Court Decision is Victory for Free Market

Last updated on May 13th, 2019 at 02:36 pm

When the U.S. Court of Appeals for the 7th Circuit declared that Milwaukee County’s "Labor Peace Ordinance" (LPO) was an unconstitutional and unenforceable preemption of the National Labor Relations Act, it was a big win for the Metropolitan Milwaukee Association of Commerce (MMAC) and our members.

This was a costly five-year legal battle, and our members were being threatened with the loss of hundreds of thousands of dollars in human service contracts.

But this court decision was a victory in a larger sense as well. It was a victory for free market principles and for those who believe that more can be done with better results for more people through private sector contracts than through public sector mandates.

At the heart of Milwaukee County’s Labor Peace Ordinance was a government mandate. Under pressure from organized labor, the county attempted to use the power of its purse to force unionization on companies receiving human services contracts. The LPO would have required the termination of any human services contract over $250,000 with any company that did not allow union organizers unfettered access to their employees. The LPO further tilted the playing field toward the union by limiting management efforts to convince employees not to join the union.

The county attempted to justify their ordinance by claiming that it was necessary to ensure that there were no labor-related interruptions in human service provision to county residents. That’s a noble goal. However, there was no magic in the LPO to help achieve that goal.

The court forcefully pointed out that, if the goal of the county was actually dependable uninterrupted service for its citizens, well-written contracts providing incentives for that dependability and penalties for interruptions are more effective means of achieving the goal than forced unionization.

In short: the free market tool of the contract is a more effective guarantor of quality, productivity and dependability than any regulatory club the public sector can fashion.

Of course, that observation won’t come as a surprise to anyone familiar with politics or commerce. Too often, government regulatory "solutions" are fatally flawed by the infection of ideology. Policy makers allow political allegiances and special interest debts to animate their decisions rather than service efficiency or effectiveness.

Government and the private sector should be allies, not adversaries, in building a thriving economy and healthy community. The very reason that the county contracts for human services with so many MMAC members is because those members provide service for Milwaukee citizens at a level of quality and efficiency that cannot be matched by the public sector.

The court’s decision in the labor peace case is a useful reminder that when government puts the energy and expertise of the free market to work for it in providing services, it needs to have the wisdom to rely on free market tools rather than politically-driven government mandates to accomplish its goals.

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