In our conversations about remedies so far, we've been talking about money damages, which is largely the available remedy for parties to employment contracts who are seeking remedy for breach. There is a remedy we haven't talked about though, and it's the one that many people think of most naturally in contracts. That's the idea that if someone has breached their contract with me, the thing I really want the court to do in some cases is just to make them do what they promised that they would do. Asking the court to require the breaching party to perform. That remedy, which is available in some areas of contract law, is called specific performance. Now, one of the reasons we haven't talked about it yet in this module is that actually it's a pretty clear rule in the context of personal service contracts that there is no specific performance remedy. It's a clear rule, but it deserves a little discussion of history here, because the history of contract remedies in the personal service domain is relevant for how courts are looking out for a particularly salient, and important moral and legal line in remedies for contracts. I want to remind you of some background facts about American contract law. American contract law has largely been averse to permitting private parties to threaten one another with personal or financial ruin basically, in order to let individuals coerce others into performing their contracts. If you think about the fact for example that debtors prisons have been outlawed in the US since 1833, or the fact that we don't permit penalty clauses in contracts with really high damages in the event of breach. You can think about these as being facts that reflect a sort of aversion to letting private parties force one another into personal service. Now, employers have periodically tried to ask courts to specifically enforce personal service contracts, especially when the personal service is for something special or unusual. In other areas of contract law, if the contract is for a performance that's very hard to monetize, very hard to replicate with money damages, a sale of unique goods or sale of land. In those cases, courts will sometimes require that a breaching seller actually transfer the property, not just pay money in an amount that would permit the buyer to get the same thing elsewhere. Because the reasoning is you can't get the same thing elsewhere. You are trying to buy a house, you're trying to purchase something that's going to be a family heirloom. You can't buy it somewhere else, money isn't good enough. The court might specifically enforce the contract. In the personal service contexts though, this would be really hard to enforce. Courts have long recognized that. There's a series of cases from the 19th century that actually features female singers of all things who were breaching their promises to perform with particular theaters, and the theater owners will go to court and say, "I can't really sue for money damages. First of all, the singer in question doesn't have enough money to pay me. But second of all, this is unusual. I have staked my entire theater's reputation on the ability of this one famous person to headline for the season," something like that. The courts have observed that trying to enforce these contracts specifically would be feudal. How would this be supervised? How does a court require an employee to perform? Does an opera singer who was off-key or low energy. Is that person in contempt of court. The courts have said, we're not going to supervise this kind of situation. This is out of bounds. It's not just practical though. It's also a deeper problem. The idea of specific performance for personal service contracts is also a deeper problem because of its implications for personal liberty. The tendency of such a remedy to subjugate laborers, that's going to specifically resonate of course with the American history of chattel slavery. We can specifically see attempts by employers to require that employees continue to work in attempts to specifically enforce sharecropping contracts. Oftentimes these are predatory and exploitative contracts, that have a history or part of a history of exploiting those with the fewest resources, and the lease legal protections, especially black Americans post reconstruction after the Civil War. This question about enforcing personal service contracts specifically came before the Supreme Court in 1911, and gave them cause to consider what the basis is of refusing to enforce personal service contracts specifically. This is the case of Bailey versus Alabama in 1911. Alabama had passed a law in the late 19th century targeting sharecroppers and tenant farmers. The law that they passed said, "Any employee who takes an advance on their salary, whether the advance is actual cash or could sometimes be even personal property, so things like clothing or food". Then breaches that contract later on, leaves the employer, is going to be presumed by the state to have intentionally defrauded their employer. Intentional fraud is a criminal offense punishable by incarceration and fines. Bailey, the employee, left his employer and was later convicted of exactly this crime and appealed and eventually reaches the Supreme Court. The Supreme Court considered the Alabama Law and said the following, "We cannot escape the conclusion that although the statute in terms is to punish fraud; still it's natural and inevitable effect is to expose to conviction for crime those who simply fail or refuse to perform contracts for personal service in liquidation of a debt, and judging its purpose by its effect that it seeks in this way to provide the means of compulsion there which performance of such service may be secured. The question is whether such a statute is constitutional." The court then turn to something that is very unusual in a contract case, which is the US Constitution. In this case, the court turns to the 13th Amendment, which abolished slavery and says, "The plain intention was to abolish slavery of whatever name in form in all its badges in incidence to render impossible any state of bondage to make labor free, and by prohibiting that control by which the personal service of one man is disposed of or coerced for another's benefit, which is the essence of involuntary servitude." The court explicitly relates its refusal to specifically enforce a personal service contract to the abolition of involuntary servitude. But 13th Amendment prohibits involuntary servitude as part of its prohibition on slavery, threatening workers with incarceration, says the court, is coercion. Legally, morally, constitutionally, the rule is that personal service contracts, and that's what employment contracts are, may not be enforced via specific performance. Now, there remains a more difficult and more live question on specific performance remedies in employment law. In that question, which we see both historically and in modern practice, is the question of the negative injunction. Injunction was because when the court forces the parties to do something. We saw in the history of various kinds of employment contracts from these theater contracts, and in this sharecropping contexts, the court being very clear that the court will not use state power basically to enjoin a party to perform as promised to another private party. However, the court that's unable to compel an employee to continue to work, may nonetheless be able to compel in some circumstances the employer, that the employee not to be able to work elsewhere. There's a famous case from the late 19th century on this featuring the actress Lillian Russell. Lillian Russell breached her contract in the 1880s to perform a contract basically to feature in an opera with a particular theater. She refused to do that and the theater sued her for injunction and the court said, "We can't make her performing your theater, but instead we can enjoin her from working for other theaters." The court did levy that injunction. This was a controversial outcome for a number of recent. Other courts have said it's not permissible to do indirectly what the court can't do directly, which is to say you can't indirectly force her to perform when you couldn't directly forced to perform and of course, if she's prohibited from working elsewhere, that is going to indirectly have the effect of forcing her performance for the original theater in part just because of the financial imperative. In the final section of this course, we're going to talk about the modern incarnation of this issue, which is non-compete clauses and those you see in modern American contracts. But that is some history and some context for why and employment contracts we're talking about money damages specifically in where courts have an eye out for the boundaries of what kinds of incursions on personal liberty they are willing to enforce.
