U.S. Supreme Court Ruling Allows Yellow-Dog Contracts Summary

  • Last updated on November 10, 2022

In Adair v. United States, the U.S. Supreme Court declared unconstitutional a provision of the 1898 Erdman Act that prohibited “yellow-dog” labor contracts.

Summary of Event

To understand the importance of the U.S. Supreme Court’s decision in Adair v. United States for the evolution of labor relations, one must understand the nature of the employment relationship examined in that case. “Yellow-dog contracts” were agreements between employers and prospective employees that the employees did not belong to and would not join any labor union. Through such agreements, employers were able to make the promise not to join a union a condition of employment, effectively barring unions from the workplace. These contracts might be arrived at individually between a worker and an employer, or they might take the form of collective agreements between employers and groups of workers. Supreme Court, U.S.;labor law Adair v. United States (1908) Yellow-dog contracts[Yellow dog contracts] Labor law;yellow-dog contracts[yellow dog] Contracts;yellow-dog[yellow dog] [kw]U.S. Supreme Court Ruling Allows Yellow-Dog Contracts (Jan. 27, 1908) [kw]Supreme Court Ruling Allows Yellow-Dog Contracts, U.S. (Jan. 27, 1908) [kw]Court Ruling Allows Yellow-Dog Contracts, U.S. Supreme (Jan. 27, 1908) [kw]Yellow-Dog Contracts, U.S. Supreme Court Ruling Allows (Jan. 27, 1908)[Yellow Dog Contracts, U.S. Supreme Court Ruling Allows (Jan. 27, 1908)] [kw]Contracts, U.S. Supreme Court Ruling Allows Yellow-Dog (Jan. 27, 1908) Supreme Court, U.S.;labor law Adair v. United States (1908) Yellow-dog contracts[Yellow dog contracts] Labor law;yellow-dog contracts[yellow dog] Contracts;yellow-dog[yellow dog] [g]United States;Jan. 27, 1908: U.S. Supreme Court Ruling Allows Yellow-Dog Contracts[02070] [c]Business and labor;Jan. 27, 1908: U.S. Supreme Court Ruling Allows Yellow-Dog Contracts[02070] [c]Laws, acts, and legal history;Jan. 27, 1908: U.S. Supreme Court Ruling Allows Yellow-Dog Contracts[02070] Erdman, Constantine Jacob Harlan, John Marshall Holmes, Oliver Wendell, Jr. McKenna, Joseph

The earliest collective agreements, in the printing trades in 1795 and in the iron industry in 1866, were little more than wage scales, but over time the subject matter of agreements extended to cover other aspects of the employer-employee relationship, including provisions precluding union membership and union organizing activity. Yellow-dog contracts increased in frequency in response to the growing use of the strike by unions in the railroad industry, use that culminated in the Pullman Strike of 1894, one of the most violent strikes of the period. The Erdman Act Erdman Act (1898) of 1898 (named for its principal sponsor, Congressman Constantine Jacob Erdman of Pennsylvania) attempted to strengthen the ability of employers and employees to resolve conflicts between themselves, but it also provided for federal mediation and conciliation. It outlawed discrimination against employees based on union membership, in effect rendering yellow-dog contracts illegal. In addition, many states passed legislation making it illegal for an employer to force workers to agree not to join a union as a condition of employment.

These issues came to the attention of the U.S. Supreme Court in October, 1907, when Adair v. United States was argued. William Adair was a supervisor for the Louisville and Nashville Railroad when O. B. Coppage, a member of the Order of Locomotive Firemen, was discharged. The only apparent reason for the discharge was Coppage’s union membership. In a ruling issued on January 27, 1908, the Supreme Court affirmed the discharge of Coppage. The Court, in the majority opinion written by John Marshall Harlan, concluded that the prohibition of yellow-dog contracts was a violation of the property right of the employer to hire and fire, a right protected by the Fifth Amendment of the Constitution. Adair had a responsibility to prescribe conditions of employment that were in the best interests of his business. As long as those conditions were not injurious to the public interest, the Court ruled, legislation should not interfere with individual freedom.

The Court also made two additional points. First, there had been no stated or implied length of employment agreed to between the employer and the employee, so that the dismissal was not a breach of contract. In addition, although Congress had the right to regulate interstate commerce, that right extended only to those aspects of the employer-employee relation that affected interstate commerce. Membership in a labor organization had nothing substantive to do with how commerce was conducted or with the ability of workers to perform their function. Congress did not have the right to prescribe conditions of union membership, as such a prescription did not fall within its constitutional powers to regulate commerce among the states. In the same way that a worker may choose whether to accept a job, an employer has a reciprocal right to specify the terms and conditions of employment.

The Court’s decision was a significant blow against unions on two fronts. Labor unions;impacts of Adair v. United States First, it made organizing workers more difficult, because the very fact of union membership might lead to dismissal. Second, it greatly diminished the bargaining power of the unions by lessening the effectiveness of strikes. Striking workers could be replaced with workers who would agree not to join the union. In workplaces that were unionized, the employer could, by precipitating a strike, effectively eliminate the union by replacing the striking union workers with nonunion workers.

Two justices wrote dissenting opinions in Adair v. United States. Joseph McKenna expressed the view that the intent of the Erdman Act was to resolve industrial conflict in the workplace. This end could be served better if the employer dealt with members of a labor organization rather than with separate individuals. The potential gains to society from the law thus overrode any losses of individual freedom to the employer. Oliver Wendell Holmes, Jr., presented the second dissenting opinion. He saw the outlawing of yellow-dog contracts as a means of protecting the worker, usually the weaker party in an employment contract, from the potentially discriminatory exercise of power by the employer. The rights of the employer are not without bound, and the interest of the public welfare takes precedence over that of the employer. Foreshadowing future events, Holmes concluded that even if the only outcome of the Erdman Act was to promote the growth of organized labor in railroads, that would be sufficient justification for passage. A strong union was in the best interests of the individual workers, the railroad industry, and society as a whole.

In 1915, the Court found illegal a state statute prohibiting yellow-dog contracts, in Coppage v. Kansas. Coppage v. Kansas (1915) In this case, the Court held that the state statute violated the due process clause of the Fourteenth Amendment. Although the individual had the right to join or not join a union, the employer was not obligated to hire or to continue to employ a union member. In the same way that the individual does not have the right to join the union without the consent of the union organization, the individual does not have the right to be employed without the consent of the employer.

Significance

In the early 1900’s, the United States faced a question that would shape the nation’s political and social structure. The issue was whether workers should have the right to bargain collectively. In the laissez-faire world of the eighteenth and nineteenth centuries, employers bargained individually with workers. The rights of the employer were relatively unbounded, although workers did have access to the court system when they believed they had been wronged. The technological advances that accompanied the Industrial Revolution brought workers together in factories, where the same terms and conditions of employment affected many people. These common concerns inevitably led to collective mechanisms to resolve conflicts with employers.

Previously, if conditions in the workplace were unacceptable, an employee’s main recourse was to quit; now there was the possibility of groups of employees having a voice. Unions offered the possibility of affecting the terms and conditions of employment, and the threat of the strike gave unions bargaining power. Social acceptance of the right of unions to bargain collectively implied a jurisprudence in the workplace separate from that in the courts. Although the right of the employer to bargain with individual employees over the preconditions of employment may be acceptable in the abstract, it may not hold universally. In other words, private contracting may not be in the public’s best interest because it denies workers the right to a voice; it denies them democracy in the workplace. The yellow-dog contract might be in the interests of the employer and possibly even of the worker directly involved, but it is not in the best interests of society.

Adair v. United States set the stage for a dramatic change in legislation concerning unions. The yellow-dog contract served as an effective tool for employers to keep out unions and, in the event of a strike, to replace union workers with workers who promised not to join a union. The idea of “employment at the will of the employer,” however, was being slowly circumscribed. The majority and dissenting opinions in this case, especially that of Holmes, highlight the complexity of the issue.

The right to bargain over the terms and conditions of employment was assured by the Fifth Amendment. In that context, yellow-dog contracts can be viewed in two quite different ways. On one hand, their prohibition by Congress ensured that employers, assumed to have the greater power in the bargaining context, would not be allowed to use that power to exploit an individual worker and indirectly all workers or the labor movement. Given that the prohibition of union membership was not essential to the performance of the job and did not alter the worker’s productivity, it should not be permitted and in fact was discriminatory because it was unrelated to job performance. Yellow-dog contracts would be illegal because they were coercive on the part of the employer or because such subject matter was beyond the scope of legitimate contracts.

The alternative view was that Congress was interfering with the rights of individuals to engage in potentially mutually advantageous trades. The private property rights of the employer made union membership a legitimate matter for contracting, and the right of the prospective employee to refuse the job offer precluded coercion. This right of the employer was affirmed in the 1917 U.S. Supreme Court case of Hitchman Coal and Coke Company v. Mitchell. Hitchman Coal and Coke Company v. Mitchell (1917) A yellow-dog contract was in effect when union agents attempted to organize the employees and become their exclusive bargaining agent. The Court determined that the employer could seek injunctive relief against the union. Justice Mahlon Pitney asserted that the right of the employer to make union membership a condition of employment is as sacrosanct as the right of the employee to join the union and that these rights derive from the constitutional rights of private property and individual freedom. In another 1917 case, Eagle Glass & Manufacturing Company v. Rowe, Eagle Glass & Manufacturing Company v. Rowe (1917) the Court ruled that the employer could enjoin the officers and members of the union from conspiring to induce employees to violate such a preemployment contract.

At the federal level, the change in public attitude toward unions is symbolized by the Railway Labor Act of 1926, Railway Labor Act (1926) which forbade the use of yellow-dog contracts by employers and rendered invalid any such existing contracts. The constitutionality of the act was affirmed in the 1930 Supreme Court case of Texas & N.O.R. Company v. Brotherhood of Railway & Steamship Clerks. Texas & N.O.R. Company v. Brotherhood of Railway & Steamship Clerks (1930) The Court sustained a decision of a lower court that workers discharged because of union membership must be reinstated. The Court reconciled its decision in this case with those in Adair v. United States and related cases by making a subtle distinction. The employer’s right to hire whom it wanted was not being interfered with. The employees, however, had a right to be represented by individuals of their own choosing. The law was not limiting the right of the employer; rather, it was ensuring the right of employees to choose their own representatives. The employer does not have a constitutional right to limit the right of workers to choose their representatives.

The Court’s opinion in Adair v. United States stated that the worker and the employer were equal parties in the contracting process, that unions inhibited individual rights, and that unions were in some cases conspiracies in restraint of trade that could be enjoined. These legal ramifications were changed by the Norris-La Guardia Act Norris-La Guardia Act (1932)[Norris Laguardia Act] (the Anti-Injunction Act) of 1932. The main focus of the act was to prevent employers from seeking injunctive relief against striking unions, but it also acknowledged the helplessness of individual workers in bargaining with employers. Section 3 of the Norris-La Guardia Act made yellow-dog contracts nonenforceable and not subject to injunctive relief. The prohibition of the use of the injunction was extended to railroads the next year.

In 1933, Congress amended the Bankruptcy Act to prevent railroad carriers in bankruptcy from using yellow-dog contracts to circumvent unions. This prohibition was extended and reinforced in the Emergency Railroad Transportation Act of 1933 and in the 1934 amendments to the Railway Labor Act. The change in the public’s attitude toward unions from one of tolerance to one of encouragement culminated in the passage of the National Labor Relations Act National Labor Relations Act (1935) (Wagner Act) in 1935. Wagner Act (1935)

The opinions articulated in Adair v. United States defined the terms in the debate concerning the role of organized labor in the American economy. The Court’s decision represents one of the last times the Court has ruled that the rights of the employer to freedom and to private property dominate the rights of the worker. In Adair v. United States, the Court saw the role of the union as negatively affecting private rights without consideration of the public good. Implicit was the eighteenth century view that the private good is compatible with the social good. Holmes challenged this attitude of individual rights in his minority opinion, in which he stated that in the interest of the public good and the collective social well-being, the unilateral right of the employer must be limited. The unrestricted right of the employer limits the right of the employee and is not in the best interests of society. Once this view was accepted, the institution of unionism could no longer be seen as an obstructionist conspiracy contrary to the Constitution. Unions instead became recognized as vehicles to safeguard individual rights. Supreme Court, U.S.;labor law Adair v. United States (1908) Yellow-dog contracts[Yellow dog contracts] Labor law;yellow-dog contracts[yellow dog] Contracts;yellow-dog[yellow dog]

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Commerce Clearing House. Labor Law Course. 24th ed. New York: Author, 1976. A complete summary of the law governing labor relations. Both topic and legal case indexes are provided. Major legislation and court opinions are presented and cross-referenced.
  • citation-type="booksimple"

    xlink:type="simple">Herman, E. Edward, and Gordon S. Skinner. Labor Law: Cases, Text, and Legislation. New York: Random House, 1972. An introduction to labor law. Each major topic is summarized. The principal legislation is presented, and the most important legal cases are excerpted.
  • citation-type="booksimple"

    xlink:type="simple">Myers, A. Howard, and David P. Twomey. Labor Law and Legislation. 5th ed. Cincinnati: South-Western, 1975. Uses both essays and legal cases to trace the evolution of societal views on labor relations, beginning with British common law.
  • citation-type="booksimple"

    xlink:type="simple">Taft, Phillip. Organized Labor in American History. New York: Harper & Row, 1964. One of the best descriptions of the role of unions in the United States prior to 1960. Analyzes the influence of yellow-dog contracts and labor legislation on union growth.

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