AN ANALYSIS OF THE LABOR SECTIONS OF THE CLAYTON ANTITRUST BILL.*

Congress has passed the Clayton AntiTrust Bill, so-called, the President has signed it, and it has become a law. In the shape in which it finally passed it makes few changes in existing laws relating to labor unions, injunctions and contempts of court, and those are of slight practical importance.

First, it does not change in any respect the Sherman Anti-Trust Act, as it has been construed by the supreme court relative to those matters. Both the Senate and House Judiciary Committees, which reported the bill, so stated, and its provisions bear them out.

The Senate Committee in its report said, "It is well, at the outset, to state the theory of the bill, both as it passed the House of Representatives and as it is proposed to be amended, for the general scope of the House measure is unchanged. It is not proposed by the bill or amendments to alter, amend or change in any respect the original Sherman Anti-Trust Act of July 2, 1890. The purpose is only to supplement that act and the other anti-trust acts referred to in section 1 of the bill." Senate Committee also quoted from the report of the House Committee to the same effect as follows: "The bill does not interfere with the Sherman Anti-Trust Act at all; it leaves the law of conspiracy untouched, and it is not open to effective criticism on any constitutional ground."

The

Moreover, the bill in section 4 re-enacts, word for word, section 7 of the Sherman Anti-Trust Act, under which the Loewe case was brought to and decided by the Supreme Court, without excepting that or any other case from its provisions, which action, upon established principles of construction, is an adoption by Congress of the doctrines of that case. In addition, section 6 gives every person, without excep

[This article is by Mr. Daniel Davenport, Counsel for the American Anti-Boycott Association, who has given many years of study to the subject of labor injunctions and boycotts.-Ed.]

tion, the right to injunctive relief against threatened loss from conduct of anyone in violation of that act, without excepting any case whatever. Read in the light of the foregoing, section 6 of the bill is nothing more than a legislative declaration of the law as it had been laid down by the Supreme Court in the case of Adair v. U. S. 208 U. S. 178, which was under considera

tion by the court along with the Loewe case and was decided just one week before it, to the effect that Congress, under its power to regulate commerce, had not prohibited and could not prohibit the existence of labor organizations as such. The court there said:

"Manifestly, any rule prescribed for the conduct of interstate commerce, in order to be within the competency of Congress under its power to regulate commerce among the states, must have some real or substantial relation to or connection with the commerce regulated. But what possible legal or logical connection is there between an employe's membership in a labor organization and the carrying on of interstate commerce? Such relation to a labor

organization cannot have in itself and in the eye of the law any bearing upon the commerce with which the employe is connected by his labor and services. Labor associations, we assume, are organized for the general purpose of improving or bettering the conditions and conserving the interests of their members as wage earners-an object entirely legitimate and to be commended rather than condemned. But surely those associations as labor organizations have nothing to do with interstate commerce as such. One who engages in the services of an interstate carrier will, it must be assumed, faithfully perform his duty, whether he be a member or not a member of a labor organization. His fitness for the position in which he labors and his diligence in the discharge of his duties cannot in law or sound reason depend in any degree upon his being or not being a member of a labor organization. It cannot be assumed that his fitness is assured, or his diligence increased, by such membership, or that he is less fit or less diligent because of his not being a member of such an organization. It is the employe as a man and not as a member of a labor

organization who labors in the service of an interstate carrier."

The right of labor unions as such to exist, and the limitations on their lawful activities, are well defined in the case of Gompers v. Bucks Stove and Range Co., 221 U. S. 439, and section 6 of the Clayton Bill is but a declaration by Congress to the same effect, and is almost a paraphrase of it. The court in that case said:

"Society itself is an organization and does not object to organizations for social, religious, business and all legal purposes. The law therefore recognizes the right of workingmen to unite and to invite others to join their ranks, thereby making available the strength, influence and power that comes from such association. By virtue of this right, powerful labor unions have been organized. But the very fact that it is lawful to form these bodies, with multitudes of members, means that they have thereby acquired a vast power, in the presence of which the individual may be helpless. This power, when unlawfully used against one cannot be met, except by his purchasing peace at the cost of submitting to terms which involve the sacrifice of rights protected by the constitution, or by standing on such rights and appealing to the preventive powers of a court of equity. When such appeal is made, it is the duty of government to protect the one against the many as well as the many against the

one.

In the case of an unlawful conspiracy, the agreement to act in concert when the signal is published, gives the words 'unfair,' 'we don't patronize,' or similar expressions, a force not inhering in themselves, and therefore exceeding any possible right of speech which a single individual might have. Under such circumstances they become what have been called 'verbal acts' and as much subject to injunction as the use of any other force whereby property is unlawfully damaged. When the facts in such a case warrant it, a court having jurisdiction of the parties and subject matter has power to grant an injunction."

I insert here for comparison with the foregoing declarations of the law by the Supreme Court the words of section 6 of the Clayton Bill, that it may be seen that they work no change in the existing law.

"The labor of a human being is not a commodity or an article of commerce. Nothing contained in the anti-trust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit,

or to forbid or restrain individual members of such organizations, from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to restraint of trade, under the anti-trust be illegal combinations or conspiracies in

laws."

In this connection it is proper to refer to the legislative history of this section for its better understanding. For twenty-four years the labor unions had sought specific exemption from the provisions of the Sherman Anti-Trust Act by an amendment of it, stating that it should "not apnever succeeded. ply to" them, but had When the Clayton Bill was before the House several attempts were made to amend this section by inserting in lieu of the words "shall be construed to forbid the existence, etc., of labor unions, etc.," the words "shall apply to," but they were all defeated. This was but a repetition of what was thus described by the supreme court in the Loewe case. "The records of Congress show that several efforts were made to exempt, by legislation, organizations of farmers and laborers from the operation of the act, but that all these efforts failed, so that the act remained as we have it before us."

This section further declares that nothing in the anti-trust laws shall be construed to forbid or restrain the individual members of labor unions from lawfully carrying out the legitimate objects thereof. The legitimate objects of the labor union, of course, are the same as those of other people, the advancement of their own interest by lawful means. This section, therefore, does not affect in the least the restraints of the Sherman Anti-Trust Act upon the members of such unions from

carrying out unlawfully either the legitimate or illegitimate objects thereof.

When does a labor union become an unlawful combination under the Sherman Act, and what are the means which it and its members are prohibited thereby from using? The answer is to be found in Eastern States R. L. D. Asso. v. United States, 234 U. S. 600:

"It broadly condemns all combinations and conspiracies which restrain the free and natural flow of trade in the channels of interstate commerce. *** In Loewe v. Lawler, 208 U. S. 274, this court held that a combination to boycott the hats of a manufacturer and deter dealers from buying them in order to coerce the manufacturer to a particular course of action with reference to labor organizations, the effect of the combination being to compel third parties and strangers not to engage in a course of trade except upon conditions which the combination imposed, was within the Sherman Act. In Gompers v. Bucks Stove & Range Co., 218 U. S. 418, after citing Loewe v. Lawler, this court said (p. 438): 'but the principle announced by the court was general. It (the Sherman Act) covered any illegal means by which interstate commerce is restrained, whether by unlawful combination of capital, or unlawful combinations of labor; and we think also whether the restraint be occasioned by unlawful contracts, trusts, pooling arrangements, black-lists, boycotts, coercion, threats, intimidation, and whether these be made effective, in whole or in part, by acts, words, or printed matter.'

"These principles are applicable to this situation. Here are wholesale dealers in large number engaged in interstate trade upon whom it is proposed to impose as a condition of carrying on that trade that they shall not sell in such manner that a local dealer may regard such sale as an infringement of his exclusive right to trade, upon pain of being reported as an unfair dealer to a large number of other retail dealers associated with the offended dealer, the purpose being to keep the wholesaler from dealing not only with the particular dealer who reports him, but with all others of the class who may be informed of his delinquencies. 'Section 1 of the act is not confined to voluntary restraint, as where persons engaged in interstate

trade or commerce agree to suppress competition among themselves, but includes as well involuntary restraint, as where persons not so engaged conspire to compel action by others, or to create artificial conditions, which necessarily impede or burden the due course of such trade or commerce, or restrict the common liberty to engage therein.' U. S. v. Patten, 226 U. S. 541."***"A retail dealer has the unquestioned right to stop dealing with a wholesaler for reasons sufficient to himself, and may do so because he thinks such dealer is acting unfairly in trying to undermine his trade. 'But,' as was said by Mr. Justice Lurton, speaking for the court in Granada Lumber Co. v. Mississippi, 217 U. S. 433, 'when the plaintiffs in error combine and agree that no one of them will trade with any producer or wholesaler who shall sell to a consumer within the trade range of any of them, quite another case is presented. An act harmless when done by one may become a public wrong when done by many acting in concert, for it then takes on the form of a conspiracy, and may be prohibited or punished if the result is hurtful to the public or to the individual against whom the concerted action is directed.'

"When the retailer goes beyond his personal right, and, conspiring and combining with others of like purpose, seeks to

obstruct the free course of interstate trade and commerce and to unduly suppress competition by placing obnoxious whole

sale dealers under the coercive influence of a condemnatory report circulated among others, actual or possible customers of the offenders, he exceeds his lawful rights, and such action brings him and those acting with him within the condemnation of the act of Congress."

It is to be observed that the foregoing case demonstrates that the distinction between the primary and secondary boycotts has no place under the Sherman Act, for it was a case of what would be termed a primary boycott by those who claim to see something in that distinction at common law.

This section does not affect in any respect the liability of the members of such unions for the unlawful acts of their officers and agents, when within the scope of their authority, as the same has been estab

lished in the Loewe case. Nor does it change in any way the rules of evidence by which the unlawful nature of such combinations is established. The same remain as laid down as follows by the supreme court in the Retail Lumber Dealers' case above cited.

"But it is said that in order to show a combination or conspiracy within within the Sherman Act some agreement must be shown under which the concerted action is taken. It is elementary, however, that conspiracies are seldom capable of proof by direct testimony and may be inferred from the things actually done; and when, in this case, by concerted action the names of wholesalers who are reported as having made sales to consumers were periodically reported to the other members of the association the conspiracy to accomplish that which was the natural consequence of such action may be readily inferred."

Nor does this section sanction the existence of, or remove from the condemnation of the civil and criminal provisions of the Sherman Act, or justify or excuse a conscientious Department of Justice in neglecting to proceed against such a combination as the American Federation of

Labor, whose constitution provides for the declaration of boycotts, and establishes a vast machine for their prosecution in interstate commerce, and directs its Executive Council to secure the unification of all labor organizations so far as to assist each. other in making the same effective, and whose principles and methods are thus accurately described in the following report unanimously adopted by its Convention of

the least number of unfair parties or places in their jurisdiction. One would be preferable. If every available means at the command of the State Federations and Central bodies were concentrated upon one such, and kept up until successful, the next on the list would be more readily brought to terms and within a reasonable time none opposed to 'fair' wages, conditions or hours, but would be brought to see the error of their ways and submit to the inevitable."

The Sherman Anti-Trust Act, having been enacted under the constitutional power of Congress to regulate commerce among the states, is, of course, the supreme law of the land, in all cases within its purview, in every state, territory and district, and judges of every court, federal and state, are bound thereby, anything in the constitution and laws of any state to the contrary notwithstanding. Since there is nothing in the Clayton Bill which limits in any way the restraints of that act upon the unlawful acts of labor unions, or their members, and since it goes still further and specifically grants to any person threatened with irreparable injury from acts forbidden by that Act injunctive relief, the protection of the individual, whether employer or employe, instead of being impaired, is greatly increased by it.

Second. Let us turn next to sections 17, 18, 19 and 20 of the bill, which deal with the subject of the issuance of restraining orders and injunctions by federal courts.

There is nothing in the first three of those sections which would justify any extended comment here. They make no material changes in existing law and practice. Such small changes as are made are in provisions which are merely directory, not mandatory, and which the courts will construe as having been intended by Congress to promote the administration of justice, not to impede it, and to secure the rights of all parties.

There is, however, one thing about these sections which is most noticeable, and that is the total repudiation therein by Congress of the contention made before its

committees, for the last twenty years, in behalf of the labor unions, that the federal courts have no power to enjoin the commission of acts which are crimes, and their equally persistent contention, that the issuance of injunctions by the federal courts to protect any right except property or a property right, defined by them so as to exclude from its meaning the right to do business, the right to work, to buy and sell labor, or to seek and obtain employment, is a usurpation by those courts which they called upon Congress to forbid. The whole scheme of the Trades Commission Bill, and of most of the Clayton Bill, is framed in complete negation of the doctrine that Courts of Equity cannot issue injunctions except to protect property or property rights so defined, or that they cannot enjoin the commission of acts which are also crimes. Indeed, what has been so long denounced as "Government by Injunction" has been enormously extended by these two bills. And sections 21 and 22 of the Clayton bill (to be hereafter discussed) specially provide for the enforcement of injunctions issued to forbid acts which are crimes, by penalties of unexampled severity.

Labor's Bill of Rights-But section 20 of the Clayton Bill calls for special remark, for it is said to be that section which constitutes "Labor's Bill of Rights." It singles out for special treatment from the vast field of cases over which, by the Constitution and laws of the United States, the federal courts have jurisdiction, those only which are between employers and employes or between employes, or between persons employed and persons seeking employment where such relations actually exist at the time suit is brought and an injunction is applied for, which suits involve or grow out of disputes concerning terms and conditions of employment.

Suits between parties, who previously sustained those relations, but have ended them, and suits between either of said parties and outsiders, are not covered by this section. Suits between an employer and

his ex-employes who have struck, and boycott cases generally, are excluded from this section. Apparently, also, the class of cases to which the section relates is still further limited by being confined to suitș between the specified parties brought to prevent irreparable injury to tangible property or property rights, because the application for an injunction in the specified cases must describe "with particularity" the property or property right to be protected by the injunction. But whether this last limitation on the class is intended or not, it is clear that suits to protect other rights between such specified parties, and suits between either of such parties and outsiders to protect property, or other rights, and suits between parties who have previously sustained the relations specified but have terminated them, are not included in the prohibition against the issuance of injunctions addressed to the federal courts in this section. The legislative history of this section shows that these exemptions were intentionally made.

And in the very limited class of cases to which the prohibitions of the section are confined by its terms, what are the acts which the federal courts are prohibited by this section from enjoining? They are any acts or acts which might lawfully be done in the absence of such dispute, including the lawful termination of the relation of employment, the lawful recommending, advising or persuading others by peaceful means to terminate employment, the lawful attending at any place where it is lawful to be, for the purpose of peacefully obtaining or communicating information, the lawful peaceful persuasion of any person to work or to abstain from working, the lawful ceasing to patronize or employ any party to such dispute and the lawful recommending, advising or persuading others by peaceful and lawful means so to do, the lawful paying or giving to or withholding from any person engaged in such dispute any strike benefits or other moneys or things of value, and the lawful assembling in a peaceable and lawful manner. It