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News from EPI New EPI “Unequal Power” project refutes assumption of equal bargaining power in the workplace

Today, EPI launches the Unequal Power project, a three-year interdisciplinary initiative that challenges the assumption that workers and employers have equal bargaining power—the idea that if workers don’t like a job, they are free to work elsewhere and this prevents exploitation. The initiative is dedicated to Justice Ruth Bader Ginsburg, whose dissent in Epic Systems inspired the project.

The project launches with a new paper by University of Michigan labor law professor Samuel Bagenstos tracing the story of the seeming rejection, but actual resiliency, of the 1905 Supreme Court case Lochner v. New York, which established the premise of equal bargaining between employers and workers. The decision led to a period in which judges invalidated labor laws based on their view that those laws prevented employers and workers from striking the best deal they could with each other.

Lochner-ism was seemingly rejected by policymakers and courts beginning in the 1930s during the New Deal, but Bagenstos demonstrates that labor and employment law has never shed Lochner’s premise. In fact, the judicial trend toward ignoring imbalances of bargaining power has only accelerated in recent years, with the Supreme Court under Chief Justice John Roberts issuing a series of anti-worker decisions. Consequently the assumption of equal bargaining between employers and workers in employment law continues to have a pervasive and insidious impact on workers.

The paper provides some examples of key labor doctrines to which courts apply the premise of equal bargaining power and disadvantage workers, including:

  • Employment at will
  • Forced arbitration
  • Right-to-work laws
  • A worker’s status as an “employee”

“For much of the past century, labor and employment law has rested on Lochner’s flawed premise of equal bargaining power, which undermines constitutional, statutory, and common law protections in the workplace,” said Bagenstos. “At a time when working people’s wages have stagnated, labor’s share of national income has dropped, and inequality has risen, the law has doubled down on the premise that workers and their employers approach their bargaining on an equal footing. Lochner never truly died. It just shape-shifted.”

The paper is the first in a series of papers for the Unequal Power project that identifies why we need to operate with a framework that centers unequal workplace power.

“The flawed assumption of equal power enables employers to subject workers to private, authoritarian systems of power in the workplace. This assumption undercuts employee rights and protections, generates wage and income inequality, and perpetuates systemic race and gender discrimination,” said Lawrence Mishel, distinguished fellow at EPI, who is leading the project. “The Unequal Power project seeks to shatter this assumption of equal power—a necessary first step toward advancing democracy, freedom, and economic fairness.”