Not Even a Bourgeois Freedom: Freedom of Contract in John Roberts’s America

6 Jul

Ever since the 19th century, one of the points of convergence between the free-market right and the socialist left has been that the most important freedom under capitalism is the freedom of contract. Whatever its other problems, the market is the one sphere where the rights of man obtain. As Marx put it in Volume 1 of Capital:

This sphere [of the market] that we are deserting, within whose boundaries the sale and purchase of labour-power goes on, is in fact a very Eden of the innate rights of man. There alone rule Freedom, Equality, Property and Bentham. Freedom, because both buyer and seller of a commodity, say of labour-power, are constrained only by their own free will. They contract as free agents, and the agreement they come to, is but the form in which they give legal expression to their common will. Equality, because each enters into relation with the other, as with a simple owner of commodities, and they exchange equivalent for equivalent. Property, because each disposes only of what is his own. And Bentham, because each looks only to himself. The only force that brings them together and puts them in relation with each other, is the selfishness, the gain and the private interests of each. Each looks to himself only, and no one troubles himself about the rest, and just because they do so, do they all, in accordance with the pre-established harmony of things, or under the auspices of an all-shrewd providence, work together to their mutual advantage, for the common weal and in the interest of all.

For the free-market right, that’s the end of the discussion: Workers are free. No one’s forcing them to work. If they don’t like a job, they can leave it.

For the socialist left, it’s more complicated. Workers are not in fact free, the left argues, but the source of their unfreedom is not to be found in the usual guise. The most important constraint upon the freedom of contract is not the discrete or formal acts of coercion by power-holders (what political scientists sometimes call the first face of power), which are embodied in law and enforced by the state. Rather, it is systemic inequality and disparities of power between labor and capital: people with few resources are not in much of a position to say no to a job that they don’t like. Formally, workers are free; in practice, they are not.

Now there was always a problem with this thesis: as Karen Orren has argued, up until the twentieth century, public and private power-holders (specifically, employers and judges) often imposed overt and formal constraints upon the worker’s exercise of her independent will. At-will employment was often a myth, not merely because workers were not the economic equals of their employers, but also because of legal liabilities imposed by these judges and employers. For example, when seeking a new job, workers were often required by law to present testimonial letters from their previous employers; without those letters, they were out of luck. That rule effectively kept them in the employ of their previous boss. Conversely, vagrancy laws could be used to force men and women into the workplace.

But now comes this latest report from the Los Angeles Times (h/t Frank Pasquale), suggesting we’re back in a version of the nineteenth century, in which this same nexus of employers and judges is being used to sharply abridge whatever modicum of freedom there is to be found in at-will employment.

Emboldened by a series of Supreme Court decisions and an employers’ job market, many companies are starting to require workers to sign away their rights in return for a job. It is a trend that experts worry could further wear away employees’ power in the workplace. The contracts make it harder for employees to join class-action lawsuits, take their employers to court, or leave to go work somewhere else.

Mazhar Saleem is bound to his employer by a number of contracts that made it hard to earn enough money to live, but also hard to go work anywhere else. He drives a town car for a company in New York as an independent contractor, rather than as a full-time employee. That means he doesn’t get benefits, never gets overtime, and isn’t guaranteed set hours.

But he also signed a non-compete contract when he started working, meaning he can’t drive a car for anyone else in New York. So even if his employer doesn’t give him any work, he’s not allowed to go find it elsewhere, says his attorney, Michael Scimone, with the law firm Outten and Golden.

“It ties into the larger theme of employers trying to use contracts to alter pieces of the employment relationship that are supposed to be governed by law,” Scimone said.

Non-compete clauses, once a staple of the high-tech world, are being extended to cover hairdressers, auto mechanics, exterminators and other professions that courts would traditionally not uphold them for, lawyers say. They essentially mean an employee can’t leave a job to take another one nearby, unless he or she wants to stop working for a year or so.

It’s a way to keep promising employees from leaving, said Matt Marx, an MIT professor who has studied these contracts.

“Given the increased job mobility of today’s world, companies are saying, ‘We can’t count on people to be here forever. We have to lock them up with contracts,” he said.

In a recent case in Worcester, Mass., three women working at a hair salon tried to leave after their conditions at work deteriorated. All three received cease and desist letters when they started working elsewhere, because they had signed non-compete clauses. They had to wait a year for the clauses to expire before they could work in the area again.

Many employment lawyers say they’re not surprised that courts have made life tougher for employees. Since the beginning of the Roberts court, experts say, the Supreme Court has issued decision after decision cutting back employees’ legal avenues to complain.

“Since the Warren court, employers have done well at the Supreme Court, but in the Roberts court, they have done exceptionally well,” said Cynthia Estlund, a professor at New York University‘s School of Law. John G. Roberts Jr. became chief justice in 2005.

Law historians trace the court’s conservative leanings to the long stretches of Republicans in the White House in the 1980s and 2000s that allowed presidents to appoint more conservative judges to lower courts and to the Supreme Court. A study published earlier this year in the Minnesota Law Review found that two of the court’s current justices are the most conservative out of any of the justices who served between 1946 and 2011, and that court under Roberts is friendlier to business than it was during either of the two previous chief justices.

Adding up seven years of decisions, the workplace is getting to be a tough place for many, said Cliff Palefsky, an employment lawyer at McGuinn, Hillsman & Palefsky in San Francisco. Employers already can ask employees to work harder for less because the job market is still so sluggish in many fields. But in some cases, employees who think they can find a better situation elsewhere are going to have trouble doing so.

“The law is being undermined and it’s putting some workers in a bind,” Palefsky said. In some situations, when non-compete clauses are mixed with arbitration agreements, he said, “We’re one step away from indentured servitude.”

Not to get all libertarian on you, but when I read these reports about the actual state of freedom of contract in contemporary America, I’m reminded of Gandhi’s alleged reply to a reporter asking him what he thought about Western civilization: sounds like a good idea.

16 Responses to “Not Even a Bourgeois Freedom: Freedom of Contract in John Roberts’s America”

  1. Corey Robin July 6, 2013 at 7:11 pm #

    It’s on my list of to-read! I can never keep up with the fertility of your mind! Hope to get to it soon. What’s the Pope article, the one on the 13th Amendment? Still haven’t read that one though I’m planning to for a long piece I’ve been asked to write on Clarence Thomas.

  2. Michael C. Duff July 7, 2013 at 12:49 am #

    It’s “James Gray Pope.” Great labor law scholar.

  3. Blinkenlights der Gutenberg July 7, 2013 at 2:10 am #

    Unrelated to this post, I thought you might be interested in this article:

    http://www.guardian.co.uk/commentisfree/2013/jul/06/wall-street-journal-editorial-egypt-pinochet

    On Friday, the Wall Street Journal published an editorial entitled “After the Coup in Cairo”. Its final paragraph contained these words:

    “Egyptians would be lucky if their new ruling generals turn out to be in the mold of Chile’s Augusto Pinochet, who took over power amid chaos but hired free-market reformers and midwifed a transition to democracy.”

    • Benedict@Large July 7, 2013 at 10:48 pm #

      I too thought of Corey’s work on Hayek when I read this article, and since it didn’t mentioned Hayek specifically in it, I scanned the comments, Sure enough, there were a number for Hayek and several more for Friedman. One in particular a bit down included a letter to the editor from Hayek published in The Times, 3 August 1978, which was promptly torn apart in a reply just afterwards. Good reading.

      http://discussion.guardian.co.uk/comment-permalink/24910667

  4. Magpie July 7, 2013 at 8:16 am #

    Prof. Robin,

    Just for the record and to avoid misunderstandings, the rest of Marx’s quote (immediately under the bit you quoted):

    “On leaving this sphere of simple circulation or of exchange of commodities, which furnishes the ‘Free-trader Vulgaris’ with his views and ideas, and with the standard by which he judges a society based on capital and wages, we think we can perceive a change in the physiognomy of our dramatis personae. He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but — a hiding.”

    In my opinion, for what it’s worth, it seems to fit well with the main message of your post.

  5. zenner41 July 7, 2013 at 12:44 pm #

    @Magpie: An excellent example of Marx’s irony. He was perfectly aware that capitalism doesn’t give workers any rights.

    As for the original post, this part of the LA Times quote:

    “Law historians trace the court’s conservative leanings to the long stretches of Republicans in the White House in the 1980s and 2000s that allowed presidents to appoint more conservative judges to lower courts and to the Supreme Court. A study published earlier this year in the Minnesota Law Review found that two of the court’s current justices are the most conservative out of any of the justices who served between 1946 and 2011, and that court under Roberts is friendlier to business than it was during either of the two previous chief justices.”

    explains precisely why the idea that voting is unimportant because we can leave it up to the courts to advance progressive causes makes no sense. You have to get the reactionaries out of the executive and legislative branches in order to get a decent judiciary. It also explains what’s wrong with the “balance between the branches of government” notion we were all mis-taught in school. Most people interpret that to mean that it’s a good idea to have a good “balance” of left and right in all the parts of government. This is an excellent recipe for going nowhere, which in practice, given the underlying reality of a capitalist system, means a steady undertow moving the country to the right, even if there are a few “left” people in the government.

  6. mikethemadbiologist July 7, 2013 at 9:19 pm #

    It seems to me this is also part of a larger trend in contract law, where people are offered ‘take it or leave it’–which they are in no position to refuse to sign.

  7. Darryl Williams July 8, 2013 at 7:13 am #

    Seems to me that I recall from the one labor law course I ever took that the only enforceable non-compete clauses are those that involve employees who have had access to confidential information that could be used against the former employer. I doubt that applies to beauticians, etc.

    • Michael Duff July 8, 2013 at 9:37 am #

      I think you may be confusing employees who are entitled to be included in a bargaining unit selected by employees for purposes of collective bargaining with employees who may be bound by a non-compete agreement. Two different concepts. Almost anyone can be bound by a non-compete agreement. Typical issues include the post employment duration of the agreement and its geographical scope.

      Michael Duff

  8. The Navigator July 8, 2013 at 1:56 pm #

    The whole point of being an independent contractor is that you’re free to work for other employers – in fact, that’s one central element to the usual test to determine whether or not you are, in fact, a true indep. contractor or really, legally speaking, an employee who has been misclassified. (I haven’t read the article Corey linked to but I’m confident the attorneys at Outten & Golden are making exactly this point.) A lot of employers are going to find that they have contracted themselves right into a whole lot of employment obligations that they thought they’d cleverly evaded. Maybe not too clever by half – let’s say, too clever by 7.65%, which is the matching amount of Social Security taxes that these employers will now have to pay, once they’ve been taken to court. (Of course there’s also overtime and minimum wage, unemployment, worker’s comp, etc…) Naturally, this only works for those employees who have smart lawyers willing to take their cases – the rest of them may be treated as indentured servants, at least unless and until Outten and other plaintiffs’ lawyers win some eyebrow-raising damage awards and corporate in-house counsel start hurridly whispering among themselves.

  9. neffer July 8, 2013 at 3:36 pm #

    Not to be a party spoiler but, by and large, non-competition law is state, not Federal, law. And, most, if not all, states hold that a non-compete clause must be a reasonable restraint of trade and, to note, that means in practice that the restriction of the employees right to find work must be limited in time and to a reasonably small geographic area. Moreover, it normally means also that the restriction is limited to the specific industry of the employer. In short, state courts are not too friendly to non-competition agreements.

    I rather doubt that the Supreme Court would re-write state contract law as it relates to state employment law. I think that someone may be reading way too much into the matter.

    • Michael Duff July 8, 2013 at 3:38 pm #

      See mine at 9:37.

      • neffer July 8, 2013 at 4:21 pm #

        Thanks. I did not notice your comment, with which I basically agree.

  10. bensday823 July 30, 2013 at 2:47 am #

    I find myself agreeing with Corey Robin. Businesses should not be allowed to, essentially trick employees into signing contracts that no reasonable person would knowingly and willingly agree too. I’ve worked for companies that outright lied to customers about the terms of an agreement knowing the customers were to lazy to read the fine print.

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    […] armed guards (are they going to open fire on people who commit property damage? This is insane) Not Even a Bourgeois Freedom: Freedom of Contract in John Roberts’s America Things In Politico That Make Me Want To Guzzle Antifreeze, Part The Infinity The Real Reason You […]

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