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