Reforming Labor Law

In a conversation with The Regulatory Review, Benjamin Sachs, the Kestnbaum Professor of Labor and Industry at Harvard Law School, shares his perspective on necessary reforms to the National Labor Relations Act (NLRA), the state of the National Labor Relations Board (NLRB), and potential state and local regulatory actions to increase worker protections.

The NLRA, enacted in 1935, aimed to protect the rights of workers and encourage collective bargaining, the process by which employees and their employers negotiate for terms and conditions of employment. As part of the NLRA, Congress created the NLRB to enforce its protections.

On January 27, President Trump removed Gwynne Wilcox as an NLRB member. The NLRB then had only two members. The Supreme Court held in New Process Steel v. NLRB that the Board needs at least a three-member “quorum” to exercise its authority. As a result, the NLRB could not rule on labor disputes or otherwise regulate labor activity until her reinstatement or replacement. On March 6, a federal court ordered that Wilcox be reinstated.

The Court has established that state and local governments are preempted, or prevented, from regulating labor-management relations that are arguably covered under the NLRA. The NLRA governs employees’ rights to bargain collectively and prohibits certain unfair labor practices by both employers and unions. Sachs discusses how preemption interacts with the Board’s vacancies and offers his thoughts on the future of labor regulation.

Benjamin Sachs formerly served as the assistant general counsel of the Service Employees International Union and was the Joseph Goldstein Fellow at Yale Law School, where he earned his J.D. He has received the Sacks Freund Award for Excellence in Teaching at Harvard Law School, where he directs the Center for Labor and a Just Economy. He is the editor-in-chief of the online publication OnLabor.

The Regulatory Review is pleased to share the following interview with Benjamin Sachs.

The Regulatory Review: You have written that the NLRA has failed to meet its objectives. What are the most concerning or pressing failures of the NLRA? 

Sachs: The NLRA’s central statutory mission is ensuring that working people can choose freely to organize unions. To ensure this kind of employee free choice, the statute must make sure that employers do not interfere in union organizing campaigns in coercive ways, but the statute does not do this.

Today, fewer than 6 percent of private sector workers have union representation, even though more than 50 percent of workers say they want a union and even though union approval ratings are at their highest level in history.

A big part of the problem is that the law does not stop employer retaliation for union organizing. One study reported that approximately 20 percent of workers who take a lead role in an organizing campaign are fired for doing so.

Another part of the problem is that the NLRA is geared toward firm-level bargaining, as opposed to industry level, which has the perverse effect of convincing managers that unionization is a competitive disadvantage that ought to be fought at every turn.

TRR: What reforms to the NLRA should be made and why?  

Sachs: The Center for Labor and a Just Economy spent several years, and worked with hundreds of people from all over the globe, putting together a report—Clean Slate for Worker Power—that lays out the labor law reforms we need in the United States. Part of what we concluded is that we need systemic reform—a kind of soup-to-nuts overhaul of the NLRA designed to ensure that working people can organize and develop the power necessary to build a more equitable economy and politics.

That report is a great roadmap for the kinds of reforms to the NLRA that we ought to pursue. The reforms include giving workers a menu of representational choices at the workplace level, creating a system of sectoral bargaining to complement workplace bargaining, vastly improving the protections for worker organizing, expanding the range of bargainable subjects, and expanding the range of collective action that is protected by the law.

TRR: The NLRB was without a quorum to act when President Trump removed former chair Gwynne Wilcox as a member. How did that vacancy—or others that might arise in the future—impact employees and employers?

Sachs: The removal of Board member Wilcox—the first and only Black woman ever to serve on the NLRB—has profound implications for labor law, the right to organize, and collective bargaining. With only two active members, the NLRB lacked a quorum and could not function. It is thus no exaggeration to say that, until she was reinstated, workers lacked enforceable labor law rights in the United States.

TRR: What areas of labor regulation should be left to the federal government exclusively, if any? Are there areas better left to states?  

Sachs: The ideal system is a functional, uniform federal labor law that ensures all workers—wherever they live and work—robust protection for union organizing and collective bargaining. The question we face today, however, is how to think about state and local authority over labor law in light of the failure of the federal regime.

TRR: What kind of discretion should states and cities have in regulating labor relations?

Sachs: This is a difficult question because, of course, states and cities would do lots of different things—some would protect the right to organize, some would unfortunately try to squelch that right even more than the failed federal rules do. My view is that, in the end, workers and their unions probably would be better off if we allowed states to innovate. In the end, that also seems the most likely way to move us toward the kind of federal labor law reform we so badly need.

TRR: What tools can and should state and local governments use to regulate labor relations?

Sachs: One of the best things that states and cities can do today is to enact organizing and bargaining rights for workers who are excluded from the NLRA. I say this for two reasons. First, workers excluded from the NLRA are badly in need of state and local labor law, and second, preemption rules do not interfere with state and local efforts on behalf of NLRA-excluded workers.

TRR: What workers are excluded from the NLRA’s coverage?

Sachs: Since 1935, when the NLRA was passed, the statute has left out agricultural workers and domestic workers. It also excludes independent contractors, which today means that gig workers—including Uber and Lyft drivers—are outside the NLRA and therefore in need of state protections.

TRR: How can states and local government regulate labor relations in ways that will not be preempted by the NLRA?  

Sachs: NLRA preemption, as it currently exists, is remarkably broad and really does choke off much of what states and cities could otherwise do. But there are important exceptions to the rules of preemption. First, as I mentioned above, states and cities are free to regulate the labor relations of workers not covered by the NLRA. Second, states and cities are free to act as market participants and structure labor relations on projects in which they have so-called “proprietary interests” without running afoul of preemption rules.

But I should emphasize another point. We may not have any NLRA preemption in a short while. That is because there are a slew of constitutional challenges to the NRLA working their way through the courts—primarily in the U.S. Court of Appeals for the Fifth Circuit—and if the NLRA is declared unconstitutional, its preemptive effect will likely fall along with the statute itself.