Back in the 1990s when Robert Reich was Labor Secretary, his department gigged a professional baseball team for keeping minors—in this case, ballboys and batboys—working too late at night. Reich squelched the furor, but in fact, due to a Supreme Court decision, baseball teams could easily have argued that they are not even subject to the Fair Labor Standards Act (FLSA), which governs both child labor and minimum wages.
Back to the headlined question, then: What do baseball and at-will employment have in common?
One’s first instinct in answering the question might be to point to the now-abolished (and infamous) Reserve Clause, which kept players at the beck and call of team owners for decades as virtual servants. That would indeed be close to the answer, but the real answer goes deeper, to wit: Both Major League Baseball (MLB) and at-will employment exist in their present realities because of anomalies in Supreme Court decisions.
In 1922, the Supreme Court impossibly and implausibly ruled that MLB does not engage in interstate commerce, when of course teams routinely travel from state to state to perform before fans in those outlying states. Since that finding, subsequent Supreme Court decisions have treated the 1922 ruling as stare decisis—legal precedent not to be overturned by court decision but left to the legislature to deal with. Indeed, the last time the high court entertained a suit regarding MLB’s status, it specifically deferred the antitrust exemption from the 1922 ruling to Congress. Since then, federal legislators have mostly used the antitrust exemption as a bludgeon with which to threaten MLB on matters such as steroid abuse, but never to overturn the exemption.
Similarly, at-will employment arose not out of whole cloth, but from the ether itself, following the publication of a treatise on the subject in 1877. Catch this—the title of that writing was Master and Servant, and in it author Horace Wood cites previous court decisions that he claims established the practice and principle of at-will employment. Common law at the time held that employment was guaranteed for one year, while at-will employment meant that both employers and employees would be free to end their relationship at any time for whatever cause, good or bad. Problem was, those prior court decisions Wood cited never broached at-will employment or any aspect of it. Nonetheless, after publication of Master and Servant, many courts up to and including the supreme one treated at-will employment as stare decisis, or established legal doctrine, leaving any modification of it to legislatures. Fait accompli.
(Weird or wild interpretations like these two are not uncommon in American Constitutional history and jurisprudence. To this day, almost everyone thinks the Constitution contains a clause demanding “separation of church and state,” but one would look in vain throughout the whole document and all its amendments for that clause. Indeed, “separation of church and state” was actually taken from a letter written much later by Thomas Jefferson that quickly took on a life-force of its own. The Constitution itself merely forbids the national government from establishing a religion and is completely silent on what states can or cannot do with religion except that they cannot bar its practice.)
In 1983, the Wisconsin Supreme Court wrote:
“In the late nineteenth century, apparently influenced by the laissez-faire climate of the Industrial Revolution, the American courts then rejected the English rule [of one-year employment contracts] and developed their own common-law rule, the employment at will doctrine. The doctrine recognized that where an employment was for an indefinite term, an employer may discharge an employee “for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong.”
“Commentators state that many courts were influenced by H.G. Wood’s treatise on master-servant relationships published in 1877. In that treatise Wood wrote:
“‘With us the rule is inflexible, that a general or indefinite hiring is prima facie a hiring at will, and if the servant seeks to make it out a yearly hiring, the burden is upon him to establish it by proof…. [I]t is an indefinite hiring and is determinable at the will of either party, and in this respect there is no distinction between domestic and other servants.’
“The commentators also generally agree that Wood’s analysis was not supported by the cited authorities.”
Now, while some states and the federal government have in more recent times established laws and categories of protected classes, as they are called, to enact barriers to discrimination in both hiring and firing, the United States is alone among the industrialized nations of the world in not protecting employees from the harshness of at-will termination as a matter of broad public policy. Even the People’s Republic of China instituted its own contract labor law in 2008 to protect employees from indiscriminate termination, though there have been reports of authorities’ turning the other way during the current economic downturn (which is not surprising since authorities in China have long been “on the take”). In short, the U.S. is the only major economic power that adheres to the notion of at-will employment, but who’s actually affected?
A court in Missouri in 1985 reviewed wrongful discharge cases challenging at-will employment decisions that were reported between 1977 and 1984 and concluded:
“As many of the decided cases illustrate, the burden of the at-will employment doctrine seems to be falling most heavily and harshly upon professional and upper and middle level employees. [footnote cites 15 cases] They have the least protection. Most are at-will employees and few have job security through union or individually negotiated contracts. They have the most to lose, frequently being the long-term employees who have the greatest responsibility and substantial investment in and the highest expectations from their careers. Often they are at an age when replacement of their life and medical insurance programs and their retirement plans are difficult or impossible. They are the most vulnerable to the improper demands of employers who find it profitable to take chances with anti-trust and consumer fraud violations, environmental pollution, health-related misconduct, defense procurement fraud, and the like. The at-will employment doctrine does not include, contemplate or require a privilege in the employer to subject its employees to the risks of civil and criminal liability that participation in such activities entails.”
Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859, 877-878 (Mo.App. 1985).
The prospect for changing at-will employment as a matter of public policy seems almost nil. At-will employees are mostly white collar professionals with a diverse set of skills populating a wide range of business sectors. Thus they have no one group to speak for them, except for some scattered and usually impotent and reluctant trade and professional organizations. Moreover, labor unions view these professionals with indifference or as targets for unionizing and certainly would never advocate for an end to at-will employment, which would simultaneously end almost all of labor’s bargaining power and its very raison d’etre. Business for its part would fight implementation of a contract labor law tooth and nail, and the onslaught would make the current battle against the Employee Free Choice Act (EFCA) seem like kids’ play in comparison. Finally, the Obama administration basically sleeps with labor while Republicans sleep with big business, so there is no chance for agreement on a broad public policy on contract labor.
What contract labor law achieves in one fell swoop is also the heart and soul of union and other collective bargaining agreements and is often contained within individually bargained contracts—in essence, these vehicles transform the at-will employer-employee relationship into “just cause” employment. Under just cause, the employer must show and document clear reasons to terminate an employee, and the whole decision is then reviewable by outside agents, be they the union, state or federal labor officials, arbitrators, or the courts themselves. This increases the burden on employers when they need to pare and trim or even clean house, and it may plausibly lead to more complacent workforces, but advocates argue that employment protection also results in a more cohesive and peaceful social fabric. Think European-style socialism here, a system that combines widespread unionization with sweeping job protection legislation for all employees.
So far, America has resisted the siren’s call of social and employment harmony, usually for dollars-and-cents reasons. The cost of such a system is indeed high taxation to pay for massive programs for retraining and sustaining the unemployed since job protection generally translates into leaner, more scrutinized-before-hiring workforces. However, never before has a recession been this deep, or as widely visible due to the proliferation of new media. In the 1970s, just print and broadcast media conveyed the unfolding human tragedy. Add the fax machine and some cable television, and the 1980s’ recession was similarly limited in exposure. Today, news travels by cell phones, e-mail, tweets, blogs, podcasts, e-alerts, cyber news sources, and cable and satellite TV and radio—all the new jungle drums—as well as through the more traditional but fading media. People may thus be so saturated with bad news and simultaneously filled with enough fear to finally embrace Euro-style solutions. Barack Obama certainly thinks so, though nothing on his agenda so far—except for easier unionization—speaks for an end to at-will employment.
So if at-will employment and MLB’s antitrust exemption were both born of anomalies, how do they compare today, nearly a century later?
This is where the comparison ends: As a result of the Curt Flood case in the 1970s, baseball players were freed from the Reserve Clause and have since formed perhaps the strongest union in the nation. Players make a fortune and enjoy contracts that often pay them when their skills have long since departed, or even after they’ve been felled by injuries, never to play again, while MLB continues to enjoy an antitrust exemption. Meanwhile, for the tens of millions of at-will employees out in the American workforce, the huge numbers of layoffs each month during the current recession are a stark reminder of their “servant” status under Horace Wood’s clandestine but ingenious implementation of at-will employment. As a result, the Reserve Clause has been preserved for the rest of non-unionized America.
Play ball.
Note: The details in this white paper are provided for informational purposes solely. All answers are general in nature, not legal advice and not warranted or guaranteed. Readers are cautioned not to rely on this information. Because laws change over time and in different jurisdictions, it is imperative that you consult an attorney in your area regarding legal matters and an accountant regarding tax matters.
Gary McCarty is a researcher and Web content provider for Personnel Concepts, a pioneer in the labor law poster compliance industry based in Ontario, Calif. He supplies the content for the company site, http://www.personnelconcepts.com, from which this is taken.
