Document Type

Article

Publication Date

2025

Abstract

In shaping economic coordination within and across both firms and markets, one significant action of law is to allocate privileges or rights between people or groups of people. These include the right to coordinate with other people or groups of people in particular ways regarding core economic decisions-a type of activity that is not always or in all circumstances legally permissible. An area that makes this more general action of law especially concrete is antitrust or competition law, with its collection of "exemptions." Antitrust's formal and informal exemptions quite directly allocate economic coordination rights, for particular kinds of activity, and sometimes perhaps to particular kinds of people. Competition law's exemptions also inscribe in law the symbiotic relationship between economic coordination and competition that is at the heart of economic life more generally. Firms or enterprises, in particular, can be understood to enjoy a kind of "firm exemption" to antitrust law, one whose boundaries are expressly policed by legal doctrine. Labor organizations also involve economic coordination and correspondingly benefit from a competition law exemption as well.

Competition law often develops a kind of working "theory" of the social and economic activity or organization corresponding to the exemption. This is true for business firms, but also for labor organizations and, a bit more obscurely, for agricultural cooperatives. The subject-specific areas of law that affirmatively regulate the conduct of those organizations also develop working "theories" of the organizations they govern. All the aforementioned areas of law, even as they govern and shape key economic institutions are of course also affected and shaped by trends in economic thought to different degrees. Equally importantly, though often less obviously, they-or stylized versions of them-often play the role of providing unstated inputs or assumptions to economic thought. This includes the strand of economic and social thought known as "the theory of the firm."

Labor law also has a working theory of the business firm, and that this idea of the firm is in turn quite significant in shaping labor law's conception of labor organizations. This Essay thus focuses on two broadly related topics: (1) American labor law's theory of the business firm, with an emphasis on the somewhat peculiar ideas about property it brings along; and (2) the way a stylized picture of labor law and labor relations has been received into an important strand of the broader debate over corporate governance.

Comments

Originally posted as Sanjukta Paul, Labor Law, Ownership, and the Firm, 99 Chi.-Kent L. Rev. 177 (2024). Available at: https://scholarship.kentlaw.iit.edu/cklawreview/vol99/iss1/12

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