Copyright (c) 2003 Drake University
Drake Law Review
ARTICLE: THE CONFLICT OF THE COURTS: RICO, LABOR, AND LEGAL PREEMPTION IN UNION COMPREHENSIVE CAMPAIGNS
51 Drake L. Rev. 307
Nathan Newman *
Why do we regulate labor conflict in one set of courts, largely through National Labor Relations Board proceedings overseen by circuit courts of appeals, while internal corporate governance is regulated largely by state corporate law statutes, overwhelmingly overseen by the Delaware Court of Chancery? Despite the fact that labor conflict is largely a struggle with shareholders over labor's share of corporate surplus (the so-called wage-profits split), 1 the oddity is not just that the U.S. so completely separates the law governing shareholder versus labor interests over that same surplus, but that such completely different courts are involved in their respective disputes with firm management.
While such a split approach had a semblance of coherence in the immediate post- New Deal era of integrated oligopolistic firms, 2 in an era of increased subcontracting, merger and spin off activities, and intensive consumer and environmental regulation, this tradition of split court jurisdiction over corporate governance has become less viable. 3 As this Article will explore, nothing highlights this dysfunction more than the recent turn by corporations to use the Racketeer Influenced and Corrupt Organization Act (RICO) 4 against unions seeking to enlist consumer and some shareholder allies in conflicts with firms. Such lawsuits suddenly add federal criminal and civil courts to the cacophony of players over corporate governance and the economic weapons that are viable for each side in battling for shares of the corporate surplus. 5
This breakdown in simple court jurisdiction reflects a broader legal and theoretical breakdown in ...
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