Nearly a 2:1 Advantage in Employment Growth
Right to Work states outpaced forced-dues states in job growth by nearly 2:1 over the past decade...
National Right to Work Legal Defense Foundation Attorney William Messenger filed the Foundation’s brief in the UNITE HERE LOCAL 355 v. MARTIN MULHALL Supreme Court case that is set to end card-check forced unionism as we know it. We have made it available in Adobe format for your reading pleasure. The case is scheduled to be heard on November 13, 2013.
Below are some highlights from the highlight-filled brief (references have been removed, download the entire brief for referenced information):
Federal law grants unions an extraordinary power: if a union meets certain qualifications, it can become the “exclusive representative” of a group of employees for collective bargaining with their employer. That power creates a fiduciary relationship between the union and employees, similar to that between trustee and beneficiary, or attorney and client. And, as Congress long ago recognized, that fiduciary relationship carries the potential for abuse because of the power with which the union is entrusted.
“For centuries,” one Senate report observed, “the law has forbidden any person in a position of trust to hold interests or enter into transactions in which self-interest may conflict with complete loyalty to those whom they serve.” Or, as Senator Carl Hatch explained by analogy: “[A] lawyer knows full well that he, representing a client, would not take a gift from the opposition.”
Determined to forbid such conflicts of interest in labor relations, Congress enacted Section 302 of the Labor Management Relations Act (“LMRA”). Section 302(a)(2) makes it “unlawful for any employer . . . to pay, lend, or deliver, any money or other thing of value . . . to any labor organization, or any officer or employee thereof, which represents, seeks to represent, or would admit to membership, any of the employees of such employer.” Section 302(b) reciprocally makes it “unlawful for any person to request, demand, receive, or accept . . . any money or other thing of value prohibited by subsection (a).” Section 302(c) states nine exceptions to these prohibitions. The provision carries criminal penalties and is enforceable through civil actions.
Section 302 is designed to prevent “conflict[s] of interest” and protect employees “from the collusion of union officials and management.” Notably, however, Congress did not grant unions a right to employer assistance with organizing their employees. For example, unions have no statutory right to use an employer’s private property for organizing.
Nor do they have a statutory right to information about the employer’s nonunion employees before filing a valid NLRB election petition. Indeed, “[b]y its plain terms . . . the NLRA confers rights only on employees, not on unions or their nonemployee organizers.”
“Over the past twenty-five years,” however, “unions have turned increasingly to strategies outside the traditional framework of the [NLRA].” The primary new tactic is “top-down” organizing, in which a union, instead of first seeking employee support, coerces or induces the employer to enter into an organizing agreement. As Unite puts it, “neutrality agreements privatize the organizing process” in order to avoid what it calls “the NLRB’s lengthy and expensive processes.”
Although the terms of organizing agreements vary, common features prohibit employers from speaking about unionization, ban NLRB-run secret ballot elections, prohibit the filing of unfair-labor-practice charges with the NLRB, and require that employers give union organizers confidential information about their workforce and free use of their property for organizing. Unsurprisingly, this employer assistance dramatically increases a union’s odds of organizing the targeted employees. For example, “unions in one study prevailed in 78% of the situations in which they attempted to organize, compared to only a 46% success rate in contested elections.”
To obtain these benefits, some unions agree in advance to make wage, benefit, or other concessions at the expense of the employees they seek to represent. In that case, in exchange for organizing assistance from an employer, the union secretly agreed that any future collective bargaining agreement would contain, among other things, “no provisions for severance pay . . . in the event of a layoff or plant closure”; “no wage adjustments provided at any newly organized facility prior to mid–2003”; and “no guaranteed employment or transfer rights between Business Units or Plants.”
Although examples of earlier organizing agreements exist, it was not until the 1990s that unions made top-down organizing their primary tactic for acquiring more members and forced-dues payers. The question presented here is whether three components of this new tactic—namely, union demands for employee information, free use of employer property, and control over employer speech—violate Section 302(a)(2)’s prohibition of a union demanding any “thing of value” from an employer whose employees it seeks to represent.
Specifically, Mardi Gras agreed to provide Unite with three types of organizing assistance: (1) lists of confidential information about Mardi Gras’ nonunion employees, including their “job classifications, departments, and addresses”; (2) use of Mardi Gras’ private property for organizing; and (3) control over Mardi Gras’ communications to nonunion employees regarding unionization. The last provision stated that “[t]he Employer will not do any action nor make any statement that will directly or indirectly state or imply any opposition by the Employer” to unionization or any particular union.
In addition, Mardi Gras agreed to recognize Unite as its employees’ exclusive representative if the union produced authorization cards from a majority of employees. The company agreed not to petition the NLRB for a secret-ballot election regarding union representation or to file charges with the NLRB “in connection with any act or omission occurring within the context of this agreement.”
In exchange, Unite promised Mardi Gras that it would not strike, picket, or take other economic actions against Mardi Gras during the organizing process. Unite also promised that it would campaign in support of a ballot initiative expanding casino gaming. Id. at 66. Unite estimates that Mardi Gras would have lost over $100,000 in business from a Unite boycott, and that the time and money the union and its members spent on the ballot initiative exceeded $100,000.
Martin Mulhall is a groundskeeper employed by Mardi Gras. He filed suit, alleging that Unite is violating Section 302(b)(1) by requesting and demanding three “thing[s] of value” from his employer: lists of employee information, free use of Mardi Gras’ property for organizing, and control over Mardi Gras’ actions and communications regarding unionization.
Mulhall’s Complaint explains in detail why these things have significant value to Unite, including monetary value. For example, the Complaint alleges that delivery of the three request-ed benefits “will result in a significant monetary benefit to the union because, among other things, it will reduce the expense of conducting an organizing campaign against Mardi Gras employees and likely result in an increase in dues revenues for the union.” Id. Unite confirmed the tangible value of Mardi Gras’ promises in parallel legal proceedings, pleading that Mardi Gras’ refusal to comply with the organizing agreement has resulted in “increased organizing expenses and lost revenues for the Union,” and that Unite conducted a $100,000 political campaign in exchange for the agreement.
On remand, the district court dismissed the com-plaint on the merits.The Eleventh Circuit again reversed, holding “that organizing assistance can be a thing of value that, if demanded or given as payment, could constitute a violation of § 302.” The court reasoned that it “seems apparent that organizing assistance can be a thing of value.” It believed that “intangible organizing assistance cannot be loaned or delivered because the actions ‘lend’ and ‘deliver’ contemplate the trans-fer of tangible items.” It held, however, that an intangible can act as a “payment” if “its performance fulfills an obligation.” Here, the “$100,000 Unite spent on the ballot initiative that was consideration for the organizing assistance” rendered “Mulhall’s allegations . . . sufficient to support a § 302 claim.” In reaching this result, the Eleventh Circuit rejected Unite’s contention that “all neutrality and cooperation agreements are exempt from the prohibitions in § 302.”
Section 302(a)(2) prohibits employer payment or delivery of “any money or other thing of value . . . to any labor organization,” save as permitted by Section 302(c). Information about nonunion employees, use of private property for organizing, and control over employer communications regarding unionization are each “things” of great “value” to unions. None of them are exempt under 302(c). When an employer provides those three things to a union in exchange for valuable consideration, it has “paid” and “delivered” them.
Unite and its amici nonetheless insist that, what-ever the statute’s plain language may provide, organizing assistance is not forbidden by Section 302 because it “implicates none of the concerns animating” the provision. S.G. Br. 30. That is quite wrong. The experience of the last two decades demonstrates that unions have been willing to sacrifice employee interests—such as by agreeing in advance to make wage and other concessions at the expense of employees they seek to unionize—to obtain the organizing assistance they covet. Enforcing Section 302 in these circumstances thus fulfills Congress’ purpose of protecting employees from union self-dealing in collective bargaining. In contrast, to not enforce Section 302 here would tear a gaping hole in the statute. It would allow unions to demand from employers the thing many now value most—assistance that helps them sign up more dues-paying members—to the detriment of the employees whom Section 302 is supposed to protect.
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