2017.

170. Vasundhara Prasad, “If Anyone Is Listening, #MeToo: Breaking the Culture of Silence Around Sexual Abuse Through Regulating Non-Disclosure Agreements and Secret Settlements,” Boston College Law Review 59, no. 7 (2018): 2507-49.

171. Matt Marx and Ryan Nunn, “The Chilling Effect of Non-Compete Agreements” (blog post), Hamilton Project, May 20, 2018.

172. Marx and Nunn 2018. See also Matt Marx, “The Firm Strikes Back: Non-Compete Agreements and the Mobility of Technical Professionals,” American Sociological Review 76, no. 5 (2011): 695-712.

173. Alan B. Krueger and Eric A. Posner, A Proposal for Protecting Low-Income Workers from Monopsony and Collusion, Hamilton Project, February 2018.

174. Alexander J.S. Colvin and Heidi Shierholz, Noncompete Agreements: Ubiquitous, Harmful to Wages and to Competition, and Part of a Growing Trend of Employers Requiring Workers to Sign Away Their Rights, Economic Policy Institute, December 10, 2019.

175. Daniel Wiessner, “Jimmy John’s Settles Illinois Lawsuit Over Non-Compete Agreements,” Reuters, December 7, 2016.

176. Medix Staffing Solutions, Inc. v. Dumrauf, No. 17C6648, 2018 WL 1859039 (N.D. Ill. April 17, 2018). See also Jamie Maggard and John Vering, “Overreaching Covenants Not to Compete Under Attack from All Sides” (blog post), American Bar Association website, December 26, 2018.

177. H.R. 1423, 116th Congress (2019-2020).

178. Jeffrey Johnson, “Non-Disclosure Agreements and Arbitration Clauses in the #MeToo Era,” JD Supra, August 29, 2019.

179. Roy Maurer, “Vermont Bans No-Rehire Clauses,” SHRM, August 7, 2018.

180. See Brian S. Clarke, “A Better Route Through the Swamp: Causal Coherence in Disparate Treatment Doctrine,” Rutgers Law Review 65, no. 3 (2013): 723-86.

181. Kevin M. Clermont and Stewart J. Schwab, “Employment Discrimination Plaintiffs in Federal Court: From Bad to Worse?” Harvard Law & Policy Review 3, no. 1 (2009): 103-32.

182. Conley v. Gibson, 355 U.S. 41, 42-43 (1957).

183. Fed. R. Civ. P. 8(a)(2).

184. Bell Atlantic Corp v. Twombly, 550 U.S. 544, 570 (2007).

185. Ashcroft v. iqbal, 556 U.S. 662, 684-686 (2009).

186. Bell Atlantic Corp v. Twombly, 550 U.S. 544, 557-559 (2007); Ashcroft v. iqbal, 556 U.S. 662, 678 (2009).

187. See, e.g., Littlejohn v. City of New York, 795 F.3d 297, 311 (2d Cir. 2015).

188. Steven R. Semler, “Hijacking of Title VII Employment Discrimination Plaintiffs on the Way to the Jury,” Hofstra Labor & Employment Law Journal 32, no. 1 (2014): 49-89.

189. Cynthia Remmers, “Summary Judgment Motions in Discrimination Cases: Bringing, Defending and Appealing,” ABA Section of Labor and Employment Law Annual Meeting, August 6, 1997.

190. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 804-805 (1973).

191. Steven R. Semler, “Hijacking of Title VII Employment Discrimination Plaintiffs on the Way to the Jury,” Hofstra Labor & Employment Law Journal 32, no. 1 (2014): 49-89.

192. Semler 2014.

193. Amelia M. Wirts, “Discriminatory Intent and Implicit Bias: Title VII Liability for Unwitting Discrimination,” Boston College Law Review 59, no. 2 (2017): 809-56; Sandra F. Sperino, “Into the Weeds: Modern Discrimination Law,” Notre Dame Law Review 95, no. 3 (2020): 1077-22.

194. 42 U.S.C. 2000e-2(a).

195. See Linda Hamilton Krieger and Susan T. Fiske, “Behavioral Realism in Employment Discrimination Law: Implicit Bias and Disparate Treatment,” California Law Review 94, no. 4 (2006): 997-1062 (social science research shows that discriminatory attitudes and behavior still exist today, and a large percentage of bias, prejudice, and discriminatory behavior is due to unconscious factors).

196. See, e.g., Amelia M. Wirts, “Discriminatory Intent and Implicit Bias: Title VII Liability for Unwitting Discrimination,” Boston College Law Review 59, no. 2 (2017): 809-56; Sandra F. Sperino, “Into the Weeds: Modern Discrimination Law,” Notre Dame Law Review 95, no. 3 (2020): 1077-22.

197. Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731 (2020).

198. Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731, 1739 (2020).

199. Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731, 1739 (2020). The Bostock Court’s explanation of but-for causation contradicts lower court decisions that have construed the “but-for causation” standard as “elevat[ing] the burden of proof.” See, e.g., Arthur v. Pet Dairy, 593 Fed. Appx. 211, 219 (4th Cir. 2015) (“Gross elevated the burden of proof”).

200. Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731, 1741 (2020).

201. Bostock’s broad view of the but-for causation standard also applies to ADEA and ADA claims. The ADEA’s “because of” language is identical to Title VII and was derived from Title VII. See Lorillard, Inc. v. Pons, 434 U.S. 575, 584, n. 12 (1978) (“the prohibitions of the ADEA were derived in haec verba from Title VII”).

202. Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731, 1740 (2020), relying on Burlington N. & S. F. R. Co. v. White, 548 U.S. 53, 59 (2006) and Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 986 (1988).

203. The Bostock Court repeatedly explains “intentional discrimination” as designed to achieve a purpose without regard to underlying animus or bias, or whether the employer’s state of mind was benevolent or malevolent. For example, the court held an employer “liable for intentionally requiring an individual female employee to pay more into a pension plan than a male counterpart even if the scheme promotes equality at the group level.” Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731, 1744 (2020).

204. Smith v. Fairview Ridges Hosp., 625 F.3d 1076 (2010), abrogated by Torgerson v. City of Rochester, 643 F.3d 1031 (2011).

205. National Employment Lawyers Association, Judicial Hostility to Workers’ Rights: The Case For Professional Diversity on the Federal Bench, February 2012.

206. Steven R. Semler, “Hijacking of Title VII Employment Discrimination Plaintiffs on the Way to the Jury,” Hofstra Labor & Employment Law Journal 32, no. 1 (2014): 49-89.

207. Eaglin v. Texas Children’s Hospital, No. 19-20222, slip op. at 2, 9 (5th Cir. Feb. 4, 2020) (per curiam).

208. Mesnick v. General Elec. Co., 950 F.2d 816, 825 (1st Cir. 1991).

209. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (“In deciding a motion for summary judgment, the court must view the factual evidence in the light most favorable to the non-moving party”).

210. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011).

211. Author Jenny Yang served as co-counsel for plaintiffs in this case.

212. The court also found that Wal-Mart was entitled to individualized determinations of each employee’s eligibility for backpay and had the right to raise individual affirmative defenses to each class member’s backpay claim. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011).

213. Ross Todd, “Report: Plaintiffs in Employment Cases Won Class Certification at Record Rates in 2019,” Law.com, January 7, 2020; Michael Selmi and Sylvia Tsakos, “Employment Discrimination Class Actions After Wal-Mart v. Dukes,” Akron Law Review 48, no. 4 (2015): 803-30.

214. Suzette M. Malveaux, “The Power and Promise of Procedure: Examining the Class Action Landscape After Wal-Mart v. Dukes,” DePaul Law Review 62, no. 3 (2013): 659-73.

215. See, e.g., Moussouris v. Microsoft Corp., No. 18-35791 (9th Cir. Dec. 24, 2019); Guzman v. Chipotle Mexican Grill, No. 17-cv-02606-HSG (N.D. Cal. Jan. 15, 2020).

216. Michael Selmi and Sylvia Tsakos, “Employment Discrimination Class Actions After Wal-Mart v. Dukes,” Akron Law Review 48, no. 4 (2015): 803-30.

217. Selmi and Tsakos 2015.

218. Suzette M. Malveaux, “Fighting to Keep Employment Discrimination Class Actions Alive: How Allison v. Citgo’s Predomination Requirement Threatens to Undermine Title VII Enforcement,” Berkeley Journal of Employment & Labor Law 26, no. 2 (2005): 405-34.

219. Malveaux 2005.

220. Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 168 (2d Cir. 2001), cert. denied, 535 U.S. 951 (2002).

221. See Sandra F. Sperino, “Rethinking Discrimination Law,” Michigan Law Review 110, no. 1 (2011): 69-125.

222. Kevin M. Clermont and Stewart J. Schwab, “Employment Discrimination Plaintiffs in Federal Court: From Bad to Worse?” Harvard Law & Policy Review 3, no. 1 (2009): 103-32.

223. Clermont and Schwab 2009.

224. Clermont and Schwab 2009.

225. Michael Selmi, “Why Are Employment Discrimination Cases So Hard to Win?” Louisiana Law Review 61, no. 3 (2001): 555-74.

226. Kevin M. Clermont and Stewart J. Schwab, “Employment Discrimination Plaintiffs in Federal Court: From Bad to Worse?” Harvard Law & Policy Review 3, no. 1 (2009): 103-32.

227. See, e.g., Cathy Ventrell-Monsees, “It’s Unlawful Age Discrimination—Not The ‘Natural Order’ of the Workplace!” Berkeley Journal of Employment & Labor Law 40, no. 1 (2019): 91-133 (discussing judicial skepticism in age discrimination cases).

228. Race discrimination complaints filed with the EEOC also have the lowest success rate among all types of complaints, despite the fact that they are one of the commonly filed complaints. Maryam Jameel and Joe Yerardi, Despite Legal Protections, Most Workers Who Face Discrimination Are on Their Own, Center for Public Integrity published in partnership with Vox, February 28, 2019.

229. Michael Selmi, “Why Are Employment Discrimination Cases So Hard to Win?” Louisiana Law Review 61, no. 3 (2001): 555-74.

230. Selmi 2001.

231. Pew Research Center, Race in America 2019, April 2019 (in 2019 poll, whites are far more likely than any other racial or ethnic group to say that too much attention is paid to race and racial issues; of those who responded that being black hurts people’s ability to succeed, whites are far less likely than blacks to say that racial discrimination and a lack of access to high-paying jobs are major reasons).

232. In a 2019 study, respondents were sharply divided by race on whether Blacks are treated less fairly with respect to hiring, pay, and promotions in the workplace, with 44% of whites and 82% of Blacks responding that such discrimination exists. Pew Research Center, Race in America 2019, April 2019.

233. Eugene Scott, “Majority of Americans Say Race Discrimination Is a Big Problem in the U.S.,” Washington Post, July 10, 2020.

234. Barry J. McMillion, “U.S. Circuit and District Court Judges: Profile of Select Characteristics,” Congressional Research Service, 2017.

235. National Employment Lawyers Association, Judicial Hostility to Workers’ Rights: The Case For Professional Diversity on the Federal Bench, February 2012.

236. Danielle Root, Jake Faleschini, and Grace Oyenubi, “Building a More Inclusive Federal Judiciary,” Center for American Progress, October 3, 2019.

237. Pat K. Chew and Robert E. Kelley, “The Realism of Race in Judicial Decision Making: An Empirical Analysis of Plaintiffs’ Race and Judges’ Race,” Harvard Journal on Racial and Ethnic Justice 28 (2012): 91-115.

238. Chew and Kelley 2012. See also Jonathan P. Kastellec, “Racial Diversity and Judicial Influence on Appellate Courts,” American Journal of Political Science 57, no. 1 (2013): 167-83 (finding that the presence of one Black judge on three-judge panel of federal courts of appeals nearly ensures that panel will vote in favor of an affirmative action program).

239. Matthew Knepper, “When the Shadow Is the Substance: Judge Gender and the Outcomes of Workplace Sex Discrimination Cases,” Journal of Labor Economics 36, no. 3 (July 2018): 623-664.

240. Robert S. Erikson, “Appellate Court Assignments as a Natural Experiment: Gender Panel Effects in Sex-Discrimination Cases,” paper prepared for 11th Annual NYU-CESS Experimental Political Science Conference, February 9 & 10, 2018.

241. Adam N. Glynn and Maya Sen, “Identifying Judicial Empathy: Does Having Daughters Cause Judges to Rule for Women’s Issues?” American Journal of Political Science 59, no. 1 (2014): 37-54.

At-will employment is the most common kind of employment relationship in the United States. When employment is “at will,” the employer and employee have a right to walk away for any or no reason at any time. The common law—the law made by judges when deciding cases—presumes that employment is at will unless the parties provide otherwise.

This paper critiques the common tendency of courts to label and attempt to treat at-will employment as a “contractual” relationship when resolving employment disputes. At-will employment is not contractual, and labeling and trying to treat it as such makes it harder to regulate employment, reinforces and legitimizes the inherently unequal power between employees and employers, and disguises political issues as doctrinal ones.

The nature of at-will employment: Unequal power and power struggles

At-will employment reflects systematic power imbalances between employers and workers because it is a creature of capitalism. The rules of capitalism both create and defend a distinction between the propertied and the propertyless, and they condition life opportunities on this distinction. Most workers enter at-will employment relationships because they do not have any property apart from themselves to bring to the market. They must bring something, however, since access to most of life’s necessities requires market exchange, and so they bring themselves. In exchange for pay, they offer to work to increase the value of another’s property, under the other’s command, for so long as the other wishes. The employee has a formal right to quit, but this right seldom carries with it a proportional, countervailing power to that of the employer.

At-will employment is also characterized by power struggles. The employee formally agrees to “work” under the authority of the employer, but to work is simply to exercise one’s faculty for taking voluntary action toward some end. The object of this agreement is not separable from the individual, so it is not capable of being exchanged through a market transaction. The individual’s ability to take purposive action—whether it be the physical, cognitive, or emotional dimensions of this ability—is an inalienable part of the person. Within employment then, the more that the employer attempts to treat this ability (its “purchase”) as an object of its acquisition and dominion, the more the worker will be deprived of autonomy, dignity, and sometimes health and life. The worker often resists.

At-will employment is not a contractual relationship

At-will employment did not develop out of contract law. The appellation of “contract” was attached to employment in the 19th century as a palatable and expedient means of extending the master’s authority over a servant to an employer’s authority over the commercial enterprise. Employers sought authority over workers that neither contract law nor property rights could justify. Thus, the U.S. legal system created a sui generis category to accommodate the employer.

The common law defines at-will employment as an agreement by one party to work for another, under the other’s authority, in exchange for pay, for as long as either party wishes the relationship to continue. By definition, at-will employment is nearly the opposite of a contract:

• First, it lacks a “promise,” meaning a commitment by at least one party. Since either party may quit the relationship at any time for any reason or no reason, at-will employment is missing a promise.
• Second, it lacks an ex ante bargain, meaning some agreement, entered at the outset of the relationship, regarding what the parties are going to trade or do for one another. For an agreement to be enforceable, contract law requires some minimal certainty—“definiteness”—as to what the parties are going to exchange. The parties must reach agreement on this at the time they enter the relationship, not later. Otherwise, if the parties later dispute their obligations, a court will not be able to determine if the parties lived up to their agreement. However, at-will employment is more “indefinite” than other agreements the law recognizes as contracts. In agreeing to work under the employer’s command, the employee agrees to subject her very capacity for contractual agreement to the employer’s authority. In other words, the employee says, “I permit you to choose the bargain for me at a later time.” The employer chooses the bargain by commanding the employee in her work as the relationship proceeds. The exchange is for whatever labor the employer decides to, and is able to, extract from the employee. For no other kind of contract does the law assume or permit that the bargain was not to have a bargain.

To address the first issue, the lack of a commitment, many jurisdictions posit that at-will employment is not really an at-will relationship but rather a series of one-day contracts. Under this construction, which appears to resolve the oxymoron of an “at-will contract,” the employer does not have the authority to terminate an employee at will. The employer simply has the right, like anyone else, to choose not to enter a new contract with the employee the next day.

Constructing at-will employment as a series of one-day contracts does not resolve the misfit between a contract and at-will employment, however. For one thing, it does not touch on the problem of the missing ex ante bargain. Furthermore, the law does not take seriously the one-day construction; it resorts to this construction as an expedient fiction only in certain kinds of employment disputes, and the outcome is usually favorable to the employer. This construction also fails to provide a realistic picture of how most at-will employment is organized in practice. At-will employers often structure work practices and compensation in anticipation of an ongoing relationship. The relationship is rarely what economists would call a “spot transaction.”

The consequences of labeling at-will employment a contractual relationship

Legal, political, and mainstream discourse often identifies at-will employment as a contractual relationship. By doing so, it usually sides with the employer in the power struggles within at-will employment.

The contractual designation surrounds at-will employment with the ideological aura of “freedom of contract.” The precise content of this ideology carries no consensus; however, it usually involves a suspicion of state regulation, at least where the regulation would disrupt a status quo that benefits the powerful. The association of at-will employment with the clarion call of freedom of contract has at least two consequences:

• It deters regulation. Associating at-will employment with freedom of contract is likely a deterrent to enacting regulations to protect workers, to enforcing them adequately, and to ensuring that decision-makers interpret them broadly.
• It justifies the employer’s at-will power. By associating at-will employment with freedom of contract, the contractual label tends to legitimize the employer’s power. Judges have invoked freedom of contract to justify the employer’s at-will authority.

The consequences of trying to impose a contractual framework on at-will employment in legal disputes

In several kinds of disputes between employers and employees, courts try to impose a contractual framework on at-will employment to resolve the dispute. This attempted framing offers little benefit to employees and instead reinforces and legitimizes the employer’s power.

Offering little benefit to employees

Attempting to treat at-will employment as a contractual relationship does not really disturb the imbalance of power between employees and employers or lead to more equitable terms and conditions of work. Contract law is not designed for these purposes. Nor does it guarantee employees the key benefit of a contract—legally enforceable expectations about the future conduct of another. Under the attempted contractual framework, there is:

• No limit on the employer’s power of termination.
• No right to expect the employer to abide by its policies and practices. Employers often issue written documents to at-will employees setting out performance expectations, compensation, benefits, discipline, and other employment policies. The employer generally expects employees to abide by these policies, and employees often rely on them, particularly if an employer has regularly followed them in the past. However, the principles of contractual interpretation usually enable the employer to defeat employee claims that it has assumed enforceable obligations to employees. In most jurisdictions, the employer can defeat these claims by including a disclaimer confirming that the relationship is at will and/or that its policies are not contractual. The use of such disclaimers is now common practice among employers. Often, the employer’s only enforceable obligation is to pay for completed work.
• No right to expect that the terms and conditions of work will be stable or predictable. The point of a contract is to fix the parties’ obligations to one another within their bargain. However, trying to impose a contractual framework on at-will employment generally does not disturb the employer’s power to make up and alter the main terms of the relationship as it goes along. This is the flipside of the employer’s ability to avoid assuming contractual commitments to employees. The at-will employer can generally dictate and alter working schedules, the pace of work, the kind of work, and other important conditions when it pleases. The court’s usual authority to determine what goes into contractual “gaps” is largely inapplicable in at-will employment.
• No right to expect the employer to act honestly, rationally, or without opportunism. Contract law imposes a duty on all contractual parties to act in “good faith.” This generally means that the parties should not be irrational, dishonest, or opportunistic toward one another in carrying out their contractual duties. However, in most jurisdictions, the duty of good faith is inapplicable to at-will employment. For example, the at-will employer may terminate an employee based on false accusations.
• No right to expect the employer to abide by binding commitments. Sometimes employers do assume binding obligations to at-will employees. However, contract law does not usually disturb the employer’s unilateral power to alter its commitments on a prospective basis. Contract law does regulate how parties can modify their contracts. For example, a party seeking to modify a contract must act in good faith, which often requires the party seeking the modification to offer the other party something additional to what it already promised. When courts apply these requirements to at-will employment, the usual conclusion is that they do not, in effect, constrain the employer’s attempt to modify its obligations to at-will employees. The employer may unilaterally eliminate a bonus to which it contractually committed, lower employee pay, or even declare that non-at-will employees are at-will employees going forward. It may act dishonestly, opportunistically, and irrationally in making these changes.

In sum, despite the “contractual” designation of at-will employment, the employer is obligated to the at-will employee only to the extent that it desires (with the exception of its duty to pay for completed work) and only for the time it desires. It may act dishonestly, opportunistically, and irrationally toward at-will employees. It is a “contractual” party and yet exempted from the requirements of a commitment, an ex ante bargain, and good faith.

Likewise, despite being a party to a “contract,” the at-will employee has few contractual rights. She generally has no right to expect that the employer will abide by its own policies, or even its contractual obligations. She generally has no right to expect the employer to act honestly or rationally, let alone to treat her fairly. Her main “right” is to quit. If she cannot adjust child care arrangements for the employer’s new schedule, for example, or if she is unhappy about the elimination of a benefit, her primary remedy is to leave her job. Contractual parties get enforceable expectations. At-will employees do not. 

Imposing binding terms on at-will employees

Despite contract law not delivering employees the basic benefit of a contract—enforceable expectations—courts usually apply the rules on forming and modifying contracts to permit the employer to impose enforceable obligations on at-will employees. These include mandatory arbitration agreements and restrictive covenants, like noncompete agreements. Again, the at-will employer normally does not need to act in good faith in taking such actions. In most jurisdictions, for example, the employer may require an at-will employee to sign a noncompete agreement as a condition for keeping a job she has held many years, and then terminate the employee the day after she signs.

The contractual designation also helps to rationalize an employer’s attempt to hold an at-will employee liable for violating the “duty of loyalty.” This duty restricts the employee’s activities that she might take during employment to prepare to compete with the employer following the end of the relationship.

Obscuring, reinforcing, and legitimizing employer power

Not only does the contractual designation of at-will employment fail to disturb the employer’s extra-contractual discretion, it also offers an affirmative justification for this discretion. The main consequence of trying to apply contract law to at-will employment is to obscure, reinforce, and legitimize the employer’s largely unchecked power over its at-will employees.

In some of the examples above, for example, courts rationalize the employer’s power through the fiction that at-will employment is a series of one-day contracts. This construction usually ensures that applying contractual rules will preserve the anti-contractual elements of at-will employment—the employer’s at-will authority and lack of an ex ante bargain. Two features of contract law lend themselves to this paradoxical preservation: (1) its wide notion of assent; and (2) its general indifference to the fairness of an exchange. First, contract law defines in very broad terms what it means to assent, or to voluntarily agree, to a contractual offer. Very few transactions are involuntary under contract law. Second, an enforceable contract requires that the parties exchange something; however, it does not generally regulate whether the parties are exchanging things of roughly equivalent value—one may contract to purchase a tropical island for one dollar.

To illustrate how this works in many jurisdictions, consider the case where the employer seeks to impose a mandatory arbitration agreement on its at-will employees. The employer sends an email to employees attaching the arbitration agreement and stating that, if an employee does not quit, the employer deems that she has assented to the agreement.1 Since each day is a new contract, there is no contract to change. By sending the email, the employer is proposing a new contract that includes an arbitration agreement. Therefore, it need not follow the rules of good faith. The employee may not like the arbitration agreement, but she also cannot afford to lose her job. By not quitting, under contract law’s broad notion of assent, the employee voluntarily consents to the agreement. The employer also satisfies the requirement that it provide something to the employee in exchange for her “promise” to abide by the arbitration agreement: The employer does not fire her immediately. Thus, by construing at-will employment as a series of one-day contracts, the law makes contractual rules, like the rules on modification, applicable to at-will employment while it simultaneously rationalizes the employer’s power not to follow them. Contract law is used both to explain the employer’s power to terminate the employee whenever it wants for any reason, but also to rationalize the employer’s power to commit the employee to obligations that outlive the employment relationship.

Conclusion

At-will employment is not a contractual relationship. By designating it as such, the law drapes the employer’s power with the legitimacy of legal authority and associates it with the ideology of freedom of contract. We should stop identifying at-will employment as a contractual relationship in political and social discourse. And decision-makers should stop recognizing at-will employment as a contractual relationship in legal disputes. Still, the above measures would be inadequate in themselves to dismantle the employer’s private rule over workers. Rather, we need to strengthen the capacity of workers to organize and collectively bargain.

Introduction

It is common to hear people call employment a “contract” or a “contractual” relationship. This is, however, an incorrect classification of the most prevalent kind of employment in the United States—at-will employment. When employment is at will, the employer and employee have a right to walk away for any reason, at any time. The common law—the law made by judges when deciding cases—presumes that employment is at will unless the parties provide otherwise.2

This paper is not a critique of at-will employment as such. Others have taken on that task, demonstrating that employers wield enormous power over at-will employees (Anderson 2017). Likewise, others have critiqued the at-will presumption, correctly suggesting that it recruits the law to the political cause of maintaining the employer’s power (Bagenstos 2020b; Summers 2000).

Rather, this paper focuses on a narrower issue: the labeling and attempted treatment of at-will employment as “contractual.” Judges, legislators, scholars, and others often identify at-will employment as a contractual relationship, and in many kinds of disputes between employees and employers courts try to apply contract law to resolve the issue. However, at-will employment is not contractual as a matter of legal doctrine, and designating it so confirms and legitimizes the inherently unequal power between employees and employers.3

Affixing the contractual label tends to deter needed regulation by signaling that at-will employment reflects the parties’ “freedom of contract” and therefore should be left undisturbed by the legislature and judiciary. Thus, the contractual designation makes it more difficult for policymakers to increase wages or mandate benefits and for judges to interpret legislation protecting employees in a manner consistent with the legislation’s purpose.

Further, trying to impose a contractual framework to resolve legal disputes between employers and at-will employees provides little benefit to employees. It does not disturb the imbalance of power that underlies the employer’s “private government” (Anderson 2017) over the employee or lead to more equitable terms of employment. Redressing power imbalances is not the purpose of contract law, so this is unsurprising. However, the contractual designation of at-will employment does not even afford employees the most basic benefit that a contract has to offer—enforceable expectations about the future conduct of another:

• The contractual designation usually does not give employees a right to expect the employer to abide by its own policies regarding working terms and conditions. This is the case even where the employer expects employees to abide by these policies and promulgates them to obtain their loyalty and hard work. Employers can often avoid assuming any enforceable obligations to at-will employees (apart from a duty to pay for completed work) by issuing disclaimers stating as much.
• It does not give employees a right to expect that their working terms and conditions will be stable or predictable. Unlike parties to a contract, at-will employers need not commit to a contractual bargain and can invent the terms of the relationship as they go along. These terms might deal with the nature and intensity of the work, and they might also deal with matters that have little or nothing to do with performing a job well or realizing the employer’s commercial goals, such as whether the employee supports the employer’s political party. The court’s usual role in determining what goes into contractual gaps is largely inapplicable when it comes to at-will employment.
• It does not give employees a right to expect that the employer will act honestly, rationally, or non-opportunistically toward them. In contrast, contractual parties must act in “good faith” toward one another in carrying out their contractual obligations.
• It does not give employees a right to expect that employers will follow the usual rules for modifying contracts. Thus, even where the employer has assumed binding obligations to at-will employees, the employer can alter them unilaterally on a prospective basis.

While employees are usually left without the benefit of enforceable expectations, the attempted contractual treatment of at-will employment enables the employer to impose binding obligations on its at-will employees. In many jurisdictions, an employer can impose an arbitration agreement or restrictive covenant on its at-will employees without committing to anything in exchange. Many courts will hold the employee to these obligations even where the employer terminates the employee shortly after introducing them.

Paradoxically, where courts try to fit at-will employment into a contractual framework, they usually end up preserving the anti-contractual features of the relationship. How does this happen? The defining features of at-will employment are the opposite of the defining features of an enforceable contract. For example, an enforceable contract requires a commitment by at least one party. By definition, an “at-will” relationship lacks a commitment. Given the anti-contractual features of at-will employment, courts cannot both preserve the employer’s power and apply contract law coherently. Courts must therefore resort to doctrinal contortions and empirical fictions to create a semi-plausible case that at-will employment is, in fact, contractual. They go through this trouble only to conclude that contract rules do not regulate the employer’s behavior in any meaningful way, because the effectiveness of these rules depends upon features that at-will employment lacks. Thus, the exercise of trying to construe at-will employment as a contractual relationship rationalizes the employer’s power as legal authority. It legitimizes the employer’s anti-contractual power to terminate employees at will, invent the terms of the relationship as it goes along, disregard its own commitments, and act in bad faith.

Two features of contract law also play a role in ensuring that contract rules do not disturb the employer’s power: contract law’s wide definition of assent and its indifference to the equity of an exchange. For example, under the former, many courts will find that an employee assents to an arbitration agreement by failing to quit her job after the employer notifies her that it is eliminating her right to go to court.4 And the employer satisfies the requirement that it provide something to the employee in exchange by not terminating her immediately.

Given the consequences of trying to impose a contractual framework on at-will employment, contract law should not govern this noncontractual relationship. Legal actors and policymakers should stop referring to at-will employment as a “contract.” Nonetheless, refusing to recognize at-will employment as a contractual relationship is not, in itself, enough to check the employer’s power. We must support workers’ rights to organize and build collective power. This is also a precondition for contract law to play an effective role in regulating employment.

This paper proceeds in several parts. Part I explains the features of at-will employment as a social relationship. Part II explains at-will employment as a legal relationship. Part III demonstrates that at-will employment is not contractual as a doctrinal matter. It also explains the mismatch between the organization of at-will employment in practice and a common legal construction that courts use to make it appear contractual. Part IV examines the consequences of labeling at-will employment a contract. Part V examines the consequences of trying to construct at-will employment as a contract in legal disputes. It shows that purporting to treat this relationship as a contract does not generally provide at-will employees with enforceable expectations, but it does enable employers to impose binding obligations on at-will employees. Part VI argues that imposing a contractual framework on at-will employment tends to obscure and legitimize, and thus reinforce, the employer’s power. Part VII proposes that worker organization is the best way to counter the employer’s power.

Two caveats are in order before continuing. By necessity, this paper generalizes the law of contracts and of employment. Each U.S. jurisdiction5 has its own common law of contracts and employment, and this paper focuses on the majority and plurality positions. Keep in mind, however, that the law of a particular jurisdiction may differ.6 Statutory contract law is more uniform, but can also vary.7 Second, the focus of this paper is on the relationship between contract law and the common law at-will employment relationship. The paper deals little with statutory employment law, except where highlighting how the contractual designation of employment tends to limit statutory worker protections. The reader should nonetheless be aware that statutory law places some limits on the employer’s power over the employment relationship.8

Part I. At-will employment as a social relationship

To understand the at-will employment relationship, we first need to understand the employment relationship. At first glance, employment appears simple. To be an employee means to work for another, under the command of another, in exchange for remuneration. But what does it mean to “work”? To work is to take voluntary action toward some end. It means choosing and acting upon those choices toward an end. Thus, in working under the command of another, the employee places her ability to take purposive action at the employer’s disposal.

To understand employment in the U.S., we also need to understand capitalism and its main features. Employment is a creature of capitalism and one of its defining characteristics.

Capitalism is a social system in which price-setting markets dominate many forms of economic activity. As in other places, the development of capitalism in the United States involved the assimilation and subjugation to price-setting markets of various kinds of economic activity—meaning activity by which humans interact with and shape their material environment to satisfy wants and needs. A market is a meeting of buyers and sellers, and these buyers and sellers need not be bound to one another through feudal or kinship ties. In a price-setting market, buyers and sellers determine prices through voluntary exchanges. The price mechanism governs the use of social resources by regulating their production and allocation in the commodity form. A commodity is simply something of use to humans that is produced for market sale and capable of exchange via a market transaction.

The philosophy behind the development of capitalism was that price-setting markets would govern the use of finite economic resources in a more efficient manner than other systems. Prices would equilibrate the supply and demand of commodities, directing them to those who valued them most.

What distinguishes capitalism as a peculiar kind of market system is its attempt to treat the ability to work—the ability to take purposive action—as a commodity. In other words, capitalism seeks to commodify this ability. Why?

Another feature of capitalist systems is the appropriation and monopolization of social resources by a small group of persons. This was originally accomplished through extra-legal means (Marx 2005, 521) and labor practices that have since been outlawed (Steinfeld 1991; Orren 1991). Once appropriated, the social resources become productive, private property, or capital. Through the law of private property, the state protects this group’s possession of capital and conditions access to these social resources—including life necessities—upon market exchange (Hale 1923, 472–73; Weber 1961, 277). But the monopolization of capital by a small group means that the majority of persons have no property to bring to the market and nothing to exchange for the commodities they need to survive and live with dignity (Weber 1923, 277, 306–7). Thus, they bring themselves to the market, “compelled” to work for those who possess capital (Weber 1961, 277). As law professor and economist Robert Hale wrote: “The employer’s power to induce people to work for him depends largely on the fact that the law previously restricts the liberty of these people to consume, while he has the power, through the payment of wages, to release them to some extent from these restrictions” (Hale 1943, 627). By applying her labor to the employer’s capital, the employee makes the capital more valuable for market sale. Today, most persons in the U.S. make their living by working for someone else (Bureau of Labor Statistics 2020).

Why, however, does the capitalist insist that the propertyless individual agree to work under its command—to subjugate to the capitalist her ability to take purposive action? Why not instead agree to an exchange of some quantity and kind of work (the results of purposive action)? As a capitalist, the employer seeks to get as much as possible from the propertyless individual, and its survival depends in large part upon its competitive production of market value (Marx 2005; Weber 1961). To obtain as much value as possible from the employee, the employer does not want to commit itself to terms specifying the quantity or quality of work the employee should provide. It would rather have free use of the employee’s very ability to work, at least for some number of hours (Marx 2005). In this way, the employer can seek to maximize the rate at which work is converted into market value. The employer dictates the nature of the work, its intensity, its pace, and even disciplinary rules to maximize this rate of conversion.

By definition, price-setting markets allocate resources efficiently only to the extent that resources are commodified. The resources must be produced for sale on the market if the price mechanism is to regulate their supply. And the resources must be exchangeable through market sales; that is, they must be capable of being alienated from the seller and acquired by the buyer. If a resource cannot be separated from the seller, we cannot claim that the market is allocating resources to where they are valued most. Apart from the resource not changing hands, we no longer have a subject on the selling side to value the use.

The ability to work, however, is a “fictitious” commodity (Polanyi 1957).9 It is not produced for market sale, nor is it exchangeable through a market transaction. These two dimensions of labor’s status as a fictitious commodity are the object of power struggles between workers and capital.

An individual’s faculty to take purposive action is not created for market sale. When the state seeks to regulate the supply of this ability via the price mechanism (e.g., the level of wages), deleterious social consequences follow: Decreases in labor demand increase poverty, starvation, degradation, and other forms of abject human misery (Polanyi 1957).

Economics uses somewhat different language to explain the harmful consequences of treating labor as a commodity. Labor supply is less elastic than labor demand, meaning that the supply of labor is less responsive to decreases in the price of labor or labor demand than the demand for labor is sensitive to increases in the price of labor or labor supply (Offe and Wiesenthal 1980; Silver 2008). In an ideal market, levels of supply and demand adjust until they reach equilibrium. Suppliers of a good or service, when faced with a decrease in demand, respond by withdrawing supply from the market (e.g., producing less) or decreasing the price at which they are willing to sell. Buyers of a good or service, when faced with an increase in price, demand less of the good or service or bargain for a lower price.

Workers, as suppliers of labor, are limited in their ability to withdraw labor from the market or accept price decreases (lower wages). In some cases, workers are able to withdraw labor from the market to go to school. A tiny number of workers can rely on savings until the market improves. Unemployment insurance in the United States is generally only an option if the employee loses her job through no fault of her own. Moreover, compared with other wealthy industrialized states, the United States makes it difficult for workers to withdraw labor from the market in order to raise a family or pursue other socially valuable activity. As an empirical matter, labor markets rarely clear, meaning there are always more individuals seeking work than there are positions for them (Bivens and Zipperer 2018).

Employers, as possessors of capital, are better positioned than workers to lower their demand for labor when the price of labor increases. Capital’s concentration, flexibility, and mobility make several fixes available to employers that are not generally available to workers. These include relocating production, switching lines of production, moving to another industry, or leaving commerce altogether to profit via financial activity (Silver 2008).

Anyone who has taken an introductory course in macroeconomics is familiar with the vertical labor supply curve. This verticality is not natural: It is a consequence of legal and policy choices to treat labor as a commodity. We see power struggles over the regulation of labor supply through price-setting markets in many forms. These include living-wage movements, as well as disputes over family leave, funding for education and the arts, and other policies that would incline the labor supply curve and give workers some meaningful autonomy. The power struggles also appear in worker efforts to leverage the price mechanism through collective power, for instance, by unionizing for better wages.

The second obstacle to commodifying the ability to work is that the ability cannot be exchanged. Exchanging a commodity by definition means alienating that commodity so that the buyer can appropriate it as its own private property. An individual’s ability to choose and act upon her choices is inalienable, however. Contrast this to work that is not carried out under the authority of another and is exchangeable in its objectified, completed form. For instance, a computer programmer’s work is alienable from the programmer in the form of the program.10 However, the employment relationship by definition involves the sale of one’s ability to work, not work itself. This ability is inalienable from the individual who possesses it—it is her vitality, life force, and means of self-determination (Marx 2005).11

What happens when the employer seeks to grasp and command the worker’s means of self-determination for its own ends? Workers generally seek to preserve some means of self-determination from the employer’s commandeering. Therefore, attempting to treat the ability to work as a tradeable commodity generates power struggles. These struggles appear in various forms, including political contests over privacy protections at work and the regulation of working hours. Workers also wage these struggles by organizing and using collective power to establish limits on the employer’s commandeering. For instance, union contracts often include limits on the pace and kind of work the employer can command.

The above discussion illustrates that the employment relationship reflects systematic power imbalances between employers and workers and that it is a site of power struggles. Most individuals are “compelled” to work for employers. Laws and policies that attempt to subject labor supply to price-setting markets and to commodify the ability to work sustain the employer’s power and generate conflict between workers and capital. One such law is the employer’s common law right to terminate employees at will, explained further in the following section. Parts IV through VI show that, where the law designates at-will employment a “contractual” relationship, it usually sides with the employer in the power struggles between workers and capital.

Part II. Employment as a legal relationship

The employment relationship in the United States is a combination of common law and statutory law.

A. Common law development: The departure from contract

The common law employment “contract” is the legal expression of the attempt to commodify the ability to work. It defines employment as an agreement to work for another under the other’s right of control, in exchange for remuneration.12

This definition derives from the pre-industrial, household relationship of master and servant. The master-servant relationship was not contractual; it was in pre-industrial times one of several kinds of legal relationships involving an exchange of services for pay. Apart from slavery and indentured servitude, it was perhaps the most one-sided in favor of the hiring party. The master had a property right to the personal services of the servant (Tomlins 1992), a right that entailed a broad authority to command the servant on anything touching the master’s interest and even beyond, reaching the servant’s private life (Morris 1946).

The reformulation of the master-servant relationship as a contract was the accomplishment of judges and legal treatise writers in the 19th century (Tomlins 1993). They transplanted the master’s authority over an individual servant into the employer, giving the employer discretionary authority over a business enterprise (Tomlins 1992, 83).

The categorization of the master-servant relationship as a contract appeared to solve the challenge of accounting for the employer’s power through law while making it politically acceptable. The employer’s de facto power over its workers derived from its property in the means of production and from the law of private property, which denied to workers both the means of life and means of production. Sometimes, legal decisions suggested a property rationale to explain the employer’s power, but the problem was that property rights could not adequately account for the employer’s command over workers (Tomlins 1993, 295). For example, the employer’s property rights could not give the employer a right to discipline employees.13

Employers insisted upon a legal right to devise and change working conditions and work rules as they went along, and they sought the courts’ assistance. Employers asked the courts to declare that their power issued from an expanded form of the master’s authority over the servant; however, they also asked the courts to ascribe a contractual appearance to this power-cum-authority. The courts obliged, and “rules and working conditions were incorporated into the employment contract as implied terms. The employee is presumed to have given his assent to the rules, and this assent is the font of their legitimacy” (Selznick 1969, 131). Thus, 19th-century cases expanded the employer’s legal prerogatives on the basis of employee consent to an employment contract rather than resting these prerogatives on property ownership (Tomlins 1993). This interpretation entrenched the master-servant character of employment in the law and blocked its development along contractual lines, even though the relationship was denominated as “contractual” (Tomlins 1993, 343). “By the end of the nineteenth century the employment contract had become a very special sort of contract—in large part a legal device for guaranteeing to management the unilateral power to make rules and exercise discretion” (Selznick 1969, 135).

The common law employment relationship of today retains an additional feature from the 19th century: It presumes that employment is at will.14 Under this presumption, either the employee or employer can terminate the relationship at any time, for a good reason, a bad reason, or no reason.15

B. The at-will presumption and employer power

The employer’s authority to terminate employees at will translates into considerable power. Consider the following example:

At the time of her discharge, the plaintiff was the mother of a young son whom she cared for herself and supported entirely from her earnings. She commuted from Cape Cod to work for the defendant in Canton. When she was hired in April, 1991, she was told that her hours of work would be 8:15 A.M. to 5:30 P.M., with the need to work late on one or two days each month. The plaintiff arranged child care accordingly. In fact, the requirements of her job kept her until 6:30 P.M. to 7 P.M. from the outset and even later as the job progressed. In late July, 1991, the plaintiff was told that she would have to work until 9 or 10 P.M. each evening and all day Saturday for at least several months. The plaintiff informed her employer that she would not be able to work such hours because of her responsibilities as a mother. She was discharged two weeks later.16

The court found that the above discharge was lawful. Within the limits imposed by wage-and-hour legislation,17 the employer may direct the hours the employee is to work, and it may terminate the employee who refuses to work over 12 hours a day due to child care responsibilities.18 In another case, a court upheld a newspaper’s right to terminate an editor for placing an advertisement for her ice cream and hot dog stand in a rival newspaper in addition to her employer’s newspaper.19 It did not matter whether the employer’s reaction was “unreasonable,” because the employer is under no obligation to act reasonably when exercising its authority to terminate an employee.20 Under the at-will rule, it is also lawful for an employer to terminate a breastfeeding employee for taking unauthorized breaks to pump milk.21 And courts have upheld terminations following an employee’s good faith reporting of safety concerns to the employer.22

The common law recognizes few limits on the obedience the employer can demand and back by its at-will authority. Employers are generally free to direct the tasks that employees are to perform, the pace of the work, and its intensity. The employer may determine the kinds of work the employee provides, the hours the employee must work, and other terms and conditions, such as when and whether the employee may take bathroom breaks (within the limits of statutory requirements). Commands that are even more intrusive are permissible, such as when to speak, what to say or not to say, what emotions to convey, how to dress, and how to style one’s hair. Walmart, for instance, has prohibited employees from chatting with one another while on duty (Anderson 2017). The employer has a right to surveil the employee at work for compliance with its commands, and, subject to some limitations, to search the employee’s belongings. Of heightened salience today, the employer may demand that employees perform dangerous work, including work that will expose the employee to a risk of infection during pandemics.23

The employer’s authority extends to employee behavior unrelated to work.24 The employer may dictate elements of the employee’s civic life, including what political candidate the employee publicly supports (Anderson 2017; VanderVelde 2017). The employer may use its power to control the employee’s romantic life, for instance, determining who the employee may date or not date, or marry or not marry (Anderson 2017; VanderVelde 2017).25 The employer may control other aspects of the employee’s social life, such as the employee’s social media use and choice of recreational activities or hobbies.26

The at-will feature of employment is not a mandatory term but rather a presumption. The employer and employee may agree that the relationship is not at will. For instance, their agreement might provide that the employment is to last a certain term, like two years. In this case, terminating the employee early where the employee has not done anything wrong would make the employer liable for breach of contract. Instead of providing for a definite term, the agreement might provide that the employer can terminate the employee only under certain conditions, for instance, when the employer has “cause” or “good cause.” Certain employees commonly have non-at-will relationships. These include high-level managerial employees, like corporate officers, and employees with exceptional talent, knowledge, or expertise, like professional athletes. Further, collective bargaining agreements usually include a “just cause” provision. If the parties dispute the at-will nature of the relationship, the party arguing that the relationship is not at will (usually the employee) has the burden of proving this to the court.

C. Noncontractual, common law limits on the employer’s at-will authority

A majority of jurisdictions recognize a common law exception to the employer’s at-will authority in the form of an action for “wrongful discharge in violation of public policy.”27 In most jurisdictions with this exception, the cause of action is not under contract law but under tort law, the body of common law dealing with civil wrongs.28 When an employer terminates an employee in violation of public policy, it does not breach its agreement with the employee. The law deems the discharge to harm not just the employee but also third parties or the public. The elements and breadth of the tort claim differ across jurisdictions, but the tort commonly prohibits employers from terminating employees for exercising certain legal rights, like filing a workers’ compensation claim, serving on a jury, or cooperating with a law enforcement investigation.29

D. Statutory regulation

Statutory regulation also defines the employment relationship. Although these interventions fail to adequately constrain employer power, they play a critical role in protecting some of the human, civil, and political rights of workers.

Federal statutes and rules regulate various aspects of employment. They establish a minimum wage and overtime pay (Fair Labor Standards Act); prohibit discrimination on the basis of protected characteristics, such as race, religion, and sex (Title VII of the Civil Rights Act of 1964), and disability (Americans with Disabilities Act); establish unemployment insurance and workers compensation schemes; grant unpaid family leave (Family and Medical Leave Act); regulate employer-provided retirement benefits (Employee Retirement Income Security Act); protect employee privacy (for instance, under the Genetic Information Nondiscrimination Act); and give employees the right to refuse to perform unsafe work (Occupational Safety and Health Act).

The National Labor Relations Act (NLRA) protects employees’ right to organize, form unions, and bargain collectively with employers. It also gives employees a right to engage in “concerted activities for the purpose of…mutual aid or protection” whether or not they are in a union or seeking to form one. Thus, the NLRA protects an employee who approaches the employer with a co-worker to complain about unsafe work requirements during the pandemic. In addition, under the NLRA employees have a right to refuse to perform the unsafe work if the employer does not adequately address their concerns.

State and local government laws also regulate employment and sometimes go further than federal legislation, for instance, by requiring a higher minimum wage or paid family leave.

Statutory worker protections and rights do not derive from or depend upon the characterization of employment as a contract. Rather, as discussed in Part IV, this characterization has posed an obstacle to the enactment of worker protections. It likely deters additional regulation and encourages courts to interpret existing regulations in ways that limit their reach (Bagenstos 2020b).

Part III. At-will employment is not a contractual relationship

At-will employment is not a contractual relationship from the perspective of contract law. Like a contract, at-will employment involves an exchange—an exchange of work for pay. But contract law does not recognize every exchange as a contract. Further, the construction that many courts adopt to make at-will employment appear contractual neither resolves the doctrinal misfit nor provides a plausible picture of how most at-will employment is actually organized.

A. Doctrinal mismatch

By definition, an at-will relationship is not a contract. The sine qua non of a contract is commitment. Further, a contract must include an ex ante bargain—some minimal agreement, determined up front, as to what the parties are going to exchange or otherwise do for one another. At-will employment is missing both a commitment and an ex ante bargain.

1. Absence of a promise

A contract must include at least one promise to be binding. The Restatement (Second) of Contracts defines a contract as a “promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.”30 The term “promise” indicates two essential things about contract law.

First, contract law deals with expectations about future conduct. It lays out rules by which someone can assert a legal right to expectations about how someone else will behave. If the parties meet certain requirements, contract law provides one party a remedy for the other party’s breach of her expectations.

Second, the promise requirement indicates that contract law deals in commitments: One party’s expectations about the future conduct of another receive no legal protection without a commitment either to or from the other. The Restatement (Second) of Contracts explains, “Words of a promise which by their terms make performance entirely optional with the ‘promisor’ do not constitute a promise.”31 Contractual promises cannot be “illusory” (Farnsworth 1990, 75–76). In other words, “One who states ‘I promise to render a future performance, if I want to when the time arrives,’ has made no promise at all” (Corbin 1995, 175–76).

At-will employment lacks a contractual promise because neither party makes a commitment to the other. Either party may terminate the relationship at any time for any reason or no reason. At first glance, it may appear that the employer and employee make promises to one another—the employee promises to work for the employer in exchange for compensation, and the employer promises to provide work. However, in legal terms, the at-will employee says, “I will work for you if and for as long as I feel like it.” And the at-will employer says, “I will give you work if and for as long as I feel like it.” An at-will relationship is, by definition, the opposite of a contract.32

Contrast at-will employment to employment for a definite term. In this case, the employer makes a promise to provide work and to pay the employee for completed work for the term of the agreement. The employee can get contractual damages if the employer terminates the employee or stops providing work or payment before the agreement expires.33

In one respect, at-will employment involves a promise. The employer must pay the agreed-upon rate of pay for completed work. Courts tend to treat this as a contractual commitment by the employer, meaning an employee can bring a breach of contract claim against the employer to recover unpaid compensation.

However, from the perspective of contract law, this is not one promise but an undetermined number of promises. In contractual terms, the employer makes an enforceable promise only upon providing work to the employee and each time thereafter that the employer provides work, or, in other words, each time the employer instructs the employee to do something. This arrangement becomes apparent when we look at how courts treat supply agreements in which a buyer agrees to pay for any orders it decides to place with a seller, but where the parties do not otherwise commit to place or fulfill orders. The courts tend to treat each buyer order and seller acceptance as a separate contract; as the judge makes clear in the following excerpt, the overarching agreement is not a contract:

At no point do the Terms and Conditions specify any obligation on the part of either party sufficient to create an enforceable contract—not a minimum number of units to be ordered, a minimum duration of exclusivity, nor a fixed price at which goods can be purchased.34

Courts treat service agreements in the same way: Without more, an agreement to provide services on an as-needed basis if the buyer has need for such services is not enforceable as a contract.35 The employer does not make a promise or undertake a commitment by hiring the at-will employee—at this point, the commitment is illusory.

Employment is the only “contract” carrying the at-will presumption. Where a true contract is silent about its duration, courts do not presume that the contract is at will. Instead, contract law says that a court can insert a duration term into the contract. For instance, the court might provide that the agreement was to last a “reasonable” length of time.36 The Uniform Commercial Code (UCC) expressly recognizes sales contracts of indefinite duration. In contrast to employment, however, the UCC generally requires the party terminating the agreement to provide “reasonable” notice to the other.37

2. Absence of an ex ante bargain

At-will employment is also not a contract because the object of the agreement—working under another’s control—is incompatible with the bargain requirement. At-will employment is the only “contract” where courts assume or permit that the “bargain” is not to have a bargain.

The ex ante bargain requirement

Most contracts must include an ex ante bargain, meaning some agreement as to what the parties are going to exchange or do for one another, reached at the outset of the relationship.38

The bargain must include the essential terms of the deal. Where the parties leave essential terms open and the court cannot fix this by inserting terms itself, the contract fails for being “indefinite.” The standard for definiteness is that the terms must be “reasonably certain,” meaning “they provide a basis for determining the existence of a breach and for giving an appropriate remedy.”39 The UCC requires evidence that the “parties have intended to make a contract” so that the court has a “reasonably certain basis for giving an appropriate remedy.”40

The parties must agree upon this bargain ex ante, meaning at the time they enter the agreement. A common refrain by the courts is that they will not enforce “agreements to agree.” In an agreement to agree, the parties not only omit an essential term but also provide that they will make up their minds about the term at a later time.41 Agreements to agree suggest that the parties did not agree to the essential terms of their deal at the time they formed the agreement.

One mantra of contract law is that “all contracts are incomplete.” The parties cannot possibly account for every scenario that might arise and address it in their contract. Contract law does not expect this. However, courts do not recognize vague commitments as binding contracts.

What do courts look for to determine that the parties “intended” to enter a contract? What terms are essential to the existence of a bargain? Given the salmagundi of matters covered in contracts, this is difficult to generalize; however, the UCC and case law provide guidance. Essential terms tend to answer basic questions about the exchange: “What, for how much?” For example, agreements lacking a quantity term (a “what”) tend to be unenforceable unless they satisfy an exception.

Output and requirements contracts illustrate this point. In an output contract, a buyer promises to purchase all of a seller’s output of a particular product. In a requirements contract, a seller promises to sell as much of a certain product as a buyer requires. Thus, outputs and requirements contracts have open-ended quantity terms. Further, the seller’s promise in the output contract and the buyer’s promise in the requirements contract appear illusory. For instance, the buyer in a requirements contract may decide that it no longer “requires” the selling party’s product, but that it instead “requires” the product of a cheaper seller. Thus, courts recognize these contracts only if they require the buyer and seller to deal exclusively with one another with respect to the product.42 

The courts sometimes take it upon themselves to fill in a contractual gap, and we can better understand the limits of the law’s tolerance for open-ended agreements by examining the limits of the courts’ willingness to do this.

In the practice of “implication,” the court implies something into the parties’ agreement that is not expressly articulated.43 For example, both the common law44 and UCC authorize courts to insert missing terms under certain circumstances where the parties later disagree on what they intended. The UCC provides for a court to insert a missing price term into a sales agreement so long as the agreement is otherwise clear. In this case, the court can supply a term that the contract price will be a “reasonable price.”45

The main justification for the court’s authority to imply content into agreements is that the inserted content reflects the “reasonable expectations” of the parties at the time they formed the agreement, given the context of the agreement. Thus, where the court inserts a price term under the UCC, the justification is that it was within the parties’ reasonable expectations that the contract would include the statutory term in the absence of the parties including their own term.

The court assesses the parties’ reasonable expectations from an objective standpoint. The court is unconcerned (formally) with the subjective intentions of the parties. Instead, it looks to the empirical manifestations of their agreement and its context and asks, “What would a ‘reasonable’ person take this agreement to be?”46 Judges are not positioned to derive the attributes of a reasonable person or the relevant context of the agreement through social scientific methods. As many have observed, the objective account of reasonable expectations is an alibi for judicial policymaking. Below I examine how courts have used it to delineate the outer contours of the bargain requirement. 

Consider how courts deal with contracts that afford one party discretion to determine some aspects of the bargain. Commercial contracts often grant one party the discretion to exercise certain terms, supply certain missing terms, or resolve certain ambiguities in the interpretation of terms. For example, a buyer might delegate to the seller the right to determine the manner of delivery. Limited grants of discretion are not a problem for meeting the bargain requirement.

What poses a problem is when the agreement seems to delegate so much discretion to one party as to enable it to deprive the other party of its deal. These agreements, by their terms, appear to permit one party to determine essential terms of the deal ex post.47 In such cases, the court generally has two options. First, it may find that the parties did not intend to enter a contract—they did not agree on the essential terms.48 In other words, the court refuses to countenance that it was within the reasonable expectations of the parties that one party would have such discretion. Second, the court may imply terms that restrict the party’s exercise of its discretion, again, on the theory that this is what the parties reasonably expected when they entered their agreement.

In sum, these agreements usually fail as contracts unless the court intervenes to save them by implying limits to one party’s discretion. To illustrate, consider an agreement in which one party promises the other that it will have an exclusive right to deal in the first party’s products, and where the other agrees to deal in the first party’s product. The UCC requires that the second party use its “best efforts” to market the first party’s product.49 Similarly, under the common law, where a commercial agreement fails adequately to specify one party’s obligations, the court will sometimes imply a term that the party use reasonable efforts or best efforts, thus limiting the party’s discretion and revealing an ex ante bargain.50 As illustrated above, output and requirements contracts also seem to provide one party with a quantum of discretion that would enable it to destroy the expected deal for the other party. In addition to implying a term of exclusive dealing into an otherwise valid output or requirements contract, the UCC imposes another requirement on these contracts: an implied term forbidding the party from demanding or tendering an “unreasonably disproportionate” quantity compared with what it demanded or tendered earlier under the agreement.51

Another means by which the case law and UCC circumscribe agreements that give too much discretion to one party is through the implied covenant of good faith and fair dealing (“good faith”). Each party to a contract owes a duty of good faith to the other party in the performance of its contractual duties. The law implies the duty of good faith into every contract and makes it nonwaivable.52 This means that the duty attaches to contractual obligations regardless of whether the parties expressly provide for it and even if the parties try to limit or exclude it. As with other implied terms, the dominant rationale for implying a duty of good faith is to realize the parties’ reasonable expectations at the time they entered the agreement.

The duty of good faith varies by jurisdiction.53 It usually requires that parties perform contractual duties honestly. Consider the following example where a requirement of honesty limits one party’s discretion to destroy the other party’s expected benefit. An artist agrees for a price to paint a portrait of her client to her client’s “satisfaction.” The artist paints the portrait, and the client is pleased with the portrait. However, the client tells the artist that she is not satisfied and refuses to pay the contract price. The client’s dishonesty breaches the duty of good faith.54 Depending on the jurisdiction and circumstances, the duty of good faith may prohibit sabotaging the other party’s ability to perform its contractual duties, willfully shirking one’s own contractual duties, abusing the power to specify terms, and exercising one’s contractual discretion to deprive the other party of its expected bargain (Summers 1968; VanderVelde 2017). For example, to fulfill the duty of good faith, the UCC requires that the purchaser in a requirements contract not drastically change the quantity it demands.55

At-will employment and the missing ex ante bargain

At-will employment far exceeds contract law’s tolerance for open-ended agreements.56

By definition, to form an at-will employment relationship, the parties need not reach any agreement that contract law would otherwise recognize as an ex ante bargain. Recall that employment is an agreement to work for another under the other’s right of control. And to work is to exercise one’s ability to take purposive action, or to make choices and act upon those choices. Thus, in agreeing to work under the employer’s right of control, the employee agrees to subject her very ability to reach a bargain to the employer’s command. The employer chooses the bargain—what the employee is to provide—by commanding the employee in her work as the relationship proceeds: what the employee does, how it is done, the effort exerted, the benefits the employee is to receive, and, as explained in Part V, even the employee’s obligations after the relationship has ended. At-will employment is an “agreement to agree” to whatever the employer decides upon ex post.

Take the example of an employee paid an hourly wage. The employer decides ex post the terms that answer the questions, “What, in return for how much?” It decides these questions by commanding the nature, pace, and intensity of the work. The employee agrees to provide an indefinite amount of work—whatever the employer can extract in an hour—in return for a definite amount of pay (Fox 1974, 190).57

Selznick (1969, 135) illustrates the absence of an ex ante bargain in this rhetorical passage:

Just what does the employer purchase? A reasonable amount of labor? So much as the employee is willing to do? Enough to keep the machinery running at a rate the employer finds proper? In purchasing labor, does the employer buy the right to regulate the employee’s working day as he sees fit? Does he purchase the right to ignore the proprieties of conduct, or must he treat the employee with decency and respect for his physical and psychological needs?

Now we can see that the employer’s “promise” to pay the employee in exchange for her obedience creates only the illusion of an ex ante bargain. At the end of the relationship, the employee has provided some quantity and quality of work to the employer, under certain conditions. However, the employee and employer did not agree on this quantity or quality or these conditions ex ante. The employer promised to pay only for whatever work it would later decide to, and be able to, extract from the employee.

An employer usually hires an employee to fill a particular position and will often lay out duties that the employee is to perform. The employer may even describe the employee’s duties in written form. However, the employer generally has no contractual right of action against the employee where the employee fails adequately to perform in the position.58 The terms are not contractual. Likewise, the at-will employee generally has no right to perform these duties, and the employer may terminate the employee if she refuses to perform other kinds of duties.59

This almost open-ended discretion afforded to one party is extraordinary from the perspective of contract law. At-will employment does not meet the same fates that befall other agreements with open-ended quantity terms or terms that otherwise afford one party an enormity of discretion. In most jurisdictions, at-will employment does not fail as a contract for indefiniteness. However, the law does not provide for the implication of terms to restrict the employer’s discretion. For example, courts do not impose a legal requirement that an employer and at-will employee deal exclusively with one another for a particular kind of work. In this regard, courts sometimes recognize the exceptional nature of employment as a “contract”:

[T]here is one area of contract law which is strikingly idiosyncratic. That is the law of employment contracts. It has developed contrary to all of the standard, modern contract principles….If the parties to an employment contract do not specify the duration of the contract, a court will not imply a reasonable duration. The contract is considered terminable at will.60

Nor does the law generally provide for courts to use the duty of good faith to delineate a bargain in at-will employment. The law imposes no duty on the employer to use “reasonable efforts” to provide work to an at-will employee, even where the employee is relying on her job to earn a living and the employer expects the employee to be available full time. Several jurisdictions do not recognize the duty of good faith in at-will employment at all.61 No jurisdiction subjects the employer’s at-will authority to an independent duty of good faith.62 In some jurisdictions, the duty applies to a limited category of dismissal decisions—the employer cannot dismiss an employee with the intention of depriving her of earned compensation or vested benefits.63 For example, if an employee earned a contractual annual bonus to be paid in the following year on the condition that the employee still be employed then, the employer cannot avoid paying the bonus by terminating the employee before the payment date.64 Thus, the duty in these cases is available only where the court first finds that the employer and employee agreed to a contractual right or benefit—it does not follow from the agreement to form an at-will employment relationship.65

It is difficult to find another “contract” where the law deems such broad discretion as that afforded to the at-will employer to be within the parties’ reasonable expectations. For no other kind of agreement that courts recognize as “contractual” can one party delegate so much discretion to the other without prompting the court to find either that the agreement fails for indefiniteness or requires the implication of additional terms.

3. At-will employment as a unilateral, day-to-day set of contracts

To deal with the conundrum of calling an at-will agreement a contract, courts often adopt the fiction that at-will employment is not an at-will agreement. They try to impose a peculiar doctrinal construction on at-will employment that involves two elements: (1) construing employment as a unilateral contract; and (2) construing employment not as one contract but as a series of contracts in which the employer and employee enter a new contract each day or for some other short duration.66

In a unilateral contract, instead of exchanging promises of future conduct the parties exchange a promise of future conduct for a performance. One party makes an offer to the other, but it is not bargaining for a return promise from the other. Rather, it is bargaining for the other party to do something.67 The structure of a unilateral contract offer is, “I promise to do X if you do Y,” whereas the structure of a bilateral contract offer is, “I promise to do X if you promise to do Y.” For instance, if a police department promises a reward for locating a wanted criminal, it does not want someone to promise to locate the criminal. It is bargaining for someone to locate the criminal. The other party can accept the contractual offer only by performing. The contract only comes into existence when the nonpromising party completes the performance, for instance, by locating the criminal. Note that the nonpromising party cannot breach a unilateral contract, because it makes no promise. If it decides not to render the performance or stops halfway through, the legal interpretation of this conduct is that the party does not accept the offer. Thus, the police department in the example cannot sue someone on the basis of a contract breach where the person tried but failed to locate the criminal. Nor can unilateral contracts be modified, since there is no contract unless and until the party completes the performance.

In jurisdictions that try to impose a unilateral contract framework on at-will employment, the employer is the promisor and the employee is the performer. The employer promises to pay the employee for following its commands. The employer is not bargaining for the employee’s promise to work, but rather for the employee to follow its directions.

The other part of this reconstruction is to depict employment not as one unilateral contract but as a series of unilateral contracts: The employer and employee renew the unilateral contract each day. Each day the employer makes an “offer” to the employee, and the employee accepts the offer and completes the contract each day by working under the employer’s direction.

This day-by-day construction appears to explain why at-will employment is a contract that either party can quit without incurring contractual liability. If the employee quits, she is simply “rejecting” the employer’s “offer,” not breaching her contract. When the employer terminates the employee, it is declining to extend a new offer to the employee for the next day. Note that the common law does not impose a duty to negotiate contracts in good faith.68 Thus, a party may decide that it does not want to renew a contract for a good reason, bad reason, or no reason. Under this construction, at-will employment looks more like a commercial agreement to supply goods or services, where the buyer promises to pay for any orders it places with the seller, but where the parties do not commit to place or fulfill orders. Each order by the buyer and responsive fulfillment by the seller creates a new unilateral contract committing the buyer to pay. 

However, the comparison is inapt. This attempt at a doctrinal solution fails adequately to explain at-will employment as a contractual relationship.

First, the reconstruction of employment as a series of day-to-day unilateral contracts does not address the problem of the missing ex ante bargain. It is still an agreement to work for another under the other’s right of control, although only for one day. Thus, it is still an agreement to allow the other party to choose the bargain ex post.

Second, the law does not take the day-to-day reconstruction seriously. Courts adopt this expedient only for some kinds of disputes, where it usually favors the employer. The common law does not otherwise recognize at-will employment as a one-day contract or as a non-at-will contract for a different period. For example, almost the only way to breach an at-will employment agreement is for the employer to fail to pay the employee for completed work. If at-will employment were a unilateral, one-day contract, however, it would be possible for the employer to breach the contract by other means. The employer would breach the contract by dismissing the employee mid-morning and refusing to pay the employee for the rest of the day. This breach occurs because contract law prohibits the promisor from withdrawing its offer of a unilateral contract until the other party has had an opportunity to accept by completing the requested performance.69 Thus, if at-will employment were a one-day unilateral contract, the employer would be required to permit the employee to continue working for a day. Yet, the at-will employee is generally entitled to be paid only for completed work.70 Likewise, if at-will employment were a one-day contract, the employer would not have to pay the employee where her performance was woefully inadequate. Instead, the employer is usually required to pay for the completed work. The employer’s remedy is to terminate the employee. Furthermore, as explained in Part V, even where courts do attempt to treat at-will employment as a series of one-day contracts, they are unable to reconcile this at-will, bargain-less relationship with contract law.

The only way to construe at-will employment as a collection of non-at-will contracts and still satisfy the bargain and commitment requirements would be to decompose each hour, minute, moment, or task into an independent contract. Each employer instruction would be an “offer” of work and implied promise to pay the employee for following that instruction. This uncertain decomposition that would be necessary to fit at-will employment into a contractual framework makes it clear why at-will employment is different from the overarching arrangement between a buyer and supplier of goods or services, where each buyer order is a new unilateral contract. In the buyer-seller relationship, it is easier to identify the transaction constituting the contract. It may be an order to purchase three gadgets, to perform one delivery job, or to cater two events. Identifying the contract in at-will employment is more difficult, if not impossible, in most cases: Is the contract for the hour, the minute, the moment? For one customer served, one library book reshelved, one bundle of insurance claims processed? And, indeed, courts do not undertake this exercise, despite it being necessary to determining whether there was any bargain and to find a commitment.

At least one scholar has suggested that at-will employment is a spot contract (Epstein 1992); however, this argument also fails to fit at-will employment into a contractual framework, for two reasons. First, a spot transaction refers to an extemporary exchange, for instance, where the parties trade goods and money simultaneously (Epstein 1992, 60). By definition, a spot transaction is not a contract, because it lacks a commitment: Instead of either party making a promise, both parties exchange performances. They form and perform the agreement at the same time, so the exchange does not exist in an unperformed state. It is like exchanging $2 for a glass of lemonade at a lemonade stand.71 Second, in practice, contract law deals with what otherwise look like spot exchanges by superimposing a contractual framework that supplements the otherwise bare-boned exchange. For instance, the UCC implies certain promises into transactions for the sale of goods, like the warranty of merchantability.72 The absence of contractual supplementation in the case of at-will employment makes it stand out.

B. Empirical mismatch between at-will employment and daily contracts or spot exchanges

Construing at-will employment as a series of daily contracts provides an unrealistic picture of most at-will employment.

The typical spot market as described by economists comprises one-off transactions: The buyer and seller meet for one exchange, and the parties settle the exchange—and their relationship—within a short period. The unpredictable and decentralized currents of the market bring them together once and then separate them again. They do not anticipate repeat business with one another, let alone that they would repeat the transaction on mostly the same terms, in succession, for an indefinite period. If the typical employee and employer were truly renegotiating a new exchange every day—the equivalent of the parties wandering into a busy bazaar each day to strike up a new deal—most economists would shame this as an extremely inefficient way of doing business or immediately recognize the legal characterization as a sham.73

Most at-will employment relationships do not resemble spot transactions. Day laborers may be hired for the day, but employers and at-will employees usually do not renegotiate their agreement and re-establish the terms of the relationship each day (let alone each hour or minute). The employer and employee make “transaction-specific” investments—specific commitments of resources to the relationship—on the assumption that the relationship will (or must) continue on about the same terms and shared understandings for some time (Williamson 1981). The design of the work process and compensation formula usually indicate that the employer does not contemplate a one-off transaction. Employers normally embed at-will employees into some kind of organizational regime. Employers screen and train employees. They issue employment handbooks laying out policies like performance expectations, benefits, and disciplinary procedures. They schedule employees and locate them within a particular division of labor. The employee accrues knowledge and experience regarding the employer’s methods—knowledge and experience that the employer cannot replace without some cost.

Economists have observed that wages generally have not followed the pattern one would predict in spot markets. Namely, wages have not reflected employee productivity but instead have tended to increase incrementally over the length of the employment relationship (Schwab 1993; Lazear 1979). Thus, early in the employee’s tenure with the employer, when the employee is still learning and gaining experience with the work, wages tend to exceed the employee’s productivity. In the middle of the employee’s tenure, when the employee is proficient at the work, wages are more equal to productivity. Closer to retirement, wages again exceed productivity. The secular increase in wages rewards the employee’s continuing effort, commitment, and loyalty (Weil 2014; Stone 2004; Weiler 1990). Over the past few decades, wages have become more “market-mediated” (Kalleberg 2011). For example, performance-based pay is more common, along with the practice of paying piece rates that roughly reflect the value of employee sales (Stone 2004). Some companies tie wages to company earnings. Despite these trends, compensation practices in at-will employment do not match the spot market theory.

Many jobs have become more precarious over the past few decades (Kalleberg 2011; Doussard 2013).74 Average job tenure has decreased for men (Hollister and Smith 2014), and many workers today face fluctuating and unpredictable schedules (Lambert, Fugiel, and Henly 2014). Companies have reorganized work practices to require less training, experience, skill, and education (Weil 2014; Kristal 2013; Doellgast 2012), rendering each worker more fungible. For instance, companies have used technology to deconstruct complex tasks into simple ones and refine the division of labor, with the consequence of making each worker’s contribution easier to replace (Irani 2015). Companies have outsourced work to unstable, undercapitalized entities that face more competitive pressures than their upstream clients, rendering the positions offered by the downstream entities less secure (Weil 2014). These changes have emboldened many employers to claim that the workers performing their core business operations are not their employees at all but rather “independent contractors” (Weil 2014). Indeed, nonstandard work arrangements have increased relative to regular, full-time positions (Katz and Krueger 2016).

These changes are still a far cry from turning at-will employment into a one-day contract. Only the rare employer is indifferent to cultivating an experienced or reliable workforce. This observation holds even if we consider a company that claims the workers performing its core business operations under its command are not employees—the on-demand ride company Uber. In legal proceedings, Uber holds itself out as a company that has all but perfected the use of information technology to design its relationship with its drivers as one-off exchanges. However, even Uber designs the work process and pay formulas to encourage driver loyalty to its platform. For example, Uber has programmed its algorithm to incentivize drivers to choose Uber over other platforms (Prassl 2018). Its pay is structured to incentivize drivers to work for Uber somewhat regularly (Uber n.d.).

Part IV. Labeling at-will employment a contract: ‘Freedom of contract’

One of the consequences of designating this noncontractual relationship a contract is to legitimize the employer’s power by raising an ideological barrier to regulating at-will employment.

Contract is a convenient ideological home for employment in a capitalist system. Once the master-servant relationship becomes a “contract,” the ideology of “freedom of contract” claims it for its own and makes regulation of the relationship suspect (Bagenstos 2020a).

Most references to freedom of contract are not to be taken literally. It is usually a metonym for “freedom” of the market, or for the tenet that the government should not interfere with the power of a private property owner to use and dispose of its property (Weber 1961; Bagenstos 2020a). Two key premises of this tenet are: (1) every individual is the foremost judge of her own interests, including how to weigh and rank those interests; and (2) the best evidence—the only valid evidence—of the individual’s interests are her choices about how to use and dispose of her property, including how the individual decides to dispose of her property through market exchange. Therefore, whenever the state seeks to regulate the market, it is (1) second-guessing the individual’s choices as to her interests, and, by extension, second-guessing the self-rule of the individual; and thereby (2) interfering with the efficient allocation of resources to those who value them most. Connected to this ideology is the 17th-century philosophy of possessive individualism, under which the individual possesses her ability to work as private property: Each person is user and disposer of her own labor (Gershon 2011).

Together, freedom of contract and possessive individualism form a dense dogma, since “when commerce and industry are perceived as the use and disposition of private property, there is no encouragement to legal scrutiny of the social structure that lies behind the economic act” (Selznick 1969, 65). Evidence has revealed time and again that these premises do not provide a logical or realistic depiction of the individual or establish that market “interference” is inefficient; nonetheless, the ideology discourages legal scrutiny of employer power. Affixing the inaccurate contractual label to at-will employment tends to deter needed regulation of this relationship by signaling that it embodies the parties’ freedom of contract.

For example, the contractual label has encouraged spurious defenses of the at-will presumption. Courts have invoked freedom of contract to justify and protect the employer’s at-will authority (Bagenstos 2020b).75 Other proponents of the at-will presumption have likewise argued that it protects workers’ freedom of contract (Epstein 1984) or that it is at least consistent with it (Hillman 2014). Historically, there is some support for this position: Giving the employee a right to quit meant eliminating the “entire contract doctrine,” under which an employee who left before the expiration of the term of employment (usually one year) would forfeit all payment for the employee’s work (Orren 1991; Stone 2007). But for a long time now, the freedom of contract argument has made no sense. Contract law does not require that contractual rights be mutual, including rights to terminate the agreement.76 Courts will enforce a contract giving only one party a right to terminate the agreement upon reasonable notice.77 Imposing limits on the employer’s right of termination does not mean the agreement must likewise restrict the employee’s right to quit to constitute an enforceable contract.

Furthermore, requiring parties to abide by their commitments for an agreed-upon period is consistent with freedom of contract. Every contract restrains the freedom of market trade to some extent, because every contract includes a commitment and thus looks to the future. For example, if I have a contract to purchase a bicycle from you that obligates me to pay you in two weeks, your bicycle is off the market for two weeks. The theory justifying contractual market restraints is that such restraints ultimately facilitate commerce by enabling rational planning. Contract law permits parties to agree to long-term contracts, including for personal services. It enforces lifetime contracts, contracts that last for decades, and contracts with no express termination point. Courts do not presume that a contract missing a duration term is terminable at will for any other kind of contract apart from employment. At-will employment represents freedom from contract.78

Placing at-will employment beneath the banner of freedom of contract likely inhibits statutory worker protections as well. Opponents have sought to prevent the enactment and extension of labor legislation by contending that it interfered with freedom of contract. During the Lochner era, courts regularly invoked freedom of contract to overturn statutory worker protections (Bagenstos 2020b).79 Courts still use this totem to support narrow interpretations of statutory protections (Bagenstos 2020b).

Part V. Constructing at-will employment as a contractual relationship: Little benefit to employees

In several kinds of disputes between employers and employees, courts try to impose a contractual framework on at-will employment to resolve the dispute. This offers little benefit to employees.

A. Contract law not designed to disturb power imbalances

Contract law is not designed to level imbalances of bargaining power, so trying to impose a contractual framework on at-will employment does not disturb the imbalance of power between employees and employers. It does not provide at-will employees a meaningful legal basis to challenge inequitable terms and conditions of work.

Several features of contract law add doctrinal flesh to the ideology of freedom of contract and its indifference to inequality.

First, the doctrine of “consideration” illustrates that contract law is unconcerned with the fairness of the terms of the exchange. To be enforceable against the promisor, the promise must be backed by consideration—something of legal value.80 Consideration could be a benefit to the promisor or a detriment to the promisee. For example, imagine that a seller and buyer bargain for return promises: The seller promises to give its car to the buyer in exchange for the buyer’s promise to give the seller $3,000. The promise to pay $3,000 is consideration backing the seller’s promise. It gives the buyer a legal right to insist that the seller execute its promise to give the buyer the car. Likewise, the promise to give the buyer the car is consideration for the buyer’s promise. It gives the seller a legal right to insist that the buyer pay it $3,000. Consideration may also be a promise not to exercise a legal right. For example, courts will enforce settlement agreements in which one party agrees not to sue the other in exchange for the other’s payment.

Contract law does not generally inquire into whether the consideration is “adequate”: “If the requirement of consideration is met, there is no additional requirement of…equivalence in the values exchanged.”81 In other words, so long as the consideration is something deemed to have legal value,82 courts will not otherwise scrutinize the fairness of the exchange. In keeping with the ideology of freedom of contract, interfering with a contract because the court disagreed with the terms of the exchange would breach the parties’ autonomy to determine their own interests.83 Thus, denominating at-will employment as a contractual relationship does not invite scrutiny of the terms of the exchange, for instance, of the wage level and working conditions.84

Second, contract law defines assent extremely broadly. Nearly all agreements are, by definition, “voluntary.” The commodious boundaries of contractual assent likewise reflect contract law’s basic indifference to disparities in bargaining power. The exceptions are narrow and not often applicable.85 Where the exceptions are helpful to employees, this is in part because attempting to force a contractual framework on at-will employment provides a rationale for allowing employers to impose legal obligations on employees in the first instance (see the section, “Imposing enforceable duties on at-will employees,” below).

Third, the interpretative principles are not designed to counter the adverse consequences of an imbalance of power between the parties.86 The goal of contractual interpretation is to find the parties’ intent based on the objective manifestations of this intent. The court considers the “reasonable expectations” that similarly situated parties would have about the meaning of the agreement at the time of contracting. The more powerful party can often determine that certain expectations are reasonable by clearly dictating them in a contract of adhesion.87 For example, if your contract with your internet provider states that your monthly charge is $50, it is generally unreasonable for you to claim that you expected the charge to be only $35 per month under the agreement. Contract law is concerned with preventing a party from frustrating the other party’s reasonable expectations. However, the harm caused to at-will employees due to the employer’s unilateral imposition of employment terms and conditions is not just a product of frustrated expectations; rather, it is also a product of an imbalance of power.

In sum, even if at-will employment were a contract, certain doctrinal features of contract law would foreclose most legal scrutiny of its voluntariness or the fairness of its terms. (Not only do these features help to show why employees receive little benefit from attempting to treat at-will employment as a contract, but, as discussed in Part VI, they help explain why this attempt legitimizes the employer’s exercise of power over employees).

B. At-will employment does not provide the key benefit of a contract: Enforceable expectations

Designating at-will employment as a contract does not even give employees the key benefit of a contract—legally enforceable expectations about the future conduct of another.

A key purpose of contract law is to facilitate commerce by making it possible to plan. In a complex market society, recognizing certain promises as legal commitments (in theory) enables persons to arrange their affairs in anticipation of the behavior of others. “Calculability” (Weber 1961) is an animating principle of contract law: “That is why contract as a legal device is so well adapted to the market economy. The obligor knows what he is getting into and can calculate his costs. He can maximize his freedom to make alternative decisions under changing economic conditions” (Selznick 1969, 56). A contract gives one a legal right to form and rely upon expectations about how another will act.

Attempting to impose a contractual framework on at-will employment does not give the employee a legal right to form and rely upon expectations about the employer’s conduct. It does not ensure that employers will be held to their own policies. It provides no certainty about the terms or length of employment. It does not restrict the employer’s abusive or arbitrary exercise of discretion. It does not even subject employers to the normal rules for modifying contracts.

In limited circumstances, employees succeed in negotiating contractual obligations that restrict the employer’s power, including its at-will power. Executive employees are generally able to negotiate binding, favorable terms. Star athletes and performers, and some professionals, are in a similar position. Another example is where workers negotiate a collective bargaining contract or otherwise use collective leverage to negotiate terms.88 In all of these cases, however, bargaining power is necessary to achieve these contractual arrangements. Contract law alone is inadequate.

The purpose of a contract is to “restrict…its expected future effects to those defined in the present, i.e., at the inception of the transaction” (MacNeil 1977–1978, 863). The employee, however, secures no commitments as to the future when she enters at-will employment.

1. No enforceable expectations that employers will abide by their own policies

Courts do not necessarily approach disputes over the interpretation of employment agreements differently than disputes over other agreements; however, the employer can often avoid assuming any contractual obligations to at-will employees (apart from a duty to pay for completed work), even where it issues personnel policies to govern the relationship. Contract law does not generally hold at-will employers accountable for their own policies as to working terms and conditions and fair treatment. This is the case even where the employer issues such policies to cultivate expectations among employees as to these matters in exchange for their loyalty and hard work.

At-will employment relationships are often formed without any written or oral contract.89 Recall that, unlike other agreements that the law recognizes as contractual, an employer does not have to commit itself to any contractual terms upfront to form an at-will employment relationship. The employer often specifies only a rate of pay. (And, as explained below, the at-will employer usually has a unilateral right to alter this rate prospectively.)

However, at-will employers often issue written policies to all employees or to a group of employees to govern them uniformly. Such policies may be in the form of a personnel manual, handbook, or other document. The materials may describe job duties, work rules, bonus schemes and other benefits, promotion ladders, and disciplinary procedures. The materials sometimes suggest that the employer will only terminate an employee for inadequate performance, for certain infractions, and/or only after following a set of procedures, like conducting an investigation and hearing.

Employees often (and reasonably) expect that these written policies will govern their work relationship, particularly where the employer expects employees to abide by rules in the documents. For example, where an employment manual lays out the details of a disciplinary process, an employee might argue that the employer’s failure to abide by this policy in terminating her was a breach of contract.

Even where there is no clear written policy, where the employer follows a consistent course of conduct, its employees often (and reasonably) expect that the employer will continue to adhere to the policy implicit in its treatment of them. For instance, a sales employee might argue that the employer’s regular practice in the timing of commission payments from the outset of the relationship reflects a term of the employment contract.

However, contract law does not provide a good basis for holding employers accountable for their policies. As noted above, courts look to the parties’ “reasonable expectations” to determine the terms of a contract. The concept of reasonable expectations also applies in determining whether the employee can hold the employer liable under the doctrine of promissory estoppel or “reliance.” This doctrine allows a party to recover when another’s unambiguous promise induces the party’s “reasonable” reliance on that promise to its detriment. The party relying on the promise can recover even though she did not offer a return promise or conduct sought by the promisor so as to form a unilateral or bilateral contract (Hillman 2014).90 Under these principles of interpretation, the at-will employee’s expectations or reliance regarding the employer’s policies is often “unreasonable.”

‘Reasonable expectations’

(1) The employer can often prove that the employee’s reliance or expectations were unreasonable by issuing a disclaimer.

For a time, courts seemed willing to enforce some employer practices and policies on the basis of “implied” contract theory (Stone 2007). In an implied contract, the contractual offer and acceptance are implicit and inferred from the parties’ conduct. For instance, an employer’s use of a certain formula over a course of years to calculate an employee’s commission payments might establish that the employee had a contractual right regarding the commission formula. Courts found that written policies, oral promises, and consistent practices could be the basis for implied contract claims by employees (Arnow-Richman 2009; Stone 2007).91 Courts even upheld limitations on the employer’s at-will authority on this basis, for instance, where a handbook promised job security or limited an employer’s right to dismiss employees arbitrarily (Stone 2007).

More recently, scholars have observed a contraction in the tendency of courts to find that employers have assumed enforceable obligations to at-will employees (Fineman 2008). They attribute this in part to employers learning to issue disclaimers to employees (Arnow-Richman 2009; Stone 2007). The disclaimers generally provide that the employer’s personnel policies, practices, and oral promises create no contractual obligations on the employer’s part. They often state that the relationship will remain at-will notwithstanding any oral statements or other personnel policies (Moss 2017; Arnow-Richman 2009).92 Thus, if an employer says that it has a policy not to terminate employees without following certain procedures, but also says that the relationship is at will, many courts will say it was unreasonable for the employee to believe that she was entitled to any sort of due process before termination.93 The Restatement (Third) of Employment finds that, despite a majority of jurisdictions being willing in theory to enforce employer policies under some circumstances, “All jurisdictions give considerable weight to the presence of a prominent disclaimer in the employer statement as evidence that the statement is not a binding commitment.”94

(2) Thinking that the employer limited its at-will authority is often ‘unreasonable’

Some scholars have argued that courts are particularly reluctant to find that an employer has contractually restricted its at-will authority (Bodie 2017; Summers 2000). Even where there is no disclaimer, courts have suggested that the at-will presumption makes it almost always unreasonable for an employee to rely on personnel policies or oral assurances as evidence that the employer limited its at-will authority.95 Some courts require exceptionally clear written evidence to find that the employer and employee agreed to something other than the at-will default (Bodie 2017).96 Some go so far as requiring that the employee offer something to the employer in addition to providing services under the employer’s direction, such as releasing the employer from a claim for damages.97 Otherwise, it is unreasonable for the employee to think that the employer had agreed to limit its at-will authority.98

(3) The employee’s expectations or reliance may be “unreasonable” for other reasons

As discussed in Part III, contractual promises must be somewhat clear and definite. Courts have found that the language in employer policies is too indefinite—to the point of being illusory—to constitute a contractual promise or the basis for a reliance claim.99 Where the employer expressly reserved a right to modify its personnel policies unilaterally at any time, courts have also found the employee’s expectation that the employer would abide by the policies—even where the policies were not modified—to be unreasonable.100 Some courts find that at-will employees cannot enforce written policies at all—any apparent promise by the employer to abide by its policies is illusory, because the employer can terminate the employee for any reason at any time.101 Even without a disclaimer then, some courts will find that it is unreasonable for an at-will employee to rely on an employer policy.102

Other obstacles to the contractual enforcement of employer policies

(1) Detrimental reliance

When bringing a claim of promissory estoppel, the employee may be unable to demonstrate that she relied to her detriment on an employer policy. In some jurisdictions, merely continuing to work for the employer following issuance of an employer policy is not enough.103 Some courts require that the employee demonstrate that she remained at work because of her reliance on the employer policy.104

(2) Unilateral and bilateral contracts: Bargaining for a promise or performance

Employer policies are difficult to enforce under a unilateral or bilateral contract analysis because the requirement that a return promise or performance be bargained for is normally missing.105

For an exchange of promises or an exchange of a promise for a performance to be contractually binding, the promisor must offer the promise in order to induce the return promise or performance, and this offer must in fact induce the return promise or performance. To meet the requirement of a contractual offer and acceptance, the offer cannot be in the form of a performance. To illustrate, if Fred bakes you cookies, and, in return, you promise Fred to pay him for the cookies, your promise is not enforceable: you did not make your promise to induce Fred to bake the cookies or to induce Fred to promise to bake cookies.

In the employment situation, employees are often unaware of the employer’s policies when they begin working, so it is not the case that the employer’s issuance of the policy induced the employee to work or continue working—it is difficult to say that the employee “accepts” the employer’s offer of its policies by beginning to work or continuing to work where the policies are disseminated through supervisors or by email.106 Likewise, the employer usually does not promulgate a written policy in response to the employee’s bargaining, such as where the employee threatens to quit in the absence of the policy.107 However, the employee does not make a contractual offer to the employer simply by working (baking cookies). Arguments that the employer’s assent to contractual obligations is evidenced by its course of conduct face similar problems under contract law.108

Where employers are obliged to follow their personnel policies: Departing from contract law

Where courts enforce policies on behalf of at-will employees against employers, they usually depart from a strict application of contract principles.109 For example, the Restatement (Third) of Employment notes that some jurisdictions enforce employer policies on “general estoppel principles,” without requiring that the employee demonstrate that she relied to her detriment on an employer policy. It recommends dropping the pretense that unilateral contract rules or the doctrine of detrimental reliance justifies their enforcement. The Restatement argues that the policies should be binding because the employer receives, and expects to receive, a benefit from the policies: The employer issues the policies because it expects them to contribute to an orderly and satisfied workforce; therefore, the employer should not be permitted to claim later that it was under no obligation to abide by them and that employees were unreasonable to expect as much.110

The Restatement summarizes the rule as follows with respect to policies limiting the employer’s at-will authority, and recommends the same rule for other employer policies:

Policy statements by an employer in documents such as employee manuals, personnel handbooks, and employment policy directives that are provided or made accessible to employees, whether by physical or electronic means, and that, reasonably read in context, establish limits on the employer’s power to terminate the employment relationship, are binding on the employer until modified or revoked.111

2. No enforceable expectations of certain or stable working terms or conditions

The failure of contract law to protect the expectations of at-will employees that employers will abide by their policies indicates that designating at-will employment as a contract does not disturb the employer’s power to make up the main terms of the relationship as it goes along. The point of a contract is to fix the parties’ obligations to one another within their bargain. However, as illustrated in Part III, at-will employment need not include a contractual bargain. The at-will employer can generally dictate working schedules, the pace of work, the kind of work, and other important conditions. It can alter these as it pleases.

3. No enforceable expectations that the employer will act honestly, rationally, or without opportunism

As explained in Part III, contract law imposes a duty on the contracting parties to act in good faith. In carrying out their contractual obligations, the parties should be honest with one another, and they should not be irrational or opportunistic in exercising contractual discretion.

Despite their designation as “contractual” parties, however, the duty of good faith does not give at-will employees a right to expect that the employer will act honestly, rationally, or without opportunism. This is because the applicability and scope of the duty depends on the underlying bargain. The duty of good faith is not a freestanding or extra-contractual obligation. It attaches to extant, particular contractual terms.112 In other words, parties do not have a general duty to act in good faith to one another by virtue of having entered a contract. They must act in good faith to one another only in the performance of their obligations. Thus, a federal appellate court explained that there is no duty of good faith in at-will employment, because at-will relationships do not have contractual terms to which the duty could be affixed.113 This ruling is consistent with contract doctrine and the common law of at-will employment. It highlights the weakness of contract law in protecting at-will employees from an employer’s abusive exercise of its power. 

The duty of good faith is antithetical to at-will employment (and to any other at-will relationship). The duty of good faith means that a contractual party cannot exercise its right to terminate an agreement dishonestly.114 In at-will employment, either party may terminate the agreement for any reason. For instance, the employer may terminate an at-will employee based on false accusations of employee wrongdoing. Employers are free to act dishonestly and opportunistically toward their at-will employees.

4. No enforceable expectations that the employer will abide by its binding commitments

Sometimes employers do assume binding obligations to at-will employees. As discussed above, in some jurisdictions and under some circumstances, the employer may be bound by personnel policies, including policies that change the employees’ at-will status. And the obligation to pay for completed work at a certain rate is usually treated as a contractual promise. However, contract law does not generally disturb the employer’s unilateral power to alter its commitments on a prospective basis. Contract law does regulate how parties can modify their contracts. Nonetheless, when courts apply these requirements to an employer’s attempt to modify obligations to its at-will employees—or to employees it now wants to consider at will—the usual conclusion is that these rules do not, in effect, apply. Contract law permits the employer to make prospective, unilateral changes whenever it wants, without even a minimal inquiry into the employer’s good faith. The employer may unilaterally eliminate a bonus to which it contractually committed, lower employee pay, or even declare that non-at-will employees are at-will employees going forward. It may act dishonestly, opportunistically, and irrationally in making these changes.

The usual rules for modifying contracts

The traditional rule—the “pre-existing duty rule”—is that the same requirements for entering a contract apply to modifying the contract: The party not seeking the change must assent, and the modified promise must be backed by something of value apart from what the party seeking the change already promised to do under the existing contract. In other words, the party seeking the change must provide additional consideration. For example, imagine that a buyer and seller have exchanged promises for the sale of a car for $3,000. Now imagine that, before the parties have performed, the seller decides that it wants $4,000 for the car. Two things need to happen under the traditional rule to modify the contract price: (1) the seller should offer something additional in exchange for the buyer’s promise to pay an extra $1,000 (e.g., perhaps free maintenance or a new navigation system), and (2) the buyer must agree to pay the $4,000. Otherwise, under the pre-existing duty rule, the seller breaches the contract if it refuses to give the buyer the car for the contract price of $3,000.

A more recent trend in contract law relaxes the pre-existing duty rule by permitting a contractual change without additional consideration if it is in good faith and the other party assents. For example, the UCC provides that an agreement modifying a contract for the sale of goods “needs no consideration to be binding,” but must be in good faith, meaning that it is sought for a “legitimate commercial reason.”115 The Restatement (Second) of Contracts provides that a “promise modifying a duty under a contract not fully performed on either side is binding…if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made.”116 Thus, the modification should also be prompted by unanticipated circumstances.

The requirements of additional consideration and good faith are intended to prevent the party seeking the change from subjecting the other party to a hold-up in bad faith. For example, imagine that A, a catering company, contracts with B to provide catering for B’s large gala. The morning of the gala, A tells B that it will only cater the gala for 50% more than the contract price. It is too late for B to find another caterer, so B may feel it has no choice but to pay the higher price to get the same services that A already promised.117 In this case, A held up B in bad faith.

Modifying at-will employment and non-at-will employment relationships governed by a binding policy

Disputes over changes to at-will employment relationships—and to those that are no longer at will due to a binding employer policy—arise in several circumstances, usually where the employer takes unilateral action. The employer might seek to alter the employee’s pay or benefits, or the employer might seek to retract a binding promise, for example, a promise that the employee will only be terminated for cause. Or the employer might seek to introduce a restrictive covenant or mandatory arbitration agreement (discussed in the section, “Imposing enforceable duties on at-will employees,” below).

The dominant approach is to permit the employer to modify the relationship on a prospective basis, unilaterally, upon reasonable notice. This applies whether the change is advantageous to the employee (for example, introducing job security) or adverse (for example, cutting employee pay). The Restatement (Third) of Employment describes the prevailing position as to modifying binding policies: “An employer may prospectively modify or revoke its binding policy statements if it provides reasonable advance notice of, or reasonably makes accessible, the modified statement or revocation to the affected employees.”118

Courts suggest that this approach follows the traditional rule that the modification must be supported by consideration and voluntarily accepted by the employee. For a modification that is beneficial to the employee, the employee voluntarily accepts the change and provides consideration by continuing to work for the employer instead of quitting. For changes beneficial to the employer, the employer provides consideration by not terminating the at-will employee right away. Since the employer has a legal right to terminate the at-will employee at any time, refraining from exercising this right gives the employer a right to insist that the employee abide by the new arrangement (e.g., accepting lower pay). Again, the employee voluntarily accepts the change by not quitting.

The claim that, by refraining from terminating the employee right away, the employer provides consideration to support modifying the relationship to its advantage has provoked some dispute: 

If the same at-will employment relationship continues, where is the consideration? The employer has relinquished nothing, since it retains exactly the same pre-existing right it always had to discharge the employee at any time, for any reason, for no reason, with or without cause. The employee has gained nothing, for he has not been given or promised anything other than that which he already had, which is “employment which need not last longer than the ink is dry upon [his] signature.”119

In many jurisdictions, courts rebut this challenge with the following explanation: The employer does not propose to change the employment contract but rather proposes a new contract.120 At-will employment is a one-day contract that ends and begins anew each day: “because employers can fire employees at any time with or without cause, every day of an at-will relationship is a new day.”121 So long as the employer does not terminate the employee right away, and the employee does not quit, the modification is valid.

Problems with the dominant approach under contract law

Neither attempt to rationalize the employer’s power to modify the agreement makes sense under contract law. That the dominant approach is a sui generis doctrinal innovation spurred by the peculiarity of employment illustrates the incompatibility between contract law and at-will employment: Courts are unable to apply contract law in an intelligible manner, deliver enforceable expectations to employees, and protect the employer’s power.122

Consider first the explanation in which at-will employment appears as one unilateral contract of indefinite duration. Where the employer changes the agreement to its advantage, we saw that it is difficult to find any consideration for the employee’s promise, since the employer can still terminate the employee at any time.

The explanation faces additional problems where the employer is seeking to rescind a promise. As explained in Part III, unilateral contracts are not formed until they are executed by one side: The promisee accepts the offer and completes its performance at the same time. At one time, the law permitted the promisor to revoke her promise at any time before the promisee completed performance. This is no longer the law. The current position is that once the promisee begins performance, the promisor may not withdraw its offer until the promisee has a reasonable opportunity to complete the performance.123 For example, let us say that I promise to pay you $100 for bicycling across a bridge. In response, you begin bicycling across the bridge. When you are halfway across, I tell you that I have changed my mind about paying you for crossing the bridge. I have violated the agreement.

Now apply this to at-will employment where the employer has promised some right or benefit to an employee but then seeks to retract it. For example, imagine that the employer makes a clear written promise to senior managers that they will have job security in the absence of a major disruption to its business, a promise that the court and employer acknowledge creates a binding obligation.124 It would seem that the reasonable expectation of the parties is that the employer was bargaining for the managers to work until retirement. If the courts were applying unilateral contract principles, the employer could not withdraw the benefit until the managers had a chance to complete their bargained-for performance. It could not terminate employees before retirement.125 Similarly, if the employer promises its sales employees to provide a 10% commission until they turn 60, it seems that the employer was bargaining for the employees to continue to work for it at least until age 60.

Another reason the dominant approach is hard to reconcile with contract law is that, unlike the bridge example or the examples provided in the previous paragraph, it is often difficult to understand what performance the employer bargained for in making a promise/offering a unilateral contract. For example, imagine the employer promises to pay a 10% commission to at-will sales employees. Two years later, the employer says that it is only going to pay a 5% commission going forward. The employees object. The employer might claim that, in promising to pay the commission, it was bargaining for the employees to work for it until it changed its mind about the commission, and that now it has changed its mind. Of course, this means there was no ex ante bargain. It cannot be that, whenever the employer decides to withdraw the promise, the precise amount of time has passed for which the employer initially bargained when it made its promise. Contract law does not accept ex post or retroactive bargains. Therefore, permitting the employer to alter the commission under the dominant approach does not make sense under unilateral contract theory. On the other hand, it is not clear from the promise what performance the employer was bargaining for, so it is unclear how the employees could complete their performance. Thus, it also makes little sense to try to impose a unilateral contract on this scenario.

Now consider the day-to-day or moment-to-moment rationale, where the employer can modify even its binding obligations prospectively, because it is simply proposing a new contract each day, hour, minute, etc. As noted in Part III, the common law does not, in other respects, treat at-will employment as a series of daily contracts. Rather, courts adopt this fiction on a selective basis where it generally favors the employer. Likewise, it is difficult to say either as a practical matter or doctrinal matter that the parties are continuously re-negotiating their contract based on some other arbitrary but short unit of time, like each hour or second. Recall that a promise to do or not do something “at will” is illusory under contract law and that the day-to-day fiction is meant to get around this problem. So, courts sometimes suggest that the employer is “promising” non-at-will employment on a moment-to-moment basis. Here, the court is just calling a performance a “promise”: Promises are future-regarding acts. Promising putatively non-at-will employment on a moment-to-moment basis is basically saying that the employer is performing—in exchange for the employee’s obedience, the employer is providing work to the employee, not promising it. This is not a contract. There is not even an implicit promise within the moment-to-moment construction. (Note we are here setting aside the problem that agreeing to follow another’s command is too indefinite to constitute a bargain—it would be a bargain not to have a bargain).

C. Imposing enforceable duties on at-will employees

Another consequence of categorizing at-will employment as a contractual relationship is to make it easier for employers to impose enforceable obligations on employees. Employers generally rely on their power of termination to procure the at-will employee’s compliance with its rules and commands. However, in some situations, often where the employment relationship has already ended, the employer seeks the law’s assistance. The most common of these situations is where the employer wants to hold an employee to a restrictive covenant or mandatory arbitration agreement. Employers often require employees to sign arbitration agreements and restrictive covenants as a condition of employment. Another scenario where the employer seeks affirmative assistance from the law is where it wants to hold an employee liable for breaching the duty of loyalty.126

1. Restrictive covenants and arbitration agreements

Restrictive covenants restrict the employee’s actions following termination. For example, a restrictive covenant might prohibit an ex-employee from soliciting any of the employers’ customers or other employees, or it might prohibit an ex-employee from dealing with anyone who was a customer of the employer during the employment relationship. Common restrictive covenants include noncompete, nonsolicitation, and nondealing agreements. Noncompete agreements prohibit the ex-employee from engaging in a line of work or kind of business in competition with the employer. A few states do not enforce noncompete agreements, and a few have banned their use for certain low-wage employees (Prescott, Bishara, and Starr 2016; Hahn and Beck 2019).127 However, over one-quarter of employees in the private sector are subject to noncompete agreements (Colvin and Shierholz 2019). An employee who breaks a valid restrictive covenant can be subject to damages or an injunction.

Mandatory arbitration agreements require employees to arbitrate employment disputes instead of bringing them to court. These agreements often prohibit employees from bringing collective claims as well, meaning that the employee must bring any claims against the employer as an individual.128 The Supreme Court’s interpretation of the Federal Arbitration Act makes arbitration agreements widely enforceable against employees, even where the agreement requires the employee to arbitrate civil rights claims and other statutory rights.129 The Supreme Court has made it clear that it views most arbitration agreements to be voluntary.130 Courts enforce these agreements by refusing to hear disputes covered by a valid arbitration agreement. An estimated 55% of U.S. workers are subject to mandatory arbitration agreements (Colvin 2018).

Construing at-will employment as a contractual relationship makes it easier for employers to impose binding restrictive covenants131 and arbitration agreements on employees unilaterally. In many courts, the rationale is the same as that for permitting the employer to modify its binding obligations: The employer provides consideration for the employee’s “promise” to comply with the agreement by not terminating the employee right away, i.e., through an implicit “promise” of at-will employment. Again, it does not matter that the employer may terminate, or in fact terminates, the employee shortly thereafter.132 The rationale applies whether the employer imposes the agreement at the beginning, middle, or even end of the employment relationship. Where the employer imposes the agreement in the middle of the relationship, some courts again resort to the day-to-day construction to explain this outcome: The employer did not modify the agreement, but proposed a new contract.133 A majority of jurisdictions permit employers to impose restrictive covenants on employees unilaterally under these rationales (Arnow-Richman 2016, 439).134

Although it still provides a rationale in many instances, the contractual designation of at-will employment may be less critical in enabling the employer to impose arbitration agreements on at-will employees compared with restrictive covenants.135 The employer’s return promise to arbitrate disputes constitutes consideration for the employee’s promise to arbitrate.136 The court need not assert that the employer’s provision of employment on an at-will basis constitutes a contractual promise. Nor does it need to depict at-will employment as a series of daily contracts to find contractual consideration. According to Arnow-Richman (2016, 445), most arbitration agreements do include a promise by the employer to arbitrate, given the employer sacrifices little in making this promise.137

2. Duty of loyalty

Some states impose a nonreciprocal duty on employees to be “loyal” to the employer (Selmi 2012). In these jurisdictions, employers can sue and hold employees liable for breaching that duty, which is applicable primarily where an employee begins to compete with her employer while still employed. While employed, an employee may take “preparatory steps” to begin competing with the employer after leaving the employer. For example, the employee may prepare for a job interview with a competitor of her employer or apply for a business license to start a new business in competition with the employer. The employee cannot begin competing while still employed, however. For instance, the employee cannot solicit the employer’s customers or co-workers (Selmi 2012; Fisk and Barry 2012). The employer is not subject to a reciprocal duty of loyalty to the employee. It may, for example, require the employee to train another worker to become the employee’s replacement, and it may sabotage the employee’s work or the employee’s outside vocation.

Construing at-will employment as a contract provides some rationale for imposing the duty of loyalty. The duty attaches to agents in all principal-agent relationships, and it is therefore not unique to employment. However, principal-agent relationships are generally formed through contracts. Thus, imposing the duty on at-will employees goes beyond agency law. Some states do not recognize a duty of loyalty in at-will employment relationships, because they do not see at-will employment as a contractual relationship in this regard (Selmi 2012).

3. Escape valves do not justify designating at-will employment a contractual relationship

Contract law includes a few doctrines intended to relieve vulnerable parties of their contractual obligations, such as the doctrine of unconscionability. The purpose of the unconscionability doctrine is to prevent “oppression” and “unfair surprise” to the weaker party, for example, where an imbalance in bargaining power leads the weaker party to agree to harsh terms hidden in the fine print.138

The doctrine of unconscionability is sometimes helpful to at-will employees in relieving them of obligations the employer has imposed via a restrictive covenant or arbitration agreement. This does not, however, demonstrate that the contractual classification of at-will employment benefits employees, for at least two reasons: 

1. As explained above, the contractual designation provides a legal rationale for permitting employers to impose these obligations on at-will employees in the first instance.
2. Courts do not, and cannot in the case of arbitration agreements, regularly find that employee obligations under these agreements are unconscionable. The doctrine of unconscionability is not meant to re-allocate contractual risks and burdens that reflect the imbalance of power between the parties. In the arbitration context, the Supreme Court has held that “mere inequality in bargaining power…is not a sufficient reason to hold that arbitration agreements are never enforceable in the employment context.”139 The Supreme Court has also limited the room for both courts and legislatures to apply unconscionability principles to arbitration agreements.140

Part VI. Legitimizing employer power

Rather than temper the employer’s whim, trying to impose a contractual framework on at-will employment obscures, even as it reinforces, the employee’s subjugation to capital. It lends the legitimacy of law to the employer’s exercise of power over the employee.

Calling at-will employment a contract is a post hoc legitimization of the employer’s exercise of power over the employee. The defining features of at-will employment are the opposite of the defining features of an enforceable contract. An enforceable contract requires a commitment by at least one party. By definition, an at-will relationship lacks this commitment. An enforceable contract requires that the parties arrive at a bargain—some minimal agreement as to what they are going to exchange or do for one another at the outset of the relationship. In contrast, the employee agrees only to subject her very faculty for agreement to the employer’s disposal. For no other kind of contract does the law assume and permit that the bargain was not to have a bargain.

Contract law’s broad notion of assent tends to rationalize the employer’s power to make up the terms of the deal as the parties go along. Historically, designating at-will employment as a contract enabled courts to rationalize the employer’s unfettered control on the pretext that the employee implicitly assented to everything the employer might do as the relationship proceeded (Tomlins 1993). Courts still rely on this line of reasoning, as illustrated by a more recent judicial defense of the at-will presumption: “The employee usually feels free to leave and take another job if it presents a more desirable opportunity. Similarly, the employer generally feels free to discharge the employee if he no longer wants his services. The at-will presumption is simply a legal recognition of the parties’ normal expectations. In the vast majority of cases, it is consistent with the parties’ intent.”141 Since contracts are almost always “voluntary,” the employee would not have agreed to enter this contract if she did not assent to the employer’s authority; and, the moment she does not, she would express her non-assent by quitting.

We saw that the interpretative principles of contract law do not guarantee any enforceable expectations to the at-will employee apart from being paid for completed work; instead, applying these principles rationalizes the employer’s power as the reasonable expectations of both employer and employee. Contract law declares the realized power of the employer as the parties’ mutual expectations agreed to ex ante.

We also see this legitimization of the employer’s power in disputes over employer attempts to modify an agreement or impose binding obligations on employees. As noted, the main approaches are to construe at-will employment as a day-to-day sequence of contracts or to invent a new doctrine of unilateral contracts to justify the employer’s power. These approaches tend to ensure that the employer will be effectively exempt from the rules of contractual modification. The meaningful application of the duty of good faith and other requirements for contractual modification depends upon the existence of a contractual bargain. By definition, at-will employment need not include a bargain that the law would otherwise recognize as “contractual.” The point of at-will employment is not to commit the employer to a bargain.

In other words, the law resorts to various doctrinal contortions and empirical fictions to say, “See, at-will employment is contractual.” After this herculean effort, the law turns around and says, “but, at-will employment is such a peculiar contract that the usual ways in which we would supervise a contract are inapplicable here; we defer to the employers.” The formal exercise of applying these rules to the at-will employment “contract” renders them meaningless. Why undertake a cumbersome analysis, requiring a set of sui generis doctrinal contrivances, if the inevitable conclusion is that even the duty of good faith—a duty that in theory applies to all contracting parties—does not apply to at-will employers? Construing at-will employment as a unilateral contract or series of one-day contracts respects neither doctrine nor social practice. The main consequence is to legitimize the employer’s power.

Note how contract law’s loose version of assent and its indifference to the equity of the bargain help make sense of these rationales for the employer’s power to modify the agreement or impose a binding duty on an at-will employee. The employee “assents” to the employer’s modification by not quitting. It might seem that a decision made under the ultimatum “your job or my way” is not a choice made under free circumstances. Under contract law’s extremely broad definition, however, the employee’s decision not to quit is voluntary. Also, under these approaches, the employer provides consideration by not terminating the employee right away or by putatively hiring the employee for one day. It likewise might seem like a rather inequitable deal for the employee to give up, for example, in exchange for a day of work, her annual bonus or even her right to be terminated only for cause. The employer’s abstention from terminating the employee before the ink dries on an arbitration agreement might likewise seem quite an insubstantial thing to support the employee’s relinquishment of her right to go to court. However, contract law is not generally concerned with the adequacy of consideration.

By trying to construct at-will employment as a contractual relationship and apply contract law rules, the courts offer a legal justification for the employer’s extra-contractual power to make up and change the terms of the relationship as it goes along. Contract law is used both to explain the employer’s power to terminate the employee whenever it wants for any reason, but also to rationalize the employer’s power to commit the employee to obligations that outlive the employment relationship. The law launders employer power into lawful authority.

Part VII. Solutions?

We should surrender the pretense that at-will employment is contractual. The contractual classification dresses up the employer’s power as lawful authority, making it more impervious to legislative or judicial abrogation. However, it is not enough to simply shed the contractual label and for the common law to stop recognizing at-will employment as a contractual relationship. After all, contract law does not give employers power over workers—capital does.

How then do we counter the power of capital over the lives of workers? Legislation has been critical in protecting the civil, political, and human rights of workers, and it is worth considering new statutory protections and better enforcement of existing ones. However, with a partial exception explained below, this is an inadequate solution. The panoply of statutes regulating employment does not confront the employer’s overall power. The statutes mainly carve out discrete exceptions to the employer’s use of its power. For instance, under anti-discrimination statutes, employers cannot use their power to discriminate on the basis of sex.

At-will employment is aberrant among contracts. Contract law does not otherwise recognize the open-ended authority of the at-will employer as compatible with a contractual relationship—it is a “magisterial authority” (Tomlins 1993, 284–85). Individuals do not normally enter these anti-contractual agreements unless they are without other property to bring to the market to make a living. It is a disparity of bargaining power that leads individuals into at-will employment. Within the syntax of contract law, the main features of these relationships are discernible only ex post. They are the outcomes of power struggles waged by the parties, not the products of ex ante commitments. In the absence of the workers having collective power, the employer often wins these struggles.

Therefore, reviving and protecting worker rights to organize and collectively bargain should be both the primary means of removing at-will employment from the governance of contract law and of countering the power of capital. In particular, we need much more worker organization and collective bargaining to constrain the employer’s power—both so workers can impose fairer terms of exchange and restrict the employer’s discretion.

The NLRA governs the legal status of unions and collective bargaining in the U.S., with some exceptions.142 It mandates that an employer bargain in good faith over the terms and conditions of employment with its employees’ chosen representative. The mandate is coupled with a right for employees to take collective action against employers to gain bargaining leverage in these negotiations without facing certain forms of employer retaliation.

Rather than target discrete aspects of the employer’s power, the NLRA protects the employee’s right to counter this power through collective action and bargaining. Congress did not intend the NLRA to be a radical instrument, and legislative amendments, case law, and administrative interpretations have unduly restricted workers’ NLRA rights and left many of them ambiguous and/or unstable (Mishel, Rhinehart, and Windham 2020); nonetheless, the underlying principle is worth fighting for—through collective power, workers can restrict the employer’s arbitrary power over their lives. They can subject employer power to negotiation.

Collective worker power is a necessary precondition for contract law or contractual principles to play an effective and humane role in employment. Where the employer and employees approach one another with more proportional bargaining power, a contract-like agreement such as a collective bargaining agreement (CBA) can play a useful role in governing their relationship. CBAs generally include fairer terms of exchange than the employee could obtain through bargaining in isolation, such as higher wages. CBAs also partially contractualize the employment relationship. They usually restrict the employer’s at-will authority, thus adding a promissory element to the relationship. They restrict the employer’s discretion in other ways as well, for instance, by regulating assignments, the intensity of the work, working hours, and employee discipline. In contrast to contract law and the common law generally, workers can use CBAs to impose enforceable limits on the employer’s power over the disposal of their capacity for purposive action.143

How to revive the NLRA to better empower workers, and whether other models for building and exercising collective power are more appropriate than the NLRA model for some workers today, is beyond the scope of this paper. The point is that, once organized, workers have a more realistic chance of confronting the power of capital.

Conclusion

At-will employment is simply unintelligible in contractual terms. Yet the law insists that it is a contractual relationship, requiring courts to attempt to use contract law to resolve disputes over the parties’ rights and obligations within this relationship.

This does little to help employees. We might not expect that designating at-will employment as a contractual relationship would lead to more equitable terms and conditions of work. The purpose of contract law is to protect and effectuate the “reasonable” expectations of the parties as to the meaning of their bargain, not to ensure an equitable exchange. And, indeed, designating at-will employment as a contractual relationship does not really disturb the imbalance of power between employees and employers.

Designating at-will employment as a contract does not even deliver on the basic promise of contract law. It does little to help employees secure legal recognition of employer policies and promises as enforceable obligations. The employer can often determine the parties’ “reasonable expectations,” for instance, by requiring employees to sign a disclaimer acknowledging that the employer has made no contractual commitments. And, should the at-will employer assume an enforceable obligation, it can modify it prospectively at any time upon notice. Thus, the at-will employer is obligated to the employee only to the extent that it desires (with the exception of its duty to pay for completed work) and only for the time that the employer desires its obligations to remain in effect. Thus, trying to treat at-will employment as a contract does not ensure that employees will have stable or predictable working conditions. It does not ensure that the employer will treat employees honestly or nonarbitrarily, let alone fairly.

Courts have been unable to both apply contract law to at-will employment in a coherent manner and to also rationalize the employer’s power. The ability of contract law to deliver enforceable expectations depends upon the very features that at-will employment lacks—a commitment and a definite bargain entered ex ante. By insisting that at-will employment is a contract then, the common law leads courts to engage in tortured doctrinal analyses that have the effect, paradoxically, of protecting and rationalizing the anti-contractual features of at-will employment—the employer’s power to terminate employees at will, to determine the terms and conditions of employment as it goes along, and to do these things via dishonest, arbitrary, and opportunistic means. It even protects and rationalizes the employer’s power to subject at-will employees to binding obligations, such as arbitration and noncompete agreements, while in effect exempting the employer from following the usual legal rules.

Even labeling at-will employment as a contract has undesirable consequences. Affixing the contractual label tends also to associate at-will employment with the ideology of “freedom of contract” in the eyes of adjudicators and policymakers. This makes it more difficult as a political matter to regulate the relationship via judicial and legislative means.

Why then do we persist in the fallacy of designating at-will employment as a contractual relationship? At-will employees are subject to the employer’s power, and the law both disguises and legitimizes this power by treating their subjugation as a contractual relationship. Construing at-will employment as a contractual relationship rationalizes this power as legal authority and disguises political questions as legal issues.

We must drop the pretense that at-will employment is a contractual relationship. The most promising way of removing at-will employment from the governance of contract law and countering the employer’s private rule is through collective worker power.

Acknowledgments

I am grateful to Larry Mishel for providing the opportunity to undertake this project and for his patience and creative and intellectual support along the way. I also thank Aditi Bagchi, Michael Harper, and Wilma Liebman and for their detailed and thoughtful feedback on earlier drafts.

Endnotes

1. This is the fact pattern underlying the Supreme Court’s decision in Epic Systems v. Lewis, 138 S. Ct. 1612 (2018).

2. This presumption is also in the Louisiana Civil Code, La. C.C. Art. 274. Louisiana is the only U.S. state that is not a common law jurisdiction.

3. This paper focuses on at-will employment, but parts of the analysis also apply to some employment relationships that are not at will. I indicate where this is the case.

4. This is the fact pattern underlying the Supreme Court’s decision in Epic Systems v. Lewis, 138 S. Ct. 1612 (2018).

5. For purposes of this paper, I confine the analysis to the 50 states and Washington D.C.

6. To illustrate common law doctrines, the paper uses case law and the Restatement (Second) of Agency (Am. Law Inst. 1958), Restatement (Third) of Agency (Am. Law Inst. 2006), Restatement (Second) of Contracts (Am. Law Inst. 1981), and Restatement (Third) of Employment (Am. Law Inst. 2015). The Restatements are compilations by jurists, legal scholars, and practitioners that summarize a certain body of law. Although the Restatements do not have legal force like case law, courts will sometimes cite them to illustrate points of law. For instance, the Supreme Court has often used the Restatement (Second) of Agency to distinguish employment from independent contracting. E.g., Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 752 (1989).

7. Every state and Washington D.C. have codified a version of the Uniform Commercial Code (UCC) (Am. Law Inst. & Unif. Law Comm’n 2002), a set of model laws for commercial transactions. To illustrate contract law principles, this paper looks in particular at UCC Article 2, which covers the sale of goods. Louisiana is the only state that has not adopted Article 2.

8. Federal statutes generally apply to all private-sector employment relationships. States and municipalities may enact their own laws to cover aspects of employment that are not preempted by federal law. Most federal statutes do not preempt states and localities from enacting their own laws. These include the Fair Labor Standards Act (FLSA) (29 U.S.C. §§ 201–219), which establishes a right to the federal minimum wage and overtime pay, and federal anti-discrimination law. In contrast, the National Labor Relations Act (NLRA) (29 U.S.C. §§ 151-169), which regulates the legal status of trade unions and collective bargaining in the private sector, has a broad preemptive effect (Chamber of Commerce of the United States of Am. v. City of Seattle, 890 F.3d 769 (9th Cir. 2018)). The Occupational Safety and Health Act (OSHA) also has a preemptive effect. State and local laws must not provide less protection to workers than federal statutes. They sometimes regulate matters not covered by federal law. For instance, a California statute provides paid family leave (7 Cal. Unemp. Ins. Code §§ 3300–3308 (2003)), while the federal Family and Medical Leave Act (FMLA) (29 §§ U.S.C. 2602–2654) provides only unpaid leave.

9. Karl Polanyi (1957) theorized that money and land were also “fictitious” commodities.

10. To sell completed work, as opposed to selling the ability to work, it is not necessary that the exchange occur only after the work is completed, as in the programming example or the case of a carpenter who creates a chair that she later sells to a customer. In most cases of the production of personal services, the exchange at least in part overlaps with the work. For example, a doctor running a private practice in part exchanges her work as she examines or treats a patient. The recipient of the service is a necessary part of the productive process; however, the doctor is not placing her ability to work under the authority of the patient.

11. This notion appears implicit in the 13th Amendment’s prohibition of both slavery and involuntary servitude: Selling this faculty on a permanent basis is akin to slavery, because you cannot purchase a person’s capacity for purposive action without purchasing the person.

12. Restatement (Second) of Agency § 220(1) (Am. Law Inst. 1958); Restatement (Third) of Agency § 7.07 (Am. Law Inst. 2006); Restatement (Third) of Employment § 1.01 (Am. Law Inst. 2015).

13. There is a common misconception that the employer’s property gives it an ownership right over the job, and that this, in turn, “gives the employer the right to impose any requirement on the employee, give any order and insist on obedience, change any term of employment, and discard the employee at any time” (Summers 2000, 78). In the collective bargaining context, employers and arbitrators often insisted that employers had “reserved authority” over any aspect of the work relationship and enterprise governance that was not expressly qualified in the collective bargaining agreement (Young 1963, 247; Atleson 1982–1983, 95–96). Yet, property rights in nonlabor factors of production (e.g., capital, plant, equipment, and intellectual property) do not give the employer a property right over the job. Nor do they give the employer at-will authority or a right to direct, monitor, and discipline workers. The right to exclude others is a basic property right, but an owner can qualify and limit this right by contracting to permit others access to its property. The employer, like any other property owner, retains no absolute right to exclude others where this breaches its contractual obligations. The employer can likewise establish measures to protect its property when it grants access to others. However, an owner has no property right to require that others affirmatively cooperate with it, according to the owner’s terms, to help the owner valorize its property (Chamberlain 1951, 315).

14. Only Montana and Washington, D.C., through legislation, have changed this presumption. Restatement (Third) of Employment § 2.01 comment b (Am. Law Inst. 2015). Other statutes limit the reasons for which an employer may terminate employees, including at-will employees.

15. Id. at § 2.01.

16. Upton v. JWP Businessland, 425 Mass. 756 (1997).

17. The federal FLSA requires that employees be paid time-and-a-half for hours worked above their regular hours.

18. Upton, 425 Mass. 756.

19. Martin v. Capital Cities Media, Inc., 354 Pa. Super. 199 (1986).

20. Id. at 223.

21. Allen v. totes/Isotoner Corp., 123 Ohio St.3d 216 (2009). State and federal statutory anti-discrimination law prohibits some terminations related to lactation.

22. E.g., Murray v. Warren Pumps, LLC, 821 F.3d 77, 81 (1st Cir. 2016). The tort of wrongful discharge limits some terminations related to internal whistleblowing. As in the lactation case, any termination protections for at-will employees depend upon the development of statutory and tort law, not contract law.

23. An OSHA rule gives workers a right to refuse to perform dangerous work, but it is not regularly and decisively enforced (Berkowitz and Sonn 2020).

24. Four states—California, Colorado, New York, and North Dakota—have statutes that prohibit employers from terminating employees for their lawful activities outside of work. Cal. Labor Code §§ 96(k) (1999), 98.6 (2005); Colo. Rev. Stat. § 24-34-402.5 (1990); N.Y. Labor Law § 201-d; (2004) N.D. Cent. Code §§ 14-02.4-01 et seq. (1993). Another eight states protect employees from termination on the basis of using lawful products outside of work hours (ALI 2020). Few states have broad statutory prohibitions on discriminating against private employees on the basis of political beliefs or political activities outside of work (Mateo-Harris and Ogletree Deakins 2016). In most states, private employers may still punish employees for not participating in employer-sponsored political activities (Hertel-Fernandez 2017; Harvard Law Review 2014).

25. E.g., Frankel v. Warwick Hotel, 881 F. Supp. 183 (E.D. Pa. 1995) (upholding termination of at-will employee where employee refused to divorce his wife).

26. E.g., Bammert v. Don’s Super Valu, Inc., 646 N.W.2d 365 (Wis. 2002) (upholding termination where the employee’s husband, a patrol officer, arrested the employer’s spouse for drunk driving).

27. Restatement (Third) of Employment § 5.01 (Am. Law Inst. 2015).

28. Id.

29. Id. at § 5.02.

30. Restatement (Second) of Contracts § 1 (Am. Law Inst. 1981).

31. Id. at § 77.

32. Courts sometimes recognize this. E.g., White v. Roche Biomedical Laboratories, Inc., 807 F. Supp. 1212, 1219–20 (D.S.C. 1992) aff’d, 998 F.2d 1011 (4th Cir. 1993) (“a promise of employment for an indefinite duration with no restrictions on the employer’s right to terminate is illusory since an employer who promises at-will employment has the right to renege on that promise at any time for any reason”).

33. Restatement (Third) of Employment § 2.01 (Am. Law Inst. 2015).

34. Rekal Co. v. PGT Indus., Inc., No. 8:13-CV-1433-T-33TGW, 2013 WL 5487370, at *4 (M.D. Fla. Sept. 30, 2013) (citing Johnson Enterprises of Jacksonville, Inc. v. FPL Group, Inc., 162 F.3d 1290 (11th Cir. 1998)).

35. E.g., Johnson Enterprises, 162 F.3d 1290.

36. E.g., Haines v. City of New York, 41 N.Y.2d. 769 (Ct. App. N.Y. 1977).

37. U.C.C. § 2-309 (Am. Law Inst. & Unif. Law Comm’n 2002).

38. Under some circumstances, promises to make a gift are enforceable, and some jurisdictions recognize contracts under seal. Restatement (Second) of Contracts § 90 comment f, 4 3 Stat. Note (Am. Law Inst. 1981). These exceptions are not relevant to at-will employment.

39. Id. at § 34(2); Greene v. Oliver Realty, Inc., 363 Pa. Super. 534 (Penn. 1987).

40. U.C.C. § 2-204(3) (Am. Law Inst. & Unif. Law Comm’n 2002).

41. See Sun Printing & Publishing Association v. Remington Paper & Power Co., 139 N.E. 470, 471 (N.Y. 1923).

42. Mid-S. Packers, Inc. v. Shoney’s, Inc., 761 F.2d 1117, 1121-22 (5th Cir. 1985).

43. In theory, there is a distinction between “implication,” in which the court inserts new language into an agreement, and “interpretation,” where the court interprets language already in the agreement. The distinction is often difficult to discern in practice. The “reasonable expectations” principle applies to both implication and interpretation.

44. See Restatement (Second) of Contracts (Am. Law Inst. 1981) § 204 (“a term which is reasonable in the circumstances is supplied by the court”).

45. U.C.C. § 2-305.

46. Contract law provides guidance to courts regarding where they can look for gap fillers and what they can insert into a gap. For example, the UCC ranks the places courts should look for missing terms—the first place is the history of the contractual relationship, then prior dealings between the parties, and then industry custom. U.C.C. § 1-303. As to what to imply, contract law provides some standard gap fillers, such as the place for delivery in a sale-of-goods contract where the destination is not specified. U.C.C. § 2-504.

47. Centronics Corp. v. Genicom Corp., 562 A.2d 187 (N.H. 1989).

48. Id.

49. U.C.C. § 2-306(2).

50. Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88 (1917); Restatement (Second) of Contracts § 77 (Am. Law Inst. 1981).

51. U.C.C. § 2-306.

52. Restatement (Second) of Contracts § 205. See also U.C.C. § 1-304.

53. E.g., Centronics Corp. v. Genicom Corp., 562 A.2d 187 (N.H. 1989).

54. Morin Building Products Co. v. Baystone Construction, Inc., 717 F.2d 413, 415 (7th Cir. 1983).

55. U.C.C. § 2-305(2).

56. The problem of a missing ex ante bargain is less of a problem in non-at-will employment agreements. An employment agreement with a definite term or “for cause” provision still appears to require the employee to submit her faculty for purposive action to the employer’s authority. Thus, like the at-will agreement, it appears too open-ended to be a contract. However, where an employer terminates an employee for “cause” or for “breaching” the agreement, and the employee contests this termination, the court must imply some content to the agreement to determine whether the employer in fact had “cause” or was entitled to terminate the employee before the agreement expired. Courts interpret these terms as constraining the reasons the employer can deem to be “cause” for termination or to constitute a “breach.” If the employer could declare that the employee had breached the agreement for “any reason” the employer felt like at the time (e.g., because the employee refused to divorce her husband at the employer’s request), the term would mean little. Thus, courts imply terms into non-at-will employment agreements that outline a faint bargain.

57. Where employees lack collective power and face difficult labor markets, we see evidence that employers have taken advantage of this open-endedness at the macro level in the widening gap between worker pay and productivity (Mishel and Bivens 2015).

58. An exception is where the agreement expressly states that breach of the provision is a basis for liability. See Restatement (Third) of Employment § 9.07 (Am. Law Inst. 2015).

59. McGrane v. Reader’s Digest Association, Inc., 822 F. Supp. 1044, 1050 (S.D.N.Y. 1993).

60. Greene v. Oliver Realty, Inc., 363 Pa. Super. 534 (Penn. 1987).

61. Restatement (Third) of Employment §2.07 (Am. Law Inst. 2015).

62. Id.

63. Id.

64. Id.

65. As discussed in Part V, the employer can often avoid assuming any contractual duties to at-will employees.

66. E.g., Copeco, Inc. v. Caley, 91 Ohio App.3d 474, 478 (1992).

67. Restatement (Second) of Contracts § 231 (Am. Law Inst. 1981). See also Hamer v. Sidway, 124 N.Y. 538 (1891).

68. The common law imposes some limits on what the parties can do during negotiations. For example, the claim of misrepresentation provides a remedy to an individual who enters a contract due to her reasonable reliance on another party’s misrepresentation of a material fact.

69. Restatement (Second) of Contracts § 45 (Am. Law Inst. 1981).

70. Restatement (Third) of Employment § 3.01 (Am. Law Inst. 2015).

71. Note that a sign advertising lemonade for $2 is unlikely to be a contractual offer or promise. Advertisements are normally invitations to bargain under contract law.

72. U.C.C. § 2-314.

73. In economic terms, the parties would be incurring unnecessary and high “transaction costs” in trying to make the deal each time, including the costs involved in searching the market for a contractual party and negotiating a deal. Thus, it may be cheaper to do business in a different way, for instance, through a long-term contract or as a firm (Williamson 1981).

74. Several factors have played a role in this transformation, including de-unionization, deregulation and lax enforcement, technological changes, and changing patterns of competition related to financialization and globalization (Kalleberg 2011; Weil 2014).

75. E.g., 765 S.W.2d 497 (Tex. App. 1989), writ denied (Dec. 13, 1989).

76. Restatement (Second) of Contracts § 79 (Am. Law Inst. 1981).

77. Without a provision requiring notice before termination, the promise would be illusory.

78. E.g., Haines v. City of New York, 41 N.Y.2d. 769 (Ct. App. N.Y. 1977).

79. Lochner v. New York, 198 U.S. 45 (1905).

80. In a bilateral contract it is backed by the other party’s return promise, and in a unilateral contract it is backed by the other party’s performance. Restatement (Second) of Contracts § 79 (Am. Law Inst. 1981).

81. Id.; Greene v. Oliver Realty, Inc., 363 Pa. Super. 534 (1987).

82. Moral obligations and sentiments do not meet the requirement of consideration. Restatement (Second) of Contracts § 71; Stone v. Lynch, 312 N.C. 739, 325 S.E.2d 230, 233. For example, if you promise “eternal gratitude” in exchange for your roommate’s promise to pay your rent next month, your roommate’s promise is not backed by consideration.

83. E.g., Restatement (Second) of Contracts § 79 comment c.

84. Courts may look at the fairness of the exchange for other purposes. The court may deny the non-breaching party a remedy of specific performance where there is a “gross disparity” in consideration. Unfair terms might also be evidence of misrepresentation or fraud. Id. at § 79.

85. The main exceptions that vitiate the voluntariness of an agreement are incapacity, duress (physical coercion or threats), undue influence, and unconscionability.

86. One interpretative principle, however, tends to favor the weaker party: where a provision in a standard-form contract is ambiguous, the court should construe the provision against the party that drafted it. E.g., ConFold Pac., Inc. v. Polaris Indus., Inc., 433 F.3d 952 (7th Cir. 2006).

87. A contract of adhesion is an agreement drafted by the stronger party with little or no negotiation and presented to the weaker party on a take-it-or-leave-it basis (Radin 2013).

88. Collective bargaining agreements cover only a small percentage of private-sector workers today (Mishel, Rhinehart, and Windham 2020).

89. It is difficult to find recent data on the percentage of U.S. employees that have a written agreement. Research from the 1990s indicates that very few employers used written agreements (Verkerke 1995).

90. Restatement (Second) of Contracts § 90.

91. E.g., Thompson v. St. Regis Paper Co., 102 Wash.2d 219 (1984).

92. E.g., Lobosco v. N.Y. Tel. Co./NYNEX, 96 N.Y.2d 312, 317 (2001); Bisig v. Time Warner Cable, Inc., 940 F.3d 205, 215, 216 (6th Cir. 2019).

93. A disclaimer communicated to employees will sometimes prevent the court from finding that the employer has assumed any enforceable obligations, despite other promises or assurances the employer may have provided. E.g., Trabing v. Kinko’s, Inc., 2002 WY 171 (2002) (employee’s knowledge of at-will policy defeated claim that employer should have followed disciplinary procedure in handbook before terminating her). But see McDonald v. Mobil Coal Producing, Inc., 789 P.2d 866, 869–70, on rehearing 820 P.2d 986 (Wyo. 1991) (disclaimer in handbook stating that it was not a contract did not prevent employee from making a viable claim). In some courts, a disclaimer is not dispositive evidence of the absence of enforceable obligations, but it may be enough to keep the issue from the jury. See Gargasz v. Nordson Corp., 68 Ohio App.3d 149 (1991) (finding that employee was unreasonable to expect employer to follow disciplinary sequence laid out in handbook).

94. § 2.05.

95. E.g., Martin v. Capital Cities Media, Inc., 354 Pa. Super. 199, 213 (1986); Restatement (Third) of Employment Law § 2.03.

96. Restatement (Third) of Employment Law § 2.03.

97. E.g., Spacesaver Sys., Inc. v. Adam, 212 Md. App. 422, aff’d, 440 Md. 1 (2014). The objective theory of contract interpretation leaves room for judicial policy making. In some cases evaluating employer assurances of job security, it is clear that the court’s determination of what is reasonable reflects its policy preferences. These preferences are sometimes based on the unproven economic assumption that employers must have nearly complete control over the enterprise for efficiency purposes.

98. E.g., Hawley v. Dresser Industries, Inc., 737 F. Supp. 445, 463, 464 (Ohio 1990). In Ohio, the courts presume that promises of “permanent” employment mean at-will employment, and that it would be unreasonable for an employee to rely on any such promise, even a 59-year-old employee. Where the parties are incorporated (and thus potentially immortal) entities, it may well be within the parties’ reasonable expectations that a “permanent” agreement means only an indefinite agreement (terminable on notice). It is difficult to see why this must be the case where one party is mortal.

99. E.g., Martin, 354 Pa. Super. at 213 (1986) (finding that employer’s handbook was an “aspirational statement,” and that the “vagueness and the generalities coupled with the employer’s reservation of power to unilaterally alter the handbook’s terms would lead a reasonable at-will employee to interpret its distribution as an informational guideline”).

100. E.g., Neri v. Ross-Simons, Inc., 897 A.2d 42, 48 (R.I. 2006).

101. Restatement (Third) of Employment § 2.05 (Am. Law Inst. 2015).

102. Id. Individuals have also sought damages where they relied upon an employer’s unfulfilled promise to hire them, for instance, by turning down another job offer or moving across the country. Some jurisdictions will not permit individuals to recover for relying on promises of at-will employment. See White v. Roche Biomedical Laboratories, Inc., 807 F. Supp. 1212, 1219–20 (D.S.C. 1992) aff’d, 998 F.2d 1011 (4th Cir. 1993) (“reliance on a promise consisting solely of at-will employment is unreasonable as a matter of law since such a promise creates no enforceable rights in favor of the employee other than the right to collect wages accrued for work performed”); Slate v. Saxon, Marquoit, Bertoni & Todd, 166 Or. App. 1 (2000).

103. E.g., McKenny v. John V. Carr & Son, Inc., 922 F. Supp. 967, 979 (D. Vt. 1996).

104. E.g., Baker v. City of SeaTac, 994 F. Supp.2d 1148, 1160 (W.D. Wash. 2014).

105. Restatement (Third) of Employment § 2.05. Despite these challenges, employees occasional win. E.g., Presto v. Sequoia Systems, Inc., 633 F. Supp. 1117, 1120 (enforcing on basis that the employer should have known that the employee would rely on its promises).

106. Restatement (Third) of Employment § 2.05.

107. Id.

108. Where an employee seeks to prove the employer orally promised employment that was to last more than a year, the “statute of frauds” can pose obstacles to enforcing the promise in some courts (Bodie 2017). The statute of frauds requires contracts that cannot by their terms be performed within a year to be in writing and signed to be enforceable.

109. Restatement (Third) of Employment § 2.05 (Am. Law Inst. 2015).

110. Id. at § 2.05, comment b.

111. Id. at § 2.05. Even this relaxed approach to contractual rules does not ensure that employers will be held to their policies. Jurisdictions that follow the Restatement approach retain the requirement that the employee’s expectations must be “reasonable.” As discussed, the employee’s expectations are often “unreasonable” because the employer’s superior bargaining power did not enable the employee to negotiate for more balanced, clear, and binding terms.

112. E.g., Racine & Laramie v. Department of Parks and Recreation, 14 Cal.Rptr.2d 335 (Cal. App. 4 Dist. 1992).

113. Liu v. Amway Corp., 347 F.3d 1125, 1138 (9th Cir. 2004).

114. E.g., Anthony v. Atlantic Group, Inc., 909 F.Supp.2d 455 (S.C. 2012) (“To impose a duty on employers to exercise reasonable care…would eviscerate the employment-at-will presumption.”)

115. U.C.C. § 2-209 (Am. Law Inst. & Unif. Law Comm’n 2002).

116. § 89.

117. The modified agreement might be in good faith, however, where the caterer requests 10% above the contract price due to an unexpected product recall or embargo that abruptly increases the price of truffles the buyer has requested for the party. This would be in good faith due to the unanticipated circumstances.

118. Restatement (Third) of Employment § 2.06 (Am. Law Inst. 2015).

119. Lake Land Emp. Grp. of Akron, LLC v. Columber, 804 N.E.2d 27, 34 (2004) (dissent) (quoting Kadis v. Britte, 244 N.C. 154, 163 (1944)). In a minority of jurisdictions, the employer’s abstention from terminating the employee is inadequate consideration to support the employer’s unfavorable modification. The employer must offer something in addition, like a promotion, new benefit, or improved working conditions. E.g., Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 541 (Wyo. 1993). The basis of the requirement is that the employer’s implied promise of continued employment on an at-will basis is illusionary. Given that contract law is unconcerned with the “adequacy” of consideration, it is generally easy for employers to meet the requirement of additional consideration. The employer could, for instance, provide an additional vacation day (Arnow-Richman 2009, 155). Where the additional benefit depends on continued at-will employment, however, it would also seem to be illusionary. There are two other variations on the dominant approach worth mention: (1) A few courts find that the employer’s abstention from terminating the employee constitutes consideration for an unfavorable change only if the employer does not terminate the employee for some time following the change, for instance, until the employee decides to leave her job. E.g., Zellner v. Conrad, 183 A.D.2d 250, 589 N.Y.S.2d 903 (App. Div. 1992). While this approach is fairer to the employee, it is difficult to justify under contractual rules, since it implies an ex post bargain as to the period of employment the parties were bargaining for. An illusory promise does not become less illusory under contract law where the party carries it out in part. See Curtis 1000, Inc. v. Suess, 24 F.3d 941 (7th Cir. 1994) (noting the ex post bargain issue as a problem, but suggesting that requiring the employer to continue employment for a “substantial period” shows that the employer was not acting fraudulently in promising at-will employment). (2) The second variation requires that the binding promise the employer wants to retract be in effect for a “reasonable time” before the retraction. Asmus v. Pac. Bell, 23 Cal.4th 1, 14, 999 P.2d 71 (2000). This is likewise more fair to employees but hard to explain under contract law.

120. E.g., Summits 7, Inc. v. Kelly, 2005 VT 97, 10 (2005) (“the presentation of a noncompetition agreement [for example] is, in effect, a proposal to renegotiate the at-will relationship”).

121. Id.

122. The reasonable notice requirement, for example, has no place under unilateral contract law and seems to be an attempt to create a unilateral-bilateral hybrid. Given these issues, the Restatement (Third) of Employment § 2.06 (Am. Law Inst. 2015) makes no attempt to reconcile the dominant position with contract law. Instead, it suggests the at-will employer’s power of modification is not restricted by contract law since contract law does not form the basis for finding that its policy statements are binding in the first place.

123. Restatement (Second) of Contracts § 45 (Am. Law Inst. 1981).

124. This is roughly the fact pattern underlying the California Supreme Court decision Asmus v. Pacific Bell, 23 Cal.4th 1 (2000).

125. Sometimes courts will find that a clear bargained-for-performance is implicit in the promise and prevent the employer from retracting the promise prematurely. E.g., McCaskey v. California State Auto. Assn., 189 Cal.App.4th 947 (2010).

126. Another kind of provision that employers sometimes seek to enforce against employees is a prohibition against disclosing trade secrets. Also, high-level employees are subject to fiduciary duties.

127. California’s Civil Code makes virtually all noncompete agreements unenforceable against employees (Cal. Bus. & Prof. Code § 16600). California law does not, however, prohibit employers from using noncompete agreements. Research suggests that this distinction is consequential. A recent study found little evidence of a correlation between the law on the enforceability of noncompete agreements and the rate that employers use noncompete agreements, including in California (Prescott, Bishara, and Starr 2016).

128. The Supreme Court recently found that these agreements do not violate an employee’s right under the NLRA to take collective action. Epic Systems v. Lewis, 138 S. Ct. 1612 (2018).

129. Gilmer v. Interstate/Johnson Lane Corp., 500 US 20 (1991).

130. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 346–47, 131 S. Ct. 1740, 1750 (2011).

131. Note that this discussion only deals with the issue of contractual formation and modification. To be binding, restrictive covenants must also meet public policy requirements. For instance, in evaluating noncompete agreements, courts apply a test of “reasonableness” to determine whether the agreement is an unreasonable restraint of trade and unduly limits the employee’s ability to earn a living. Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 541 (Wyo. 1993). In some jurisdictions, construing at-will employment as a contractual relationship may help employers surmount the public policy obstacle to enforcing noncompete agreements against former at-will employees. To not impose an unreasonable trade restraint, among other things, the agreement must be “ancillary to an otherwise valid transaction or relationship” (Restatement (Second) of Contracts § 187). In many jurisdictions, the “otherwise valid transaction or relationship” does not have to be an enforceable contract. Therefore, at-will employment satisfies the requirement. In Texas, however, a nonenforceable agreement does not satisfy this requirement. And, in other jurisdictions, construing at-will employment as a contract appears to make judges more comfortable with finding that the noncompete is enforceable. E.g., Mattison v. Johnston, 152 Ariz. 109 (1986).

132. See Marine Contractors Co. v. Hurley, 365 Mass. 280, 310 N.E.2d 915 (1974). Unlike in the context of altering employer policies, however, the employer does not need to provide reasonable notice before imposing an arbitration agreement or restrictive covenant.

133. See infra Part V.B. for a discussion of why these rationales are inadequate as a matter of contract law.

134. In contrast to restrictive covenants, regarding arbitration agreements imposed in the middle of an employment relationship, Arnow-Richman (2016, 444) has found that courts are more likely to require the agreement to include a reciprocal promise by the employer to arbitrate before holding the employee to the agreement. According to Arnow-Richman (2016), most arbitration agreements do include an employer promise.

135. See, e.g., Epic Systems, 138 S. Ct. 1612.

136. See Patterson v. Nine Energy Service, LLC, 330 F.Supp.3d 1280, 1308 (D.N.M. 2018).

137. Where the parties do not exchange promises (i.e., where the employer does not promise anything in return), most jurisdictions find that the employer provides consideration by providing at-will employment or even by considering the employee for hire. E.g., Coup v. Scottsdale Plaza Resort, LLC, 823 F.Supp.2d 931, 943 (D.Ariz 2011) (employer’s implied promise of continued at-will employment was consideration for arbitration agreement); Martindale v. Sandvik, Inc., 173 N.J. 76, 87, 800 A.2d 872, 879 (2002) (upholding arbitration agreement in application for employment). 

138. Restatement (Second) of Contracts § 208.

139. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33 (1991); see also Brondyke v. Bridgepoint Educ., Inc. 985 F.Supp.2d 1079 (S.D.Iowa 2013).

140. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 346–47, 131 S. Ct. 1740, 1750 (2011).

141. Greene v. Oliver Realty, Inc., 363 Pa. Super. 534 (1987).

142. The NLRA does not cover public-sector employees or employees covered under the Railway Labor Act.

143. Although the NLRA makes CBAs legally enforceable, they differ from contracts in several respects. The CBA is between a collective and the employer. And its terms often resemble tariff-like regulations more than specific contractual duties and rights. Some have described the CBA as akin to a constitution for the workplace (MacNeil 1977–1978).

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Lawyers call this era of jurisprudence the “Lochner era” after Lochner v. New York,1 the 1905 case in which the Supreme Court of the United States struck down a state law that barred bakers from working more than 60 hours a week. For lawyers, Lochner has become shorthand for a period in which judges invalidated labor laws based on their view that those laws prevented employers and workers from striking the best deal they could with each other.

The Lochner-era cases were based on an abstract, formalist understanding of bargaining between employers and workers. The idea, which judges often made explicit, was that absent labor legislation employers and workers were each equally free to enter into, or refuse to enter into, contracts with each other. That is, the courts presumed that employers and employees had equal power in the labor market. Protective labor laws disrupted that natural baseline of contractual freedom by barring both sides of the transaction from entering into bargains that they would otherwise prefer to make.

By the time of the New Deal, however, it had become widely accepted that this premise of formal equality between workers and employers was unrealistic. A new wave of labor legislation—exemplified at the federal level by the National Labor Relations Act (NLRA), enacted in 1935, and the Fair Labor Standards Act (FLSA), enacted in 1938—rested explicitly on the contrary premise that workers suffered from a lack of bargaining power vis-à-vis their employers. Laws guaranteeing the right to organize, as well as laws providing minimum employment terms, could rectify this imbalance and ensure that workers received their fair share of the surplus arising from their employment. With the Supreme Court’s “switch in time” in 1937, in which a majority pivoted to support New Deal labor legislation purportedly to forestall a court-packing scheme, the courts began to reject Lochner and uphold these new labor laws.

For many years now, law students have been taught that Lochner died in the New Deal. Centrists and progressives regard the Lochner era as a time when conservative judges overreached—taking it on themselves to block democratic efforts to improve the condition of workers. Perhaps more surprisingly, many modern conservatives have criticized Lochner in similar terms—though they have done so in support of an argument that the courts are making the same overreaching error as Lochner when they protect women’s reproductive rights or the rights of Americans based on sexual orientation. Some libertarian conservatives have sought to revive Lochner’s doctrine of constitutional freedom of contract, but their position remains a minority one.

This picture, though, focuses on the rarefied precincts of constitutional law. When we look at the doctrine of labor and employment law, we find something very different. As courts apply the worker protections adopted in the New Deal and later, they continue to be driven by Lochner-ist premises. They continue to disregard the imbalance of bargaining power between (many) employers and (many) workers. And as a result, they have adopted and applied a number of doctrines that have severely undercut the protections that legislatures have sought to give workers. The misguided assumption of equal power undermines constitutional, statutory, and common law protections in the workplace.

Chief among the labor doctrines to which courts apply the Lochner-ist premise of equal bargaining power are:

• Employment at will. As a formal matter, the employment-at-will doctrine authorizes both employers and employees to terminate the relationship at any time, and the Supreme Court expressly relied on this supposed equality when it gave constitutional significance to at-will employment in its Lochner-era decisions. Since then, legislatures have made inroads on the rule with workplace protections like the NLRA, antidiscrimination laws, and whistleblower statutes, but the resilience of the doctrine has undermined their enforcement. Courts continue to treat employment at will as the baseline rule while they treat the modern statutes as mere exceptions—exceptions that they feel a need to read narrowly to avoid threatening what they understand as the core of the doctrine.
• A worker’s status as an “employee.” Employers have the power to drain workplace protections from their workforce simply by categorizing workers as independent contractors rather than as employees and writing those categorizations into contractual documents. In the handful of cases in which courts review those employer actions, their decisions often rest on a Lochner-ist premise of free contract among equals.
• Forced arbitration. Courts tend to regard arbitration requirements purely as a matter of contract: Workers must agree to arbitration if they are to lose their right to pursue their claims in court. But workplace arbitration agreements are typically offered as a take-it-or-leave-it condition of employment.
• Right-to-work laws. Twenty-seven states have adopted right-to-work laws through the legislative process, but in 2018 the U.S. Supreme Court imposed a right-to-work regime on government employees across the nation. The court said that collective bargaining was a form of speech, and that requiring workers to pay a fee to unions to subsidize that speech violated the worker’s First Amendment rights.

The judicial trend toward ignoring imbalances of bargaining power has accelerated in recent years, with the Supreme Court under Chief Justice John Roberts issuing a series of anti-worker decisions. The timing is ironic, because these judicial developments have occurred while evidence of weak worker bargaining power is accumulating. Working people’s wages have stagnated, labor’s share of national income has dropped, and inequality has risen. Economists are increasingly recognizing these trends, but the law has doubled down on the Lochner-ist premise that workers and their employers approach their bargaining on an equal footing.

This paper traces the story of the seeming rejection, but actual resiliency, of Lochner in labor law. It begins with a discussion of the old Lochner-ism. Unlike treatments that focus on constitutional law, this paper highlights Lochner’s premise of equal bargaining between employers and workers. It then turns to a discussion of the rejection of Lochner-ism beginning in the 1930s. In the wake of the Great Depression, legislative and judicial actors picked up on academic criticism of Lochner and embraced the notion that the law needed to step in to rectify the imbalance of bargaining power in the employment relationship. Finally, the paper demonstrates that labor and employment law has never really shed Lochner’s premise. Consequently the assumption of equal bargaining between employers and workers in employment law continues to have a pervasive and insidious impact on workers.

The old Lochner

One of the key provisions of the New York Bakeshop Act of 1895, which, as the name suggests, regulated the operation of bakeries, prohibited any bakery employee from being “required” or “permitted” to work more than 10 hours a day or 60 hours a week. In an opinion by Justice Rufus Peckham, the U.S. Supreme Court, in Lochner v. New York, held that the law violated the 14th Amendment’s due process clause.

Beginning with the very first paragraph of his opinion, Justice Peckham emphasized that the New York law blocked employers and workers from entering into agreements they believed to be mutually beneficial. “The employe may desire to earn the extra money, which would arise from his working more than the prescribed time,” Justice Peckham said, “but this statute forbids the employer from permitting the employe to earn it.” And that, he said, “necessarily interferes with the right of contract between the employer and employes.”2

As the court’s language suggests, the justices who joined the Lochner opinion did not regard their decision as protecting employers at the expense of workers. Rather, they understood themselves as protecting the rights of both employers and workers to enter into the contracts they preferred. Laws like the New York statute, Justice Peckham wrote, “are mere meddlesome interferences with the rights of the individual,” because they “limit[…] the hours in which grown and intelligent men may labor to earn their living.”3 And he saw no reason to believe “that bakers as a class are not equal in intelligence and capacity to men in other trades or manual occupations, or that they are not able to assert their rights and care for themselves without the protecting arm of the State, interfering with their independence of judgment and of action.” “They are,” he said, “in no sense wards of the State.”4

For a sense of what the court meant by “wards of the state,” one might look to its decision three years later in Mueller v. Oregon.5 There, the court upheld an Oregon maximum hours law that was limited to women workers. Its opinion explained that “woman has always been dependent upon man,” and that female workers deserve the protection of the state because “there is that in her disposition and habits of life which will operate against a full assertion of” her rights.6

But the Lochner principle was not limited to maximum hours laws (which, as in Mueller, the court sometimes upheld); the court applied the same principle to invalidate laws prescribing a minimum wage. In the 1923 case of Adkins v. Children’s Hospital,7 Justice George Sutherland’s opinion for the court described a minimum wage law as “simply and exclusively a price-fixing law,” one that “forbids two parties having lawful capacity—under penalties as to the employer—to freely contract with one another in respect of the price for which one shall render service to the other in a purely private employment where both are willing, perhaps anxious, to agree, even though the consequence may be to oblige one to surrender a desirable engagement and the other to dispense with the services of a desirable employee.”8 So applied, the Lochner principle stood as a powerful barrier to legislative efforts to set minimum labor standards.

The court applied the same principle to undermine legislatures’ efforts to protect workers’ rights to form and join unions. In the years surrounding the turn of the 20th century, employers often required their workers, as a condition of employment, to sign “yellow-dog contracts,” which prohibited workers from joining a union. As the populist and progressive movements obtained a measure of political power, Congress and state legislatures passed laws to ban yellow-dog contracts, but the courts, applying the principles of Lochner, held those laws unconstitutional.

The first key case was Adair v. United States,9 decided three years after Lochner. There, the court invalidated a federal law, adopted in 1898, that prohibited yellow-dog contracts in interstate railroad employment. Justice John Marshall Harlan (who had dissented in Lochner) wrote the opinion for the court, and his analysis rested explicitly on what he understood to be the equality of position between employers and workers: “The right of a person to sell his labor upon such terms as he deems proper is, in its essence, the same as the right of the purchaser of labor to prescribe the conditions upon which he will accept such labor from the person offering to sell it.” Just as a worker had the right to “quit the service in which he was engaged, because the defendant employed some persons who were not members of a labor organization,” an employer must have the right “to discharge [a worker] because of his being a member of a labor organization.” “In all such particulars,” Justice Harlan said, “the employer and the employe have equality of right, and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land.”10

The U.S. Supreme Court further explained its reasoning in its 1915 decision in Coppage v. Kansas,11 which invalidated a state law barring yellow-dog contracts. In an opinion by Justice Mahlon Pitney, the court quoted extensively from the “equality of right” discussion in Adair. In its decision upholding the state law, the Kansas Supreme Court had sought to sidestep Adair by arguing that employers and workers did not in fact enter into their contracts on an equal plane. The state court said that “employes, as a rule, are not financially able to be as independent in making contracts for the sale of their labor as are employers in making contracts of purchase thereof.”12

But the U.S. Supreme Court rejected that analysis. Justice Pitney refused to consider the actual bargaining power of workers vis-à-vis employers. Instead, he insisted that the courts must consider only the formal equality of rights between the two parties, lest the entire capitalist system collapse: “since it is self-evident that, unless all things are held in common, some persons must have more property than others, it is from the nature of things impossible to uphold freedom of contract and the right of private property without at the same time recognizing as legitimate those inequalities of fortune that are the necessary result of the exercise of those rights.”13

The (apparent) death of Lochner in the New Deal

The Lochner-era courts stood in the way of an engaged popular movement. Their decisions rested on an abstract and formal understanding of equality between workers and employers—an understanding that seemed inconsistent with the lived experience of most workers. Not surprisingly, the courts soon faced a backlash. The reaction came at three levels. The first was intellectual, as academics affiliated with the ascendant school of Legal Realism detailed the analytic weaknesses of the courts’ abstract and formal understanding of equality. The second level was political, as the Great Depression and the New Deal led to the adoption of new statutes that directly challenged the Lochner regime. And the third level was judicial, as the courts came to endorse progressive understandings of the inequality of bargaining power between workers and their employers.

The intellectual reaction to the courts began with an observation that seemed self-evident: Whatever judges might say about the formal, legal equality between the parties, in reality workers in the industrial capitalism of the time had much less bargaining power than their employers. Most individual workers needed a job more than their employers needed any particular worker. As a result, employers could impose terms of employment that individual workers would lack any effective ability to resist. And if employers could require, as a take-it-or-leave-it condition of being hired, that workers not join a labor union, then the workers could never come together in a way that balanced out the employer’s power.

For the Lochner-era courts to say that they were protecting the freedom of workers was thus perverse. The courts were simply ensuring that employers could continue to pit workers against each other and degrade their bargaining power.

A group of legal and economic scholars, known as Legal Realists, bolstered this intuitive argument with an analytic one. These scholars challenged the entire premise of the Lochner cases—that in a state of nature parties are free to contract, and that government intervention merely reduces those natural liberties. Because property and contract rights themselves derive from state action to create and enforce them, these scholars argued that Lochner’s premise was incoherent. Laws providing for a minimum wage, maximum hours, and a ban on yellow-dog contracts helped to rectify the coercive power that employers—backed by the law of property—imposed on workers. They did not introduce new coercion into the system.

For example, Robert Hale, professor of law and economics at Columbia University, argued that all employment contracts are the result of coercion backed by law. Thanks to the law of property, individuals cannot simply take from others the food, shelter, or income they need to survive—nor can they take land, machinery, or other means of making a living. These legal entitlements thus coerce those individuals into accepting contracts of employment. “If the non-owner works for anyone,” Hale argued, “it is for the purpose of warding off the threat of at least one owner of money to withhold that money from him (with the help of the law)” (Hale 1923, 472). Because “the law which forbids [a non-owner] to produce with any of the existing equipment, and the law which forbids him to eat any of the existing food, will be lifted only in case he works for an employer,” it is “the law of property which coerces people to work for factory owners” (Hale 1923, 473).

Of course, workers have coercive power, too, in the form of their legal right to withhold their labor from their employer—at least to the extent that the law gives them that right. (Recall that for many years courts prohibited workers from joining together to collectively withhold their labor from employers.) Hale thus concluded that any contract for hire reflects the balance between the coercive power deployed on either side—coercive power that is backed by, and to a large extent created by, law (Hale 1923, 474, 477). “[I]n a sense each party to the contract, by the threat to call on the government to enforce his power over the liberty of the other, imposes the terms of the contract on the other” (Hale 1920, 452).

For Hale, then, to talk about “freedom of contract” in the sense of freedom from coercion was nonsensical. All contracts reflect the balance of coercion between the contracting parties. And because that coercion finds its source in state power in the form of law, it is equally nonsensical to treat existing contracts and distributions as a neutral baseline against which any new government intervention is coercive. As Hale said, “To take this control by law from the owner of the plant and to vest it in public officials or in a guild or in a union organization elected by the workers would neither add to nor subtract from the constraint which is exercised with the aid of the government. It would merely transfer the constraining power to a different set of persons” (Hale 1923, 478). The only real question is which forms of coercion, in which circumstances, the law should support. And that is a policy question, not one that can be answered by reference to abstract rights.

Justice Pitney’s Coppage opinion had argued that the law must take for granted the “inequalities that are but the normal and inevitable result of” the exercise of property and contract rights. But the Legal Realists showed that these inequalities weren’t inevitable—and that they in fact resulted from the state’s own actions. When the law intervened to rectify those inequalities, it was not introducing coercion into a natural realm of freedom; it was rectifying the imbalance of coercion that its own rules of property and contract had created. Just “because courts can do nothing to revise the underlying pattern of market relationships,” Hale argued, it did not follow that “courts should, in the name of liberty and equality, thwart [legislative] attempts to equalize the economic liberty of the weak” (Hale 1943, 625).

The intellectual work of the Legal Realists, along with institutional economists like John Commons, fed the political work of progressive legislators during the Franklin Roosevelt administration. A key pillar of the New Deal was the National Labor Relations Act of 1935, which guaranteed workers the right to engage in collective action for mutual aid and protection. During the congressional debates over the bill, supporters explained that its provisions were necessary to rectify the imbalance in bargaining power between workers and employers.

The NLRA’s principal sponsor, Senator Robert Wagner, made this point explicit in a speech he gave shortly after introducing the bill. He argued that the NLRA was a key step toward industrial peace and cooperation between workers and employers. And he made clear that rectifying the imbalance between the parties was essential to that end: “The primary requirement for cooperation is that employers and employees should possess equality of bargaining power. The only way to accomplish this is by securing for employees the full right to act collectively through representatives of their own choosing.”14 In part, of course, Wagner’s speech was political rhetoric. The idea of ensuring absolute equality of bargaining power in every instance seems quixotic in light of the many factors that might give a particular party an edge in a particular negotiation. But Wagner was clear that in the typical case workers were at a significant disadvantage in bargaining, and that the surest way to cooperation and industrial peace was to mitigate that disadvantage by empowering workers to join together.

In response to the claim that legal protections of worker collective action violated the freedom of contract, Wagner endorsed the Realist position that rectifying the imbalance in bargaining power was in fact essential to ensure true freedom of contract:

The law has long refused to recognize contracts secured through physical compulsion or duress. The actualities of present-day life impel us to recognize economic duress as well. We are forced to recognize the futility of pretending that there is equality of freedom when a single workman, with only his job between his family and ruin, sits down to draw a contract of employment with a representative of a tremendous organization having thousands of workers at its call.15

As a result, he said, “the right to bargain collectively” was “a veritable charter of freedom of contract; without it there would be slavery by contract.”16

Three years after it adopted the NLRA, the New Deal Congress adopted the Fair Labor Standards Act, which prohibited child labor and guaranteed covered workers a minimum wage and overtime.

Not surprisingly, these New Deal laws faced challenges in the courts. But in two crucial cases in 1937, the Supreme Court upheld progressive labor legislation and seemed to inter Lochner.

In NLRB v. Jones & Laughlin Steel Corporation,17 the court upheld the NLRA against a constitutional challenge. In his opinion for the court, Chief Justice Charles Evans Hughes explicitly embraced the arguments of Hale and Wagner, explaining that “a single employee was helpless in dealing with an employer,” that “he was dependent ordinarily on his daily wage for the maintenance of himself and family,” and that “if the employer refused to pay him the wages that he thought fair, he was nevertheless unable to leave the employ and resist arbitrary and unfair treatment.”18 As a result, the right of workers to join together in labor unions was “essential to give laborers opportunity to deal on an equality with their employer.”19

In the other key 1937 case, West Coast Hotel Company v. Parrish,20 the court upheld a state minimum wage law that applied only to women. Again writing the opinion for the court, Hughes emphasized the role of a minimum wage in preventing the “exploitation of a class of workers who are in an unequal position with respect to bargaining power and are thus relatively defenceless against the denial of a living wage.” Hughes also highlighted the way the seemingly private conduct of employers in paying starvation wages imposed a burden on the public purse: “[w]hat these workers lose in wages the taxpayers are called upon to pay. The bare cost of living must be met.” Allowing employers to pay their workers low wages, he said, would thus be “a subsidy for unconscionable employers.”21

West Coast Hotel was decided before Congress adopted the FLSA, but four years later the court extended the precedent specifically to uphold the act. In United States v. Darby (1941),22 Justice Harlan Fiske Stone’s opinion for the court said that since West Coast Hotel it was “no longer open to question that the fixing of a minimum wage is within the legislative power and that the bare fact of its exercise is not a denial of due process.” And he concluded that the FLSA was “not objectionable because applied alike to both men and women.”23

Lochner, undead

After Jones & Laughlin, West Coast Hotel, and Darby, it seemed that Lochner was dead. The courts had rejected the notion that laws regulating employment terms violated a constitutional right to freedom of contract, and the courts had seemed to embrace the Legal Realist point that regulation could actually enhance contractual freedom by rectifying imbalances in bargaining power.

In the area of constitutional law, Lochner did really die. Libertarian conservatives have repeatedly attempted to bring it back, but the courts have largely stuck to the settlement of 1937 and refused to use the 14th Amendment’s due process clause to enforce a supposed constitutional right to freedom of contract. That is, by and large, true of both conservative and liberal judges. The libertarians have had more success in sneaking Lochner-ist principles into the law through other constitutional provisions—notably the First Amendment. That is a troubling development, but so far the return of Lochner-ism in constitutional law has been limited.

But when we turn our focus to the doctrine of labor and employment law—doctrine that generally purports to apply the common law and statutes, rather than the Constitution—we find that Lochner never really left. Central aspects of labor and employment law continue to rest on the premise that workers and employers have equal bargaining power. And that premise has significant, concrete, and insidious consequences. Like the old Lochner, it operates to deprive workers of the rights they won in political battles.

The resilient employment-at-will rule

Employment at will, the concept under which an employer is free to “terminate an employee for a good reason, a bad reason, or no reason at all” (Bagenstos 2013, 244–245), stands as the baseline rule nearly everywhere in the United States. The alternative to at-will, adopted in this country only in Montana and to some extent in Puerto Rico, permits employers to fire their workers only if they have good cause. Most union contracts contain similar provisions limiting firing to cases of just cause. But employment at will is the norm in nonunion positions, which are the overwhelming majority of jobs in the private sector.

Legislatures have made inroads on the at-will rule by enacting modern workplace protections like the NLRA, antidiscrimination laws, and whistleblower statutes. But, as shown below, the resilience of the at-will doctrine has undermined the enforcement of these statutory protections. Courts continue to treat employment at will as the baseline rule while they treat the modern statutes as mere exceptions—exceptions that they feel a need to read narrowly to avoid threatening what they understand as the core of the doctrine.

Scholars have long seen continued adherence to employment at will as an example of undead Lochner-ism (see, e.g., Blades 1967). Key Lochner-era cases like Adair and Coppage explicitly defended the regime of at-will employment, and, more important, the doctrine rests on the Lochner-ist premise that workers and employers have equal bargaining power. Judges and scholars have repeatedly defended the doctrine as reflecting the choices of workers, while dismissing any claim that workers lack the ability to bargain for something better.

The Lochner-ist premises of employment at will

Defenders of employment at will highlight the bilateral nature of the doctrine, at least as it appears on the books: As a formal matter, the doctrine authorizes both employers and employees to terminate the relationship at any time.

The Supreme Court expressly relied on this supposed equality when it gave constitutional significance to at-will employment in its Lochner-era decisions. In Adair, Justice Harlan wrote that “the right of the employee to quit the service of the employer, for whatever reason, is the same as the right of the employer, for whatever reason, to dispense with the services of such employee.”24 He went on to say that “the employer and the employe have equality of right, and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land.”25 And he declared, “it cannot be…that an employer is under any legal obligation, against his will, to retain an employe in his personal service any more than an employe can be compelled, against his will, to remain in the personal service of another.”26 Modern defenders of the rule like New York University Law Professor Richard Epstein have similarly pointed to its evenhanded nature (Epstein 1984, 954–955).

These arguments draw their rhetorical force by equating the position of employers who want to fire their employees with the position of workers who seek freedom from being forced to continue to work for their current employers. But the positions of the two groups are not comparable. If workers are bound to particular employers, they live in a situation of feudalism or slavery—with ramifications that limit the freedoms they can enjoy throughout their lives. The 13th Amendment reflects a fundamental national commitment that individuals may not be bound to their employment in that way. Although the baseline right of a worker to quit at will is deeply rooted, there is no similar justification for giving bosses the right to fire at will. Employers who must retain an unwanted employee will perhaps absorb some economic costs—which may be regarded as one of many costs of doing business imposed by government regulations adopted for the public good—but they will not experience any broader restriction on their freedom throughout life. And it’s not like the alternative to employment at will is unqualified life tenure for workers. The alternative is instead barring employers from firing a worker without just cause—a rule that takes full account of the legitimate interests of business.

More to the point, as the Legal Realists showed, in many industrial contexts the formal equality of the at-will rule does not match workers’ reality. And the same is true in our increasingly post-industrial era. To treat the employer’s ability to terminate an employee as equivalent to the worker’s ability to walk away is to disregard that reality. Workers typically cannot simply leave their jobs. Because our nation ties so many important benefits—notably health care and retirement security—to the particular workplace, many employees will find themselves unable to exit even an undesirable work situation. And where taking a new position requires a move to a different city, workers will understandably be unwilling to break important ties to family and community.

Despite the at-will rule’s formal equality, observers have recognized that in most cases it is the employer, rather than the employee, who has the real power to decide whether to terminate the relationship. That was what the New Deal Congress concluded when it enacted the NLRA and the FLSA, and it has been a basic premise of virtually all of the worker protections legislatures have enacted since. The at-will doctrine rests on a denial of that reality.

Defenders argue that the at-will doctrine nonetheless implements the choices of workers because it is merely a default rule. Employees and employers are free to negotiate contracts that give the workers more job security, but in the overwhelming majority of cases they do not do so—a fact that leads defenders to conclude that workers prefer to be fireable at the will of their employer.

As numerous scholars have shown, however, there are many reasons to doubt that workers actually make a free choice to be fireable at will (Bodie 2017, 233–238). Surveys demonstrate that many at-will employees believe the law protects them against arbitrary termination—a fact that suggests they did not actually choose to forgo such a protection (Freeman and Rogers 1999, 146–148; Estlund 2002, 9). Workers might fail, simply due to inertia, to think to change the default term of the contract they are offered (Korobkin and Ulen 2000, 1113). Or they might be afraid to ask for greater job tenure because their employer will think of them as less-capable workers (Kamiat 1996). And, of course, workers may simply have no realistic option to say no to at-will employment; their particular position may be the only sort of job on offer to them. By assuming that workers choose to be denied employment security, the at-will baseline disregards these limitations on their ability to exercise a truly free choice.

The Lochner-ist effects of employment at will on worker protections

Employment at will is objectionable in itself. It reinforces status hierarchies in the workplace by requiring workers to accept all manner of indignities on pain of losing their jobs. Three scholars memorably described the effects of the at-will doctrine this way:

On pain of being fired, workers in most parts of the United States can be commanded to pee or forbidden to pee. They can be watched on camera by their boss while they pee. They can be forbidden to wear what they want, say what they want (and at what decibel), and associate with whom they want. They can be punished for doing or not doing any of these things….They can be fired for donating a kidney to their boss (fired by the same boss, that is), refusing to have their person and effects searched, calling the boss a “cheapskate” in a personal letter, and more. (Bertram, Robin, and Gourevitch 2012)

But the problems go beyond that: The persistence of the at-will baseline has the effect of undermining other common law and statutory protections for workers. The at-will doctrine thus is not just Lochner-ist in its premises. It is Lochner-ist in its effects, because it allows a background principle of free contract and managerial prerogative to take precedence over democratically adopted regulations of the work relationship.

Speech and privacy protections

The Lochner-ist effects of at-will employment can be seen first in the way the doctrine has led courts to limit their protection of worker speech and privacy under the common law. Over the last two decades, employers’ efforts to control workers’ off-the-job speech and to intrude on workers’ otherwise private spaces and choices have been a frequent subject of controversy and litigation. Employers have disciplined workers for expressing opinions on controversial political issues—even if the workers have done so off the job and without in any way drawing the employer’s name into the matter. In one notable case in 2002, Goodwill Industries fired a sewing-machine operator because he was a member of the Socialist Workers Party. More prosaic cases involve workers who were discharged because they took positions in local political debates that conflicted with those of the companies they worked for—even when their jobs had nothing to do with those issues (Bagenstos 2013, 255–256). Employers have also discharged workers for violating company policies regarding off-work dating, using tobacco, or even volunteering at the worker’s chosen charity (Finkin 2018).

Although workers have sought to challenge these employer practices, the at-will baseline has made judges wary of embracing their arguments. Protecting workers’ speech or privacy, after all, would impose limits on the reasons why an employer could terminate the employment relationship—limits that would stand in tension with the background principle that the relationship can be terminated for any reason or no reason at all.

With vanishingly rare exceptions, courts have refused to grant workers the right to challenge employer retaliation for political speech.27 And they have often explained that they were doing so precisely to limit intrusions on employment at will. Thus, when the Illinois Supreme Court declined to protect worker speech, the court declared that “[t]he common law doctrine that an employer may discharge an employee-at-will for any reason or for no reason is still the law in Illinois, except for when the discharge violates a clearly mandated public policy.”28 And when the New Mexico Supreme Court reached the same conclusion, it emphasized “that retaliatory discharge is a narrow exception to the rule of employment at will” and that the courts “have refused to expand its application.”29

Courts have done a somewhat better job of protecting privacy in the workplace—particularly where an employer has sought to force workers to undergo drug testing or intrusive searches of their bodies or personal property. But courts still frequently reject privacy claims on the ground that workers have consented to any intrusion.

The problem is that the concept of “consent” can empower employers to vitiate privacy rights entirely. If the employer says that giving up a privacy interest is a condition of the job, how should we treat a worker’s decision to accept that job? Does the acceptance constitute consent to what would otherwise be a privacy invasion? Note that the same question can arise for an at-will employee if the employer imposes the condition at some point after hire. Because the employer can end the relationship at any time, the law generally treats the new condition as the equivalent of the employer firing the worker and then offering to rehire on new terms—a practice that would shock most observers without legal training (and probably many with legal training).

At least once the condition is made clear, the worker’s acceptance of (continued) employment on that condition does constitute a form of consent, in the sense that the worker considered it the best of available options. But the worker’s decision is made in a coercive context. Unfortunately, however, courts too often focus on the concept of consent and too rarely attend to the imbalance of bargaining power between employers and employees. Sometimes, a court’s analysis is obviously reminiscent of the Lochner era. In an infamous Texas case, for example, the court held that a worker could be fired for refusing to submit to urinalysis.30 The employee argued that, because she needed her job to live, “any ‘consent’ she may give, in submitting to urinalysis, will be illusory and not real.”31 The court rejected the argument on the ground that “[t]here cannot be one law of contracts for the rich and another for the poor.”32 Indeed, the judges said that they could not “imagine a theory more at war with the basic assumptions held by society and its law.”33

The echoes of Justice Pitney in Coppage are evident there. But even those courts that do not so explicitly endorse Lochner-ist premises still give significant weight to (compromised) worker consent. Many courts conclude that a worker cannot demonstrate a violation of the right to privacy unless the employer’s actions invaded a reasonable expectation of privacy. If an employer notifies workers that they cannot expect certain spaces or actions to be private—or requires workers to sign a waiver of any right to privacy—courts will often say that the worker’s consent demonstrates the lack of any such reasonable expectation (Summers 2001, 472–473).

Statutory workplace protections

The cases involving worker speech and privacy are generally common law decisions. They involve judge-made doctrines, so one might think it legitimate that judges read those doctrines narrowly to preserve the at-will presumption. But judges have done something very similar with statutory protections of workers. By reading those protections narrowly to preserve at-will employment, they have undermined the victories workers won in Congress and state legislatures.

Statutes protecting workers against discrimination, or against retaliation for complaining about violations of law, should override common law rules like the at-will presumption. Federal statutes—where many of the crucial worker protections are found—should certainly override state common law rules. But judges have aggressively defended the baseline of employment at will against encroachment from those statutes. As a result, workers have in many cases found it impossible to challenge intentional race or sex discrimination, retaliation for their union activity, and other violations of the law.

Some of the reasons are practical. As New York University Law Professor Cynthia Estlund demonstrated years ago, if employers are free to discharge workers for good reasons, bad reasons, or no reason at all, they can easily hide the bad motive that violates anti-discrimination, anti-union, or anti-retaliation laws. “When liability depends on proof of a particular bad reason for discharge, ‘no reason’ or even a demonstrably false or fabricated reason is good enough for the employer to escape liability” (Estlund 1996, 1671). The at-will doctrine therefore substantially weakens many of the most significant workplace protections enacted by legislatures.

The courts have exacerbated these practical problems by adopting rules that blunt the force of statutory workplace protections in order to preserve employment at will. Their actions have been particularly notable in discrimination cases. Because employers can easily hide discriminatory motives, courts have developed intricate procedures for proving those motives circumstantially. One of these procedures, called the McDonnell Douglas approach after the 1973 Supreme Court case adopting it,34 contains three steps. First, the worker must present evidence that he or she was qualified for the job at issue. At that point, the inquiry moves to the second stage, where the employer has to present evidence that there was a legitimate, nondiscriminatory reason for firing or refusing to hire the worker. If the employer can do so, the court moves to the third stage, where the worker has the opportunity to show that the employer’s supposed legitimate reason was in fact a pretext. This three-part scheme rests on a common-sense inference: If the worker was qualified for the job, and the employer gives a reason for an adverse action that is proven false, it’s fair to infer that the real reason for the action was discrimination.

In the nearly five decades since the McDonnell Douglas case, the court has made it very difficult for workers to prevail under its three-step approach. And it has done so precisely because the justices were worried about the anti-discrimination laws encroaching on employers’ prerogative to discharge workers for whatever (nondiscriminatory) reason they wish.

In its 1978 decision in Furnco Construction Corporation v. Waters,35 the court dramatically lowered the employer’s burden at the second stage of the McDonnell Douglas inquiry. McDonnell Douglas had said that the employer must show a legitimate, nondiscriminatory reason. In Furnco, the court held that any nondiscriminatory reason would do, even if it was one that was objectively unreasonable.36 As a matter of factual inference, if an employer’s explanation for an adverse action is unreasonable, that would be a legitimate basis for an observer to conclude that the explanation was false—and that the real reason was a forbidden one like discrimination. But the court feared that inquiring into the reasonableness of the decision would intrude on the employer’s prerogative to be unreasonable—a prerogative protected by the common law at-will doctrine.

Fifteen years after Furnco, the Supreme Court took a similar step in the employer’s favor, this time at the third stage of the McDonnell Douglas process. In its 1993 decision in St. Mary’s Honor Center v. Hicks,37 the court held that workers were not necessarily entitled to prevail simply by showing that the legitimate nondiscriminatory reason proffered by the employer was pretext; they must also show that the reason was a pretext for discrimination.38 As in Furnco, the court’s decision rested on the at-will rule. The court disclaimed any “authority to impose liability upon an employer for alleged discriminatory employment practices unless an appropriate factfinder determines, according to proper procedures, that the employer has unlawfully discriminated.”39 But the very question at issue in the case was whether a showing of pretext was sufficient to require a factfinder to determine that the employer had unlawfully discriminated—and a reasonable observer would surely think that if the employer had a chance to offer a nondiscriminatory reason for its actions, and that reason was proven false, the real reason was likely to be discrimination.

As University of Nevada, Las Vegas Law Professor Ann McGinley shows, St. Mary’s is but one example of a common thread in employment discrimination cases. Judges deciding those cases “often rely on the employment at will doctrine to defeat the plaintiff’s case” by concluding, “[i]n essence,” that the employer has a “license to be mean” (McGinley 1996, 1459). Even if plaintiffs can prove that their discharges were “wrongful[…]” in some generic sense, or even were based on “animus” against them, judges refuse to infer that the reason was discrimination based on protected-class status (McGinley 1996, 1459–1460). Just like Lochner, decisions like these allow the judge-made at-will doctrine to trump democratic efforts to protect workers’ rights. A formalist assumption of equal power begets at-will, and at-will begets the systematic undermining of democratically determined worker protections.

Excluding workers from legal protection: Who is an ‘employee’?

Courts have found another way to undermine the workplace protections democratically adopted by Congress and the state legislatures. These protections—including the National Labor Relations Act, the Fair Labor Standards Act, the federal antidiscrimination laws, and their state equivalents—generally apply only to workers who have the legal status of “employee” rather than “independent contractor.” Employers thus have the power to drain protections from their workforce simply by categorizing workers as independent contractors rather than employees and writing those categorizations into contractual documents. And in the handful of cases in which courts review those employer actions, their decisions often rest on a Lochner-ian premise of free contract among equals.

Courts have tended to use one of two tests for determining whether a worker is an employee and whether a firm is an employer: the common law “control” test and the “economic realities” test (which was first applied in FLSA cases but has expanded to other areas of employment law). In the past several years an approach that focuses on entrepreneurial opportunities has also become popular. Under any of these approaches, a court will start with the terms of the contract between the worker and the hiring party. Some recent developments in the law offer reasons for hope, however. In particular, employment law reformers have successfully pressed several states to adopt what has become known as the “ABC test”—most notably in a key 2018 California Supreme Court decision.40 This rising legal doctrine may help avoid the Lochner problem.

Under the classic common law control test, a court looks to “the hiring party’s right to control the manner and means by which the product is accomplished.”41 The “right to control” does not come from nature; it comes from the contractual arrangement between the parties. And scholars have shown that it is highly manipulable. Lead firms can practice “fissuring,” allocating key aspects of control to poorly capitalized intermediaries who will be the ones on the hook as employers—thus protecting the large enterprise in charge from liability (Weil 2014). And sophisticated firms can readily characterize workers’ actions as the “ends” for which the parties have contracted rather than as the “means” of performing the contract (Tomassetti 2015; 2014). As a result, employers can evade the obligations of labor and employment law without making any real change in their operations. They can demand that workers accept these evasive contract terms, and many workers will lack effective power to say no.

But because the common law control test focuses on what sorts of control the hiring party has once the work relationship begins, without giving attention to the background conditions under which the parties enter into and set the terms of the relationship in the first place, it will treat all of these terms as freely chosen by the worker. As UCLA Law Professor Noah Zatz points out, the definition of employment thus replicates the problems with yellow-dog contracts: “The same employer power that necessitates labor law cannot be allowed to circumvent labor law…by forcing employees to agree to verbal characterizations of themselves as nonemployees ineligible to unionize and then giving force to those agreements” (Zatz 2011, 289).

Progressive legislators and judges tried to solve this problem by adopting a different approach for determining who is an employee in cases brought under the Fair Labor Standards Act. The FLSA seeks to prevent circumvention of its requirements by defining the word “employ” broadly to include “to suffer or permit to work.”42 Courts tried to implement that broad purpose by adopting what they called the economic realities test. That approach was designed to be just what its name suggests—a test that focuses not on the formal terms of the employment contract but on what is actually going on between the parties. In practice, however, things have not worked out that way.

Courts applying the economic realities test still generally focus on questions of control (Goldstein, Linder, Norton, and Ruckelshaus 1999). But rather than simply examining the letter of any formal contract between the parties, the courts look to the relationship demonstrated by their entire course of dealing. If the hiring party “really” has control over the means and manner of performance, the court will find an employment relationship even if the written contract does not expressly provide for such control (Lee 2018, 796). But that analysis, too, is contractual—it simply looks as much to the tacit terms of the parties’ agreement as to the express ones. And, crucially, the economic realities test often focuses entirely on control within the parties’ contractual relationship. It thus does not look to the effective freedom the workers had to decide to enter into that relationship.

Sometimes courts applying the economic realities test do look beyond the relationship between the worker and the hiring party. If “workers are genuine entrepreneurs,” these courts say, “then they do not depend economically on any single firm for work and thus do not require the FLSA’s protection” (Cunningham-Parmeter 2016, 1698). But these courts often dramatically overstate the worker’s exit options. These courts conclude, for example, that workers who operate small side businesses “lack[…] ‘economic dependence’ on a single company”—even if their side businesses are so small that they cannot realistically walk away from their main line of work (Cunningham-Parmeter 2016, 1698–1699). This vision of a worker as a freely choosing entrepreneur, divorced from the realities of bargaining power, is precisely the one Justice Pitney indulged in Coppage.

Some courts have sought to reverse these trends and implement a test of who is an employee that gives full weight to the importance of counteracting employer power. The most prominent example, which builds on statutory and judicial efforts in other states, is the California Supreme Court’s 2018 decision in Dynamex Operations West v. Superior Court.43 The California legislature recently codified that decision, with some small changes, in a prominent new statute.44

In the introductory section of its opinion, the Dynamex court highlighted “the potentially substantial economic incentives that a business may have in mischaracterizing some workers as independent contractors.”45 The court noted that regulatory agencies had estimated that misclassification costs “millions of workers of the labor law protections to which they are entitled.”46 It held that, “in light of [the] history and purpose” of California wage-and-hour regulations, the employee definition under those regulations “must be interpreted broadly to treat as ‘employees’…all workers who would ordinarily be viewed as working in the hiring business.”47 But it emphasized that “the type of individual workers, like independent plumbers or electricians, who have traditionally been viewed as genuine independent contractors who are working only in their own independent business,” would not be covered by that definition.48

To avoid evasion of workplace protections, the Dynamex court adopted what has become known as the ABC test.49 Under that test, workers will be treated as employees unless the business that hires them can prove all three of the following:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.50

Under the ABC test, a lack of control is thus not enough for a conclusion that a worker is an independent contractor. Accordingly, the ways in which employers can manipulate the control and economic realities tests seem less likely to be available (Pearce and Silva 2018, 28).

When the Dynamex court adopted the ABC test, it did so expressly to impose a counterweight to employers’ bargaining power. The court explained that a key purpose of this test was to protect workers against being effectively forced to agree to independent-contractor arrangements that waived employment-law protections.51 Under a contrary rule, the court explained, “employers might be able to use superior bargaining power to coerce employees…to waive their protections.”52 When the New Jersey Supreme Court adopted the same test, it similarly explained that “the ‘ABC’ test fosters the provision of greater income security for workers, which is the express purpose of” the state wage-and-hour laws.53

Of course, a necessary consequence of adopting the ABC test is to prevent some workers from opting into contractor status, even if they might actually freely choose that status in circumstances of equal bargaining power. But that margin of overinclusion seems justified as a check against the manipulability of employment status under other tests—particularly in light of the large bargaining-power imbalance that typically exists, and the way that our laws make employee status the key to so many protections.

The Dynamex approach is the most promising tool yet to overcome the legacy of Lochner in determining who is covered by the labor and employment laws. But its reach is limited. It applies only to state law claims, and only in some states. The federal labor and employment laws do not adopt that test.

And even in states that have adopted it, businesses are seeking to evade the ABC test. After the California Legislature codified the test last year, Uber and Lyft announced their position that their drivers still did not satisfy the definition of employee because, in the companies’ view, driving was not part of the “usual course” of their business (Ghaffary 2019). This aggressive approach seems unlikely to prevail, but expanding and implementing the ABC test will take a fight.

Closing the courthouse door: forced arbitration

Courts—and particularly the U.S. Supreme Court—have used another tool to deprive workers of the protections adopted by Congress and the state legislatures: They have closed the courthouse door to claims that employers have violated their legal obligations and have required instead that these claims be heard in private arbitration. But arbitration often takes place in secret, it is not meaningfully bound by legal precedent, and the arbitrators often depend on the employers—who are the most important repeat players in the process—to continue to be assigned cases to arbitrate in the future. As a result, workers tend to face a stacked deck when they are sent to arbitration (Colvin 2016).

And, in recent years, the Roberts court has made the problem worse. It has said that arbitration provisions can lawfully bar workers from engaging in class or collective actions. Because any individual worker’s pay claim is likely to be too small to attract a lawyer to bring a case, class actions are often the only way that workers can effectively bring claims that they have been denied the minimum wage or overtime pay, or that they have been the victims of pay discrimination. To ensure that laws concerning wages can be effectively enforced, workers must be able to join together to bring their claims; only then will there be a sufficient amount at stake to make a case viable for an attorney.

The Supreme Court has expanded the role of arbitration in a series of cases dating back to the 1990s. But the key case was 2018’s Epic Systems v. Lewis,54 which held that workers could be bound to an arbitration provision that denied them the right to pursue class actions. In her dissenting opinion in Epic Systems, Justice Ruth Bader Ginsburg accused the majority of reviving “Lochner-era contractual-‘liberty’ decisions.”55 The majority rejected the comparison. But Justice Ginsburg’s analysis was apt—not just because the court’s decisions have undermined the enforcement of democratically adopted worker protections, but also because those decisions have rested on a view of consent that ignores the imbalance of bargaining power in the workplace.

The key point is that there is no statute that requires workers to arbitrate their claims. Arbitration is purely a matter of contract. Workers must agree to arbitration if they are to lose their right to pursue their claims in court.

Workplace arbitration agreements, however, are typically offered as a take-it-or-leave-it condition of employment. Indeed, they often appear in a stack of papers that workers are required to sign on their first day on the job, in an online box that they are required to click in order to submit a job application, or somewhere in a long employee handbook. Without necessarily even knowing of the terms to which they have legally agreed, workers have no effective way of resisting.

Sometimes, the agreement appears through an even more coercive process. In Epic Systems, for example, the workers’ supposed agreement to arbitrate occurred when the employer sent an email to incumbent employees telling them that showing up to the job the next day would constitute agreement to arbitration of workplace disputes. The idea that simply showing up at work the next day represented a “free” choice defies reality. For many reasons, workers may find it impractical to change jobs even if they freely chose their current job in the first place. They may have moved cities, purchased a home, or placed children in schools to take their current position. Or they may find that it is impossible to find a new job at the moment their employer imposes a new condition. When, as in Epic Systems, a term is imposed by an employer on an ongoing work relationship, and the worker’s only possible protection is to quit, it is even less plausible to say that the supposed agreement resulted from a freely made bargain between equals.

The issue is particularly egregious in cases like Epic Systems that enforce arbitration agreements that bar workers from bringing claims collectively. The National Labor Relations Act explicitly protects the right of workers to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Class or collective litigation is a concerted activity, and it is one in which workers engage for their “mutual aid or protection.” To say that an employer can insist that its workers waive their rights to pursue this sort of concerted activity as a condition of employment is to reject the basic premises that underlay the NLRA.

As Justice Ginsburg explained, recalling Chief Justice Hughes’s opinion upholding the statute in Jones & Laughlin, Congress enacted the NLRA because it recognized that “[f]or workers striving to gain from their employers decent terms and conditions of employment, there is strength in numbers. A single employee, Congress understood, is disarmed in dealing with an employer.”56 By blessing employers’ actions to get individual employees to waive these collective rights, the court endorsed a modern-day equivalent of the yellow-dog contracts that were the subject of the Lochner-era cases.

Undermining unions: constitutionalizing ‘right to work’

A final example of the persistence of Lochner-ism involves the rise of so-called right-to-work laws. Right-to-work laws are a reaction to one of the key features of American labor law—exclusive representation. Under the NLRA and most state labor laws, a union that has been selected by a majority of a unit’s employees serves as the exclusive representative for all employees in that unit. As the exclusive representative, the union owes a duty of fair representation to each of the employees in the unit, whether or not they are union members. Because the law requires unions to represent nonmembers, it creates a free-rider problem: Individual workers have an incentive not to join the union—and thus to avoid paying dues—so they can get the benefits of union representation without paying the costs. But if too many workers choose to free-ride, the union will not have sufficient resources to do its job.

To respond to that free-rider problem, unions prefer to collect a fee from nonmembers in the bargaining unit to defray their share of the costs of representation. This exaction is called a “fair-share fee” or “agency fee.” A right-to-work law bans unions from collecting fair-share fees from nonmembers. The Taft-Hartley Act of 1947—a statute designed to roll back some of the protections Congress granted labor unions in the NLRA—first authorized states to enact these laws.

Twenty-seven states have enacted right-to-work laws, with a notable uptick in the 2010s—including in some historic bastions of American labor. Indiana and Michigan adopted these laws in 2012, Wisconsin followed suit in 2015, West Virginia in 2016, and Kentucky in 2017. Missouri’s legislature also adopted a right-to-work law in 2017, but the state’s voters rejected it at the polls the next year.

These states have adopted right-to-work laws through the legislative process. But in its 2018 decision in Janus v. AFSCME,57 the Roberts court imposed a right-to-work regime on government employees across the nation. The court said that collective bargaining was a form of speech, and that requiring workers to pay a fee to unions to subsidize that speech violated the worker’s First Amendment rights.

The First Amendment questions raised by Janus are interesting. Is a fair-share fee really speech? For present purposes, though, what is more important is the court’s understanding of worker compulsion. The court said that workers had no real option to refuse to pay the fee, because their employer’s union contract imposed it as a condition of employment.

Note that this is the opposite of the understanding of worker choice the court applied in Epic Systems, where it treated workers as freely choosing an arbitration agreement that their employer imposed on them as a condition of employment, validated by showing up for work each day. And the court’s analysis in Janus once again fails to appreciate the role of collective organization in overcoming the imbalance of bargaining power that workers face when dealing with their employers. If the fair-share fee is necessary to ensure that unions can overcome the free-rider problem to be viable organizations, and joining together in a union is essential to rectify that imbalance and give workers a meaningful ability to bargain with their employers, then prohibiting such a fee in fact impedes workers’ freedom of choice. Janus, then, is best understood as a form of undead Lochner-ism.

Conclusion

Although most lawyers think that the courts killed off Lochner during the New Deal, Lochner’s principles have persisted—not in constitutional law, but in the law of labor and employment. Key foundational doctrines of labor and employment law continue to rest on the premise of equal bargaining power. And the Roberts court has increasingly relied on the same premise in a series of anti-worker opinions. Taken together, these doctrines—like the old Lochner doctrine—seriously hamstring the laws that Congress and the state legislatures adopted to protect workers. Lochner never truly died. It just shape-shifted.

Endnotes

1. 198 U.S. 45 (1905).

2. Id. at 52–53.

3. Id. at 61

4. Id. at 57.

5. 208 U.S. 412 (1908).

6. Id. at 421–422.

7. 261 U.S. 525 (1923).

8. Id. at 554–555.

9. 208 U.S. 161 (1908).

10. Id. at 174–176.

11. 236 U.S. 1 (1915).

12. Quoted in id. at 17.

13. Id.

14. 1 Nat’l Labor Relations Bd., Legislative History of the National Labor Relations Act of 1935 at 20 (1949).

15. Id.

16. Id.

17. 301 U.S. 1 (1937).

18. Id. at 33.

19. Id.

20. 300 U.S. 379 (1937).

21. Id. at 399.

22. 312 U.S. 100 (1941).

23. Id. at 125.

24. Adair v. United States, 208 U.S. 161, 174–75 (1908).

25. Id. at 175.

26. Id. at 175–176.

27. Restatement of Employment Law § 5.02, Reporter’s Note to cmt. d.

28. Barr v. Kelso-Burnett Co., 478 N.E.2d 1354, 1356 (Ill. 1985).

29. Shovelin v. Cent. New Mexico Elec. Co-op., Inc., 850 P.2d 996, 1007 (N.M. 1993).

30. 765 S.W.2d 497 (Tex. App. 1989), writ denied (Dec. 13, 1989).

31. Id. at 502.

32. Id.

33. Id.

34. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802–805 (1973).

35. 438 U.S. 567 (1978).

36. Id. at 577–578.

37. 509 U.S. 502 (1993).

38. Id. at 515–516.

39. Id. at 514.

40. Dynamex Operations West v. Superior Court, 7 416 P.3d 1 (Cal. 2018).

41. Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992).

42. 29 U.S.C. § 203(g).

43. 416 P.3d 1 (Cal. 2018).

44. Cal. Labor Code § 2750.3.

45. Dynamex, 416 P.3d at 5.

46. Id.

47. Id. at 7.

48. Id.

49. Id.

50. Id. at 35.

51. Id. at 37.

52. Id. (internal quotation marks omitted).

53. Hargrove v. Sleepy’s, LLC, 106 A.3d 449, 464 (N.J. 2015).

54. 138 S. Ct. 1612 (2018).

55. Id. at 1635 (Ginsburg, J., dissenting).

56. Id. at 1633.

57. 138 S. Ct. 2448 (2018).

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