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Workplace Democracy & Market Reconstruction: an Agenda Catholic University Law Review Volume 38 Issue 1 Fall 1988 Article 3 1988 Workplace Democracy & Market Reconstruction: An Agenda for Legal Reform Karl E. Klare Follow this and additional works at: https://scholarship.law.edu/lawreview Recommended Citation Karl E. Klare, Workplace Democracy & Market Reconstruction: An Agenda for Legal Reform, 38 Cath. U. L. Rev. 1 (1989). Available at: https://scholarship.law.edu/lawreview/vol38/iss1/3 This Article is brought to you for free and open access by CUA Law Scholarship Repository. It has been accepted for inclusion in Catholic University Law Review by an authorized editor of CUA Law Scholarship Repository. For more information, please contact [email protected]. ARTICLES WORKPLACE DEMOCRACY & MARKET RECONSTRUCTION: AN AGENDA FOR LEGAL REFORM* Karl E. Kare** I. A MISSION FOR LABOR LAW: ENHANCING WORKPLACE D EM OCRACY ............................................... 3 A . Basic Premises ......................................... 3 B. Values Informing the Workplace Democracy Approach .... 7 C. The Business Environment .............................. 10 II. MARKET RECONSTRUCTION ................................ 13 A . Introduction ........................................... 13 B. A Spectrum of Views ................................... 14 C. Myths of the Free Market .............................. 17 1. Naturalism, Convention, and Indeterminacy .......... 19 2. Antipaternalism and Efficiency ...................... 24 D. Self-Limiting Market Reconstruction .................... 35 III. DEMOCRACY-ENHANCING MARKET RECONSTRUCTION ....... 40 A. Enhancing Collective Bargaining ........................ 42 B. Democratizing Firms ................................... 53 C. Democratizing Markets ................................. 55 IV. CONCLUSION ............................................... 68 * Copyright© 1989 by Karl E. Klare. ** Professor of Law, Northeastern University. This is a revised and annotated text of a paper presented to the centennial Symposium on "Cycles In Labor Law and Industrial Rela- tions: Projections Into the Next Century," convened April 14 and 15, 1988, by The Columbus School of Law, The Catholic University of America. In this Article, I intend to continue a discussion commenced in my paper entitled: The Labor-Management Cooperation Debate: A Workplace Democracy Perspective, 23 HARV. C.R.-C.L. L. REV. 39 (1988). I am deeply grate- ful to Dean Ralph J. Rohner and his colleagues for the invitation to speculate about and present my views on the Symposium topic. I am grateful to Hugh Collins, Duncan Kennedy, and Michael J. Trebilcock for critically reviewing the manuscript, and to Roger C. Hartley for invaluable advice and encouragement. Catholic University Law Review [Vol. 38:1 Whether through an excess of caution or wishful thinking, it was still pos- sible as recently as a few years ago to question whether American industrial relations and labor law had entered a period of profound transformation. Lingering skepticism has now receded in the face of dramatic changes in employer/employee relations, the siege of the unionized sector, and the crisis of labor law. This is a time of great risks to our fragile institutions of workplace democ- racy. The economic, political, and legal climates seem distinctly inhospita- ble to the values and assumptions that have been embodied in labor law since the New Deal and that have informed the prevailing legal conception of in- dustrial democracy. Yet it would be a mistake for friends of employee rights and of collective bargaining to dig in behind defensive barricades. The cur- rent period of transformation harbors dangers but also great potential for expanding and enriching workplace democracy. Employee rights advocates should defend and protect the enduring contributions of collective bargain- ing and of the labor movement's best traditions of egalitarianism and solidar- ity. Yet simultaneously we must be ready to rethink old assumptions and to confront our very real problems with new ideas and approaches. Above all, we need to enlarge our conceptions of workplace democracy. We must be ready to experiment and to take conceptual and practical risks to seize the opportunities and potential of the times. In considering this challenge, I have drawn inspiration from many colleagues in the labor law community and in the labor movement itself who are searching so imaginatively for new concepts and approaches. My hope here is to make some small contribution to advancing the discussion. In a symposium subtitled "Projections Into the Next Century," one as- sumes contributors may take certain liberties in formulating their proposals; specifically, that they may look beyond the constraints of practical politics and sketch out a vision of desirable, if not necessarily presently enactable, paths of development. As will be obvious, I have fully availed myself of this prerogative. I have not attempted to predict what labor law will look like two or three decades hence. Rather, my question is, what should labor law look like twenty or thirty years from now? What should be its goals and mission over that time span? What I am proposing is an agenda for a generation, not for next year's legislative session. I assumed it would be most useful here to attempt to generate reflection and debate, and consequently I have drawn my projection in broad strokes. Whether the exercise is valuable depends on how well it serves to clarify issues of principle and direction in legal and industrial rela- tions theory, and whether such a general projection assists us in identifying 1988] Workplace Democracy good questions about institutional strategies worth pursuing in greater detail. Part I of this Article proposes that expansion of democracy in work should be the guiding principle of our labor laws and social policy. I defend that view by reference both to the philosophical ideal of self-determination and to the pragmatic business considerations stemming from changes occur- ring in our economic and technological environment. Part II discusses the relationship between markets and planning in the employment context and provides the foundations for a "market reconstruction" approach to labor law reform. This section also anticipates and rebuts several likely objections to the approach, notably that expansive market reconstruction violates con- tractual liberty and is inefficient. Part III surveys several areas of labor law in urgent need of reform. It outlines a series of examples of reforms sug- gested by the market reconstruction approach, in light of the proposed de- mocracy-enhancing imperative. I. A MISSION FOR LABOR LAW: ENHANCING WORKPLACE DEMOCRACY A. Basic Premises Several goals are customarily ascribed to labor law, chief among which is the maintenance of industrial peace. Equalizing bargaining power is also mentioned, and occasionally even the concept of industrial democracy is cited, usually in vague and general terms. My central thesis is this: as our vision projects into the twenty-first century, the preeminent role and guiding principle of labor law should be to expand and enhance democracy at every level of the experience and organization of work. This democratization should extend both to the upper tiers of the firm's governance and strategic decisionmaking processes, and to the mundane levels of the organization and structure of day-to-day operations and decisionmaking. Democratization is also needed with respect to the institutional and social mechanisms that con- trol entry into and exit from paid employment. This "entry/exit" aspect of workplace democratization must be concerned with equalizing access to em- ployment opportunities in the most desirable jobs, and with developing poli- cies on long-term leave and day-to-day scheduling that will permit relatively equal labor force participation by employees who desire off-the-job training or who have parenting or other caretaking responsibilities. In this Article, I sketch some future institutional and legal changes sug- gested by the democracy-enhancing perspective. One point seems funda- mental. Collective bargaining plays a central role in my projected vision of a desirable labor law framework for the next generation. Regrettably, this is Catholic University Law Review [Vol. 38:1 not equally obvious to all other observers, so I will briefly cite some of the primary reasons why an adherent of a democracy-enhancing perspective on labor law reform would consider collective bargaining to be an essential component.' At least so long as massive inequalities of power in the workplace exist, employees will have a need for autonomous organization to aggregate their interests and voices, and to identify and articulate their collective needs in- dependent of employer domination. Autonomous organization is needed to maximize employees' collective strength, and to allow pursuit of independ- ent, concerted action to protect their interests. In addition, collective bar- gaining promotes employee autonomy and participation, and, hence, self- determination, because of its unique capacity, when functioning well, for flexible adaptation to local conditions and therefore for decentralized, par- ticipatory problem solving. Finally, unions, as institutions of working peo- ple, can contribute to civic and political democracy. This is particularly so in a political system like ours, which lacks an established social democratic tradition and major labor or social democratic parties. For these and other reasons, it is unfortunate that
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