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stitutionality of legislation reducing the hours of labor of men who work
in smelters and underground.

2 This was, of course, not the first time that this doctrine was as-
serted. Indeed, it was implied whenever a court sustained a law pro-
tecting labor. But it was the first broad statement by the highest
court in such a way as to make it "the law of the land."



28 PRINCIPLES OF LABOR LEGISLATION

(particularly those engaged in dangerous or unhealthful em-
ployments) have been found to be in need of additional pro-
tection. ... It is impossible to forecast the character or ex-
tent of these changes; but in view of the fact that, from
the day Magna Charta was signed to the present moment,
amendments to the structure of the law have been made with
increasing frequency, it is impossible to suppose that they will
not continue, and the law be forced to adapt itself to new
conditions of society, and particularly to the new relations
between employers and employees, as they arise." 1 Two
state courts have said, "While the principles of justice are
immutable, changing conditions of society and the evolution
of employment make a change in the application of principles
absolutely necessary to an intelligent administration of
government." 2

Finally a justice of the Supreme Court, in 1911, is able to
identify a public benefit with public opinion regarding not
only the health of a class of producers, but also regarding the
welfare of any class of people, and to declare that the police
power is shaped "by the prevailing morality or the strong and
preponderant opinion" as to what is "greatly and immedi-
ately necessary to the public welfare." 3

b. Equal Protection of tJie Laws. Another respect in which
the case of Holden v. Hardy is the headlight of a new period
is found in its opinion regarding the inequality of bar^aininp
power of employer and employee. The opinion declared that
a law, such as the one then before the court, limiting the work-
ing hours of men, was not class legislation and therefore did
not conflict with the constitution which guarantees to each
individual the equal protection of the laws. The reason is,

1 Holden v. Hardy, 169 U. S. 366, at pp. 385-387 (1898).

2 Ritchie v. Wayman, 244 II!., 509, 91 N. E. 695 (1910); quoted with
approval from Washington v. Buchanan, 59 L. R. A. 342 (1902).

3 Xoble State Bank v. Haskell, 219 U. S. 104. 31 Sup. Ct. 186 (1911).
Also contrary opinion in Ives v. South Buffalo R.R. Co., 201 X. Y. 271, 94
N. E. 431 (1911), at p. 448, where the highest court of New York said
in part: "As to the cases of Noble State Bank v. Haskell and Assaria
State Bank v. Dolly, we have only to say that if they go so far as to
hold that any law, whatever its effect, may be upheld because by the
'prevailing morality' or the 'strong and preponderant opinion ''it is
deemed 'to be greatly and immediately necessary to the public welfare,'
we cannot recognize them as controlling of our construction of our own
constitution."



THE BASIS OF LABOR LAW 29

as declared by the court, that the employers and their laborers
do not stand upon an equality; that "the proprietors lay down
the rules and the operatives are practically constrained to
obey them"; thatj'the latter are often induced by the fear
of discharge to conform to regulations which their judgment,
fairly exercised, would pronounce to be detrimental to their
health and strength," and that, even though "both parties
are of full age and competent to contract," yet the legislature
may interfere "where the parties do not stand upon an
equality, or where the public health demands that one party
to the contract shall be protected against himself." l

In this opinion the court recognized, what had been dimly
seen or implied from the beginning of labor legislation, that
inequality of bargaining power is a justification under which
the state may come to the protection of the weaker party to
the bargain. In earlier periods the courts had often held that
capital and labor were equal, that laws favoring labor against
capital were class legislation, and, even where certain courts
held otherwise, the law books severely criticized them as
yielding to the pressure of politics instead of bravely stand-
ing by the constitution. 2 But inequality of bargaining power
has long been a ground for legislative and judicial protection
of the weaker party, even though the courts found other
grounds on which to base their opinions. It was early con-
ceded as a justification of usury laws, protecting the weak
debtor against the strong creditor; latterly of public utility
laws, protecting the weak consumer against the powerful cor-
poration; and now it only needs a recognition of facts to
justify labor legislation protecting the weak wage-earner
against the more powerful capitalist. Such legislation could

1 A similar opinion had been stated in 1892 by a state court (Peel
Splint Coal Co. v. State, 36 W. Va. 802, 15 S. E. 1000 (1892), at p. 1009:
"When a few persons are engaged in an extensive business and they
have a multitude of customers or dependent employees and it appears
that the business is of such a character that the parties do not deal
upon an equal footing and that the many are at a disadvantage in
their contractual relations with the few, the legislature may regulate
these relations, with a view to prevent fraud, oppression, or undue ad-
vantage." See also State v. Brown & Sharpe Manufacturing Co.,
18 R. I. 16, 25 Atl. 246 (1892); Avent Beattyville Coal Co. v. Common-
wealth, 96 Ky. 218, 28 S. W. 502 (1894).

2 Eddy, Law of Combinations, 1901, Vol. I, pp. 245-247, 277; Vol. II,
p. 1023.



30 PRINCIPLES OF LABOR LEGISLATION

be held to deny equal protection of the laws only where the
facts showed that both parties were actually equal. But
where the parties are unequal (and a public purpose is shown), 1
then the state which refuses to redress the inequality is
actually denying to the weaker party the equal protection
of the laws.

It is by recognizing this inequality of bargaining power,
coupled with a public purpose, that the courts pass over, in
any particular case, from the theory of class legislation to the
theory of reasonable classification. The two are identical in
one respect; all classification is class legislation, but the kind
of class legislation which the courts condemn is that which
they consider to be "unreasonable " classification. Class legis-
lation benefits or burdens one class against others where there
is no real inequality or no public benefit. "Reasonable"
classification benefits or burdens a class where there is real
inequality to be overcome and a public benefit to be attained. 2
That which is class legislation at one time may become rea-
sonable classification at a later time, if the court perceives
that what it once thought was equality is really inequality,
and what it once thought was merely private benefit is also
public benefit.

Thus the history of the constitutionality of labor legislation
in the United States has been a history of the tji



cation. The conflicting opinions of various courts on the ex-
tent of the police power over private property are usually
conflicting opinions on the equality or inequality of bargain-
ing classes and on the public or private purpose subserved by
the legislation. In proportion as certain classes of la-
borers, such as women or mine-workers, are recognized by
the courts as suffering an injury, and in proportion as the in-
jured persons are deemed to be of importance to the public
as well as unable to protect themselves, then legislation re-
quiring the employer to remove the injury and prohibiting the

1 In the case of Coppage v. Kansas, 236 U. S. i, 35 Sup. Ct. 240 (1915),
the Supreme Court denied the application of the doctrine of inequality
of bargaining power, but this was a case where the purpose was to pro-
tect trade unions against disruption by employers. What the court in
effect decided was that a trade union performed a private and not a pub-
lic purpose. See "The Law of Conspiracy," p. 114.

2 See also Freund, Police Power, pp. 626-755.



THE BASIS OF LABOR LAW 31

laborer from even voluntarily consenting to the injury ceases
to be overruled as "class legislation" and begins to be sus-
tained as "reasonable classification." Even though the in-
dividual liberty of both employer and employee to make so-
called voluntary contracts is restricted by the law, yet each
continues to have "equal protection of the laws" because
each individual is treated equally with all other individuals
of his own class. The bargaining power of the employee is
increased while that of the employer is reduced, yet all em-
ployers in a given class are treated alike and all employees
in their class are similarly treated alike. 1

This gradual transition from the time when labor was
treated as equal to capital to the modern time when labor is
given privileges superior to those of capital may be described
as a transition from the law of master and servant to the law
of employer and employee. Prior to the decade of the 'thirties
the laborer could be imprisoned for debt. In other words, his
creditor had rights over his body, which was looked upon as
property justly belonging to the creditor as was the laborer's
other property sufficient to pay the debt. This reduced the
laborer to a servile state while pretending that he was equal
and free. No distinction was made between the fraudulent
debtor and the unfortunate debtor. Now the laborer is not
treated as a criminal unless proved to be so, and his creditor
consequently has no remedy which reduces the laborer to the
servile state.

Next, in the decade of the 'forties, the law went further and
the wage exemption laws prevented the creditor from taking
even the minimum wages of the laborer in payment of a debt.



1 This principle may be seen in the workmen's compensation laws.
Under the former law of employers' liability the laborer carried all the
expense incurred by reason of the risk of accident. The employer had
certain defenses by which he could throw the cost of accidents on the
employee. (See "Rules of Employers' Liability," p. 358.) These de-
fenses were held to be property rights, because they were valuable to
the employer. But the legislature abolished these defenses and requires
the employer to compensate all laborers for all disabling accidents. The
employers are thus compelled to pay the cost of insurance against all of
these risks, where formerly the laborer carried the insurance as best he
could. In this way the employer's increased cost of insurance may be
said, so far as the law is concerned, to have increased the bargaining
power of the employee and reduced the bargaining power of the employer
or of the consumer to the same extent.



3 2 PRINCIPLES OF LABOR LEGISLATION

Finally, the thirteenth amendment to the constitution, by
prohibiting involuntary servitude except for crime, confirmed
the preceding privileges as well as the privilege of a laborer
even to break his contract to labor without being forced to
"specific performance." In these respects labor has been
given a preference over capital, in that while both the em-
ployer and the employee can bring suits for damages on
account of breaking a contract, the employer's suit is against
the laborer whose small property is exempt from attachment,
but the laborer's suit is against an employer whose business
property as such has no exemption. 1

Other laws are mentioned in the following chapters, showing
the transition from the master-servant notion of law to the
employer-employee notion. The master and servant law,
while pretending to treat employer and employee alike, re-
tained marks of that servile status in which the laborer's body
was the physical property of employer or creditor. But the
law of employer and employee, as it develops, not only grad-
ually removes those vestiges of past servitude, when the
master could compel the servant to work, but also gives the
latter a preference over capital in bargaining and a privilege
to break contracts without effective penalty which the em-
ployer does not possess. In other words, the natural , in-
equality of employer and employee reduces the latter to a
servile state, reinforced by the law of master and servant,
but the legislature, by giving preference to the weaker party,
overcomes in part the inequalities of nature and secures a
more real equality protected by the law of employer and
employee. 2

Thus it may be affirmed that the equality of bargaining
power toward which the law of employer and employee is
directed is a principle so important for the public benefit that

1 Of course, the bankrupt employer has the same exemptions as the
laborer.

2 This distinction between the law of master and servant and that of
employer and employee is not technically correct. The law books in-
clude both under "master and servant." But the legislatures have
broken away from these terms. In recent legislation of the more indus-
trial states the terms used are employer and employee. This goes along
with popular usage and serves to bring out, not so much the legal form
of the labor contract, as the underlying purpose of equality in the wage
bargain.



THE BASIS OF LABOR LAW 33

it becomes in itself a public purpose. Many decisions of the
courts base the justification of the police power, not merely
upon the protection of health, safety, and morals, but squarely
upon strengthening the bargaining power of laborers. In sus-
taining a law requiring wages to be paid in cash, the Supreme
Court of Tennessee said: "The legislature evidently deemed
the laborer at some disadvantage under existing laws and
customs, and by this act undertook to ameliorate his condi-
tion in some manner by enabling him, ... at his election and
at a proper time, to demand and receive his unpaid wages in
money rather than in something less valuable. Its tendency,
though slight it may be, is to place the employer and employee
upon equal ground in the matter of wages." l The court again
approved the passage in Holden v. Hardy bearing on bargain-
ing equality.

Upon similar grounds was upheld as constitutional an
Arkansas law forbidding coal operators "from using screens
or other devices to reduce the amount of wages that would
be due on the basis of. weight of coal actually mined and
accepted by the operator." The court said: "We are unable
to say, in the light of the conditions shown in the public in-
quiry referred to, and in the necessity for such laws, evinced
in the enactments of the legislatures of various states, that
this law had no reasonable relation to the protection of a large
class of laborers in the receipt of their just dues and in the
promotion of the harmonious relations of capital and labor
engaged in a great industry in the state." 2

The court argued in a like tenor in upholding an Iowa
statute denying effect to any contract restricting liability or
the acceptance of any insurance benefits as a defense to per-
sonal injury actions brought against railroads by their em-
ployees. In dealing with the relation of employer and cm-
ployed the court held that "the legislature has necessarily a
wide field of discretion in order that there may be suitable
protection of health and safety, and that peace and good order



1 Knoxville Iron Co. v. Harbison, 183 U. S. 13, 22 Sup. Ct. I (1901).
For cases declaring similar laws unconstitutional, see Freund, Police
Power, pp. 305, 306.

2 McLean v. Arkansas, 211 U. S. 539, at p. 550, 29 Sup. Ct. 206 (1909),
reprinted in Hall, Cases on Constitutional Law, 1913, p. 424.

3



34 PRINCIPLES OF LABOR LEGISLATION

may be promoted through regulations designed to insure
wholesome conditions of work and freedom from oppression.
What differences as to the extent of this power may exist with
respect to particular employments and how far that which
may be authorized as to one department of activity may ap-
pear to be arbitrary in another must be determined as cases
are presented for decision. But it is well established that,
so far as its regulations are valid, not being arbitrary or un-
related to a proper purpose, the legislature undoubtedly may
prevent them from being nullified by prohibiting contracts
which, by modifications or waiver, would alter or impair the
obligation imposed." 1 The court here also quotes with ap-
proval the passage from Holden v. Hardy relating to inequality
and conflicting interest.

As summarized by Ernst Freund: 2 "Our whole economic
system is based upon a very wide liberty of dealing and con-
tract, and it is deemed perfectly legitimate to use liberty for
the purpose of securing special advantage over others. The
resulting disparity of conditions is not, on the whole, regarded
as inconsistent with the welfare of society. Yet a different
view seems to be taken of this liberty of dealing, where
economic superiority is used to dictate oppressive terms, or
where a degree of economic power is aimed at that is liable
to result in such oppression. The theory of legislative inter-
ference seems to be in some cases that oppression in itself,
like fraud, is immoral and wrong either against the individ-
ual affected thereby or against the public at large; in other
cases, that the excessive dependence of whole classes of the
community threatens, though perhaps only remotely, the
social fabric with grave disturbance or ultimate subversion
and ruin."



1 Chicago, Burlington & Quincy R. Co. v. McGuire, 219 U. S. 549,
at p. 570, 31 Sup. Ct. 259 (1911), reprinted in Hall, Cases on Constitutional
Law, p. 518. 2 Police Power, p. 285.



CHAPTER II
INDIVIDUAL BARGAINING

In the broadest sense of the term a debt is that which is
due from one person to another, whether money, goods, or
services. 1 The laborer as debtor may, therefore, be looked
upon as owing either labor or money to another. But modern
law does not force a laborer to work out his debt. It con-
verts a labor debt into a money debt, or ''damages," and en-
forces payment of the latter. Furthermore, under "exemp-
tion" laws, the law does not always enforce even the total
payment of a money debt.

On the other side, the laborer is a creditor to the extent
that the employer owes him money for his labor. Here, too,
modern legislation gives him certain privileges or protection,
not usually given to other creditors.

It is in this twofold relation of debtor and creditor that
we trace the history of labor law from the servile stage, through
the stage of master and servant, to the modern stage of
employer and employee.



i. THE LABORER AS DEBTOR

If we classify the legal relations of the laborer as debtor
we shall begin with the employment of labor in its elementary
form of slavery, where all of the rights were on the side of
the owner and all the obligations on that of the laborer.
This, and a succeeding or contemporary stage of serfdom,
are known as a period of status. The laborer is born to the



1 Kimpton v. Bronson, 45 Barb. 625 (1866).



36 PRINCIPLES OF LABOR LEGISLATION

position and does not enter it by agreement or contract. But
status often merges into contract, or the fiction of a contract,
and we may therefore speak of a servility stage, or a stage
of servile contracts, preceding that of free contracts. Here
would be classified slavery, serfdom, and peonage. These
conditions of labor, even if based on contract, may be so
evidently the outcome of coercion that they may rightly be
considered as belonging to a pre-contract or servile stage.

A second stage, which we may designate as that of master
and servant, emerges gradually from the more liberal forms of
servile contracts, although retaining vestiges of servile rela-
tions. Some of the contracts of this stage, especially the
seaman's contract, have continued down to the present day,
while others, such as apprenticeship, indentured service, and
contract labor, can with difficulty be distinguished from those
of the servile stage. The ameliorating character of both the
servile and master stage is that of paternalism, and both of
them are closely connected with the institution of the family,
in which the wife and children occupy a position of status,
afterward modified by contract, express or implied.

Modern labor legislation, as understood in this book, be-
gins with a conscious effort on the part of the legislature to
remove both the servile and paternal vestiges of the master
and servant stage and to substitute a stage of real equality,
as far as possible. This we designate as the employer and
employee stage.

(/) Servile Labor

a. Slavery. The worker under primitive slavery is re-
garded as the property of his master. In Roman law a
slave was regarded not as a person, but as a thing. 1 In 1776
Mr. Justice Chase of Maryland said: "Negroes are property,
and no more members of the state than cattle."

In England, in 1772, it was held by the court that slavery
could not exist in the mother country. The slave trade was
abolished by statute there in 1807, and in the colonies in 1833.

1 Sohm, Institutes of Roman Law, tr. Ledlie, 1901, p. 171.

2 Wilson, History of the Rise and Fall of the Slave Power in America,
n. d., Vol. I, p. 15.



INDIVIDUAL BARGAINING 37

The example of Great Britain in regard to her colonies was
gradually followed by other European states, by France in
1848, Portugal in 1858, Holland in 1863. Spanish- American
states abolished slavery after securing independence. In the
United States the slaves were freed in 1865 by the thirteenth
amendment to the federal constitution, as an outcome of the
Civil War, and Brazil, the South American state which re-
tained slavery longest, abolished it by decree of the Chambers
in 1888.

b. Serfdom. Slavery aims at the subjection of the whole
man. Another degree of unfreedom, namely, serfdom or
villeinage, does not attempt to cover the entire range of
human life. It is concerned only with certain relations, gen-
erally economic in character. Compulsory labor compul-
sion as to the kind of service and the time and place where it
is to be rendered is the essential note of serfdom or villeinage.
A serf was bound to the land and bought and sold with it,
like cattle. But he might secure freedom by "commuta-
tion," that is, by paying to the lord or master who had the
title to the soil a sum of money or an annual payment pre-
sumably equivalent to the value of the service which he
rendered his lord. He substituted a money debt for a labor
debt in other words, he bought his freedom. Serfdom ap-
pears as a corollary of feudalism. It grew up as a conse-
quence of customary subjection in an agricultural system and
melted away with the advent of the industrial age.

c. Peonage. Peonage has been denned as a "status or
condition of compulsory service based upon the indebtedness
of the peon to the master." l The basic fact is indebtedness.
In Mexico, after the Spanish conquest, slaves were used in
mines and on roads, while serfs or peons were used for agri-
culture. The condition of the latter, though differing little
from slavery, was theoretically more humane and right-
respecting. Together with peonage a system of large estates
grew up. The peons got food and clothing from their mas-
ters. 2 These Mexican peons are descendants of natives en-
slaved by the Spaniards, and are often merely bondsmen. 3

1 Clyatt v. U. S., 197 U. S. 207, 25 Sup. Ct. 429 (1904).

2 United States Bureau of Labor, Bulletin No. 38, 1902, p. 23.
8 W. E. Carson, Mexico, 1914, p. 185.



38 PRINCIPLES OF LABOR LEGISLATION

Their wages are low and they are compelled to deal at the
store of the estate. They are always kept in debt, and until
the Mexican constitution of 1917 abolished involuntary servi-
tude except as a punishment for crime, an Indian workman
owing his employer became the property of the latter. 1 Some-
times peons are induced to contract for work to be done in
tropical parts, and here they get into debt at once and are
prevented by armed guards from escaping. 2

In the United States, after the abolition of slavery by
the thirteenth amendment in 1865 the proprietors, being de-
prived of their property right in the services of the slave,
sought in some cases to effect the same purpose by indirect
means, such as enforcing indebtedness and compelling the
working out of the debt. These subterfuges gave added im-
petus to the agitation which led to the adoption, two and a
half years later, of the fourteenth amendment, which created
a citizenship of the United States in addition to that of the



Online LibraryJohn Rogers CommonsPrinciples of labor legislation → online text (page 4 of 56)