Rethinking the Nineteenth-Century Employment Contract, Again

Legal historians have turned with renewed energy in recent years to the project of fleshing out the myriad rules by which the common law of the free labor employment contract structured social relations in nineteenth-century America. 1 Of course, labor relations have always been prominent in the literature. The German sociological tradition has long taught us to see in the legal protection of property rights a source of coercive power over the working classes. And for decades now, historians have studied the great nineteenth-century labor conspiracy cases, which generated leading cases and opinions by judges such as Shaw and Holmes. But there is a new wrinkle in recent accounts of nineteenth-century labor law. Much of the law of property, contract, and tort bears a relatively self-evident (though still too infrequently remarked on) relation to the relative bargaining power of the parties to an employment contract. Property rules, along with a whole host of attendant tort doctrines such as nuisance and trespass, allocate resources among parties. As Robert Hale observed long ago, property rules set the coercive power of A to exclude B from those resources that belong to A, whether A be a prospective employee excluding an employer from the employee's labor power, or an employer excluding a would-be employee from the means of production. In similar fashion, rules of contract and tort that define the weapons that parties may deploy in competition or bargaining also shape the relative bargaining power of social actors. Thus, doctrines of duress, fraud, unconscionability, and adequacy of consideration, and the law of labor conspiracies and competition all create immutable background rules (or sometimes inalienable entitlements) that have considerable impact on bargaining power. In Halean language, we might say that the law of duress, for example, coercively precludes the strong from forcing the weak to consent to a particular deal, or that the doctrine of fraud coercively precludes the slick from outfoxing the dupes. 2 1