Corporations use bankruptcy to undermine collective worker power. They can run to bankruptcy court, for example, to shed collective bargaining agreements or tort judgments for sexual harassment and race discrimination claims. But when unions and workers fight back through collective action, corporations respond by filing tort suits, chasing the unions into bankruptcy. If unions were treated like corporations, they would be able to discharge those tort claims. But that is not the case. Instead, corporations often ask courts to deny unions the same protection that they receive on the basis that unions filed for bankruptcy protection in “bad faith” in order to evade tort liability. When examined through a law and political economy lens, this uneven application of discharge raises questions about whether bankruptcy’s promise of a “fresh start” exists for corporations but not for the unions that challenge corporate power.

This Article examines bankruptcy law’s role in shaping collective power for labor unions and workers in three ways. First, it demonstrates that bankruptcy law’s broad corporate discharge provision blunts the effectiveness of collective action tools. Second, it argues that if bankruptcy law provides no refuge for unions seeking relief from tort judgments arising out of their organizing and strike-related activity, then unions will limit their use of economic weapons during labor-management conflicts. Finally, the Article posits that the harmonization of bankruptcy and labor law regimes requires radical forgiveness of union tort liability when it is incurred through the socially beneficial exercise of collective worker power.

* Associate Professor of Law, Indiana University Maurer School of Law. The Author thanks Stephanie Ben-Ishai, Matthew Bodie, Michael Francus, Anna Galpern, Christopher Hampson, Jonathan Harris, Fred Jacob, Ted Janger, Melissa Jacoby, Nicole Langston, Leandra Lederman, Michael Ohlrogge, Michael Oswalt, and David Skeel for excellent comments and conversations about this Article. The Author also received insightful feedback from participants at the Chicago-Harvard-Wharton Restructuring Conference, the Christian Legal Thought from the Margins Workshop at Pepperdine Caruso School of Law, the Colloquium on Scholarship in Employment and Labor Law, and the Bankruptcy Global Rising Scholars Work-in-Progress Workshop. Rish Aikat and Michelle Zeiler provided excellent research assistance for this Article. The Author discloses that he was previously in-house counsel for the Service Employees International Union during some of the events mentioned in this Article. The Author thanks the editors of the Stanford Law Review for excellent substantive and editorial comments throughout the process.