Taft-Hartley Act

What it is:

The Taft-Hartley Act, officially known as the Labor-Management Relations Act, is a federal labor law that regulates the actions of labor unions.

How it works/Example:

Ratified in 1947, the Taft-Hartley Act sought to reform labor union law, largely to oversee management and collective bargaining practices were concerned. In addition to placing constraints on their lobbying capacity, the Taft-Hartley Act holds unions responsible for financial transparency and ethical standards to be upheld by directors and influential members.

Though the Taft-Hartley Act does not outlaw all strikes as means of protest, it does stipulate that such action be preceded by advanced warning. Moreover, it sets forth the legal conditions under which a strike may occur and be carried out. This thereby prohibits wildcat, political and solidarity strikes as well as secondary boycotts and closed shop policies.. The Taft-Hartley Act also made it unlawful for employers to coerce workers into joining a union.

Most of the collective bargaining provisions intended by the formation of unions and mentioned in the Wagner Act of 1935 were retained.

Why it Matters:

Essentially an overriding amendment to the 1935 Wagner Act, the provisions of the Taft-Hartley Act sought to protect the social and economic well-being of American workers from union corruption and unfair practices. This was attempted by restoring many employer rights and maintaining a balance of collective bargaining power with labor advocacy.

Union leaders were staunchly against the bill when proposed and it was vetoed by President Truman. Congress overrode the veto. Truman ran his next campaign under the promise to repeal the act. Various acts to repeal the law have been attempted, but none have succeeded. The Landrum-Griffin Act (1959) only amended some features of the bill.

Best execution refers to the imperative that a broker, market maker, or other agent acting on behalf of an investor is obligated to execute the investor's order in a way that is most advantageous to the investor rather than the agent.