The Enduring Ambiguities of Antitrust Liability forWorker Collective Action Sanjukta M Paul* This Article examines the regulation, by antitrust law, of collective action by low-wage work
THE IMPACT OF ANTITRUST ON CONTEMPORARY INDEPENDENT
In the post‑New Deal, deregulated economy, many workers are relegated to labor relationships outside formal employment, functioning as independent contractors Collective action by these workers—who ordinarily do not enjoy the labor exemption from antitrust law—has in theory, and in scattered instances, drawn antitrust scrutiny As truck drivers, taxi drivers, home health care workers, artists, and others organize to demand higher pay and better conditions, we may expect courts to address antitrust concerns if such movements gain real power Even now, the threat of antitrust liability already constrains these organizing efforts At the same time, policymakers considering new schemes to regulate work outside traditional employment may find antitrust constraints limit regulatory possibilities, particularly in local initiatives.
The labor movement's central objective was to prevent the judiciary from repressing worker collective action, whether through antitrust enforcement or through other grounds for issuing injunctions However, most of those alternative bases—many rooted in the older common-law tradition of regulating labor—have largely disappeared in contemporary practice, while antitrust has endured.
Adopt this term to describe the economic policy paradigm that began to replace the New Deal framework in the late 1970s I use the term for ease of reference, even though this suite of policies is often defined not only by the rollback of certain regulations but also by the expansion of others, frequently aimed at workers.
The Struggle for Decent Work and Decent Pay as Price-Fixing
The labor exemption largely shields most worker collective action from antitrust liability, even as employee status becomes the trigger for expanding antitrust oversight of workers' autonomous efforts to improve wages and working conditions This paradox—deregulation on the employer side paired with greater regulation of worker action—means that protections for workers can extend antitrust scrutiny even as protections for employers recede As a result, independent contractors may be subject to antitrust prosecution for organizing for decent wages or better working conditions under the price-fixing doctrine, regardless of the reasonableness of the wage or the broader social or economic outcomes.
Assuming the labor exemption does not apply to a given set of independent contractor workers and that they cannot prove they are misclassified employees, their coordinated actions are likely to fall under price-fixing laws The prevailing neoclassical interpretation of antitrust, which still dominates the field, treats market actors as black boxes: they are simply “firms,” whether a giant corporation or a single truck driver.
Cases involving professional workers and “small producers”—whose primary business is selling services—are the best predictor of how low-wage independent contractors would be treated under antitrust law and of how “professional” independent contractors are treated In most modern courts, the law of price-fixing applies to most collective economic action by these actors, especially when it is aimed at affecting prices or other terms of the bargain, and often even when it is not; such actions are typically illegal price-fixing unless a specific exception applies Neither the reasonableness of the rate nor a net social or economic benefit provides an exception.
22 This was not the case in the formative, pre-New Deal period, as described in Part III, infra
23 See, e.g., Fed Trade Comm'n v Superior Court Trial Lawyers Ass'n, 493 U.S 411, 423
Antitrust authorities consistently scrutinize collective action by independent professionals to ensure it does not amount to price-fixing In Spence v Southeast Alaska Pilots’ Ass’n and in Nat’l Soc’y of Professional Engineers v United States, 435 U.S 679 (1978), the courts delineate the boundaries of permissible cooperation among professionals The Supreme Court later addressed the issue in Fed Trade Comm’n v Ind Fed’n of Dentists, 476 U.S 447 (1986), confirming that coordinated conduct by independent dentists can raise antitrust concerns A 1990 observation notes that collective action by independent lawyers could constitute price-fixing, underscoring the persistent tension between professional collaboration and competition law.
789 F Supp 1007, 1010 (D Alaska 1990) (antitrust analysis involving association representing independent contractor pilots).
24 Superior Court Trial Lawyers Ass', 493 U.S at 423-24; Nat'1 Soc 'y ofProfl Eng'rs, 435
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An especially apt illustration of this theory of liability is the Supreme Court's opinion in Federal Trade Commission v Superior Court Trial
This seminal case is significant for price-fixing and, among post-exemption antitrust cases involving professionals or small producers, it most closely mirrors classic labor concerted action by low- or mid-wage independent contractors In the 1970s and 1980s, the District of Columbia contracted indigent-defense representation to a private-attorney panel, paying $30 per hour for in-court time and $25 per hour for out-of-court work The members of the Superior Court Trial Lawyers Association, who comprised the panel, initially tried to win higher rates through political delegations and similar lobbying, but when those efforts failed they formed a strike committee and agreed to halt new panel assignments until the District adopted their proposed rate schedule The strike, with about 90% participation, compelled the District to raise the rates.
The Federal Trade Commission filed a complaint against the association, alleging an agreement in restraint of trade by refusing to compete for or accept new appointments under the CJA program, a conspiracy to fix prices and to conduct a boycott, and engaging in related unlawful activities.
"unfair methods of competition." 2 7 Rejecting the administrative law judge's conclusion that the agreement among the lawyers had not caused economic harm, the FTC decided that the agreement had been a
The case involved a coercive, concerted refusal to deal that produced substantial anticompetitive effects, prompting the FTC to issue a cease-and-desist order prohibiting any future boycotts and directing lawyers to desist from collectively withholding labor to press for better working conditions But the court of appeals vacated the FTC’s order, ruling that the boycott’s expressive component warranted closer scrutiny and, in particular, that it required considering whether the association possessed the capacity to undertake such collective action or to express its views through the boycott.
25 Superior Court Trial Lawyers Ass', 493 U.S at 423-24.
The suit was brought under Section 5 of the Federal Trade Commission Act, which empowers the FTC to initiate litigation under the Sherman Act This authority rests on the Federal Trade Commission Act, ch 311, § 5, originally enacted in 1914 as part of 38 Stat 717–719 and presently codified at 15 U.S.C § 45 (2012).
Enduring ambiguities about market power framed the decision, as the Supreme Court affirmed the appellate court’s view that the respondents’ boycott was a classic restraint of trade under Section 1 of the Sherman Act, recognizing that restricting supply is the core mechanism of price-fixing, whether achieved by setting a price or by limiting output to push prices higher The Court also held that per se illegality applies and that neither a reasonable price nor the absence of market power among smaller participants can shield anticompetitive conduct In current antitrust jurisprudence, the Trial Lawyers case most closely matches the type of worker collective action at issue here and signals a peak in the Court’s neoclassical approach to price-fixing.
In line with the arguments of trial lawyers and the general principles they advance, a court evaluating labor organizing activity—such as a strike for higher wages by non‑employee workers like truck drivers, artists or art workers, cab drivers, or day laborers—may not only deny labor and employment protections to these workers but also subject them to treble damages or criminal penalties Although the question has not yet reached an appellate court or a trial court ruling on the law, trial lawyers offer a plausible forecast of how a court that doubles down on the neoclassical approach might decide such cases.
An Object Lesson in the Revival ofAntitrust as a
In the deregulation era, port truck drivers organized a grassroots movement to push for higher pay and better working conditions The campaign drew substantial antitrust scrutiny, and those enforcement concerns, in turn, shaped how the movement operated and its strategies This example highlights the significant obstacle that antitrust regulations can pose for workers classified as independent contractors who organize to secure improved compensation and conditions.
Deregulation-era trucking is characterized by what Michael Belzer calls the labor market paradox: perennial shortages of skilled drivers, coupled with rock-bottom wages and poor working conditions 33
31 Id at 423-24; see also infra Part IV.B.3 (discussing the First Amendment aspects of the Court's analysis).
32 See infra Part IV.B.3 (discussing the First Amendment implications of antitrust law).
33 MICHAEL BELZER, SWEATSHOPS ON WHEELS: WINNERS AND LOSERS IN TRUCKING
980 Loyola University Chicago Law Journal [Vol 47
Deregulation of economic policy has been identified as the apparent cause Returns on equity in trucking—particularly in the truckload sector—were already modest, and after deregulation they can be below cost in economic terms As a result, employers often cut wages below what they would like and below what is needed to attract or retain skilled drivers In the truckload market, including port trucking, drivers typically earn near the minimum wage and work extremely long hours.
Port truck drivers in the deregulation era began organizing, both among themselves and in coordination with established labor unions, as early as the late 1980s in response to the extremely poor working conditions created by deregulation of the trucking industry The next 15 years saw their efforts expand into widespread organizing campaigns and closer collaborations with long-standing labor organizations, reflecting a concerted push to address safety, pay, and working conditions in the freight sector.
DEREGULATION 151-54 (2000) (defining the labor market paradox).
Belzer analyzes how deregulation policy reshapes the labor market, noting that numerous established firms fail quickly while a wave of new, non-union entrants enters the market The resulting intense price competition drives wages downward, illustrating the labor market effects of deregulation.
In the early 1980s, after the Motor Carrier Act, about half of the Class I and II general freight carriers—mostly unionized—went out of business, while many new non-union carriers registered with the Department of Transportation But these shifts did not happen evenly across the trucking industry The market largely fractured along TL/LTL lines—truckload versus less-than-truckload—that had not been its prior organizing principle Surviving general‑freight carriers, the former largest players, largely shed their TL business and grew substantially in the LTL sector, filling space left by smaller carriers that exited These incumbents included United Parcel Service (UPS), which remained union and largely mid-wage Consequently, the general freight market concentrated about fivefold, while the earlier peripheral TL-only market exploded, drawing the vast majority of new entrants and driving sharp increases in price competition.
35 The contrast is to the LTL market (e.g., the UPS and Federal Express ("FedEx")) Id at
Cf id at 202 suggests that post-deregulation trucking might be a perfect market in orthodox economic theory, in the sense that profits approach zero However, it may be more accurate to say that profits typically dip below zero when analyzed in the economic sense—net of revenue, out-of-pocket costs, and the opportunity cost of capital rather than in the accounting sense HYLTON, supra note 13, at 94-.
As noted in 98 (2003), many port trucking firms are transient, and only a niche group maintains lasting power; their persistence is enabled by idiosyncratic factors such as favorable deals with select shippers—often through family connections—along with other arms of the business that subsidize port trucking operations and the personal commitment of owners or owning families who did well before deregulation (Id.).
By 2000, average real wages in trucking had returned to the levels seen in the late 1950s, but that figure masks a deeper decline: the industry had fractured into TL and LTL sectors, creating large wage gaps between them As a result, TL truck drivers—including port truck drivers—often earn close to, or even below, minimum wage, while also routinely working extremely long hours, which raises serious health and safety concerns.
Enduring ambiguities sparked strikes over pay and working conditions, notably the failure to adjust pay for spikes in fuel prices and the lack of compensation for long waits at port terminals, alongside broad safety concerns During this period, the International Brotherhood of Teamsters was intermittently involved in driver organizing—primarily in Los Angeles and Miami—while the majority of concerted action was led by independent drivers’ organizations.
Several actions by independent trucker groups drew regulatory scrutiny and lawsuits The United Container Movers Association (UCMA), a grassroots, independent drivers' association with influence in Baltimore, Charleston, Seattle, and Savannah, became the target of a federal investigation by the Clinton-era Federal Trade Commission for price-fixing tied to union organizing and port work stoppages over low pay and long, uncompensated wait times The FTC subpoenaed several drivers who described working up to 18 hours a day for less than the minimum wage to cover truck payments and basic meals Later, the Miami-based Support Trucking Group and many independent drivers mobilized over low wages, equipment safety issues, and wait times, resulting in lawsuits from port terminal operators and Miami-Dade County.
This entry references two interviews with Jon Zerolnick, the Research Director of the LA Alliance for a New Economy, conducted on August 22, 2014 and August 3, 2015, with interview notes on file with the author; for additional context, see Ruth Milliken.
L.A STORY: IMMIGRANT WORKERS AND THE FUTURE OF THE U.S LABOR MOVEMENT 178-84
(2006) (describing the grassroots, self-starting character of port truck driver organizing in the 1980's and 1990's).
39 MILLIKEN, supra note 38, 178-84; Interview with John Canham-Clyne, Former Dir., Ports Campaign, Change to Win (May 28, 2014) (interview notes on file with the author); Interview with Michael Manley, Staff Attorney, Int'l Bhd of Teamsters (January 8, 2015) (interview notes on file with the author).
40 Bill Mongelluzzo, Operators Seek to Organize, J OF COM (Dec 1, 1999, 7:00 PM), http://www.joc.com/operators-seek-organize_19991201.html; see also Rip Watson, Container Haulers Seek to Unionize, J OF COM (Sept 12, 1999, 8:00 PM), http://www.joc.com/container- haulers-seek-unionize_19990912.html; Mark Gordon, Truckers Union Boss Ordered to Testify , FLA TIMES UNION (Dec 4, 1999), http://jacksonville.com/tu-online/stories/120499/bus1E1FTC
41 Complaint for Antitrust Violations at 1-2, Miami-Dade Cty v Support Trucking Grp.,
No 04-cv-21687, 2004 WL 2868811 (S.D Fla 2004) arises from a massive conspiracy with the purpose and effect of monopolizing, fixing prices, and engaging in other unlawful practices designed to inflate the prices of trucking services.
Loyola University Chicago Law Journal
Although these actions did not reach a verdict or produce a court ruling, they profoundly shaped organizing in this industry The ever-present threat of antitrust liability structured the port truck drivers’ strategy as they fought to improve working conditions and to secure a collective voice, especially as their efforts coalesced into a nationwide campaign The campaign’s founding director recalled that the risk of antitrust liability was one of the three or four major strategic factors guiding virtually every decision they made.
Universe ofPotential Defendants
Independent contractor workers are estimated to comprise roughly 6-7% of the total workforce, and while precision is difficult to measure, the prevailing view is that this share is increasing These contractors are spread across a wide range of jobs, earnings levels, and educational and class backgrounds, appearing in nearly every trade—including professional trades—and in almost every manufacturing sector that allows for piecework For the purposes of this section, I refer to workers as independent contractors when their employers classify them as such, setting aside for the moment whether this would be the accurate legal classification if tested.
We may view the workers in question as three shades on a spectrum with imprecise and permeable borders: the first shade consists of individuals believed to be leaders of the Association who allegedly coordinated a work stoppage aimed at securing a 15% wage increase in response to a spike in fuel prices, as described in the Verified Complaint at paragraphs 3 and 10 in Horizon Lines of P.R., Inc v Asociacion de Camioneros de Arrastre de P.R., Inc., No 3:05-cv-01801-PG (D.P.R.).
Since 2005, allegations have surfaced that an independent drivers’ association conducted a classic work stoppage to raise rates The Verified Complaint in HN1 Therapy Network of P.R., LLC v Asociacion Puertoriquena de Fisioterapia, Inc., No 03:10-cv-1404 (D.P.R 2010) identifies a classic group boycott by physical therapists, while Humana Health Plans of P.R., Inc v Juan L Vilaro, No 3:12-cv-1445 (D.P.R 2012) claims concerted price-fixing and boycotting by physicians Numerous instances of lawsuits against small producers who may also be considered workers are excluded from this list.
52 See infra Part II.C.2.b (describing legal arguments that may protect some organizing among independent contractor workers from antitrust scrutiny).
53 Peter H Cappelli & J.R Keller, A Study of the Extent and Potential Causes ofAlternative
Employment Arrangements, 66 INDUS & LAB REL REv 874, 890 (2013)
54 Noah D Zatz, Working Beyond the Reach or Grasp of Employment Law, in THE GLOVES-
OFF ECONOMY: WORKPLACE STANDARDS AT THE BOTTOM OF AMERICA'S LABOR MARKET 31, 35-36 (Annette Bernhardt et al eds., 2008); see U.S Gov'T ACCOUNTABILITY OFF., GAO-15-
168R, CONTINGENT WORKFORCE 7 (2015) (noting that despite the difficulties in ascertaining a clear definition of contingent workers, data suggests that there are millions of contingent workers in the market).
Enduring Ambiguities there are people who many in ordinary parlance might not even call
Within this spectrum, the term 'workers' includes individuals whose income comes primarily from their own labor—the services they personally perform—rather than from the labor of others or from capital investment This category encompasses independent doctors, lawyers, engineers, dentists, and other professionals who are not employed by someone else and who run their own small practice or are self-employed on paper while working in and for larger facilities These professionals typically hold a professional degree or certification, earn middle to high incomes, and belong to the professional social class Although they may hire administrative or support staff, they are the ones who directly deliver the core services of their practice.
Another group of workers often classified as independent contractors are what some describe as "soft professionals": they generally lack a formal professional degree but have substantial specialized expertise in a narrow field, making them less replaceable than typical low-wage workers and positioning them in the middle of the income spectrum These professionals work across sectors such as information technology, the entertainment industry (notably pre- and post-production), repair and construction trades like electricians and plumbers, and the beauty, massage, and personal care industries.
A third sizable group of workers—independent contractors with relatively little formal education, often affected by migration or other barriers—identify as working class and are comparatively easy for employers to replace on an individual basis, earning low wages They work across truck and taxi driving, app-based ride-hailing services, construction labor, home health care, and casual or day labor, illustrating a broad, low-wage profile within the independent-contractor segment.
55 This category of workers may receive softer antitrust scrutiny See infra Part IV.B.2.
Under this framework, a lawyer or doctor who is not employed by anyone could be categorized as either primarily a worker or primarily a business owner, with the label determined by the number of production (as opposed to administrative) employees they have and the share of time and income tied to core services personally performed—lawyering or practicing medicine—versus ownership and management of others’ income-earning labor (supervising associates, investing assets, etc.) The argument does not hinge on a precise demarcation between these roles, but the general factors that help locate that boundary are useful to consider.
56 Plainly, there is overlap at each of these borders For example, many laboring in the
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Finally, small commodity producers who depend mainly on their own labor and lack market power should be provisionally included in the universe of analysis Small farmers, in particular, have played a historically significant role because their livelihoods were shaped by the concentrations of economic power that antitrust policy originally aimed to curb, and they formed enduring alliances with labor organizations to improve their economic conditions.
Any form of collective action aimed at improving pay rates or working conditions can expose the described groups of workers and economic actors to antitrust liability In the balance of this article, I argue that this rule—often treated as a protective safeguard—functions as a powerful bludgeon with shaky foundations, chilling legitimate labor organizing and collaboration while leaving the legal basis unclear.
Intersection with Work Law
OF MARKETS, COMBINATIONS, AND SERVANTS: How ANTITRUST
CAME TO PUNISH WORKER COLLECTIVE ACTION
The Sherman Act, originally designed to shield small American enterprises from nineteenth‑century monopolistic power, did not intend to regulate worker collective action Yet Gilded Age courts applied the statute to unions and other labor actions, a reinterpretation that deserves scrutiny for its enduring impact on American labor history and its likely amplification in today’s policy debates Classical legal thought at the Act’s passage emphasized freedom of contract and market‑level free agency, reacting to prior social and regulatory containment of markets However, the classicist project on antitrust and labor was not to resist regulation of workers’ freely chosen actions and contracts, but to invite it, shaping the modern relationship between labor and market regulation.
Courts have treated the Sherman Act as part of a broader effort to build a national market, and their handling of worker collective action shows a readiness to subordinate workers’ political and economic freedom to that market-building aim In this framework, the phrase “free flow of trade” often stood in for the older concept of “freedom of contract,” a pairing found not only in labor cases but across other areas aimed at shaping a unified national market Yet a key distinction appears in Sherman Act labor cases: the Act’s application could not be justified on freedom of contract grounds, and the justification instead rests on advancing the free flow of trade.
Classicists argued that extending the Sherman Act to workers would restore parity with a business sector already bound by it, but the reality is that the will of business owners was never compelled to bend toward the idea of a 'free flow of trade' in the same way that the will of workers was.
An act and an omission together accomplished this: the judge-made
"corporate exemption," an analogue of which workers never enjoyed,and the relative lack of enforcement of Section 2 of the Act (regulating mergers).
Classicist Trade Regulation and Nineteenth-Century Labor
Classicist Trade Regulation
The phrase "free flow of trade" refers not to individual freedom but to the unobstructed flow of commerce This second conception is most evident in cases applying the Sherman Act to labor, where the Act overrides the freedom of contract interests that would otherwise favor permitting the coordinated actions in question.
Herbert Hovenkamp notes that the official ideology of the classicists differs from that of contemporary neoclassicists in that classicism’s primary concern was not competition in the modern sense but the protection of individual liberty for commercial actors, especially freedom of contract Accordingly, classical theories of competition are derivative of the broader idea of liberty from constraints rather than autonomous aims of competition itself.
"For [American classicists] as well as the English classicists,
86 Christopher Tomlins, Subordination, Authority, Law: Subjects in Labor History, 47 INT'L
Before formal market-based employment took hold, the work relationship was not a single, uniform form but a spectrum of arrangements It encompassed some instances of sanctioned abuse and abasement under traditional disciplinary regimes, others of temporary and shifting attachments to work, and still others that allowed for autonomy and self-direction This diversity shows that pre-market labor involved a range of power dynamics and personal agency rather than one monolithic structure.
According to the Loyola University Chicago Law Journal, competition signified both rivalry and freedom from constraints, notably the exclusive privileges of the Mercantilist era; even as thought moved toward neoclassicism, competition was framed as a theory of liberty and free choice, not merely a description of price and cost relationships.
Price-fixing, the paradigmatic form of anticompetitive activity, was not tortious under classical common law, nor criminal The common law was ambivalent because, if entered freely, such a contract did not violate individual liberty; cartels did not jolt a common lawyer's conscience since no one's freedom was being denied Moreover, classical conceptions of competition, which included vertical competition between actors in adjacent markets, made price-fixing seem like rational, self-interested market activity by the seller in competition with the buyer, with the buyer free to respond.
Restraints that blocked entry into a market were viewed not for harming consumers or distorting the market by shrinking the number of participants, but for violating an entrant’s economic liberty The historical focus of contract law in restraint-of-trade cases was on coercion—the suppression of freedom for noncontracting parties to act Accordingly, the common law fixated on consideration when challenging restraints of trade, including non-compete agreements.
Classicist principles generally protected the freedom of commercial actors to compete, including the right for sellers to engage in vertical competition with buyers Yet they also used the Sherman Act to curb workers' freedom to vertically compete by permitting collective action to withhold labor in exchange for higher wages or better working conditions.
91 Id at 1025 (internal quotation marks omitted).
To understand this, we require the related but distinct concept of the
Free flow of trade is often confused with freedom of trade, but it is a distinct concept whose full significance emerged in the Sherman Act labor cases, where it operated independently of freedom of contract These cases show that the free flow of trade can be constrained or guided by anti-trust considerations in labor relations, highlighting how market structure and legal rules interact beyond the bounds of individual contracts and illustrating why the Sherman Act matters for trade dynamics.
Labor Regulation in the Gilded Age
By the late nineteenth century, the employment relation remained under the jurisdiction of common-law courts—the traditional masters-and-servants framework—while most other social realms had already fallen under statutes enacted by democratically elected legislators This separation kept the workplace largely outside the new democratic lawmaking process and left the employment framework to relatively conservative judges rather than progressive lawmakers The legal structure of the employment relation stood as a notable exception to the era’s push for economic freedom, preserving feudal-era hierarchy and restraints on individual freedoms Simultaneously, the rise of wage labor broadened its reach, bringing many more workers and economic relationships under its purview.
98 See generally KAREN ORREN, BELATED FEUDALISM: LABOR, THE LAW, AND LIBERAL DEVELOPMENT IN THE UNITED STATES 79-91 (1991) (discussing the judicial governance of master and servant); see also id at 81 ("[JJudges by their ritual enforcement held up a structure of domination that had existed since time out of mind."); see also FORBATH, supra note 20, at 6 ("Nowhere else among industrial nations did the judiciary hold such sway over labor relations as in nineteenth- and early-twentieth-century America.").
99 See ORREN, supra note 98, at 15-16 ("[T]he substance of relations between employers and employees still was under the ultimate jurisdiction of courts, as was the case in the Middle Ages, and the old common-law rules of labor governance had been left standing while other institutions had been changed or dissolved.").
Commercial interests moved unfettered while labor remained subject to the old constraints; merchants prospered on the basis of the ancient labor regime, whereas workers were governed by a distinctly different set of precepts—precepts that some judges described as beneficial to the “province of workingmen.” The discussion, under the heading “The order of labor,” spans pages 71–79 and outlines how this asymmetry shaped the regulation of labor versus commerce.
Historically, the diverse forms of the employment relationship were condensed into a single framework, a shift driven largely by English and American law's deployment of generic rules that codify a uniform master–servant subordination between workers and their employers.
Loyola University Chicago Law Journal
Karen Orren shows that the nineteenth-century American employment relation was permeated by substantive rights and obligations tied to social status as much as to freely bargained contracts, and many of these duties intruded on workers’ personal freedoms This produced a form of subordination that sat uneasily beside liberalism’s ideal of voluntary work Feudal-inspired arrangements remained alive in practice, with the most salient effects appearing in limits on the freedom to quit and in constraints on collective action to improve conditions The tort of enticement illustrates how courts regulated workers’ collective organization, embodying a long-standing logic of labor control that persisted for centuries prior and into the nineteenth century.
Inducing a worker to leave his master, particularly to demand higher wages, could make the instigator liable for damages to the master Enticement was frequently the basis for conspiracy charges and was sometimes used to prosecute concerted work stoppages aimed at issues such as non-payment of wages.
102 See ORREN, supra note 98, at 68-117
Quicquid acquietur servo acquietur domino—whatever is acquired by the servant is acquired by the master—embodies a legal feature of villeinage: any gains made by a servant belong to the lord In the United States, this doctrine extended into the late nineteenth century in moonlighting cases, enabling an employer to recover not only for hours missed and to dismiss the worker, but also to recover wages earned in a second job This history underscores the personal, non-fungible nature of the employment relationship, at least in the direction of duties from employee to employer.
The right to quit, historically protected within master-servant law, was markedly limited by the “performance of the entire contract” rule and its interpretation, which allowed employers to discharge workers for almost any reason related to wages due and the long intervals between pay periods; although workers technically could not be terminated without cause, in practice courts tolerated nearly any employer’s reason, while whether a servant had just cause to resign was largely judged by the master’s own view (Id at 84–86).
Drawing on common-law materials, the evolving law of labor conspiracies emerged in the very late nineteenth century to authorize injunctions against concerted action, marking a turning point in labor relations This shift gave rise to the infamous use of injunctions to curb strikes and union organizing, shaping the legal landscape of industrial conflict for decades.
Shifting and variable conceptions of property laid the groundwork for labor injunctions, while the Sherman Act—once applied to worker collective action—became a major tool for grounding and expanding those injunctions and for enabling damages As the New Deal reshaped the modern employment relationship, the old common-law bases for injunctions and the law of labor conspiracies faded away, even as the Sherman Act’s practical use and symbolic significance grew; its application to labor seemed checked by the New Deal, but in truth it went underground and kept influencing labor relations from behind the scenes.
The Sherman Act and Its Relationship to Labor
The Sherman Act was not originally intended to apply to the activities of labor unions qua labor unions nor to worker collective action 112
First, the Act was largely a product of the republicanism that was current among much of the populace, the legislature, and the labor movement in the late nineteenth century; that republicanism was quite inconsistent with the prohibition of workers' collective action to improve their working conditions Generally speaking, this republicanism supposed that American society promised its members "a basis of real equality" that had "economic and social," not only legal or formal, dimensions 113 It has been well documented that American public opinion was constellated against the unprecedented concentrations of capital in the post-Civil War era, and that this opinion
109 See generally FORBATH, supra note 20, at 59-97 The seminal, near-contemporaneous text that documented the use of the labor injunction (and whose authors went on to become two of the architects of the New Deal framework that succeeded it) was Felix Frankfurter and Nathan Greene's THE LABOR INJUNCTION (1930)
110 BENSEL, supra note 84, at 342; FORBATH, supra note 20, at 85-88
112 Cf Herbert Hovenkamp, Labor Conspiracies in American Law, 1880-1930, 66 TEX L. REv 919, 951 (1988) (suggesting that the "consensus view" is that the Act was intended to apply to labor).
113 See, e.g., TOMLINS, supra note 85, at 34-35 (1985) (discussing the revolutionary generation's outlook for the future after the newfound liberty and independence brought by the American Revolution).
Loyola University Chicago Law Journal cut across party lines 114 President Grover Cleveland had this to say in
Viewed through the lens of accumulated wealth, the era reveals the rise of trusts, combinations, and monopolies, even as citizens are left far behind or crushed under an iron heel Corporations, which should be carefully restrained by law and serve the public interest, are rapidly becoming the masters of the people, signaling a shift of power from citizen to corporate power.
President Benjamin Harrison echoed him shortly afterward, and Senator Sherman—who had already become an outspoken critic of trusts—helped drive an antitrust policy as a political and legal response to the unprecedented concentration of economic power The Sherman Act’s Republican orientation was more focused on preserving small, traditional industry and business in the face of large new enterprises than on consumer protection, which was likely a minor concern at best It was also less concerned with abstract ideals of free trade, as evidenced by the fact that Senator Sherman was not opposed to tariffs, a stance characteristic of the late nineteenth century.
"advocates of free trade" were 120 This republicanism was inconsistent
114 Joseph L Greenslade, Labor Unions and the Sherman Act: Rethinking Labor's
Nonstatutory Exemption, 22 LOY L.A L REV 151, 152-54 (1988); Elinor R Hoffman, Labor and Antitrust Policy: Drawing a Line ofDemarcation, 50 BROOK L REV 1, 9-19 (1983)
115 EARL W KINTNER, THE LEGISLATIVE HISTORY OF THE FEDERAL ANTITRUST LAWS AND RELATED STATUTES 58 (1978)
Antitrust regulation derives its name from the period when corporate law remained fairly restrictive, forcing early industrialists to rely on trusts as comparatively unfettered vehicles to consolidate investment; only after the corporate form was liberalized did corporations become the primary vehicle for raising investment in commercial activity.
118 See, e.g., TOMLINS, supra note 85, at 29-30 (characterizing them as mostly "symbolic," and describing how antitrust was part of the contemporaneous "debates over the aggregation of economic power").
119 Werner Troesken, The Letters of John Sherman and the Origin of Antitrust, 15 REV. AUSTRIAN ECON 275, 291 (2002).
Taken together, the Sherman letters undermine the traditional view that consumers lobbied for antitrust because trusts were raising prices; all of the letters Sherman received regarding antitrust came from small businesses, and only one of these businesses, the John Deere Company, complained about pools and combinations driving up prices.
Many nineteenth-century observers and free-trade advocates believed that tariff reductions would solve the trust problem During the same period, Democrats in both the House and Senate introduced bills to eliminate tariff protections in any industry dominated by monopolistic trusts Senator Sherman, however, continued to support high tariffs and opposed using tariffs as a tool to curb trusts.
Enduring ambiguities persist in the face of punishing responses to worker collective action, even as nineteenth‑century republicanism included some of its core expressions through organized labor Indeed, republican ideals were realized through worker mobilization within the craft tradition and beyond into more radical currents like the Knights of Labor.
Beyond the divergence from the original antitrust ideals, the legislative record shows that the Sherman Act was not meant to punish worker collective action Scholars like Richard Bensel highlight a clear pattern of reluctance, and even opposition, to including labor unions within the Act’s scope Joseph Greenslade notes that many senators feared the bill could prevent laborers from organizing to raise wages or improve their position, to which Senator Sherman responded that combinations of workingmen to promote their interests and welfare are not affected by the words or intent of the act This understanding recurs in debates over the Clayton Act, where legislators expressed disbelief that courts had applied the Sherman Act to worker combinations Attorney General Richard Olney, a seasoned railroad lawyer rather than an economic radical, described the application of the Sherman Act to labor actions like strikes as a perversion of the law from the real purpose of its authors.
Greenslade also provides a convincing counter-explanation for the main point relied upon by the "consensus view" within antitrust, that the reductions to combat the trusts.
121 William Forbath, Ambiguities of Free Labor in the Gilded Age, 1985 WIs L REV 767,
800-12 (describing "labor's anti-capitalist republicanism" as offering a competing interpretation of republican liberty to the narrow interpretation endorsed by Gilded Age, classicist courts).
122 See generally TOMLINS, supra note 85, at 32-59
123 ALEx GOUREVITCH, FROM SLAVERY TO THE COOPERATIVE COMMONWEALTH: LABOR
After the Civil War, the Knights of Labor emerged as the first broad-based labor organization open to nearly all workers, including unskilled workers, Black workers, and women Advocates of labor republicanism linked republican ideals to a critique of wage labor and promoted cooperation as a viable alternative to the wage-labor system.
128 1893 ATT'Y GEN ANN REP xxvii-xxviii (internal quotation marks omitted).
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The Sherman Act is often described as a measure aimed at inhibiting worker collective action, yet it included a labor exemption that was considered—and ultimately adopted by the Senate Sherman himself proposed such an amendment to his original bill, and the Senate did adopt it, but the Judiciary Committee later rewrote the bill, shifting the emphasis from Sherman's focus on how the act would affect consumer prices to the broader idea of restraint of trade When the revised bill emerged from committee, the same senators who had warned that the proposal could punish “workingmen” were silent, presumably because they did not fear that worker organization would be treated as restraint of trade.
Reading these legislators' intent through a century of antitrust doctrine and economic theory would be misleading Price-fixing was not yet the obvious harm it would become as neoclassical economics came to dominate Without explicit language about consumer prices, the meaning of “restraint of trade” remained unsettled and in flux The courts later defined it in a way that cannot be retroactively attributed to the legislative purpose.
Originally the Sherman Act emerged from republican ideals that opposed giant concentrations of capital and aimed to protect small enterprises and the traditional American artisan economy Yet over time it became a weapon against the very workers who labored for those new conglomerates, as enforcement, judicial interpretation, and shifting political winds allowed powerful interests to shape its use In short, a law born to curb monopoly ended up being applied in ways that often curtailed competition and affected the livelihoods of the working people behind the capital's rise.
Parity: A Bridge from Feudal Labor Regulation to Modern
The Argument from Parity
Scholars analyzing vertical competition look at how capital, labor, and consumers interact in the marketplace and how power shifts between buyers and sellers of labor The parity argument claims that a specific instance of vertical competition—between the sellers and buyers of labor—may be unfair if one side faces restrictions on its ability to organize or exert collective power that the other does not In other words, if business is governed by such constraints, fairness would require labor to face comparable limitations Consequently, the classicists may have been focused on horizontal competition primarily to the extent that differential restrictions among participants alter the balance of power and the outcomes of competition.
132 See generally BENSEL, supra note 84, at 289-354 (discussing the construction of the
According to Hovenkamp, the classic common-law treatise tradition exhibited a notable bias, consistently viewing labor coalitions more favorably than business combinations It also argued that public policy toward labor coalitions should be the same as the policy toward cartels.
Loyola University Chicago Law Journal combinations to limit that competition affected the balance of power between capital and labor in vertical competition Prominent lawyer Arthur Eddy wrote:
Laws and decisions aimed at preventing combinations are designed to shield consumers from money being kept at abnormal price levels, so one would expect these rules to apply impartially to both labor and capital groupings Yet rather than neutrality, there is a well-established discrimination: labor combinations are legal while capital combinations are not, acknowledging that a labor organization can affect prices just as a capital cartel can.
Eddy centered his argument on fairness and impartiality in how rules are applied, not on promoting their aims He criticized the uneven enforcement of consumer protection—strictly guarding capital while neglecting labor—and he warned that such inconsistency is a manifest injustice and, to many, an absurd one that should concern every reasonable observer.
Arguably, the claim of 'unfairness' presupposes a social hierarchy that neutrally applied freedom of contract principles would condemn By asserting that antitrust law's failure to punish worker collective action was unfair, classicists revealed a normative commitment to a workers-versus-employers hierarchy that should have been anathema to them Many classicists believed the balance of power between capital and labor was already tilted in labor's favor Among the reasons they cited for this imbalance were supposed American labor shortages But Hovenkamp also describes a more surprising strain.
"dominated" classicist thinking about labor: classicists' concern with
134 ARTHUR EDDY, THE LAW OF COMBINATIONS: CONTRACTS IN RESTRAINT OF TRADE
That Eddy, in particular, showed little interest in the consumer-protection content or purpose of the rule, as evidenced by his role as a corporate lawyer organizing the National Carbon Company, which soon controlled roughly 75% of the worldwide carbon market and helped establish several other massive oligopolies, a development documented by the New York Times on January 10, 1899.
Enduring Ambiguities the relative social mobility between the working and owning classes in the United States (as compared, for example, to Europe).
Throughout much of the nineteenth century, the belief in easy worker mobility shaped American economic thought: any laborer could save a little money, borrow from others, and become an entrepreneur As Theodore Sedgwick observed as early as 1836, New England laborers could "lay up half their wages" and within a few years they could either "settle as farmers in the new states" or "undertake an independent business in the old." By contrast, in Europe the common rule was more rigid: once a servant, always a servant; once a mechanic, always a mechanic; once a tenant, always a tenant.
Labeling such a "rule" as a barrier to market entry contradicts fundamental principles of classical economics, and interpreting the absence of the rule as an imbalance in labor's favor suggests a deeper commitment to a hierarchical order that suppresses workers' freedoms as if that order were natural.
Beyond the classicists’ focus on hierarchy, there are enduring reasons to treat labor contracts as distinctive, questions that complicate a straightforward parity argument A strong reading, echoed by Marx and Polanyi, treats labor as a “fictitious commodity,” making it awkward to claim full equivalence between its sellers and sellers of actual goods Even without embracing the strongest critique, labor contracts still exhibit features that challenge simple parity-based reasoning The republican tradition, associated with the Sherman Act, already highlighted this distinctiveness by pointing to the inherent hierarchy in labor relations and the gaps in market power and wealth that let employers unilaterally set terms Contemporary labor economics similarly recognizes these dimensions of distinctiveness, underscoring the ongoing relevance of hierarchy, power asymmetries, and contract dynamics in labor markets.
Commodities are objects produced for sale on the market, but labor, land, and money are not commodities in the same sense Labor, in particular, is not simply a market input; it is the human activity that goes with life itself, and life is not produced for sale nor can that activity be detached from the rest of life, stored, or mobilized as a tradable asset This distinction highlights why labor, land, and money resist commodification and reminds us of the boundary between market exchanges and the social order that sustains human life.
140 GOUREVITCH, supra note 123, at 106-16 (discussing the labor republicans' idea of the distinctiveness of labor contracts: "material domination" grounded in absence of wealth on the
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Implementing Parity in the Courts
These cases stood in logical opposition to freedom of contract by prioritizing the free flow of trade—essential for forming new markets, especially the national market—over workers’ liberty to engage in collective economic and political action about their conditions and livelihoods In doing so, they drew on a long tradition of subordinating workers to their employers and other social interests, explicitly relying on workers’ status to override what freedom of contract would ordinarily permit This early interpretation of the Sherman Act bridged to a modern, neoclassical antitrust framework that would treat labor’s application of the Act, absent a statutory exemption, as acceptable The Workingmen’s Amalgamated Case introduces three ambiguous “evils.” The story of how the bridge was built begins with a massive general strike in New Orleans driven largely by drayage drivers and warehouse workers seeking higher wages and better conditions The episode featured workers’ coordinated stoppage alongside employer market power enabling unilateral term-setting—long hours and low pay—and exposed the implicit hierarchy and control embedded in contract that required workers to passively obey the employer’s commands.
141 See, e.g., ALAN MANNING, MONOPSONY IN MOTION (2003) (focusing especially upon differentials in market power and wealth as creating economic inefficiencies).
This subsection offers a close reading of the first published decision that applied the Sherman Act to worker collective action, showing its continuity with the older labor-regulation tradition while exposing the ambiguous role of the concept of “free trade.” It notes that this is not the only significant Gilded Age decision to use the Sherman Act against labor, with other rulings mentioned though discussed more briefly later in the piece It also observes that in the same year as Workingmen's Amalgamated, another federal district court similarly applied the Sherman Act to worker collective action, but in that case the court’s reasoning hinged on the special regulatory and factual context of the railroads, including mechanisms like judicial receivership and railroad-specific statutes, which shaped the outcome Waterhouse v Comer, 55 F 149, 154 (S.D Ga 1893).
United States v Workingmen's Amalgamated Council of New Orleans, 54 F 994, 995 (E.D La 1893), is cited by Forbath (supra note 20, at 71) as the first application of the Sherman Act to industrial strife, arising from a tumultuous New Orleans longshoremen's strike that tied up the area.
The case centers on the enduring ambiguities of the work of transporting goods to and from the Port of New Orleans, including public demonstrations, efforts to persuade others to join the stoppage, and the involvement of other city workers not directly tied to transportation In a relatively brief district court opinion, an injunction was issued against several workers' organizations that had organized the work stoppage and the pickets The opinion does not read like a decision on a major, first-impression issue—whether the Sherman Act should apply in principle to collective action by workers seeking better working conditions—and treats that question as a mere preliminary matter Yet the decision was significant: it was the first to apply the Sherman Act to worker collective action, and roughly fifteen years later the Supreme Court’s endorsement of that extension expressly affirmed the approach.
The Louisiana district court identified the central legal issue as whether the facts before it were undertaken for the purpose of restraining commerce It analyzed the record through the lens of restraint-of-trade doctrine and concluded that the submitted facts could be read as an effort to impede trade On that basis, the court held that the challenged conduct fell within the scope of activities prohibited by laws against restraining commerce and competition.
There can be no question that the defendants’ combination was in restraint of commerce We can identify three possible wrongs arising from this restraint: first, coercion—such as violence or intimidation—by some workers or groups of workers toward others with the aim of preventing them from working; second, the mere slowing or delaying of production; and third, other forms of interference with workers’ ability to work that disrupt the normal operation of the market and curb competition.
Anticompetitive behavior can appear in three forms: whether by stalling commerce through any means or for any purpose, or by workers collectively choosing to slow or stop work in a way that aims for universally better terms Of these, only the third form plausibly maps to the modern antitrust framework, because it involves an intentional restriction of supply designed to influence price or other bargaining terms The first two factors helped shape the Workingmen's Amalgamated decision, but neither can be translated into interstate or foreign commerce in the way today’s antitrust law requires.
147 See Loewe v Lawlor, 208 U.S 274, 310 (1908) (endorsing the extension of the Sherman Act).
In the Loyola University Chicago Law Journal's contemporary framework, Wrong (3) must be read in the context of both propositions It is not merely an instance of the general claim that sellers of commodities may not constrict supply in order to influence price; rather, it articulates the specific proposition that workers may not stop working in order to influence wages and working conditions.
Wrongs (1) and (2) are evident from the court’s initial statement of the issue: the court describes the decision by workmen's organizations to "discontinue business" including "transporting goods which were being conveyed from state to state, and to and from foreign countries." When employers attempted to replace the union workers with non-union labor, they were met with "intimidation springing from vast throngs of the union men assembling in the streets, and in some instances by violence" (Wrong (1)) The result was that, by the intentional acts of the defendants, "not a bale of goods constituting the commerce of the country could be moved" (Wrong (2)) The question was, did these facts establish a cause under the statute? If the admittedly "lawful" organizations of workmen "adopt and further unlawful purposes and do unlawful acts the associations themselves become unlawful." So far, so clear Everything then rode on what the "unlawful purposes" were.
"unlawful acts" were The court answered that question as follows:
The essence of the defendants' misconduct—evil and unlawful—was their attempt to block the nation's trade until their demands were met; they sought to prevent, and did prevent, everyone from moving commerce within the country.
The "certain demands," of course, consisted not in ransoms or some other inherently illegal purposes, but in moderately improved working conditions and wages, together with recognition of a collective bargaining representative (demands that, incidentally, would later become state-sanctioned purposes in the New Deal society) It is not academic to note this, because in the law of combinations from which the court was here borrowing, overtly nefarious and illegal aims were often the actual aims of the combinations at hand In the identification
151 See id (leaving aside the question of what shall count as coercion or intimidation in such circumstances, and granting arguendo that at least some actions that would legitimately qualify as unlawful harassment or coercion occurred).
Enduring ambiguities in workers' so-called demands—sometimes labeled as 'evil' and categorized as Wrong (3)—form a conduit to neoclassicism, where moralizing claims help justify the classicist framework Across the motif of 'endeavoring to prevent everybody,' the operation of Wrong (1) reappears, suggesting a justification for outcomes anticipated in the classical era Likewise, 'from moving the commerce of the country' signals Wrong (2) and the fear that workers' refusal to work could disrupt national commerce Taken together, these moments illuminate how violence and coercion toward unwilling third parties function as a pressure mechanism in labor disputes, shaping economic policy and the perceived legitimacy of the workers' demands.
The question in Wrong (1) was whether the “evil” ascribed to the workers lay in preventing others from moving the country’s commerce or in refusing to move that commerce themselves; yet the record shows that the defendants did not prevent everyone, since many individuals—including the defendants—acted voluntarily The case produced a voluminous evidentiary record and a robust dispute over how significant or extensive the defendants’ efforts were to block commerce, and the court of appeal affirmed the district court, noting its broad discretion to resolve that factual contest, even though the district court opinion itself offered no express finding about the extent of violence or coercion directed at willing and able workers Instead, it acknowledged a vast, coordinated pattern of voluntary decisions by workers, described as a “gigantic and widespread combination” involving multiple workers’ organizations, all aimed at a work stoppage designed to draw the attention of those who profited from the city’s business and controlled the conspirators’ economic circumstances Indeed, if there had not been a critical mass of voluntary decisions to act, the City, the employers, and the court would not have pursued the matter in the first place, a point the district court did not ultimately deny.
155 Workingmen's Amalgamated Council of New Orleans v United States, 57 F 85 (5th Cir 1893) (issuing a single-page, summary affirmance).
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The court’s antitrust analysis largely rests on the proposition that intimidation—including violence against employers or third‑party workers—became the central means of the collective action, that is, Wrong (1) This premise pervades the opinion Even after articulating Wrong (3) toward the end of its discussion, the district court closes by once again identifying the central harm as the improper coercion of others, together with the halting of commerce—a repetition of Wrongs.
(1) and (2), with no mention of the "certain demands," Wrong (3), that allegedly motivated both:
The Corporate Exemption
Classical political economy treated the corporation as the central instrument of business combination, a site where economic power—and eventually political influence—converged Early corporations operated as quasi-public entities bound by state-sanctioned purposes, not merely legal forms for raising capital or limiting liability Through much of the nineteenth century, these constraints were progressively loosened as corporate law evolved, increasingly shielding owners and shareholders from liability and enabling a decisive separation between ownership and control.
185 Lawrence v Todd (1863) 143 Eng Rep 562, 14 C.B (N.S.) 554; ROBERT J STEINFELD,
COERCION, CONTRACT, AND FREE LABOR IN THE 19TH CENTURY analyzes how labor relations, including coercion and contractual obligations, were viewed in that era and how these factors shaped the concept of free labor In considering whether a wage statute applied, the literature notes that the inquiry should focus on the actual work done and the parties’ position in life As illustrated by a related ruling, “We should look at the work done and the position in life of the parties,” a principle that links statutory reach to the concrete tasks performed and the social status of those involved This approach situates wage-law questions within the broader context of nineteenth-century labor relations.
186 EDWARD BERMAN, LABOR AND THE SHERMAN ACT 271 (1930) (explaining that the first twenty cases prosecuted under the Act targeted worker collective action to improve working conditions); BENSEL, supra note 84, at 342-43.
187 HOVENKAMP, supra note 85, at 13-14 (noting that the distinguishing elements of the pre- classical corporation were "not its structure or its ability to assemble capital" but rather its
Historically, a state charter granted the incorporators powers no one else could exercise As Tomlins explains, the corporation’s role as a public body declined, and by the end of the 1810s a new archetype emerged: the modern business corporation, established to pursue private ends and individual gain rather than public purposes.
During the Gilded Age, the emergence of new legal doctrines beyond the traditional law of corporations enabled these corporate forms to spread their reach far beyond the boardroom, penetrating the industrial production process, extending into neighboring markets, and securing a powerful, enduring role in the polity This expansion created lasting ambiguities about control, as legal innovations allowed corporate power to permeate economy and government, shaping policy, markets, and governance for generations.
Scholars trace the legal status of corporations as combinations to their origins as public‑interest actors, but the justification has evolved toward efficiency-based arguments rooted in economies of scale and the emerging ideas of scientific management and production The era also spotlighted the selective approval of the cooperative form within business combinations—composed of men from the same social class—while showing ambivalence or hostility toward cooperative arrangements that included labor contributed by women and men outside that elite circle Herbert Hovenkamp’s survey of Gilded Age theorists and courts suggests that labor combinations fared poorly for structural reasons rather than overt bias Although a fuller analysis awaits future work, converging considerations imply that bias and structural factors together shaped this outcome Even Adam Smith, presumed a neutral observer, noted the selective disapproval that reflected ancient social attitudes toward labor and capital.
Tomlins explains the consolidation of corporate control over industrial production, a shift from systems that were once organized by workers or craft associations He shows how corporate decision-making came to dominate, supplanting the autonomy previously exercised by labor and craft groups He also details the triumph of corporate authority over state and local regulation of local markets, reshaping governance at the local level.
191 See, e.g., Hovenkamp, supra note 112, at 938-40 (discussing contemporaneous commentators' arguments that business combinations result in increased efficiencies, lower overall prices, and better product quality).
Francis B Sayre argued that the law punishes two steel workers who plan an act deemed tortious with fines and imprisonment, yet would be unable to reach the United States Steel Corporation if it plans and executes the same act, highlighting an unsettling inconsistency in criminal liability for individuals versus corporations Why should the law criminalize conspiratorial wrongdoing by individuals while allowing a powerful corporation to escape criminal touch for the exact same action? This critique points to the tension in criminal conspiracy doctrine: identical misconduct by people can be criminal, whereas the same conduct by a corporate entity may evade criminal liability.
Under the new regulation, labor combinations were treated the same as other market players Yet the labor market’s unique structure—characterized by easy entry and no economies of scale—meant the law imposed far harsher consequences on labor combinations than on seller cartels.
We rarely hear about the combinations among masters, even though alliances among workers are frequently discussed But anyone who assumes masters do not unite because of that observation is ignorant of both the world and the subject itself Masters are constantly forming networks, agreements, and collaborations that shape markets and industries, just as worker coalitions do.
An article in the Loyola University Chicago Law Journal contributed to the view that classicists tended to regard enhanced business profits as a social good in a way they did not regard wage premiums This represents an unprincipled distinction even before introducing normative commitments to workers’ welfare It can be seen in classicists’ sweeping statements that business profits are a social good, a position that overlooks the welfare of workers.
"cooperation" was necessary for social progress For example, the same Arthur Eddy who had urged the extension of the Sherman Act to labor organizing had this to say:
Social progress would be impossible were if not for co-operation and combination; therefore the law encourages and recognizes the formation of-
All of which are combinations in every sense of the term-a corporation being simply the co-operation of two or more individuals in a form of combination prescribed by law 196
In Hovenkamp’s view, Eddy’s defense of business combinations is a “trite apology” that these deals move the economy toward “more for less money,” while labor unions and farmers’ organizations supposedly push for “less for more money.” This framing reads less as a neutral, perspectival analysis and more as an explicit alignment with a particular economic and political class and its interests Eddy’s grouping of farmers’ organizations with labor signals a side in a class-based struggle over wages and power rather than an even-handed account of market dynamics The passage also implies that wage-setting occurs within tacit, widespread combinations that resist raising workers’ pay above the going rate, and that to violate this order is seen as an unpopular reproach among neighbors and equals Masters themselves sometimes form covert combinations to suppress wages below the prevailing rate, and these actions are carried out in secrecy until the moment of execution.
ADAM SMITH, WEALTH OF NATIONS 60 (1776)
Historically, mainstream American political economists around 1900 saw business combinations as delivering real gains through economies of scale, lower prices, higher product quality, and higher profits However, labeling profits as a benefit is internally inconsistent within that view, because the analogue—rising wages for workers—would not be treated as an independent good and would instead be viewed as an inefficiency Neoclassical economic theory likewise treats profits beyond the normal return on capital as inherently inefficient.
Enduring Ambiguities arguendo that there is such a principle that would justify harsher treatment for labor) between sellers of labor and sellers of other commodities.
Under the Sherman Act, the courts upheld a classicist view of business combinations, a stance reaffirmed in United States v Joint- Traffic Ass'n The decision directly addressed anxieties raised in an earlier dissent that broadening the common-law rule on price-fixing might imply that business organizations themselves violated the Sherman Act We might call the Court's removal of this doubt the corporate exemption, to parallel the labor exemption that the courts rejected.
By pairing a corporate exemption with a relatively permissive view of mergers, the system reduced the need for overt price-fixing among firms The Sherman Act was more often used to prosecute labor unions than industrial combinations, and as a result the Act's focus on industry faded even as corporate mergers reshaped the economy Consequently, large industrial actors could consolidate market power more freely: intra-firm collective action remained immune to antitrust scrutiny, while mergers extended firms’ control to monopolistic levels Meanwhile, workers’ efforts to organize and negotiate better terms were prohibited and penalized under the Act.
Once corporations are legally formed, the law treats them as single units rather than as combinations of individuals By contrast, workers' combinations—especially ad hoc groups formed for a specific collective action—are not regarded as single entities Even if a particular workers' organization is legally recognized, the law tends to view its actions as the acts of individuals within the group rather than as the acts of the organization as a whole, unlike the employer or business organization whose actions are treated as those of a single unit.
197 HYLTON, supra note 13, at 94; see United States v Joint-Traffic Ass'n, 171 U.S 505,
567 (1898) ("[The formation of corporations for business or manufacturing purposes has never, to our knowledge been regarded in the nature of a contract in restraint of trade or commerce.").
199 Still, at least the classicists spoke expressly of the corporation as a combination In the modem understanding, the concept is so entrenched that the fundamental unit in antitrust analysis
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THE LABOR EXEMPTION: AN UNSTABLE PARADIGM
During the Gilded Age, courts used the Sherman Act to curb worker collective action, a doctrine that largely went underground in the New Deal era even as it was nourished by a rising neoclassical antitrust consensus and shielded by a labor exemption that remained intact The labor-exemption case law became a central feature of the New Deal regulatory order and a powerful symbol of the era’s economic governance Within this framework, the market order forged through court–industry cooperation expanded to include collective bargaining, with unions emerging as market actors alongside firms The new paradigm envisioned a tripartite economy—the state, capital, and organized labor—but its guiding principles were rarely stated explicitly, in contrast to the more developed market framework it partly displaced Meanwhile, antitrust theory came to be seen as near-scientific and largely transcendent of normative debate, yielding a period of what scholars call the “normal science” of the labor exemption.
The labor exemption largely ceded ideological primacy to the market framework, even as the remedies it allowed provided a temporary bulwark against its most extreme manifestations by carving out limited economic democracy for a limited number of workers for a limited period It also perpetuated the idea of “two rival policies”—one centered on the firm, whether a corporation, partnership, or individual—and treated labor and capital as operating within separate regulatory tracks At the dawn of the New Deal, the labor exemption only partly equalized this state of affairs, because the parallel system for regulating labor combinations remained onerous and effectively imposed a tradeoff on organized labor in exchange for permitting the combination in the first place In other words, while a business corporation may not consolidate to engage in concerted action against a competitor or to raise prices, a corporation on its own is viewed as a single actor, and thus there are no NLRA-like restrictions paralleling those on labor (as Tomlins notes).
I employ the concept of normal science, a term Kuhn introduced in The Structure of Scientific Revolutions (1962), and later applied across a wide range of fields to describe the period after a paradigm shift In this phase, the emphasis shifts from questioning foundational principles to implementing and refining the new paradigm, ensuring its practical application and internal consistency In short, normal science focuses on clarifying and extending the new framework rather than revisiting basic ideas.
Enduring ambiguities persisted between fundamentally opposed views, yet they converged on a core premise: antitrust policy would produce a different outcome for worker collective action than the labor exemption doctrine would In practice, antitrust rules would not automatically mirror the results of labor exemption The labor exemption statute both expressly and implicitly endorsed this distinction, signaling that antitrust and labor-law regimes can treat collective worker action differently.