The Deprivatization of Employee Benefit and Labor Law: The Surprising Conservative Erosion of Trusts and of the Competitive Labor Model

Abstract

The accepted wisdom holds that liberal Democratic control of the national government means pro-labor government with the federal authority as a strong advocate of private sector intervention on behalf of workers and their unions, while more conservative Republican administrations favor corporate volunteerism, marketplace labor policy, and the exclusion of governmental workplace intervention. Closely akin to and allied with this dichotomy is a reading of very recent labor history, shared by neo-conservatives and socalled neo-liberals alike, which pictures the post-World War II American workplace as suffering under overly powerful bread-and-butter unions. On this reading, the powerful unions have caused America to lose the highly competitive battle with the Japanese for world markets and economic leadership. This neo-labor policy perspective rests on the myth that by forcing higher and higher non-market pay rates and benefit levels the overly aggressive unions pushed the world's leading auto producers to ruin. A close look at two current labor policy issues raises serious questions about whether these stereotypes reflect reality. An examination of both the Reagan Administration's erosion of the common law trust rules that govern the control of employee benefit investments, and its suggestions concerning a desertion of the half-century old competitive model in labor law, raise doubt about the validity of the stereotypical analysis of the relationship between labor and the government. Pressure toward strict governmental regulation of