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2017 University of Chicago Legal Forum 63 (2017)


The technology of production has always shaped the employment relationship and the issues that are important in labor and employment law. Since at least the late 1970s the American economy has adopted information technology that promises to change the employment relationship in ways at least as profound as those wrought by the other revolutions in general production technology, such as the adoption of steam power, electricity, or methods of mass production. The global network of programmable machines of the information age allows us to communicate and process much more information, much more quickly than ever previously imagined. This increased informational capacity has remade every aspect of the employment relationship including: job search, the organization of production, the methods of production, and the size of the relevant market. With the new information technology, we have progressed from a system of manual production in a single physical location serving regional or national markets, to one of highly automated production drawing on and serving a global economy. We have also progressed to the point where information technology can replicate some higher-order thinking through the rote analysis of data, yielding “artificial intelligence” that can displace human intelligence in the work place.

In this article, I examine how information technology has remade the employment relationship and the legal issues these changes have raised. I begin by chronicling those changes, their economic implications, and the legal issues they raise in job search, the organization of production, the demand for human skills, and participation in the global economy. I examine some now familiar problems including telecommuting, outsourcing, and international trade, but also analyze some more recent topics including using “big data” for “talent matching,” “work on demand apps,” “crowd-sourcing,” “job polarization,” and “artificial intelligence.” Although I hope that my economic analysis outlines and clarifies many of the labor and employment law issues the new technology raises, it is beyond the scope of this essay to attempt to resolve all of these issues for the reader. I leave the debate on at least some of these issues to the other authors in this volume, save that I venture the outline of an argument on what has emerged as the quintessential question: whether the new production relationships developed using information technology constitute employment relationships for the purpose of coverage under the web of protective legislation known as labor and employment law. I argue that we need to abandon outmoded legal definitions of who is an employee and who is an “independent contractor.” In their place we should adopt two unifying principles for coverage: the avoidance of “regulatory arbitrage” so that decisions on the organization of production are made on the basis of real economic advantages rather than just on the basis of avoiding legislative responsibility; and the assignment of responsibility for the provision of benefits under protective legislation to the cheapest cost avoider so as to minimize the burden of fulfilling the promises of protective legislation. These principles argue for broad, perhaps universal, coverage for workers under protective legislation, and that responsibility for garnering the money necessary to pay for these benefits generally be with the large corporations who organize production in the new economic environment.