Indiana’s Right-to-Work Law Upheld by 7th Circ.

CHICAGO (CN) - Upholding a ban on forced union membership and dues payment by workers who enjoy the fruits of collective bargaining, the 7th Circuit refused to disturb the Indiana Right-to-Work Act.

Passed in 2012, the Indiana Right-to-Work Act states that no person may be required to become a member of a labor organization, pay union dues or pay to a third party any portion of dues required of union members.

Members of the International Union of Operating Engineers, Local 150, AFL-CIO, sued the governor, attorney general and labor commissioner of Indiana, alleging that the act is unconstitutional and is pre-empted by federal law.

A federal judge ruled against the union, and the 7th Circuit affirmed 2-1 Tuesday.

"The statutory question posed is whether Indiana's new law is preempted by federal labor law, or threatens the Union's First Amendment rights. The answer is an emphatic no," Judge John Tinder wrote for the majority.

A law similar to Indiana's Right to Work Act has existed in Iowa for more than 65 years, yet unions continue to thrive in the state, the court said.

"We are not persuaded by plaintiff-appellants' claims that Indiana's law is somehow an extraordinary measure distinct from the numerous state statutes that have harmoniously existed under the federal labor law framework," Tinder wrote. "Nor are we persuaded by their assertions that Indiana's law represents a mortal threat to the continuing existence of unions as provided under federal law."

Saying that the law also does not represent an unconstitutional taking on Hoosier unions, the court noted that it merely precludes unions from collecting fees to cover the cost of its services.

While Indiana has arguably made it more difficult for the union to collect funds, Supreme Court precedent in Ysursa v. Pocatello Educ. Ass'n says that that the state is "under no obligation to aid the unions in their political activities," Tinder wrote. "And the state's decision not to do so is not an abridgement of the unions' speech; they are free to engage in such speech as they see fit," he added.

Federal law prohibits unions from denying their services to nonmembers, so even employees who refuse to join the union or pay dues benefit from the union's collective bargaining agreement.

The predicament failed to sway the majority. "We believe the union is justly compensated by federal law's grant to the Union the right to bargain exclusively with the employer," Tinder wrote. "The reason the union must represent all employees is that the Union alone gets a seat at the negotiation table."

Judge Diane Wood dissented from the majority's opinion.

"How this can be anything but an unconstitutional taking I do not know," she said. "We would be shocked by a rule providing that, as a condition of receiving a business license in a city, a company selling gasoline had to give it away to any customer who did not want to pay."

The majority's finding that a union is compensated by its seat at the bargaining table particularly exasperated Wood. "This suggestion fundamentally misunderstands how the union obtains its seat at the bargaining table," she wrote. "The union does so if and only if it succeeds in winning a representational election sponsored by the NLRB [National Labor Relations Board]; it does not win that seat either through the grace of the employer or in exchange for some kind of quid pro quo from either the employer or the bargaining-unit employees."

The majority's opinion also implies that employers receive no benefit from collective bargaining, which is untrue, Wood said.

"Unless or until that aspect of our labor law is changed by Congress, the only constitutional path is to permit unions to charge fees to nonmembers that cover only the limited, mandatory representational services that the nonmembers receive," Wood said. "The majority has forbidden this, and has thus sanctioned the confiscation of one private party's resources for the benefit of another private party. I cannot sign on to that result."

The same union is also challenging the Indiana law under the state constitution, and the Indiana Supreme Court will hear oral argument Friday on a lower state court's ruling in the plaintiffs' favor.

"Now that the federal courts have concluded the statute [that] the people's representatives in the legislature passed does not violate federal law, we will argue that the statute also complies with the Indiana Constitution and ought to be upheld," Indiana Attorney General Greg Zoeller said in a statement.

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