Until the early 1900s, most employee-employer relationships were governed by the common law and the doctrine of employment at will in which either party could terminate the employment relationship at anytime and for any reason provided that such an act did not violate the provisions of an employment contract. Other common law concepts governing employment relationships were those of contract, agency, and tort law (Miller and Jentz, 950). In the 1930s, during the Great Depression and after over five decades of labor unrest and agitation, state and federal governments alike began to regulate employment relationships. Most significantly, legislation during the 1930s and later decades established the right of employees to form labor unions and the right of such unions to bargain collectively with management for improved working conditions, salaries, and benefits (Miller and Jentz, 950).
Several key events in the 1930s established the beginning of a regulatory framework which has permitted unions to organize and in many instances to flourish. Federal courts played an active role in labor-management relations prior to 1930, but showed little consistency in their decisions. For example, in 1908, in the famous Danbury Hatters case, the U.S. Supreme Court held a union responsible for treble damages under the Sherman Antitrust Act for organizing a boycott of retail stores (Meiners Ringleb, and Edwards, 442).
With the passage by the Congress of the Norris-La Guardia Act in 1932, the federal government adopted a neutral position with respect to labor policy and held that individual workers had the right to free association, self-organization, and the designation of representatives of their own choosing to negotiate terms and conditions of employment. It also prevented federal courts from issuing injunctions in nonviolent labor disputes, thus forcing employers to bargain with unions (Meiners, Ringleb, and Edwards, 442).
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