''Loewe v. Lawlor'', 208 U.S. 274 (1908), also referred to as the Danbury Hatters' Case, is a

United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that turn on question ...

case in

United States labor law United States labor law sets the rights and duties for employees, labor unions, and employers in the US. Labor law's basic aim is to remedy the " inequality of bargaining power" between employees and employers, especially employers "organized in ...

concerning the application of antitrust laws to labor unions. The Court's decision effectively outlawed the

secondary boycott Secondary may refer to: Science and nature * Secondary emission, of particles ** Secondary electrons, electrons generated as ionization products * The secondary winding, or the electrical or electronic circuit connected to the secondary winding i ...

as a violation of the

Sherman Antitrust Act The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce and consequently prohibits unfair monopolies. It was passed by Congress and is named for S ...

, despite union arguments that their actions affected only intrastate commerce. It was also decided that individual unionists could be held personally liable for damages incurred by the activities of their union.

Facts

In 1901, D. E. Loewe & Company, a fur hat manufacturer, declared itself an

open shop An open shop is a place of employment at which one is not required to join or financially support a union ( closed shop) as a condition of hiring or continued employment. Open shop vs closed shop The major difference between an open and closed ...

Federal Writers' Project The Federal Writers' Project (FWP) was a federal government project in the United States created to provide jobs for out-of-work writers and to develop a history and overview of the United States, by state, cities and other jurisdictions. It was ...

(1938).
Connecticut: A Guide to Its Roads, Lore and People
'. Reprint: US History Publishers. . pp. 132-133. It was the third open shop ever established in

Danbury, Connecticut Danbury ( ) is a city in Fairfield County, Connecticut, United States, located approximately northeast of New York City. Danbury's population as of 2020 was 86,518. It is the third-largest city in Western Connecticut, and the seventh-largest ...

, the center of the pelt industry since 1780 (see

North American fur trade The North American fur trade is the (typically) historical Fur trade, commercial trade of furs and other goods in North America, beginning in the eastern provinces of French Canada and the northeastern Thirteen Colonies, American colonies (soon- ...

). Loewe's declaration sparked a strike and a

boycott A boycott is an act of nonviolent resistance, nonviolent, voluntary abstention from a product, person, organisation, or country as an expression of protest. It is usually for Morality, moral, society, social, politics, political, or Environmenta ...

by the

United Hatters of North America The United Hatters of North America (UHU) was a labor union representing hat makers, headquartered in the United States. History The UHU was founded and received a charter in the American Federation of Labor in 1896 through a merger of the Inter ...

(UHU), which had organized 70 out of 82 firms in the hat manufacturing industry. The nationwide boycott was assisted by the

American Federation of Labor The American Federation of Labor (A.F. of L.) was a national federation of labor unions in the United States that continues today as the AFL-CIO. It was founded in Columbus, Ohio, in 1886 by an alliance of craft unions eager to provide mutual ...

(AFL) and was successful in persuading retailers, wholesalers and customers not to buy from or do business with Loewe. The goal of the operation was for UHU to gain union recognition as the bargaining agent for employees at Loewe & Co. Loewe & Co. sued the union for violating the

, alleging that UHU's boycott interfered with Loewe's ability to engage in the interstate commerce of selling hats. The act had been adopted in 1890, with the primary purpose to control business monopolies. The appellee in the case was Martin Lawlor, the business agent for the UHU, but the list of defendants included 240 union members. The case was handled in the first instance by the United States Circuit Court for the District of Connecticut, which dismissed the suit on the grounds that the alleged actions fell outside the scope of the Sherman Act. Loewe & Co. appealed to the

United States Court of Appeals for the Second Circuit The United States Court of Appeals for the Second Circuit (in case citations, 2d Cir.) is one of the thirteen United States Courts of Appeals. Its territory covers the states of Connecticut, New York (state), New York, and Vermont, and it has ap ...

, which certified the case to the Supreme Court.

Judgment

In a unanimous decision written by Chief Justice

Melville Fuller Melville Weston Fuller (February 11, 1833 – July 4, 1910) was an American politician, attorney, and jurist who served as the eighth chief justice of the United States from 1888 until his death in 1910. Staunch conservatism marked his t ...

, the UHU was found to have been acting in restraint of interstate commerce and to have violated the Sherman Antitrust Act. Fuller began the opinion by recounting the relevant provisions of the Sherman Act. The first, second, and seventh section of the act can be concisely described as follows: :1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is illegal. :2. Every person who monopolizes, or attempts to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, is in violation of the statute. :3. Any person who is injured in his business or property by any other person or corporation by reason of anything forbidden or declared illegal by the act may sue in federal court in the district of the defendant and recover three fold damages. Fuller concluded that the actions of the union did constitute unlawful combination of the type described in the act: "In our opinion, the combination described in the declaration is a combination 'in restraint of trade or commerce among the several States,' in the sense in which those words are used in the act, and the action can be maintained accordingly." The union had raised a number of objections to the application of the act to its activities, all of which were found to be untenable by the Court. While the union had not interfered with the transportation of hats originating with Loewe & Co., a national boycott conceived on the initiative of the union that comprised vendees in other states was a violation of interstate commerce as proscribed by the statute:

If the purposes of the combination were, as alleged, to prevent any interstate transportation at all, the fact that the means operated at one end before physical transportation commenced, and at the other end after the physical transportation ended, was immaterial. And that conclusion rests on many judgments of this court, to the effect that the act prohibits any combination whatever to secure action which essentially obstructs the free flow of commerce between the States, or restricts, in that regard, the liberty of a trader to engage in business.

The fact that the union was not itself engaged in interstate commerce was irrelevant since the act did not distinguish between the types of associations involved but simply forbade every contract, combination, or conspiracy in restraint of trade. Fuller underscored that no exemption had been made for organizations of laborers or farmers, despite lobbying to include such language in the statute:

The records of Congress show that several efforts were made to exempt, by legislation, organizations of farmers and laborers from the operation of the act, and that all these efforts failed, so that the act remained as we have it before us.

Consequently, while the boycott and strike action had originated in a single state, the combination efforts had to be viewed in aggregation:

(...) e acts must be considered as a whole, and the plan is open to condemnation notwithstanding a negligible amount of intrastate business might be affected in carrying it out.

The judgment of dismissal was reversed, and the case was remanded for further proceedings.

Significance

In 1909, a new trial was held in the District Court to determine the outcome of the case. The presiding judge directed the jury to find for Loewe & Co., in accordance with the Supreme Court decision. The jury returned with a verdict of $74,000 in damages, which was tripled, under the Sherman Act, to $222,000. The union won on appeal but then lost on retrial in 1912. The case reached the Supreme Court in 1914, and in '' Lawlor v. Loewe'' (1915), the Court again held the union liable for damages. In 1917, the case was settled for slightly over $234,000 (approximately $3.9 million in 2009 currency) of which the AFL was able to obtain $216,000 in voluntary contributions from union members. The ruling deprived labor unions of an important and effective union tactic, and the decision to hold individual union members personally liable for damages had an adverse impact on union organizing efforts.William H. Holley and Kenneth M. Jennings. ''The Labor Relations Process''. South-Western, Division of Thomson Learning, 2008. p. 78. That led the AFL to initiate an aggressive campaign to convince

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

to address labor concerns about the Sherman Act in the reform of antitrust laws. The push culminated with the passage of the

Clayton Antitrust Act of 1914 The Clayton Antitrust Act of 1914 (, codified at , ), is a part of United States antitrust law with the goal of adding further substance to the U.S. antitrust law regime; the Clayton Act seeks to prevent anticompetitive practices in their incip ...

, which provided that "the labor of a human being is not a commodity or an article of commerce." Section 20 of the act further stated that no injunctions should be granted by federal courts in labor disputes "unless necessary to prevent irreparable injury to property, or to a property right." The provisions, however, were narrowly interpreted by the Supreme Court, which ruled, in '' Duplex Printing Press Company v. Deering'' (1921), that the exemptions in the Clayton Act did not protect secondary boycotts from judicial control. Prosecution of labor under antitrust laws would continue until the enactment of the

Norris–La Guardia Act The Norris–La Guardia Act (also known as the Anti-Injunction Bill) is a 1932 United States federal law relating to United States labor law. It banned yellow-dog contracts, barred the federal courts from issuing injunctions against nonviolent ...

in 1932, which included express exemptions of organized labor from antitrust injunctions. The exemptions were upheld by the Supreme Court in '' United States v. Hutcheson'' (1941), which stated that the act should be read broadly to provide a total antitrust exemption for labor unions, "so long as heunion acts in its self-interest and does not combine with non-labor groups." The majority opinion in ''Hutcheson'' was written by

Felix Frankfurter Felix Frankfurter (November 15, 1882 – February 22, 1965) was an American jurist who served as an Associate Justice of the Supreme Court of the United States from 1939 until 1962, advocating judicial restraint. Born in Vienna, Frankfurter im ...

, who, before becoming a Supreme Court Justice, had served as one of the drafters of the Norris-La Guardia Act.Dubofsky, Melvyn. ''The State and Labor in Modern America''. University of North Carolina Press, 1994. p. 165. Congress abrogated the holding in this case with the Taft-Hartley Act of 1947. Subsequently, the Supreme Court recognized this abrogation in cases like ''

Atkinson v. Sinclair Refining Co. ''Atkinson v. Sinclair Refining Co.'', , was a United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over al ...

'', which held that unionists were not individually liable for damages related to wildcat strikes.

Notes

References

External links