DANBURY HATTERS' CASE

DANBURY HATTERS' CASE. The Danbury Hatters' Case was the popular name for Loewe v. Lawlor, 208 U.S. 274 (1908), the first U.S. Supreme Court case to find that the Sherman Antitrust Act applied to organized labor. The decision dealt a crippling blow to consumer boycotts organized by the nation's labor movement. Loewe originated in the efforts of the United Hatters of North America to unionize a hat company in Danbury, Connecticut. Most of the nation's hat manufacturers had made their peace with the union. Dietrich Loewe, however, was among the minority of proprietors who refused to unionize, preferring to undersell competitors by paying sub-standard wages. The union responded with a strike and a boycott, the latter backed by the American Federation of Labor (AFL).

When the boycott prompted a drop in orders, Loewe brought suit for treble damages under the Sherman Act against individual union members at his plant. The federal trial court dismissed the suit, holding that the union was not a combination under the antitrust law and that the boycott was not a conspiracy in restraint of interstate commerce. The Supreme Court, however, ruled in a 9 to 0 decision that the act covered union activities and that a boycott conducted across state lines was a conspiracy in restraint of interstate commerce, even though the restraint was remote and indirect. The ruling deprived workers of an important organizing tool, and led the AFL to lobby for reform of the antitrust laws. The sought-for reform seemingly came with the Clayton Act of 1914; however, its labor provisions were ambiguous, and unions won exemption from antitrust litigation only in the late 1930s.

BIBLIOGRAPHY

Ernst, Daniel R. Lawyers against Labor: From Individual Rights to Corporate Liberalism. 1992.

William E.Forbath

See alsoClayton Act, Labor Provisions ; Sherman Antitrust Act ; Trade Unions .

Loewe v. Lawlor, 208 U.S. 274 (1908), argued 4–5 Dec. 1907, decided 3 Feb. 1908 by vote of 9 to 0; Fuller for the Court. Popularly known as the Danbury Hatters' Case, Loewe v. Lawlor grew out of a unionization effort promoted by a secondary boycott sponsored by the American Federation of Labor, which had no direct interest in the dispute. Loewe, an employer, brought a treble‐damage suit against individual members of the United Hatters of North America, including the resident union agent, Martin Lawlor. The union denied that it was a combination as defined by the Sherman Antitrust Act.

For a unanimous Supreme Court, Chief Justice Melville W. Fuller insisted that every combination in restraint of trade was illegal. Fuller stated that the Sherman Act required the Court to consider the union's actions as a whole, regardless of the intrastate character of particular actions. Fuller denied that Congress had intended to exempt unions from coverage by the act and maintained, therefore, that individual union members could be held liable for damages under section 7 of the act.

From a union perspective, Loewe provided a galling contrast to United States v. E. C. Knight Co. (1895), which had exempted local activities of the nationwide Sugar Trust from the Sherman Act's prohibitions, while Loewe extended the act's coverage to comparable union actions. This made Loewe the most threatening of the Court's labor decisions, raising the specter of dissolution and damage suits against unions. Unions therefore moved into the political sphere, seeking statutory exemption from Congress. The Clayton Act of 1914 failed to provide explicit exemption, but relief ultimately came within the changed labor‐management context in the late 1930s.

See also Antitrust; Labor.

Barbara C. Steidle

Danbury Hatters' Case decided in 1908 by the U.S. Supreme Court. In 1902 the hatters' union instituted a nationwide boycott of the products of a nonunion hat manufacturer in Danbury, Conn., and the manufacturer brought suit against the union for unlawfully combining to restrain trade in violation of the Sherman Antitrust Act. The Supreme Court held that the union was subject to an injunction and liable for the payment of treble damages. This precedent for federal court interference with labor activities was later modified by statutes.

Danbury Hatters' Case See Loewe v. Lawlor.