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In Information and the Market for Union Representation, Professor Matthew Bodie provides an instructive framework for addressing information deficiencies in union elections. His consumer or "purchase of services" paradigm is apt and well illustrates the shortcomings of the more dominant approaches to elections. The extent to which this paradigm should drive the National Labor Relations Board's (NLRB) regulation of union elections is less obvious. The best fit with Bodie's consumer paradigm appears to be a system in which employees can easily designate a union as their representative, yet can just as easily get rid of the union. In other words, employees, like many other consumers, could purchase union services with the knowledge that they can easily change their mind later. It is not clear, however, whether the benefits associated with that model are worth its costs.
Bodie rightly decries the NLRB's failure to ensure that employees have access to the information needed to make a fully informed decision whether to unionize. In particular, his criticism of the NLRB's "laboratory conditions" and "political elections" models provides valuable insights into the nature of the union election process and raises important questions about the governance of elections. Yet his consumer paradigm is no panacea. For example, employees' collective decision whether to unionize differs from a typical consumer decision, which generally does not face concerns from a group of dissenting members. Moreover, even if employees are acting as consumers when voting on union representation, there is a real danger of taking that model too far. The informational concerns that Bodie emphasizes may lead to changes with significant costs of their own. Thus, I am not convinced that the gains from a consumer approach to union elections are large enough to warrant the regulatory response it demands.
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By Harry G. Hutchison
The National Labor Relations Act provides the legal framework for private-sector workers to choose collective representation. The National Labor Relations Board ("NLRB") supervises this process and relies on an election campaign model that is premised on the assumption that competition between the union and the employer will generate sufficient information to enable workers to reach a rational decision. In his recent article, Information and the Market for Union Representation, Professor Matthew Bodie asserts the NLRB's model fails to ensure the inclusion of sufficient relevant information. Offering a "purchase of services" paradigm as an alternative way to understand the decision to choose or refrain from choosing to join a union, Bodie conceives the representation election as a collective economic decision rather than the end result of a political campaign. In order for the market for union representation to function satisfactorily, adequate knowledge is required. Bodie states that this market is afflicted by a number of difficulties, including information asymmetry, inverse employer incentives, absence of competition among unions, and the lack of public confidence in labor unions. Information deficiencies impair employees' capacity to act rationally. Professor Bodie tenders a provisional solution—mandatory disclosure aimed at boosting public confidence in the market for union representation.
Based on insights derived from mandatory disclosure requirements within the nation's securities market, Bodie concedes that additional disclosures may "create costs and . . . change market dynamics in inefficient ways." Despite these welcome caveats, Bodie's proposal suffers from a number of shortcomings. First, unions may resist disclosure initiatives unless they are paired with a card-check certification program, which defeats the goal of enabling workers to make rational decisions about union membership. Second, Bodie's conception of capture focuses on employer capture and ignores the problem of capture by outside interest groups aligned with union hierarchs. Finally, Bodie's mistaken conclusion that unions secure better conditions for workers leads to a faulty assessment of the problem of free riding. This response addresses each problem in turn.
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By Catherine L. Fisk
Imagine a market that looks like this. You're thinking of buying something—a house, insurance, shares of stock, a prescription drug, or a medical procedure. There is an entity (call it the "anti-seller") that considers it in its economic interest that you not buy the item. The anti-seller has a great deal of money and all of your working hours to persuade you not to buy. The anti-seller hires lawyers and consultants to run a campaign to block the sale. The consultants require your supervisor at work to meet with you daily in one-on-one meetings to tell you why you shouldn't buy. The anti-seller makes and screens a movie starring your co-workers in which they explain why it's a bad idea to buy. Although the law prohibits direct threats, the message underlying anti-seller's advertising campaign is that your employer may go out of business or be forced to lay you off if you buy the item. Meanwhile, the seller from whom you propose to buy has to work hard even to figure out who you are and where to reach you to speak with you. Unlike the anti-seller, the seller cannot speak with you during your working time, cannot email you at work, and can't even leave a leaflet on the windshield of your car in the parking lot at work. If union representation is sold in a market, as Professor Bodie suggests, that is what the market looks like.
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By Matthew T. Bodie
What is union representation? Is it a banding together of employees for mutual aid and protection? Or is it the decision by a group of employees to contract with a provider of negotiation services? And what, then, is the union representation election? A laboratory experiment, a rough-and-tumble election, or something else entirely?
At the center of my article, Information and the Market for Union Representation, is a new conception of the union representation election. My many thanks to Catherine Fisk, Harry Hutchison, and Jeff Hirsch for their thoughtful and thought-provoking essays in response to the article. This Essay is a brief reply to their efforts, in hopes that it is just the beginning of a much more extended conversation about the way we conceive of and regulate union representation.
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