Turning Points in the Fight Against Forced Unionism?

Summary:  Two current cases offer the U.S. Supreme Court opportunities to stop abuse. The National Labor Relations Act declares that “encouraging the practice and procedure of collective bargaining” is “the policy of the United States.” Federal courts have often treated that declaration as if it authorized union officials to do whatever they deem necessary to bring employees into unions. Fortunately, in one case heard in November and another set to be heard this month, the U.S. Supreme Court may identify some important limits on union officers’ special legal privileges.

The National Right to Work Legal Defense Foundation provides legal representation to Americans who are fighting compulsory membership in labor unions, or compulsory payments by workers to those unions. Currently, the Foundation has two cases before the United States Supreme Court, the Mulhall case and the Harris case. Depending on the outcomes, these cases could have significant impacts on people’s right to choose whether to join labor unions.

First, let’s look at the case of UNITE HERE Local 355 v. Mulhall, which was heard recently by the U.S. Supreme Court. The case stems from a so-called “neutrality” deal forged in 2004 between hotel workers’ union bosses in UNITE HERE and an employer, Mardi Gras Gaming. Mardi Gras is the operator of a dog racetrack and a casino located in Hollywood, Florida. UNITE HERE is a union that represents mostly hotel workers and those in related fields such as food and laundry services.

Under the terms of the neutrality deal, Mardi Gras agreed to help officials of Local 355 of UNITE HERE secure monopoly-bargaining power over the company’s front-line employees. In exchange, the union brass agreed to divert a substantial sum of money from their treasuries, laden with workers’ dues, to back a casino gambling ballot initiative that the company wanted passed. Union bosses also promised not to picket or strike Mardi Gras as they sought to unionize its employees.

After the deal was reached, without employees’ input, it became clear that many of them did not want to be unionized by UNITE HERE. One employee, groundskeeper Martin Mulhall, was especially determined to prevent UNITE HERE from being imposed on him and his fellow workers. Mulhall was confident that, provided that employees had the opportunity to make their choice in the privacy of a voting booth, Mardi Gras’ front-line employees would never vote to make UNITE HERE Local 355 their monopoly-bargaining agent. He was chagrined to learn that, under the terms of the “neutrality” deal, UNITE HERE could unionize the workplace without having to face a secret-ballot election first.

Mardi Gras had acquiesced to “card check” recognition of Local 355. That is the sort of thing many businesses have done in recent years in order to avoid Big Labor harassment and negative public relations, or to get something in return from the union. The “card check” process essentially eliminates the secret ballot. Under the longstanding federal court interpretation of NLRA Section 9(a), union organizers may acquire monopoly-bargaining power by collecting signed “union authorization cards,” if the employer acquiesces. Consequently, under the peering eyes of union organizers individual workers may be intimidated into unionizing—signing not just themselves, but all of their nonunion fellow employees, over to union officials’ control.

Mulhall believed that UNITE HERE organizers would never be able to win over a majority of employees without coercion, but that absent the protection of a secret ballot, the union could prevail if given a “card check” process and the opportunities for intimidation it would provide.

That’s especially true because there’s little chance that union professionals would share a critical fact with hesitant employees: that the cards, if signed by a majority, bring the union in automatically, with no secret-ballot vote ever required. Under pressure from union organizers, employees often sign such cards because they incorrectly assume—or are dishonestly told by the union—that by signing they are just calling for an election in which they will later have a chance to vote against the union.

Mulhall was determined to stop the “card check” scheme, but he didn’t know how. He reached out to the National Right to Work Legal Defense Foundation, and in 2008 foundation attorney Bill Messenger filed, on Mulhall’s behalf, a federal suit alleging that key provisions of the “neutrality” deal between Mardi Gras and Local 355 violate the law. The deal has not (as yet) led to unionization of Mardi Gras employees; the company eventually concluded the deal was illegal and repudiated it. I say “as yet” because Local 355 has attempted to enforce the “neutrality” deal in court. Thus, the Mulhall case remains active and in need of resolution.

The case was heard by the U.S. Supreme Court on November 13. Lawyers for Martin Mulhall do not contend that “card check” deals per se are illegal. However, as a practical matter, Mulhall represents a grave threat to “card check” organizing. That makes the case critically important because, according to the best available evidence, “card check” has become private-sector unions’ most important method of organizing.

No wonder Benjamin Sachs of Harvard Law School has referred to Mulhall as, potentially, “the most significant labor case in a generation.” Sachs’ assessment has been quoted in dozens of mainstream and specialized legal media reports on the case.

Gag clause a ‘thing of value’

The major issue in the Mulhall case relates to whether key elements of the agreement between UNITE HERE and Mardi Gras constitute a “thing of value.” The NLRA law’s Section 302(a)(2) makes it  unlawful for any employer to pay, lend, or deliver, or agree to pay, lend, or deliver, any money or other thing of value . . . to any labor organization . . . which represents, seeks to represent, or would admit to membership, any of the employees, of such employer.

And Section 302(b)(1) makes it unlawful for any union or union officer “to request, receive, or accept, or agree to accept” any such “thing of value.”

As Bill Messenger, attorney for the National Right to Work Legal Defense Foundation, explained in a brief to the Supreme Court, Congress adopted Section 302 largely in recognition of the fact that union monopoly bargaining as authorized and encouraged by the statute “creates a fiduciary relationship.” A fiduciary relationship is one of trust, such as between a trustee and a beneficiary; a trustee must act in the interests of the beneficiary. For example, an attorney must operate in the interests of his or her client. The NLRA-promoted fiduciary relationship between union officers and unionized employees is another example.

Messenger argued that Congress had adopted Section 302 largely to forestall “conflicts of interest in labor relations.” In support of this view, he quoted a U.S. Senate report on the 1959 NLRA amendments that extended the section to cover any union seeking to organize an employer’s employees:

For centuries, 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.

Agreements to “pay, lend, or deliver” things of value to employees themselves, rather than to union officials, are indisputably permissible. The only “things of value” prohibited are those rendered by employers to union officials (except for some explicit exceptions in the law).

In the case now before the Supreme Court, Mulhall contends that three types of organizing assistance promised by Mardi Gras to Local 355 as part of their “neutrality” deal constitute “things of value” prohibited by Section 302:

(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 “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.

The Obama administration involved itself directly in the case, filing a “friend of the court” brief. While urging the Supreme Court to find that Local 355 had not violated Section 302, Solicitor General Donald Verrilli conceded that “courts generally construe” the term “thing of value” to include “both tangibles and intangibles.” He noted:

Courts have found a wide variety of goods, services, and benefits to be “things of value” within the meaning of the criminal laws.

Mulhall’s brief added that to be a “thing of value” under Section 302, a service or benefit need only be of value to the union officials receiving it. Moreover, each of the neutrality pact provisions at issue has a market value, albeit one it is difficult to assess with any precision, and can be “delivered” to union representatives.

For example, the gag rule provision is legally comparable to one business agreeing with another (assuming the agreement is permissible under antitrust law) not to fight for customers in a particular market, in exchange for some other consideration:

. . . Coca-Cola certainly delivers something of great value to Pepsi if it enters into a noncompetition agreement that bars it from advertising or competing against Pepsi in a particular market.

No ‘successful union organizing’ without employer collusion?

Questioned during November’s Supreme Court hearing on the Mulhall case, UNITE HERE lawyer Richard McCracken had a tough time defending his claim that gag rules, lists of employee names and addresses, and use at no cost of an employer’s facilities are not “things of value” under Section 302. Even Deputy Solicitor General Michael Dreeben, who also appeared before the Court to argue that UNITE HERE bosses had not violated the law, undercut McCracken on this key point when he admitted:

Certainly, read in isolation, the words “thing of value” are very broad. In other statutes, they cover intangibles. We would have no problem treating the things here as things of value under . . . 302 if that’s the only thing that existed.

But Dreeben contended all this shouldn’t matter, because union organizers have a right to seek recognition from an employer as employees’ monopoly-bargaining agent based on signed cards alone, without a secret-ballot election. That’s under NLRA Section 9(a), as interpreted by the Supreme Court in National Labor Relations Board v. Gissel Packing (1969). If the employer acquiesces, union bosses have a right to unionize employees through such “card checks” without a vote.

“Card check” recognition is obviously a thing of value to organized labor, Dreeben noted. Because it is permissible for employers to deliver such recognition to union officials, he claimed, it should also be permissible for employers to deliver to union officials virtually any other kind of organizing assistance, regardless of what Section 302 says.

The administration’s Dreeben and UNITE HERE’s McCracken evidently did not think it prudent to baldly claim, as Sachs of Harvard Law School had in a blog post the day before, that “effective union organizing” in the private-sector today relies on employer collusion in the form of gag rules, lists of information, and use of property. Yet Dreeben made the same point more circumspectly. He suggested the Justices should rule against Mulhall because employers’ “voluntary” recognition of unions through “card checks” is not merely a “permissible” element but a “favored” element of national labor policy.

But that’s wrong. In reality, the Supreme Court in the 1969 Gissel case acknowledged that “secret elections,” not “card checks,” are the “preferred” method “of ascertaining whether a union has majority support.” Therefore, there is no plausible reason to ignore the literal meaning of Section 302 in order to avoid hindering Big Labor from securing monopoly-bargaining privileges through “card checks,” even though “card checks,” with organizing assistance from employers, have become unions’ favored modus operandi.

As the attorney Bill Messenger observed in response to question from Justice Sonia Sotomayor, “nothing gives any right to the three things it demands from Mardi Gras. So enforcing 302 in this case cannot conflict with the NLRA.”

Case #2: Forcing caregivers to join unions

If it comes out wrong, the Supreme Court case of Harris v. Quinn, set to be argued this month, could take the country much further down the road of Big Labor coercion. Or it could go in the other direction, revoking forced-dues privileges that government unions have exercised in many jurisdictions for more than four decades.

The lead plaintiff in Harris lives in a Chicago suburb and is the mother of a young adult son with severe developmental disabilities. In fall 2009, Pam Harris received a form letter from agents of Gov. Pat Quinn (D-Ill.). It informed her that, as a care-provider for her son in the state Disabilities Program, she now could cast a mail-ballot vote on which of two unions would be installed as her monopoly-bargaining agent in her dealings with the state. The letter Harris and several thousand other Disabilities Program providers received did not clearly state that they could opt for no union representation at all.

How did top bosses of the Service Employees International Union (SEIU) and the American Federation of State, County and Municipal Employees (AFSCME) get the opportunity to compete for control of Disabilities Program providers? They owed it all to Executive Order 2009-15, issued by Quinn on June 29, 2009.

Participants in the Illinois Home Based Support Services Program for Mentally Disabled Adults receive taxpayer-funded subsidies from the state to help cover the cost of care. Adults, or their legal guardians, may use their subsidies to compensate care-providers. Executive Order 2009-15 was crafted to enable one union to secure recognition from the state as these providers’ exclusive representative in their dealings with the state, and then to extract forced dues or fees from the providers.

For many years before, Big Labor had wanted to corral taxpayer-subsidized home care providers across Illinois into government unions, but had not been legally able to do so. The courts had held the providers were not public employees, because they are not supervised, hired, or fired by the state.

Quinn’s edict did nothing to change the underlying facts, of course. It simply declared that, even though citizens like Pam Harris aren’t supervised, hired, or fired by the state of Illinois or any of its subdivisions, the fact that they are paid and regulated by the state suffices to justify classifying them as public employees solely for purposes of unionization.

If the schemes concocted by Pat Quinn and other opportunistic Big Labor politicians in multiple states over the past few years—schemes to expand the reach of public-sector monopoly unionism—are constitutionally permissible, the implications are enormous. Doctors who accept patients under Medicare and/or Medicaid could be forced by gubernatorial executive order or state legislation to accept a particular private organization as their lobbying agent. Moreover, doctors could be forced to pay mandatory dues and fees to such an organization. Similarly, impoverished parents who participate in the “food stamp” program could be forced to join or pay fees to a government-designated lobbying agent.

Pam Harris and other care-providers cry halt

Over the course of the rigged Disabilities Program provider “election” in fall 2009, Harris and other parents pooled their money to print and distribute a flyer countering the Quinn team’s propaganda. The independent-minded providers’ shoestring effort succeeded. Providers ultimately voted two to one for “no union.” Nevertheless, SEIU and AFSCME union officers continued to press ahead with their efforts to gain forced-dues privileges over caregivers.

In Harris v. Quinn, Pam Harris and other Disabilities Program providers are seeking relief from these unionization efforts (continued under a program established by Quinn’s predecessor, the now-jailed Gov. Rod Blagojevich). They have been joined by several at-home caregivers who are being forced to pay union dues as a condition of receiving state assistance. Like Martin Mulhall in his case, the plaintiffs in the Harris case are represented before the Supreme Court by Bill Messenger of the Right to Work Foundation.

During oral arguments on January 21, Messenger will ask the Supreme Court to protect his clients from compulsory payments to unions by overturning Abood v. Detroit Board of Education, a 36-year-old case that invoked the “free rider” excuse to force workers into unions. Under this theory, workers who don’t pay forced union dues would get a “free ride” with regard to the benefits of the union’s bargaining and contract administration (benefits unsolicited by the workers, of course). Messenger will respond by citing a recent Foundation-won Supreme Court case, Knox v. SEIU Local 1000, in which Justice Samuel Alito observed in his majority opinion that “free-rider arguments . . . are generally insufficient to overcome First Amendment objections.” Alito added that perhaps Abood had crossed “the limit of what the First Amendment can tolerate.” (For more on Knox v. SEIU, see Labor Watch, Oct. 2012.)

Messenger will also argue that, even should the Court balk at reversing Abood, his clients must not be forced to pay union dues or face the imminent threat of forced-dues payments, because they are not employed in any government workplace. Therefore, there exists not even a theoretical possibility of “labor peace” in the workplace being disrupted by so-called “free riding,” as the Abood opinion had envisioned.

‘First Amendment values are at serious risk’

A Harris ruling that neither revokes Abood’s constitutional waiver for public-sector forced union dues nor finds the plaintiffs outside of Abood’s reach would have very dark implications for personal liberty and the democratic process.

In a November 2011 petition asking the Supreme Court to accept the case, Messenger reminded the Court that, outside the realm of labor-management relations, it has up to now been very reluctant to uphold statutes or executive orders that impose “compulsory advocates” on individual citizens. He quoted the Court’s 2001 ruling in U.S. v. United Foods:

First Amendment values are at serious risk if the government can compel a particular citizen, or a discrete group of citizens, to pay special subsidies for speech on the side that it favors.

In short, Abood blew a hole in the First Amendment, but a victory for the Quinn Administration and Big Labor in Harris would greatly expand that hole and jeopardize the free speech rights of millions of citizens who have been protected up to now.

That’s why, as high as the stakes are in Mulhall, the stakes in Harris appear to be even higher.

Stan Greer is senior research associate for the National Institute for Labor Relations Research, a think tank located in Springfield, Virginia, that is affiliated with the National Right to Work Committee. The opinions presented here are his own. This article originally appeared in Labor Watch, a publication of the Capitol Research Center, and appears here with permission.