In America’s labor markets, interactions between employers and employees are generally based on voluntary exchange. Employers make offers of wages and benefits, while workers offer their services at terms that are suitable to them. In the absence of force and fraud, job providers and job applicants can bargain to reach agreement in a mutually beneficial manner.

In the early 20th century, however, the idea that employers had too much bargaining power relative to employees began gaining favor. Congress responded by passing a series of laws allowing the formation of worker cartels called labor unions, which replaced individual employment agreements with collective bargaining.

Congress imposed the Davis–Bacon Act of 1931, the Norris–LaGuardia Act of 1932, and the National Labor Relations Act (NLRA) of 1935 on the private sector workforce. The laws created rules for exclusive representation, mandatory union dues, and other labor force restrictions.

These labor laws are still on the books, and they are deeply flawed. They damage the economy and violate individual rights, particularly the freedom of association. This study describes the 1930s labor laws and discusses why they should be repealed to allow greater freedom for workers and employers.

Introduction

In a market economy, workforce interactions are based on voluntary exchange. Buyers in the labor market are employers, who make offers of employment, including wages, benefits, and other job features. Sellers in the labor market are workers, who make offers for their labor services at terms that are suitable to them. If, through bargaining in the absence of force and fraud, job applicants and job providers reach an agreement, hiring will take place.

In free labor markets, workers gain bargaining power from employers competing to hire them. Similarly, the more workers there are competing to be hired, the better it is for employers. Labor unions are cartels that try to get workers not to compete with each other. As union supporters often say, they seek to “take wages out of competition.”1 The main role of government in a market economy is to enforce rules of voluntary exchange by protecting individual rights and open contracting. That limited-government role allows for the largest degree of personal freedom, while promoting general prosperity.

However, federal laws that regulate labor unions in the private sector violate the right to voluntary exchange. In the 1930s, Congress and the courts imposed a series of laws and decisions that damaged labor markets and undermined the freedom of individuals and businesses to organize their own affairs and make voluntary contracts. The interests of individual workers and businesses were suppressed at the behest of labor union organizations.

Federal interventions in favor of private sector unions—especially the Davis–Bacon Act of 1931, the Norris–LaGuardia Act of 1932, and the National Labor Relations Act of 1935—were premised on the false idea that in business, management and labor are natural enemies. In fact, both management and labor work together to produce goods and services for consumers, so it makes no sense to assume a sharp divide between these groups. Management and labor are complementary, not rivalrous, inputs to the production process.

The union share of the private sector labor market has fallen for decades, and by 2024 it was just 5.9 percent.2 It appears that most private sector workers try to avoid labor unions when they can, and many have done so. Right-to-work laws in 26 states allow workers to opt out of joining a union and paying union dues, although they do not allow opting out of union representation.

However, labor unions are still important in some industries, including construction, education, motion pictures, transportation, and utilities. These industries continue to be shackled by outdated labor rules that undermine economic growth and restrict individual freedom.

The Rise of Labor Unions

The union share of the US workforce rose gradually during the end of the 19th century and early 20th century. Nonetheless, even by the 1920s the union share in the nonfarm labor force was still less than 15 percent.3 Federal policymakers generally stayed out of labor-management relations, except in situations where the president felt compelled to intervene in violent strikes or strikes that were causing major economic disruptions, such as in the coal and railway industries.4

As the 20th century progressed, there were growing calls for federal intervention in labor relations. In 1913, Congress created a federal Department of Labor. An official history notes that the department’s founding “was the direct product of a half-century campaign by organized labor for a ‘Voice in the Cabinet.’”5 In 1914, the Clayton Antitrust Act reflected the rising power of organized labor by generally exempting unions from anti-monopoly rules and limiting the use of injunctions during strikes, for which unions had advocated.

During World War I, President Woodrow Wilson’s administration spearheaded a large expansion in federal control over private industry, including labor relations. For example, the War Labor Board pushed for collective bargaining in the industries that it oversaw.6 These wartime interventions created precedents for later federal legislation on labor issues.

During the 1920s, Presidents Warren Harding and Calvin Coolidge took a laissez faire approach to the economy, and the government generally stayed out of labor issues. The Supreme Court was also restrained in its approach to labor unions. In the 1921 case, American Steel Foundries v. Tri-City Central Trades Council (257 U.S. 184), the Court held that mass picketing, even in primary strikes, and even if peaceful, was inherently intimidating and so pickets must be limited to one picket per entrance; pickets had to be actual employees on strike—they could not be strangers sent from union headquarters or elsewhere; and the right to conduct a business is a property right, entitled to the same protection against trespass as any other property right.

This Court decision was made on statutory grounds (interpreting the 1914 Clayton Act), so Congress could reverse it simply by adopting another statute or amending an existing one. Unions tried to get Congress to do so during the 1920s, but things did not start to change until the election of President Herbert Hoover in 1928. Hoover supported collective bargaining, and he was accommodating to union leaders’ demands.7 Hoover signed the Davis–Bacon Act into law in 1931 and followed it with the Norris–LaGuardia Act in 1932. These pro-union laws, along with the 1935 National Labor Relations Act signed by President Franklin D. Roosevelt, were colossal blunders. In the short term, they exacerbated the damage of the Great Depression. Over the long term, they empowered unions with monopoly privileges while undermining voluntary market relations.

As a result of these laws, the share of the nonfarm workforce that was unionized soared to 33 percent by the early 1950s.8 Since then, structural changes in the economy, along with changes in policy, have put the power of unions on the wane in the private sector. By 2024, the union share of the private sector workforce had fallen to less than 6 percent.9 But the pro-union laws of the 1930s are still in place, and monopoly unions can still damage the economy because they dominate some crucial industries, such as seaports.10

The Davis–Bacon Act of 1931

The Davis–Bacon Act, which was passed during the Great Depression, requires that companies pay “prevailing wages” for work on federally aided construction projects, such as for highways. The rules apply to contractors and subcontractors on all contracts with a cost above $2,000—a figure that has not been updated since the law’s enactment. The prevailing wage, which is set by the Department of Labor under the act, is the inflated union wage—not a true market wage. The effect of the law is to exclude nonunion firms and workers from federal projects, which in turn increases costs for taxpayers.

Unions often insist that they raise wages above market-determined wages. In a narrow sense, they are correct. The problem is that they do so by limiting competition. The unions support Davis–Bacon and want the government to set wages that are more favorable to their members than the marketplace would produce.

Congress had two main purposes in passing Davis–Bacon. First, policymakers mistakenly believed that the government should stop both prices and wages from falling during the Great Depression. This economic fallacy misled the presidential administrations of both Herbert Hoover and Franklin Roosevelt, and it did much to deepen and prolong the Great Depression. Davis–Bacon was designed to keep wages artificially high. Yet falling wages and prices were precisely what was needed for labor markets to adjust to the collapse of real incomes and employment in the early 1930s. Both prices and wages fell from 1929 to 1933, but prices fell by more than wages. Thus, the real cost of hiring workers increased and pushed up unemployment.11

By excluding more-efficient union-free firms from federal work contracts, Davis–Bacon pushes up the costs of federally financed projects.

Second, Congress wanted to keep black workers from competing for jobs that had hitherto been done by white unionized labor. The racist motivation behind the legislation is plain when reading the Congressional Record of the debate in 1931. For example, Rep. Clayton Allgood (D‑AL), a supporter of the bill, complained of “cheap colored labor” that “is in competition with white labor throughout the country.”12 These days, the law may still have racist effects if minority-owned firms are less able to pay union-level wages.13

By excluding more-efficient union-free firms from federal work contracts, Davis–Bacon pushes up the costs of federally financed projects. A 2022 study by the Beacon Hill Institute found that the rules increase labor costs on federal construction projects by 20 percent and increase the overall costs of federal construction projects by 7 percent.14 This amounts to more than $20 billion per year of higher costs. Davis–Bacon rules should be abolished. They serve no purpose other than to protect unionized construction workers from open competition.

Norris–LaGuardia Act of 1932

The Norris–LaGuardia Act (NLA) made five significant changes to labor law that strengthened the power of labor unions. First, it made union-free (yellow-dog) contracts unenforceable in federal courts. Second, it prohibited federal judges from issuing injunctions to interrupt strikes. Third, it gave labor unions immunity against prosecution under antitrust laws. Fourth, it gave legal standing to strangers in labor disputes. And fifth, it insulated labor unions as organizations from prosecution for acts committed by individual members and officers.

Union-Free Contracts. A yellow-dog contract is an agreement between an employer and a worker that, as a condition of obtaining and continuing employment, the worker will abstain from involvement with labor unions. Unions coined the term “yellow dog” to imply that any worker who entered such an agreement was cowardly and a traitor to the working class. A more accurate label for such agreements is “union-free” contracts. The NLA made such agreements unenforceable in federal courts, and then the National Labor Relations Act (NLRA) of 1935 made them illegal.

Contrary to these federal rules, union-free contracts would be legitimate voluntary contracts. When an employer offers a job to a worker, the offer usually consists of agreed-upon wages, benefits, time, place, and other conditions of employment. A rule that required a worker to remain union-free would be merely a part of the job description so long as there was no misrepresentation and the worker was free to accept or reject the job. However, this right of employers to contract with willing workers was infringed by the NLA and NLRA. Workers who wanted to avoid harassment from union organizers lost an important means to do so.

In a 1917 case, Hitchman Coal and Coke Co. v. Mitchell (245 U.S. 229), the Supreme Court noted in its decision: “The employer is as free to make nonmembership in a union a condition of employment as the working man is free to join the union, and that this is a part of the constitutional rights of personal liberty and private property.”15 However, later Courts and Congresses trampled on those individual rights.

Strike Injunctions. The NLA prohibited federal judges from issuing injunctions to interrupt strikes—even violent strikes. Section 7(c) of the NLA says that an injunction cannot be issued unless a court has taken testimony, with witnesses subject to cross-examination, and has found “that as to each item of relief granted greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief.”16 In other words, the NLA forbids courts to stop aggression unless the damage to the victim is larger than the damage suffered by the aggressor as a result of the order to stop the aggression. A basic function of government in a free society is to protect people against trespass, aggression, and violence, yet Section 7(c) is still the law of the land.

Labor Union Immunity. Notwithstanding that labor unions are sellers’ cartels, the NLA gave immunity to labor unions against prosecution under antitrust laws, with some exceptions.17 Generally, actions by labor unions, even if violence is involved, cannot be enjoined as illegal combinations in restraint of trade. That means that under current law, businesses targeted in strikes—along with their suppliers, customers, and replacement workers—may be prevented from exercising their right to voluntary trading and exchange.

Antitrust laws themselves violate voluntary market exchange. Rather than promoting competition, antitrust laws are often used to protect companies that are failing in the marketplace. In a free society, neither businesses nor unions would be subject to antitrust regulation, and both would be open to challenges by entrepreneurs and new entrants. The issue with the NLA is that it gives labor unions special legal protections that are not afforded to other private groups in society.

Legal Standing to Strangers in Disputes. The NLA gave legal standing to strangers in labor disputes. Thus, a company with 150 employees on strike and 700 employees who wish to continue to work can be forcibly shut down by 5,000 picketers sent from union headquarters. These NLA provisions clearly violate voluntary exchange rules regarding property rights, trespass, and contract.

Special Legal Protection for Unions. The NLA insulated labor unions as organizations from prosecution for acts committed by individual members and officers. If picketers use violence against a replacement worker who crosses a picket line, the on-strike union cannot be blamed. If the perpetrators are apprehended by local officials and convicted by local courts, no punishment may be imposed on the union. In other words, the common law doctrine of respondeat superior, or vicarious responsibility, was made inapplicable to unions.

National Labor Relations Act of 1935

Federal intervention in private sector labor markets was dramatically increased with the National Labor Relations Act of 1935, signed by President Franklin Roosevelt. The NLRA (or Wagner Act) is still the major determinant of the structure of private-sector unionism in the United States.18 The ostensible purpose of the NLRA was to promote equality of bargaining power between employers and employees. Union supporters present the history of unionism as a long and bitter struggle of employees as the underdogs fighting against their employers, who are depicted as their exploitative masters. The real struggle, however, has been between some workers who want to create a union monopoly, or worker cartel, and other workers who wish to remain independent. The pro-union view of history triumphed during the New Deal. The Wagner Act was explicitly pro-union, anti–independent worker, and anti-employer. The NLRA also took most labor disputes out of the courts and placed them in a new administrative body, the National Labor Relations Board.

After the overreach of labor laws of the 1930s and a spike in strike activity in 1946, Congress passed the Taft–Hartley Act of 1947 over the veto of President Harry S. Truman. The act allowed state governments to pass right-to-work laws banning union security provisions. Right-to-work laws are currently in place in 26 states.19 The Taft–Hartley Act restored some balance to labor relations, but federal labor law is still strongly biased in favor of unions and against union-free workers and employers.

The NLRA violated voluntary exchange in the free economy in four major ways. First, it imposed exclusive union representation on companies and workers. Second, it introduced forced union dues (known as “union security”). Third, it imposed coercive (misnamed “good faith”) bargaining rules. Fourth, it banned company unions.

Exclusive Representation. The NLRA imposes exclusive representation on employees and employers in section 9(a). That means monopoly unionism. If, in a certification election, a majority of workers in a bargaining unit vote to be represented by Union A, then all the workers who were eligible to vote must submit to those representation services. Union A, by force of law, represents the workers who voted for it. But it does so under a winner-take-all election rule. That means that the union also represents the workers who voted for another union, those who voted to remain union-free, and those who did not vote. Individuals are prohibited from representing themselves on the terms and conditions of their employment and other matters that come under the scope of collective bargaining. Employers may not deal directly with individual workers. Individual workers have no voice, as only a certified union may speak with the employer on such matters.

Moreover, once a union is certified by majority vote, it very rarely, if ever, must stand for reelection.20 The United Auto Workers (UAW) was certified as the exclusive bargaining agent for workers at the Big Three automakers—General Motors, Ford, and Chrysler—in the 1940s.21 No current US workers of the companies have ever voted for UAW representation.

Union advocates justify exclusive representation by analogy to political elections, whereby the winning candidate is the exclusive representative of all voters in a district. Both those who voted against the winning candidate and those who did not must accept the candidate as their exclusive representative in the legislature. By analogy, union supporters argue, it is proper to force all workers to accept the representation services of a union that was selected by majority vote, as “workplace democracy.” But unions are not governments. They are private organizations. As such, they should be defined by voluntary membership and participation.

The Framers of the Constitution drew a bright line separating rules for decisionmaking in government and decisionmaking in the private sphere. Governments are natural monopolists regarding the legal use of force in their respective jurisdictions. Like all monopolists, they are prone to abuse their power. Democracy is a means by which the governed have some control over those who wield governmental power. According to the Framers, it is legitimate to override individual preferences in favor of majority rule only with respect to the enumerated, limited powers of the federal government under the Constitution. Everything else should be left to individuals to decide—irrespective of what the majority may prefer. Individuals are not forced to submit to the will of a majority in the choice of religion, nor should they be forced to submit to anybody else’s choice of a representative in the sale of their labor services.

Exclusive representation is a violation of voluntary exchange. It implies that individuals do not own their labor. Rather, a majority of their colleagues own it. It is a violation of dissenting workers’ freedom of association. Freedom of association in private affairs requires that all individuals be free to choose whether to associate with other individuals, or groups of individuals, who seek to associate with them. Freedom of association forbids any kind of forced association, even by majority vote. The sale of one’s labor services to a willing buyer is a quintessentially private act. Yet current law forces a minority of workers to subject themselves to the will of a majority of their colleagues in the sale of their labor services.

That is bad enough. Worse yet would be for the government to allow unions to gain the exclusive representation privilege simply by collecting a majority of workers’ signatures, rather than votes. Currently, signatures collected on authorization cards are used as the basis to call secret-ballot elections regarding union representation. Workers can avoid intimidation, by either unions or employers, by signing cards and then voting their choice via secret ballot. But under proposals that have been introduced in Congress, secret-ballot elections would be replaced with card-check certification of unions as the monopoly bargaining agents for workers. Under proposed card-check rules, a union would become the monopoly representative of all nonmanagerial workers in an enterprise if more than half of those workers signed a card indicating their support for such representation. Signatures would be collected by union organizers in face-to-face confrontations with workers, often at workers’ homes. The potential for coercion of workers is obvious.

Union Security. To help unions enforce their monopolies, the NLRA imposed union security rules on the workplace. Union security is the idea that workers who are represented by unions with monopoly bargaining privileges should be forced to join, or at least pay dues to, the union to cover the costs of representation.

The NLRA permitted four forms of union security: the closed shop, the union shop, the agency shop, and maintenance of membership. The 1947 Taft–Hartley Act eliminated the closed shop, but it still permits the latter three. In a closed shop, a prospective employee must already be a union member to be hired. In a union shop, an employee does not have to be a union member when hired, but must become a union member after a probationary period on the job (usually 30 days) to continue employment. In an agency shop, employees are not required to join the union but must pay union dues and fees to keep their jobs. Under maintenance of membership, no one is forced to join or pay dues, but if a worker voluntarily joins the union that employee may not resign their membership so long as an existing collective-bargaining contract between the union and the employer is in effect.

Section 8a(3) of the NLRA states that it is an unfair labor practice for an employer “by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization [except the employer may] require as a condition of employment membership therein on or after the thirtieth day following the beginning of such employment.”22 In other words, employers may not encourage or discourage membership; they may only allow a union to require it.

Unions justify this coercion on the grounds that under exclusive representation they represent all workers in their bargaining units, whether individual workers want such representation or not. Thus, unions say that every worker should be forced to pay for representation, or else some would be free riders. However, this alleged free-rider problem would be eliminated simply by repealing exclusive representation. If unions bargained only for their voluntary members and no one else, there would be no free riders.

Compulsory dues create an additional problem. Unions spend heavily on politics, so any dues that workers pay to a union may be spent on political activities with which some workers disagree. In the 1988 decision in Communications Workers of America v. Beck (487 U.S. 735), the Supreme Court declared that the dues of union members could not be used for purposes that are not directly related to collective bargaining, particularly for political purposes. In other words, employees who are forced to pay union dues under the NLRA do not have to contribute to a union’s partisan political activities. Unfortunately, the federal government has not done enough to protect this right of workers.

Forced Bargaining Rules. The NLRA imposed a duty to bargain on both employers and unions in sections 8(a)5 and 8(b)3. Section 8(d) adds that the duty is a requirement to bargain in good faith. Such mandatory bargaining violates voluntary exchange. In practice, good-faith bargaining means that each side must compromise with the other. Under ordinary contract law, if any party to the contract is forced to bargain, the contract is null and void. By contrast, no contract reached under the forced-bargaining rules of the NLRA can be a voluntary exchange contract.

Company Unions. A company union is one formed and administered by an employer, generally designed to improve labor-management relations. In the 1920s, numerous company unions were set up as a means of giving voice to workers in workplace decisionmaking. At the time, these organizations were considered progressive, and employers who used this form of labor relations, such as Goodyear Tire, were considered enlightened.23 In 1922, the Leeds and Northrup Cooperative Association, a company union, instituted one of the nation’s first unemployment insurance plans.24

The National Industrial Recovery Act (NIRA) was enacted in 1933. Section 7(a) of NIRA said that employers had to allow their employees to join unions of their own choosing and bargain with those unions. To meet this requirement, many employers formed company unions and bargained with them. Independent unions, such as the American Federation of Labor, didn’t like this competition, which might have reduced their power and membership. The Supreme Court struck down the NIRA in 1935 as unconstitutional.25 So, in the wake of the NIRA, the NLRA of 1935 outlawed company unions. Section 8(a)2 of the NLRA forbids employers to form or support any labor organizations that deal with management on the terms and conditions of employment.

These days, under the pressure of global competition, many American companies and employees want to form labor-management cooperation committees to give workers more voice in decisionmaking. These committees are sometimes called quality circles or employee involvement teams.26 Yet in the 1992 Electromation Inc. case, the National Labor Relations Board declared these cooperation committees to be illegal company unions.27 Because of that decision, the law today holds that such labor-management cooperation is illegal.

Proposed Reforms to Labor Union Laws

The ideas embodied in the federal union laws of the 1930s make no sense in today’s dynamic economy. Constant change and innovation in the private sector, along with policy changes, have relegated compulsory unionism to a smaller share of the US workforce in recent decades, but the damage done by federal union legislation is still substantial, but often unseen, in terms of the domestic jobs and investment that have been discouraged. Monopoly unionism continues to raise costs, prevents the adoption of efficiency-enhancing technologies, and imposes major disruptions at the nation’s seaports, for example.28

Many businesses and industries have likely failed or gone offshore because of the higher costs and inefficiencies created by federal labor laws regarding unions, while other businesses may not have expanded or opened in the first place.

Davis–Bacon, the NLA, and the NLRA serve the particular interests of labor unions rather than the general interests of all workers. These laws abrogate one of the most important privileges and immunities of American citizens—the rights of individual workers to enter into hiring contracts with willing employers on mutually acceptable terms. No Supreme Court has fundamentally challenged these laws since the 1930s. It is time for Congress to do so; seven important reforms for it to pursue include eliminating exclusive representation, passing a national right-to-work law, repealing the Davis–Bacon Act, allowing company unions, protecting replacement workers, allowing the nonhiring of union organizers, and requiring greater union financial transparency.

Eliminate Exclusive Representation. The principle of exclusive representation, as provided for in the NLRA, should be repealed. Workers should be free, on an individual basis, to join a union to represent them or not. They should not be forced to do so by majority vote. Unions are private associations, not governments. Government telling workers that they must allow a union to represent them violates workers’ freedom of association and gives special privileges to the union. Restrictions on the freedom of workers to choose who represents them should be eliminated.

Pass a National Right-to-Work Law. Short of eliminating exclusive representation, Congress should at least pass a national right-to-work law. Under this second-best reform option, workers would still be forced to let certified unions represent them, but no worker would be forced to join the union or pay dues to it. Congress should protect this right of private sector workers by enacting a statute incorporating the protections granted to government workers in the 2018 Supreme Court decision in Janus v. AFSCME (585 US 924), in which the Court held that government employees who are represented by a union do not have to pay forced dues to the union.

At a minimum, Congress should codify the 1988 Beck decision, in which the Supreme Court ruled that the dues of union members could not be used for political purposes.29 The importance of codifying Beck is illustrated by the NLRB’s 1995 decision in California Saw and Knife Works, in which the NLRB greatly circumscribed workers’ Beck rights, finding that unions could use their own staff accountants, rather than an independent third party, to determine how much of their expenditures were for non-collective-bargaining purposes.30

Repeal Davis–Bacon. The Davis–Bacon Act increases the costs of all federally financed projects by excluding more-efficient nonunion firms from federal work. Davis–Bacon rules serve no interest other than protecting unionized construction workers from open competition. Repealing this act would save taxpayers more than $20 billion annually as federal contracting efficiency was improved.

Allow Company Unions. Congress should repeal section 8(a)2 of the NLRA, which bans so-called company unions. Labor-management cooperation is important for the ability of American businesses and workers to compete in the global marketplace. Workers who want to have a voice in company decisionmaking without going through a union should be free to do so. The current ban on cooperation, as strengthened by court decisions, makes no economic sense. Greater workplace cooperation would increase workplace productivity, and increased productivity is what ultimately boosts worker wages. For those reasons, repealing section 8(a)2 of the NLRA would be a win for businesses and workers alike.

Protect Replacement Workers. Congress should codify the Supreme Court’s 1938 ruling in NLRB v. Mackay Radio & Telegraph (304 U.S. 333), in which the Court held that employers have an undisputed right to hire permanent replacement workers for striking workers in economic strikes.31

Allow Nonhiring of Union Organizers. Congress should repeal section 8(a)3 of the NLRA, which makes it an unfair labor practice for an employer to discriminate against a worker on the basis of union membership. In 1995, the Supreme Court ruled in NLRB v. Town & Country Electric (516 U.S. 85) that employers can be forced to hire paid union organizers as ordinary employees.32 Unions send paid organizers, known as “salts,” to apply for jobs at union-free firms and, if they are employed, they promote unionizing the business. The Court said that employers could not resist by firing or refusing to hire salts. In other words, employers must hire people whose main intent is to subvert their business, which is like telling a homeowner that it is illegal to exclude visitors who want to squat in their home indefinitely. Congress should repeal this especially nonsensical section of the NLRA.

Require Greater Union Financial Transparency. The Labor-Management Reporting and Disclosure Act of 1959 required unions to publicly disclose basic financial information so that their members could see how their dues were being spent. However, the act has never been effectively enforced, as union leaders have repeatedly misappropriated member dues. Congress should pass stricter financial disclosure and auditing rules for labor unions to protect against the common problem of union leaders lining their pockets at the expense of union workers.33

Conclusion

Collective bargaining as a legally mandated replacement of individual bargaining emerged in the early 20th century. It was based on a flawed understanding of markets by politicians and courts, who took the side of labor union organizations against the interests of individual workers and employers. Flawed understanding led to misguided policies, which should be corrected.

Exclusive representation is the central flaw of private sector labor union law, as it violates workers’ freedom of association. Congress should repeal, or at least reform, the Davis–Bacon Act, the Norris–LaGuardia Act, and the National Labor Relations Act.

On January 3, 2025, House Minority Leader Hakeem Jeffries (D‑NY) remarked just after Mike Johnson (R‑LA) became House Speaker in the 119th Congress, “We [the Democrats] will fight for the freedom to organize and join a union of your choice.”34 That is a worthwhile goal, and the way to pursue it is to end exclusive representation.

Citation

Baird, Charles W. “Reforming Federal Laws on Private Sector Labor Unions,” Policy Analysis no. 1002, Cato Institute, Washington, DC, July 29, 2025.