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University of Pennsylvania Law School




The realities of economic organization in modern industrial states pose a critical dilemma for all who care about democratic ideals. Technological developments and attendant complicated divisions of work have enabled these states to transform their citizens' standards of living; such developments have also, however, brought hierarchical economic organizations' that are unresponsive to the influence of most individual employees. A society that claims to be democratic cannot ignore this condition.2 Enhancing individuals' control over their own lives requires institutions that will facilitate democratic decisionmaking about economic production as well as governmental authority.

This Article contributes to thought about such institutions by integrating two potentially conflicting strategies to mitigate modern hierarchical industrial organization through the dispersal of decisionmaking power. The first of these strategies encourages bargaining between independent collectives of employees and the managerial elite that governs the employees' workplace. This strategy has, to a large extent, been adopted as the formal industrial policy of this country.3 Those who view collective bargaining as one model of industrial democracy understand that when employees in similar economic roles aggregate their economic power, they achieve a greater voice in the terms and conditions of their own employment relationship.4

The second strategy facilitates direct employee supervision over managerial elites. This supervisory power can be achieved in one of three ways: through collective bargaining, through complete or partial worker ownership of the firm, or through governmental command. The employees' supervisory power can be exclusive, or it can be shared, to varying degrees, with nonemployee investors. For the traditional corporate firm, this strategy includes some level of employee representation on the firm's board of directors.' The second strategy has had only minor influence on the American economy to date.6 As collective bargaining has recently been limited and contracted,' however, this alternative strategy has provoked new interest.

Most of those who have addressed the relationship between the two strategies have taken one of two somewhat polar positions.8 On the one hand, some assume that the success of the participatory strategy must further undermine collective bargaining.9 On the other hand, others conclude that direct employee supervision of management should not concern industrial democrats because it poses no threat to collective bargaining.10

This Article takes a different perspective. It agrees with those who assume that direct employee supervision can threaten collective bargaining. The Article also argues that this threat should concern those who wish to moderate organizational hierarchy by developing democratic institutions. Whatever the share of employee supervisory power over management, direct supervision does not obviate giving employees the right to choose independent collective bargaining. This Article also contends, however, that the threat posed to collective bargaining by direct employee supervision should not and need not preclude adoption of the second strategy. It should not because direct employee supervision can help achieve numerous democratic goals. It need not because any threat that such supervision poses can be met through the formulation of appropriate legal doctrine without impeding the achievement of those goals. By hypothesizing such a formulation, the Article attempts to contribute to the development of an integrated strategy to expand democracy in the American economy. 11

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