Example of Yellow Dog Contract
A case that exemplifies a yellow dog contract was brought before the United States Supreme Court in 1915, a dozen years after Kansas enacted a law to promote employee unionisation. This law prohibited employers from imposing conditions on their jobs that required an employee to reject union membership or cease participation in one before working for their companies. However, Coppage, an employer, introduced a clause in his employment contracts 12 years later that compelled employees to renounce their right to join a labour union upon accepting employment.
This “no joining” clause in his contracts was a violation of the state law that banned all forms of anti-union contracts. This case is an instance of yellow dog contracts infringing the Fourteenth Amendment, specifically the Amendment’s Due Process clause.
The question then arose whether a state could prevent an employer from making employment with his company conditional on the candidate’s union membership status. Coppage was ultimately convicted of violating Kansas state law, and a fine was imposed on him, with imprisonment being an alternative punishment. Coppage sought a review of the decision from the Kansas State Supreme Court, where the original ruling was confirmed. Coppage then took the case to the Supreme Court of the United States. The Court eventually overturned the lower courts’ decisions, ruling that both parties to a contract have the right to terminate the employment “at will,” and for any reason. The employee has the right to reject the employment opportunity if he values his union membership over the job being offered. The Court noted that a candidate’s decision to accept a job while abstaining from joining a union is not actually a violation of his freedoms. The employer and the employee have the liberty to decide the terms of their association if they choose to proceed with it at all.
The Court said,
When an individual agrees to forgo union membership during his tenure in a specific role, he is not relinquishing any portion of his constitutional liberties. He has the option to reject the job under those conditions, just as the employer has the right to refuse to offer employment under different terms. After all, It takes two to make a bargain. Even after accepting a job under these conditions, the individual retains the right to join the union once the employment period ends; or, if employed at will, he can do so at any time by simply resigning. If he agrees to refrain from joining during a specified employment period, his situation is no different from that typically associated with term contracts. Constitutional freedom of contract does not imply that a party is as free after entering into a contract as before; he cannot break it without consequences. Freedom of contract can only be enjoyed by exercising it, and each exercise involves making a commitment that, if fulfilled, prevents any inconsistent behavior for the time being.”
Furthermore,
The organisation possesses the authority to recruit individuals it finds suitable and to let go of those it deems unfit, without the obligation to provide an explanation. It is free to contract for services in any manner that is mutually satisfactory. No legislative restrictions can be imposed on the lawful exercise of these rights.”
This case serves as an example of a successful yellow dog contract, as the employer who drafted it was permitted to continue doing so and requiring employees to adhere to them. However, it’s worth noting that this case was adjudicated years before the Norris-LaGuardia Act was enacted.