Corporate Self-Regulation and the Future of Workplace Governance

American labor law has largely failed to deliver a viable mechanism for employee representation in workplace governance, while the ever-expanding body of employment law does not even attempt to do so. The resulting "democratic deficit" in the workplace is a problem in part because, without employee representation, the rights and labor standards mandated by employment law are widely under-enforced. But that very problem could point toward a solution. For while employment law does not aim to give employees a role in workplace governance, it has in fact fostered the growth of new governance mechanisms within firms in the form of internal compliance programs that capitalize on and develop firms' own regulatory capabilities.

The law has encouraged this development in part by conferring regulatory advantages on firms that maintain "effective" self-regulatory structures. Missing, however, is the recognition that, for self-regulation to be effective in the realm of employment law, it must include an organized institutional voice for employees. In other words, there should be no self-regulation, and no self-regulatory privileges, without employee representation. These same mechanisms of "regulated self-regulation" and employee representation. coupled with an appropriately broad definition of employer liability, could also help to address the problem of widespread noncompliance with labor standards among the small contractors that supply labor to more visible and capable organizations.

In short, existing developments within and among firms could and should be steered toward creating new mechanisms for collective employee participation in workplace governance.