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Northwestern University School of Law




In this Article, I examine the economic efficiency of labor law. My claim is that much of labor law seems to be efficient-in a sense that will be made precise below.9 I approach this issue by examining the process by which labor law develops and some important areas of labor law doctrine. The central question addressed is whether the process by which labor law develops differs substantially from the common law process. I demonstrate that there are differences that have implications for the efficiency of labor law. But the differences do not seem to be so great as to make the efficiency thesis inapplicable to labor law.

In attempting to bridge two heretofore separate bodies of literature-that on the economic efficiency of the common law and the labor law literature-I have taken an approach that needs to be explained. My argument requires a critical examination of the literature on the efficiency of case law before examining the applicability of the efficiency theory to labor law. The theory itself has been presented in too disjointed a fashion to simply be applied without additional analysis. I have identified what seem to me to be the strongest reasons why the common law efficiency hypothesis may be valid as well as the most important weaknesses in the theory. My argument also requires consideration of the theory of efficient unionization, since the model of the union is at the core of any efficiency argument for labor law.


Reprinted in Foundations of Labor and Employment Law 163, S. Estreicher & S. J. Schwab, eds., Foundation Press (2000).

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