Keeping Hope Alive

These are hard times for organized labor. Once a hallmark of the American industrial landscape, union membership has declined steadily in recent decades. In the aftermath of World War ?, over a third of all American workers belonged to labor unions.1 By 1980, membership had fallen to approximately 23%,2 and the number has decreased since then, seeming to shrink further each time one looks into it. Today under 7% of the private sector workforce is unionized.3 Public opinion of labor unions is at an all-time low.4The reasons for the decline of union membership are complex.5 Growth in service and technology industries and shrinkage in manufacturing as jobs have moved overseas find more and more workers in sectors in which unions have traditionally been relatively weak. Other economic changes have brought more women, young people, members of racial and ethnic minority groups, and part-timers into the workforce, all populations that historically have been less interested in union membership. In addition, much job growth has occurred in areas of the United States that historically have been resistant to unionization. A strong economy, marked by low unemployment, during the later 1990s and early years of the new century further reduced the demand for unionization. And, as membership has declined along with public views about unions, large corporations have been increasingly willing to resist efforts to organize.All of this has happened against the backdrop of accelerating economic disparities. Income inequality in this country is at its highest levels since the 1930s. As of 2007, close to 50% of the nation's income went to the top 10% of households,6 with the richest 1% of Americans now taking home 24% of the total.7 These numbers are the culmination of a trend that began around 1980.8 From 1980 to 2005, a period of remarkable economic growth, over 80% of this Increase went to the wealthiest 1% of the population.9 Meanwhile, real wages for middle- and lower-income earners remained essentially stagnant.The decline in union membership does not itself explain these alarming developments, but it certainly hasn't helped. Whether workers are able to join labor unions remains an important issue. Unionization can mean greater bargaining power, which in turn can yield better wages, benefits, and working conditions. Unionized workers are thought to earn on average approximately 15% more than their nonunionized counterparts.10 They are also much more likely to enjoy defined-benefit (as opposed to defined-contribution) pension plans.11 Of course, all this means higher costs for business, and with so much at stake resistance to unionization becomes a standard business practice in many industries.A principal battleground is the legal distinction between "employees" and "independent contractors." The right to organize under the National Labor Relations Act (NLRA) is limited to employees.12 Potential tort liability, withholding and employment tax expenses, workers' compensation, and other legal issues are also implicated. Large corporations thus have strong incentives to structure employment relations in ways that avoid employee status in favor of independent contractor status. Not surprisingly, their efforts have given rise to substantial litigation.Under the NLRA, the classification question is generally determined according to common law principles as expressed in the Restatement of Agency. The central question has traditionally been the employer's right of control over the worker, but the Restatement explains the law in more elaborate terms. Its test takes the form of a list often factors.13 However, it doesn't indicate which are more important or how they should be weighted and, furthermore, the list is said to be nonexhaustive.14 The result is a legal standard that is often vague and indeterminate. Sometimes the answers are clear - some workers obviously qualify as employees while others obviously do not - but there is a large gray area consisting of employment relationships some of whose features seem to fall in one category and others in the other. …