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7th Cir. Upholds Indiana 'Right to Work' Law

By Mark Wilson, Esq. | Last updated on

Over the past several years, "Right to Work" laws have been in vogue. Twenty-four states now have these laws, according to The Washington Post, which prevent unions from requiring workers either to join a union or pay a fee to support the union.

Today, two days before the Indiana Supreme Court is slated to hear a similar case, the Seventh Circuit Court of Appeals ruled on a challenge to Indiana's right to work statute, finding that it wasn't preempted by federal labor law.

No Federal Preemption

Yes, the key question before the court was whether federal labor law disallowed Right to Work legislation. Though the Taft-Hartley Act has prohibited unions from requiring workers to join a union (known as a "closed shop") since 1947, the Supreme Court found that a system in which non-union members paid a small fee didn't violate the law. The Seventh Circuit found a wrinkle in the law, however: it lets states ban certain union agreements that would otherwise be permissible under federal law, such as those that require the small fee in lieu of union membership.

On this basis alone, the unions' argument fails. Alternatively, though, they argued that the exception doesn't apply because non-union workers aren't paying the full membership fee. But the court didn't believe this, either, finding that a "membership fee" is paying anything to support the union's activities, whether or not the full amount.

The court also threw in its own two cents regarding the state of right-to-work laws nationwide to make the point that right-to-work legislation isn't something new and fantastical. Indiana is not an outlier: 24 other states have such laws, and 12 already had them when the Taft-Hartley Act was passed. And eight states have right-to-work laws with substantially the same language as Indiana's.


Chief Judge Diane Wood dissented. Taken as a whole, she said, federal labor law preserves a union's "duty of fair representation." A union's presence in a workplace ultimately benefit everyone there, not just the union members. This creates a "free rider problem," in which employees who don't pay union dues nevertheless benefit from the union. To solve this problem, federal law has allowed unions to require non-members to pay less than full union dues in recognition of the union's benefits to them.

The majority's opinion, she said, makes the free rider problem worse and undermines the union's duty to provide fair representation, which, she observes, requires money to do. She would have analyzed the situation under the Takings Clause because the state has imposed a duty requiring private citizens to spend money: "Where the state imposes upon the union a duty to deliver services, it may permit the union to demand reimbursement for them; or, looked at from the other end, where the state creates in the nonmembers a legal entitlement from the union, it may compel them to pay the cost."

Believe it or not, that last quotation was from a Justice Scalia concurrence finding union reimbursement was a constitutionally acceptable solution to the free rider problem. And if he's on the "liberal" side, maybe it's time for the majority to reevaluate its choices.

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