Libertarian, Contractarian, and Rawlsian Perspectives

by Dr. Jan Garrett

This version: March 27, 2002

Let's consider two proposals for employee rights, a right to due process (which is incompatible with the doctrine known as "employment at will") and a right to participatory management.

Essentials of Due Process

With an employee right to due process:

  • rules of conduct are announced in advance
  • there are fair, impartial hearings for those alleged of violating the rules
  • rules are administered fairly and impartially (the judges show no favoritism for relatives, members of their own church, bridge club, political party, etc.)
  • descriptive claims entered as justification for action must be supported by evidence (counter-evidence may be admitted)
  • people are held responsible (blameworthy) only for what they could control.
  • Under the contrasting doctrine of Employment at Will employers may discipline employes arbitrarily and maliciously.

    Forms of Participatory Management

    In his Business Ethics: Concepts and Cases, M. Velasquez distinguishes several possible levels of participatory management.

    1. Decisions are made by corporate managers, executives, or the board after full free open discussion with workers.

    2. Workers are given the right to decide about their own immediate work activities (working hours, rest periods, organization of work tasks, scope of responsibility)

    3. Major decisions are made by joint boards composed of representatives of stockholders and representatives of the workers.

    Without participatory management even at the first level, the workers are treated as cogs in a machine. Their desires and wishes and reasons do not enter into the decisions made. They are expected to supply information requested of them by their superiors, but their aims do not enter into consideration when decisions are made.

    Are There Employee Rights?

    Velasquez mentions several ideas for employee rights, including the right to due process, the right to privacy, the right to participatory management, the right to certain kinds of treatment in the event of plant closings, and the right to organize or join a union (together with the right to strike). Other issues he discusses may also be addressed through the idea of rights, for example, health and safety concerns might justify a (more precisely specified) right to safety in the workplace.

    Rawlsian Justice and Employee Rights

    My primary concern here is whether one could make a case for Employee Rights starting from considerations presented in the moral/political philosophy of John Rawls. Rather than trying to discuss all possible employee rights, let us limit ourselves to the Right to Due Process and the Right to Participatory Management.

    In my view, Rawls' approach to justice supports both of them, although Rawls himself seems to be fairly quiet about this sort of question, preferring to concentrate on justice in the public or political sphere.

    For reasons that will become clear below, this should be labeled the so-called political or public sphere.

    How does Rawlsian Justice Support Employee Rights?

  • Rawlsian principles are meant to apply to the basic structure of society, which is defined as the network of social, political, and economic institutions of a society.

  • Businesses are surely economic institutions.

  • Businesses are so important to the society that even people concerned only about social justice in the public sphere should not ignore the question of justice within businesses.

    1) The weakness and strength of various social groups in the so-called private business sphere often correspond to similar weaknesses and strength in the so-called public sphere. (Large corporations can fund highly paid lobbyists to represent their interests at the seat of government. Campaign contributions from well-endowed corporate executives and business tycoons yield special access for them to the holders of high political office.)

    2) Politically relevant skills and habits are important in both spheres. (Those who are trained to uncritically follow orders in the business sphere find it hard to exercise independent judgment in the so-called public political sphere.)

  • Businesses are similar to the society as a whole in the sense that:

    1) they consist of individual human beings who cooperate over time

    2) there is a relationship of rulers and ruled, and hence a governance structure

    3) there are several possibilities for this governance structure (regimes)

    4) there are clear analogies between national regimes and corporate regimes (from the tyrannical to the democratic)

    5) at least a large part of individual waking and active lives are carried on in them.

    Thus the liberties or rights that people enjoy in the so-called public sphere ought to have their analogues within the business sphere.

    This does not mean that the public sphere and the corporate sphere are exactly identical. Corporations often have a limited range of economic functions, while there is no analogous limitation for the social order considered as a whole. Moreover, parts of our lives are spent outside corporations but not outside the social order considered as a whole. These differences may be enough to show that employee rights may not be identical in every respect to citizen rights. They are not enough to prove that there should not be any employee rights.

    Rawlsian Reasoning

    Rawls starts from the assumption that citizens are morally free and equal. They are naturally motivated to stay free and avoid subjugation. They have a capacity for a conception of the good life. They naturally seek to discover what would make them happy or fulfilled and to pursue those goals. The Equal Liberty Principle arises in Rawlsian reasoning when idealized benevolent representatives of actual persons choose principles that will defend those interests fairly--so that one person's pursuit of her interests does not significantly hinder another person's pursuit and a basic equality is maintained.

    Suppose we go back to the Original Position and ask whether our representatives (benevolent ideal agents or trustees choosing on our behalf, not knowing our characteristics), would favor the rule of Employment at Will (EAW) or Respect for Due Process. It is clear that they would favor the latter. With EAW and without Due Process a person is practically a slave for much of his or her waking life. No benevolent trustees would admit the possibility of slavery for those in their care.

    Libertarian and Contractarian Arguments Against Due Process

    To find a defense of Employment at Will we have to turn to non-Rawlsian theories. Advocates of EAW will generally appeal to Libertarianism or to a narrow version of the Contract Theory (of employees and employers' duties to each others).

    Libertarianism might argue for EAW as follows. The stockholders are the owners of the corporation. The owners, or persons representing them, have property rights in the corporation. Thus they have the right to control what is done with their possession. They may therefore strike whatever bargain they can with employees. Unless they promise employees due process as employees they have no obligation to provide it to them. Most libertarians support a narrow version of the Contract Theory. If A has not explicitly promised B due process, then B has no right to it.

    When opponents of EAW (=advocates of employee rights) complain that this doctrine makes workers vulnerable to the caprice of their superiors, defenders of EAW will reply: Workers are always free to go elsewhere. In other words, the arbitrary freedom of the employer is equally matched by the arbitrary freedom of the workers.

    The Fallacy of the Typical Defense of EAW

    The response of advocates of employee rights is this: The advocates of EAW erroneously assume that a little freedom is the same as a great deal of it and that freedom is not made larger or smaller by the quantity of assets one controls. Nobody who was truly free would voluntarily yield her freedom for a major part of her life.

    But, EAW defenders might argue, workers apparently do often yield much of their freedom when they enter into an employment contract.

    Employee rights advocates respond that workers are not truly or substantially free when they enter into such a contract.

    In what does this substantial unfreedom consist? It consists of the desperation (which varies from a little to a lot) that workers feel when they put themselves onto the labor market. Many workers have far fewer assets than their employers and fewer alternate options to accepting the job on the employers' terms. Not only are their personally held resources (assets) limited or nonexistent, but the jobsearch is difficult (partly because it is financially costly; partly also because it is humiliating to be treated as an object, to be tested and evaluated, a process which is especially active during the hiring process; partly because it may involve relocation and leaving friends, family, and acquaintances).

    Contract Theory and Respect Arguments for Due Process Rights

    Employee rights advocates can appeal to a few shorter arguments for Due Process Rights and against Employment at Will as a moral doctrine. These are not really alternatives to Rawlsian Justice since Rawlsian Justice (with some qualifications that do not apply here) supports Contract Theory and the Principle of Respect for Persons.

    1) Employees implicitly contract for due process. An employee would really agree only to work for a firm that would treat him or her fairly. This is a Contract Theory argument, with a right to due process being a logical corollary of the employer's duty to comply (by providing what he promised). A right to due process would then be a contractual right arising from an implicit promise made to the employee at the time of hiring.

    2) Another argument based upon Contract Theory appeals to the duty not to coerce. This duty implies that no coercion should be exercised in the negotiation for the employement contract. But sometimes workers "agree" to work for a firm even when they have good reason to believe that the employer follows the doctrine of EAW and they may not be treated fairly. When this happens, we might argue, the workers must be desperate, thus there is a significant coercive aspect to the creation of the contract. It is the employer's adherence to EAW that makes such a contract invalid. Thus, the employer's adherence to EAW should be abandoned.

    3) Finally, one might construct an argument for Due Process Rights based directly on Respect for Persons (expressed, for instance, in the Kantian principle that humans ought never to be treated as a means only, but always also as an end). One cannot be subject to arbitrary disciplining and firing if one is respected as a free and equal person.

    Rawlsian Arguments for Participatory Management

    It seems to me that Rawls' Equal Liberties principle, which in general supports political participation rights and opportunities, does not by itself clearly determine how far we should go toward Participatory Management.

    What is fairly clear is that Rawlsians would oppose the No Participation option for many of the same reasons that count against Employment at Will and for Right to Due Process. The No Participation option does not show any respect at all for employees as free and equal persons.

    Note: I am assuming that the employees in question are not transient, very short-term members of the firm. When employees are like this, the analogy between social justice in society and justice in the corporation breaks down. However, if the firm fires potential long-term employees just so they won't be considered long-term employees and gain employee rights, that type of conduct violates the spirit of the liberty principle.

    How far towards second or third level participation a Rawlsian should go depends upon a number of factors that cannot be discussed in detail here. For instance, how willing are the workers to spend time (when released from other tasks to do so) to engage in the meetings required for there to be participatory management? How much experience do workers have of the conditions in their work unit? at the factory as a whole? How much knowledge of the relationship between the company itself and the situation in the economy at large do they have? Do the workers themselves own a substantial share of the company's assets? In general we might say that the more willing workers are to spend time in participatory management, the more experience they have of the conditions of the unit they are co-managing, the better they understand the operation of the factory as a whole, the better they understand the firm's relationship to the economy as a whole, and the more they collectively own of the company's essential assets--the more these factors are true, the more co-managerial responsibility the workers should have.

    As a general rule, a Rawlsian would favor as much participatory management as possible, partly because the experience would empower the workers, partly because it would make sure that their liberties (and opportunities) are sensitively protected. The firm as a whole could benefit by greater harmony of purpose arrived at out of fuller discussion involving all interested parties. Of course, the decisions reached by co-management paths would be morally limited by obligations to external stakeholders.


    1. John Rawls' Equal Liberties Principle is formulated as follows: "Each person has an equal right to a fully adequate scheme of equal basic liberties which is compatible with a similar scheme of liberties for all." For further discussion see Expounding the Principles of Justice.

    2 . The Contract Theory can be summed up as a set of duties designed to govern the formation of and compliance with a contract between two parties. The duties include: The Duty to Disclose (the nature of what one is offering), The Duty Not to Misrepresent (the nature of what one is offering), the Duty Not to Coerce (the other party into entering the contract), and finally the Duty to Comply (with the promises that were made at the time the contract was being negotiated). In the narrow version of Contract Theory only explicit promises are binding. In a broader version of Contract Theory implied promises as well as explicit promises are binding. M. Velasquez discusses Contract Theory at length in Chapter 6 of his Business Ethics: Concepts and Cases (Prentice-Hall). The emphasis there is on manufacturers' and marketers' duties to consumers. But the same principles can be applied to employers' duties to employees.