Danbury Hatters' Case & Antitrust Laws

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  • 0:03 What Were the Danbury…
  • 1:37 The Boycott
  • 2:53 The Loewe vs. Lawlor Case
  • 4:41 Two Important Rules
  • 5:12 Lesson Summary
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Lesson Transcript
Instructor: Ashley Dugger

Ashley has a JD degree and is an attorney. She has extensive experience as a prosecutor and legal writer, and she has taught and written various law courses.

The United States Supreme Court case of 'Loewe v. Lawlor' is often referred to as the Danbury Hatters' Case. This famous case established the affect of antitrust laws on labor unions.

What Were the Danbury Hatters?

'I'm on strike!' If you've ever spent time with teenagers, you may have wanted to use this line more than once; the work is too hard and the pay is too low. But have you ever really stopped to think about what it means to go on strike? Let's take a historical look by examining a famous United States Supreme Court case.

The Danbury Hatters' Case, or Loewe v. Lawlor, involved a labor dispute over unionization. The Danbury Hatters were fur hat manufacturers. Since the late 1700s, Danbury, Connecticut, had been the main hub of the pelt industry. By the early 1900s, most fur hat manufacturers were unionized through the United Hatters Union of North America (UHU). The UHU, like all labor unions, was an organized group of workers who collectively advocated for fairness, respect, and safety in the workplace. Unions typically work to negotiate in the areas of wages, hours, benefits, and training.

When D.E. Loewe & Company set up its fur hat business in 1901, it chose to be an open shop, meaning the employees were not required to join a labor union. They could be union members or they could choose not to join; it was up to the individual. Members of the UHU were not happy with this decision and they organized a strike at Loewe's shop. A strike is when a group of employees refuses to work in order to persuade the employer to agree to their position. Loewe's unionized workers wanted Loewe to require his non-unionized workers to join the UHU.

The Boycott

The UHU also organized a boycott of Loewe's shop, which meant the members refused to do business with the company in order to persuade the company to agree to their position. Generally, this is a lawful negotiation tactic under our labor laws.

However, some boycotts are illegal under the Sherman Antitrust Act. This federal law, passed in 1890 and spearheaded by Senator John Sherman, was the first major piece of legislation to address unfair business practices. The act outlaws many different types of business practices that restrict or limit interstate trade. Interstate trade, or interstate commerce, is business that is conducted across state lines, like Loewe making hats in Connecticut but selling them to people in New York.

The Sherman Act says it's illegal to negatively impact a business by threatening, coercing, or intimidating its employees, and it also says it's illegal to keep others from doing business with the company. This is where the UHU members crossed the line. The UHU boycott was a nationwide boycott, assisted by the American Federation of Labor (AFL). Together, the UHU and AFL convinced companies and customers across the U.S. not to do business with Loewe.

The Loewe v. Lawlor Case

As you might have guessed, Loewe then sued. He claimed the union members violated the Sherman Antitrust Act by preventing others from doing business with his company and, therefore, restricted his access to interstate commerce. Martin Lawlor's name is listed as the main defendant because he was the business agent for UHU, but there were actually more than 200 union members listed as defendants in this famous case that eventually made its way to the Supreme Court.

Notably, when the case was first presented in the U.S. District Court, it was dismissed. The court felt the Sherman Act did not cover the case because the union members had not prevented Loewe from transporting hats across state lines, and the union members had conducted their boycott activities from Connecticut. Because Loewe and the union were both in Connecticut, the court felt that the boycott only affected in-state commerce rather than interstate commerce. Loewe then appealed.

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