Wednesday, October 3, 2018

7th Circuit Affirms Village May Not Enact Local Right to Work Law

Right to work laws are getting more attention lately as scrutiny on public and private unions intensify. 

A “right to work” law prohibits unions from compelling union membership by employees in private sector workplaces or jobs that are represented by a union. Public sector employees have long been free of compulsory union membership, but until earlier this year when the U.S. Supreme Court issued is landmark decision of Janus v. AFSCME, public employees who declined union membership still had to pay a fair share fee which was to cover the cost of negotiating and representing non-union employees in covered job titles.

In response to business concerns in the area that they were at a competitive disadvantage to businesses in some neighboring states which have “right to work” laws, the Village of Lincolnshire adopted a unique ordinance in 2015 which essentially created a right to work area within the Village limits by banning union-security agreements within the Village, by forbidding any requirement that workers join a union, compensate a union financially, or make payments to third parties in lieu of such contributions. It also banned any requirement that employees “be recommended, approved, referred, or cleared for employment by or through a labor organization,” and from making any payments to unions on a worker's behalf except pursuant to a “signed written authorization” that “may be revoked by the employee at any time by giving written notice.” This ordinance affected all private businesses within the Village limits, but not public sector employers. While the concept of establishing a “right to work” law is not new (many states have legislatively declared such), it was highly unusual to declare a subdivision of a state as a “right to work” area.

A group of unions sued the Village, asserting that the National Labor Relations Act of 1935 preempted the ordinance and it could not stand.

The district court ruled in favor of the union finding that the federal labor act (the NLRA) prohibited a local governmental entity, such as a Village, from preempting its provisions. The Village appealed. Last week the 7th Circuit Court of Appeals affirmed the district court’s holding. While the 7th Circuit decided the issues under fairly technical analysis related to when federal law will preempt local law on a particular subject, the bottom line of the court’s decision here was that the National Labor Relations Act does not provide an allowance for local governmental units to enforce laws or regulations that are contrary to the rights and obligations provided in the NLRA itself. While states may establish themselves as “right to work” states, subdivisions of states may not.

In a still decidedly Democratic state, it is unlikely that “right to work” legislation will be enacted any time soon, although a majority of states in the nation have enacted right to work laws.