VARIOUS PHASES OF LABOR LEGIS- LATION WITH REGARD TO CONSTITUTIONALITY BY O. JOHN ROGGE THESIS FOB THE DE6REEOF BACHELOR OF ARTS JN POLITICAL SCIENCE COLLEGE OF LIBERAL ARTS AND SCIENCES UNIVERSITY OF ILLINOIS 1922 VARIOUS PHASES OF LABOR LEGIS- LATION WITH REGARD TO CONSTITUTIONALITY O. JOHN ROGGE THESIS FOR THE DEGREE OF BACHELOR OF ARTS IN POLITICAL SCIENCE COLLEGE OF LIBERAL ARTS AND SCIENCES UNIVERSITY OF ILLINOIS 1922 / 922 P?6 3 v UNIVERSITY OF ILLINOIS THIS IS TO CERTIFY THAT THE THESIS PREPARED UNDER MY SUPERVISION BY DEGREE OF _ Digitized by the Internet Archive in 2016 https://archive.org/details/variousphasesoflOOrogg VARIOUS PHASES OE LABOR LEGISLATION WITH REGARD TO CjfiA tllvtm BIBLIOGRAEHY Commons and Andrews, Principles of Labor Legislation, Ed. 1920. Goodnow, Social Reform and the Constitution. Clark, The Lav/ of the Employment of Labor Bulletins of the Industrial Commission of Ohio. Workmen* s Compensation Report, Senate Document 419, 63rd Con- gress, 2nd Session. United States Bureau of Labor Bulletins. State and United States Statutes. Monthly Labor Reviews. Groat, Attitude of American Courts in Labor Cases. CASES CITED. Bailey v. Alabama, 31 Sup. Ct. 145. Robertson v. Baldwin, 17 Sup. Ct. 326. fpchner v. Hew York, 25 Sup. Ct. 539. Bunting v. Oregon, 37 Sup. Ct. 435. Holden v. Hardy, 169 U. S. 366. Ives v. South Buffalo Railway Company, 201 N . Y. 271. Cunningham v. Northwestern Improvement Company, 44 Mont. 180. Deibeikis v. Link Belt Company, 104 N.E. 211. •*~2 r t 7 In re Opinion of Justices, 96 N. E. 308. Wheeler v. Contoocook Mills, 94 Atl. 265. Sexton v. Newark District Telegraph Co. 86 At. 451. State v. Creamer, 85 Ohio State 349. State v. Clausen, 117 Pac. 110. Borgius v. Falk Company, 133 N. W. 209. Behringer v. Inspiration Consolidated Copper Company, 149 Pac. 1065. Mac kin v. Detroit Timkin Axle Company, 150 N. V/. 49. Sayles, v. Foley, 96 Atl. 340. Jensen v. Southern Pacific Company, 109 N. E. 600. DeFrancesco v. Piney Mining Company, 86 £. E. 777. Evanhoff, v. State Industrial Commission, 154 Pac. 106 Matheson v. Minneapolis Street Railway Company, 148 N. W. 72. Hunter v. Colfax Consolidated Coal Company, 154 N.W. 1037. Middleton v. Texas Power and Light Company, 185 S. W. 556. Kentucky State Journal Company, v. Workmen's Compensation Board, 170 S. W. 1166. Anderson v. Carneigie Steel Company, 99 Atl. 215. Western Indemnity Company v. Pillsbury, 151 Pac. 398. Adams v. Iten Biscuit Company, 52 Okla* 630 New York Central Railway Company v. White, 243 U.S. 188. Hawkins v. Bleakly, 243 U*S. 210 Mountain Timber Company v. Washington, 243 U.S. 219. Middleton, v. Texas Light and Power Company, 249 U.S. 152 New York Central Railway Company v. Bianc. 250 U*S. 596. r ( c Peters v. Veasey, 251. U.S. 149. Knickerbocker Ice Company v. Stewart, 253 U.S. 149. Thornton v. Duffy, 254 U.S. 361 Tower Vein Coal Company v. Industrial Board of Indiana, 65 L. Ed. 383. Brant Smith-Porter Ship Company v. Rhode, 66 i. Ed. 172. VARIOUS PEASES OP LABOR LEG I SLAP ICE WITH REGARD to TABLE OP CONTENTS . Page . Introduction Workmens Compensation State Legislation and Court Decisions to 1917.. Act Widening Appeal State Legislation and Decisions since 1917 Conclusion * . ■ ijk c * 1 . VARIOUS PHASES OF LABOR LEGISLATION WITH REGARD TO CONSTITUTIONALITY It is the purpose of this paper to examine into the state governmental action taken in regard to labor with the resulting court decisions, and, in conclusion, note whether there are any principles underlying the action taken and whether there is any trend of opinion which regards labor in a different light than it has been considered. I shall first discuss labor and the labor con- tract, and then take up the various phases of state governmental action. We have expanded from a nation having a surplus of reserve land to a nation in which all the arable land is taken up; from a country comprised of mostly independent farmers to a country in which single establishments have thousands and ten thousands of workers, and one, the United States Steel Corporation, over 200,000. These factors have combined to produce a large class per- manently dependent on wages. Along with this we have the labor contract which, exter- nally at least, appears as any other contract, but which in the course of time has come to be looked upon as something peculiar, due partly to the fact that when a laborer agrees to work he must deliver himself up for a time into the control of another. After having contracted, however, he cannot be forced to perform, for this would be involuntary servitude and contrary to the thirteenth , 2 amendment. This principle is upheld in Bailey v. Alabama. The court said: "The act of Congress nullifying all state laws by which it should be attempted to enforce the service or labor of any persons or peons, in liquidation of any debt or obligation or otherwise, necessarily embraces all legislation which seeks to compel the service or labor by making it a crime to refuse to or * fail to perform it." ~ Seamen, however, are excepted, as was decided in the case of Robertson v. Baldwin, the court saying, "We know of no better answer to make than to say that services which have from time immemorial been treated as exceptional shall not be regarded as within its purview." On the other hand, many progressive laws have been over- thrown because it is alleged that they impair the freedom of con- tract, and thus violate the clause in the fourteenth amendment which declares that a person shall not be deprived of "life, liberty or property without due process of law." In the case of Lockner v. New York, a New York statute forbidding any employee in a bakery or confectionery establishment to be permitted to work over 60 hours in any one week, or an average of over 10 hours a day for the number of days employees should work, was delcared £ Bailey v. Alabama (1911) 219 U.S. 219, 31 Sup. Ct. 145. Robertson v. Baldwin (1897) 165 U.S. 275, 17 Sup. Ct. 326. , « * » 3 invalid because it abridged the freedom of contract. The court said: "The statute necessarily interferes with the right of con- tract between the employer and the employees concerning the num- ber of hours in which the latter may labor. The general right to mate a contract in relation to his business is part of the liberty of the individual protected by the fourteenth amendment of the constitution. ... Statutes of the nature of that under review, limiting the hours in which grown and intelligent men may labor to earn their living, are mere meddlesome interferences with the rights of the individual, and they are not saved from condemnation by the claim that they are passed in the exercise of the police power and upon the subject of the health of the individual whose rights are interfered with, unless there be some fair ground, rea- sonable in and of itself, to say that there is material danger to the public health, or to the health of the employees, if the hours of labor are not curtailed." * Such was the early stand of the court, but it has been practically overruled by the later case of Bunting v. Oregon. An Oregon statute prividing that "no person shall be employed in mill, factory, or manufacturing establishment in this state more than ten hours in any one day, except watchmen and employees when * lipchner v. New York (1905) 198 U.S. 45, 25 Sup. Ct. 559. 4 engaged in making necessary repairs, or in case of emergency, where life or property is in imminent danger; provided, however, employees may work overtime not to exceed three hours in any one day, conditioned that payment he made for such overtime at the rate of time and one half of the regular wage" was upheld as a valid exercise of the police power because the state protected the physical well-being of its citizens. "It is enough for our decision if the legislation under review was passed in the exer- cise of an admitted power of government (police power); and that it is not as complete as it might be, not as rigid in its pro- hibitions as it might be, gives, perhaps, evasion too much play, is lighter in its penalties than it might be, is no impeachment of its legality." * A somev/hat different viewpoint was stressed in the case of Holden v. Hardy. The court said: "The legislature has also recognized the fact, which the experience of legislators in many states has corroborated, that the proprietors of these establish- ments and their operatives do not stand upon an equality, and that their interests are, to a certain extent, conflicting." ** These unusual relations between a "propertyless seller * Bunting v. Oregon (1917) 343 U.3. 426, 37 Sup. Ot. 435. ** Holden v. Hardy 169 U.S. 366 5 of himself, on the one hand, and a propertied buyer on the other, coupled as it is with the equal suffrage of both in the politics of the country, has gradually acquired recognition as something sufficiently important for the government to take notice of." * The tremendous changes in political and social conditions due to the adoption of improved means of transportation and to the estab- lishment of the factory system have brought with them problems whose solution seems to be impossible under the principles of law which were regarded as both axiomatic and permanently enduring at the end of the eighteenth century.” ** Now what were some of the common law doctrines with regard to the relations between employee and employer? On the one hand, the employer was required to use due care for the safety of his employees while engaged in his service, and this was taken to "include all reasonable means and precautions, the facts in each particular case being taken into consideration."*^ On the other hand, we had the doctrines of assumed risk, contrib- utory negligence, and fellow- servant. In the first place we had the principle of"Volenti non fit injuria" which is translated Commons and Andrews, Principles of Labor Legislation, 1920, p. 2. Goodnow, Social Reform and the Constitution, p. 1. Clark, The Law of the Employment of Labor, p. 125. . . , , ! , 6 . freely to mean, "That to which a person assents is not esteemed in law an injury." In other words, the employee assumed the ordin- ary risks incident to the employment, "and of such other risks as may he known and appreciated by him." * Besides this, in order for an employee to win his case, he must establish his own freedom from negligence, he must show that he has not contrib- uted to the negligence of his employer. In the last instance, the fellow-servant rule relieved "the master from all liability for an injury sustained on account of the negligence or carelessness of a fellow-servant provided the master had exercised reasonable care in his selection," ** which may be easily proven. Through these three loopholes many employers were able to escape, and only a small number of employees received compensation for the injuries sustained. Moreover, many cases did not even reach the courts because the employee knew that all the odds were against him. The problemceased to be an individual one, and became a social evil. At first v/e had legislative regulation; but this was inadequate due to the incompleteness of these laws, to their de- fective enforcement in many cases, and to the absence of well-de- * Ibid. p. 141. ** Commons and Andrews, Principles of Labor Legislation, p. 390. ; « , t . , ■ f i i . * . , , 7 . fined standards. Attempts were made to place more liability upon the employer, but the machinery was still too slow and expensive. "Of every $100. paid by the employer in premiums, but $28. reached the workman, and that amount only after a long legal action in many instances." * The next step was Workmens Compensation. "The theory of Workmen 1 s Compensation is that industry should bear the loss of life and limb incurred in the production of its finished product, just as it bears the expense of replacing wornout and broken machinery; and that for every injury incurred in the course of employment some fixed amount should be provided in the way of compensation to the person incurring the injury, or to his dependents in case of his death; and tti s without regard to the question of fault or negligence of the employer, because many injuries or deaths are bound to occur under modern conditions even when the utmost care is exercised by both the employer and the employee." ** The practical application of this doctrine in- volves a virtual abandonment of the common law principles and many statutory enactments known as "employers* liability acts." In other words, an award of a fixed sum is provided for injuries for which the employment is responsible instead of a suit for dam- ages and the question of fault. Ibid. p. 392. Records taken from 10 insurance com- panies for a period of three years. ** Bulletin of the Industrial Commission of Ohio. Jan. 1, 1915, p. 3. 8 . Or, as the investigating commission of the American Federation of Labor and the National Civic Federation has put it: "The principle of workmen's compensation is that industry should bear the financial burden of all industrial accidents rather than the workers who happen to be the victims of particular accidents, and that the only way this can be accomplished is through the agency of the employer who, in computing costs and fixing the price of his finished product will include the industrial losses due to acci- dents. Industrial operations being broadly considered, the ques- tion of direct fault is not material. The fact that loss of bodily faculty and regular wages occurs entitles the victim to compensa- tion unless his injuries have been received through his own wilful intent." * In this last respect workmens compensation differs from employers* liability, for under the latter the employer paid dam- ages only where the accident was due to his fault or the fault of his employees. Such a wide departure from established practices would, under our legal system, naturally involve the question of con- stitutionality, and the laws were attacked under the various grounds of due process, unfair classification, freedom of contract, and * Workmen's Compensation Report, Senate Document 419 63rd Congress, 2nd session. , t ' , 9 . equal protection of the law. The first act was passed by the State of Maryland in 1902 in the form of a cooperative insurance law. This statute was restricted in its application to quarrying, mining, steam and street railway service, and to municipalities engaged in the construction of sewers or other excavations or physical structures. Liability was extended where employees were injured through the negligence of a fellowservant , and where the injured negligently contributed to his own injury; but the act further provided that an employer might be exempted if he made certain annual payments in monthly installments for the maintenance of an insurance fund. This statute was declared unconstitutional in 1904 by the Court of Common Pleas of Baltimore on the ground that it deprived parties of the right of trial by jury and conferred upon an executive officer at least quasi- judicial functions. Judge Stockbridge delivered the opinion as follows: "The effect of the act was, therefore, not only to vest in the insurance commissioner powers and functions essentially judicial in their character, but to take away from the citizens the legal right which they had here- tofore enjoyed, and which would be enforced by them in the courts, and also to deny to them the right to have their cases heard before a jury." * The case was not appealed to the supreme court. * United States Bureau of Labor. Bulletin 57, p. 690. : ! I ' ' : . ! . . 10 The next act which was questioned and declared unconsti- tutional was a New York: Compulsory Workmens Compensation statute for certain dangerous employments such as work in the construction of tunnels and subways, things charged with electric currents, work on scaffolds over twenty feet high, work carried on under compressed air, etc. The case was Ives v. South Buffalo Railway Company, decided in March, 1911. The court did not doubt the power of the legislature to regulate, modify or abolish the fellow-ser- vant and the contributory negligence doctrines, but declared it invalid as in conflict with this provision of their state con- stitution: "The trial by jury in all cases in which it has been heretofore used shall remain inviolate forever." The court said: "In other words, the objection which we are now considering bears solely upon the question whether the two last mentioned sections of the statute (dispensing with suit for damages at common law) deprive the employer of the right to have a jury fix the amount which he shall pay when his liability to pay has been decided against him. ... The argument that the risk to an employee should be borne by the employer because it is inherent in the employment may be economically sound, but it is at war with the legal principle that no employer can be compelled to assume a risk which is inseparable from the work of the employee, and which may exist in spite of a degree of care by the employer far greater than may be exacted by the most drastic law. ... We conclude, therefore, that in its basic and vital features the right given » » » 11 to the employees hy this statute, does not preserve to the employer the 'due process* of law guaranteed by the Constitutions, for it authorizes the taking of the employer* s property without his con- sent and without his fault," * The next statute which was questioned was a compulsory Workmen's Compensation act of Montana. The act provided: "Section 1. : All workmen, laborers, and employees employed in and around any coal mines, or in and around any coal washers in which coal is treated, except office employees, superintendents, and general managers, shall be insured in accordance with the provisions of this act, against accidents occuring in the course of their occupations. Section 2. All corporations, ... engaged in the business of operating any coal mine or coal washers in the state of Montana shall pay to the auditor of the state, within five days after the monthly wages at the particular mine shall have been paid, one per cent per ton on the tonnage of coal mined and shipped, or sold locally, or having been mined is ready for sale during the month for which the wages were paid; and all persons mentioned in section one employed in and about coal mines shall allow to be deducted from their gross monthly earnings one per cent thereof ... ." ** Injured workmen, however, were also per- * ** Ives v. South Buffalo Ry. Go. 201 N.Y. 271. (1911) Montana laws of 1909. Chap. 67. • » 12 mitted to sue under the employers* liability law; but in so doing forfeited the benefits under the compensation act. This law was declared unconstitutional in the case of Cunningham v. Northwestern Improvement Co. The court, after holding the act as within the police power, not an example of class legislation, not violating the trial by jury provision ("The right of trial by jury, which is secured and protected by the constitution, refers to the trial of cases, actions, or suits at law, and has no reference to claims against an indemnity fund, such as are provided for by this act” *), that it was due process of law, rested its decision on the conten- tion that the employer was deprived of the equal protection of the laws because the employee was given the option of suing to recover damages. The opinion on this point is as follows: "The injured employees of one operator may all resort to the indemnity fund, while those of another may elect to-appeal to the courts. The result is that the employer against whom an action is successfully prosecuted is compelled to pay twice. He has fully paid his ass- essments under the act, and is also obliged to pay damages.” ** * Cunningham v. Northwestern Improvement Co. 44 Mont. 180. Ibid 15 . In 1911 ten laws were enacted in the states of California, Illinois, Kansas, Massachusetts, Nevada, New Hampshire, New Jersey, Ohio, Washington, and Wisconsin. The laws in all but two of these states, Kansas and Nevada, we re questioned, and in every case their constitutionality was upheld. One elective act which was upheld^was an Illinois stat- ute questioned in the case of Leibeikis v. Link Belt Co. The court emphasized the elective features and declared that because of thenij neither jury- trial nor freedom of contract was denied. With regard to the common law doctrines the court said: "To deprive an employer, under such circumstances, of the right to assert those defenses is not an exercise of the police power, but is merely a declaration by the legislature of the public policy of the state in that regard. The right of the legislature to abolish these de- fenses cannot be seriously questioned." * The Massachusetts elective act was upheld in an ad- visory judicial opinion before passage. The argument was much the same as that used by the Illinois court. With regard to the common law defenses the Massachusetts court held that "the rules of law relating to contributory negligence and assumption of the * Deibeikis v. Link-Belt Co. 104 N.E. 211. 14 . risk and the effect of negligence by a fellow- servant were estab- lished by the courts, not by the Constitution, and the Legislature may do away with them altogether ... as in the exercise of powers intrusted to it by the Constitution it deems will be best for the ’good and welfare of this commonwealth. 1 " * Because of the elective features of the act it was further held that the law did not deny jury trial or freedom of contract. The New Hampshire elective statute was upheld in the case of Wheeler v. Contoocook Mills. The court held the act within the police power and stated that the legislature had the power ,T to abolish entirely the defenses of contributory negligence, assumption of risk, and the fellow-servant rule.” ** The Supreme Court of Hew Jersey also upheld the Compen- sation statute of that state in the case of Sexton v. Newark: District Telegraph Co. After stating that the common law defenses were merely rules of conduct and could be changed at the will of the Legislature, unless prevented by constitutional limitations, they held that the elective act did not deny due process of law, jury trial or freedom of contract, with regard to these the court said: "If he does not (accept the provisions of the act) he certainly is * In re Opinion of Justices 96 N.E. 308. Wheeler v. Contoocook Mills. 94 Atl. 265. I ' , t 15 . not deprived of property without due process of law. If he does, then he has given the consent which the prosecutor contends he must give in order to be bound by the pro visions of the second section. ... This contention (deprivation of trial by jury) totally mis- conceives the proper conjtruction and effect of the constitutional provision in question. The language, with respect to tills mode of trial, is that it shall remain inviolate, not that it shall be unalterable. It is, therefore, a privilege which may be waived by either party, and not an absolute right which is not the subject of such a waiver. ... Really, the matter (with regard to freedom of contract) comes down to a question or presumption or burden of proof, which it is entirely within the control of the Legislature to regulate so long as the parties are left en- tirely free to make whatever contract they choose, as they are in this case." * The constitutionality of the Ohio Compensation Law was passed upon in the case of State v. Creamer. The court said: "The statute in question provides for the creation of a State Lia- bility Board of Awards, which shall establish a state insurance fund, from premiums paid by employers and employees in the manner provided in the act." ** The act applied only to businesses where * Sexton v. Newark District Telegraph Co. 86 Att. 451. ** State v. Creamer. 85 Ohio State 349. 16 . the employer had five or more operatives regularly, and the workers paid 10 A/cji’to, /Y<>rT6 Georgia,,, South Dakota, Utah, Kansas, and Tennessee) have enacted * Tower Vein Coal Co. v. Industrial Board of Indiana, 65 L. ed. 383. Grant Smith--Porter Ship Co. v. Rhode. 66 L. ed. 172 Monthly Labor Review, April, 1921. p. 417. . ■* • . , < - p f ’ . t * . . 37 compensation acts, thus making a total of forty- three states with such provisions. In cnncluding, we may note that there is one underlying principle in the legislative action^ based upon the fact that the employer and employee are no longer on an equal footing. The legislature has then attempted to place them upon a more equal plane, but the courts have been sloner and more conservative in adopting this view. Part of this may be explained by a legal theory which held that law was based on certain principles of justice which were eternal and immutable. This led to the idea that legal right was an unchanging thing, and there was a (, tendency in the legal mind to regard constitutions as unchanging. * Having set up certain rules, the courts were loathe to abandon them. In time, however, the pressure of a general public opinion and the actions of the legislatures, have forced the courts to give way. Modifications were made slowly^but inevitably. "Rights generally regarded as absolute are coming to be regarded after all as only relative." ** The courts have finally accepted the view that the workmen and employer are not equal, and have acted accordingly. * Groat, Attitude of American Courts in Labor Cases, p. 360 Ibid. p. 117.