How would you like to live in a world where the federal government had to pay you every time it required you to do something? Would you rather watch football than do your taxes? Send a bill to Washington. Hate filling out that pesky form from the Census Bureau? Demand that the government pay you for your time. Ditto every other federal law or regulation that forces you or your company to do anything. Although this libertarian fantasy world is unlikely to materialize anytime soon, a recent pro-union decision may open the door to state constitutional challenges to federal regulations – or, at the very least, highlight the dangers inherent in results-oriented jurisprudence.
As described in an earlier post, in 2012, Indiana became a right-to-work state after a two-year struggle that included a legislative walk out and a bill signing on the eve of the Super Bowl. The right-to-work law prompted state and federal lawsuits that are currently winding their way through the court system. In January, a federal district court upheld the law, and that case is now pending in the Seventh Circuit. In early September, however, a state court judge struck down the right-to-work law on state constitutional grounds.
In Sweeney v. Zoeller, a state district court judge held that Indiana’s right-to-work law violates a state constitutional provision prohibiting slavery (yes, you read that sentence correctly). Article I, Section 21 of Indiana’s Constitution provides that, “No person’s particular services shall be demanded, without just compensation.” This clause prohibits involuntary servitude, similar to the Thirteenth Amendment of the U.S. Constitution. So, for example, if the state requires an attorney to represent an indigent defendant, the state’s constitution requires that the attorney receive just compensation.
Under Indiana’s right-to-work law, individuals may not be required to join a union or pay dues to a union as a condition of employment. The law makes it a Class A misdemeanor to require an individual to become or remain a member of a labor organization, or pay dues, fees, or other charges to a labor organization, as a condition of employment.
The law does not, however, outlaw unions or ban individuals from joining unions. In Indiana, as in other right-to-work states, unions are free to organize employees into collective bargaining units (basically, groups of employees who perform similar tasks). If a union convinces a majority of employees to become unionized, the union will still become the certified, exclusive bargaining unit for all employees in the unit – even for those employees who voted against the union and do not want union representation.
With this power comes great responsibility. Because a certified union gains the power to represent all employees in the bargaining unit, the National Labor Relations Act (NLRA) requires a certified union to provide services to all members of the unit, including employees who refuse to join the union. As a result, a certified union must handle grievances and other matters for non-members, even if those non-members refuse to pay dues. This basic framework has been in place since 1947, when Congress first enacted the predecessor to the modern NLRA, the Taft-Hartley Act.
Where does slavery come into play? According to the state district court, Indiana’s right-to-work law effectively forces unions into involuntary servitude. As the court explained, “with the enactment of [the right-to-work law], it becomes a criminal offense for a union to receive just compensation for particular services federal law demands it provide to employees.” Therefore, “[i]n the absence of the federal law, a union could, without incurring any criminal liability [under the state’s right-to-work law], refuse to provide services for those employees who chose not to join the union.” In other words, the right-to-work law, when coupled with the NLRA, effectively forces unions to work for “free,” at least for non-members.
As a legal matter, the court’s ruling is as likely to hold up as an early field goal by the Jacksonville Jaguars. With near unanimity, Indiana’s legal community, as well as the Indianapolis Star, predicts that the state’s Supreme Court will overrule the lower court. Indeed, the Supreme Court’s most difficult decision may be on which ground, or grounds, to reverse. In the first place, a union almost certainly is not a “person” for purposes of the state’s constitutional provision banning involuntary servitude. This provision has been interpreted to protect individuals, but never organizations, from involuntary servitude. If the state had to compensate an organization every time it required an organization to do something, it would become exceedingly expensive for the state to exercise its police power at all. For example, Indiana requires bars and restaurants to check patrons’ ID before serving them alcohol. Under the court’s reasoning, the state would have to compensate those business entities for their time.
Moreover, nothing is being “demanded” of the unions. Neither the state nor the federal government “demands” that a union service anyone. If a union does not want to represent non-members for free, it need not seek to become the exclusive representative for a bargaining unit that includes non-members. Unions are free to advocate to employers for their members, and to engage in lobbying and other activities, whether or not they are exclusive bargaining representatives. As a practical matter, of course, unions want to become the exclusive bargaining representative because the exclusivity increases their leverage. But no law, state or federal, requires a union to service anyone.
Furthermore, even if there was a legal “demand” on the union, that demand is dictated by the federal government, not the state. The NLRA, a federal law, requires a certified union to service non-members. The NLRA expressly contemplates that a state may choose to become a right-to-work state, as twenty-three other states have already done (Michigan became the twenty-fourth right-to-work state earlier this year). In holding that a right-to-work statute forces unions into involuntary servitude, the state district court judge called into question the entire framework of federal labor law, which has been in place for more than sixty years. For this reason, in a related Indiana case, staff attorneys for the National Right to Work Legal Defense Foundation have argued that the state court’s reasoning is pre-empted by federal law.
Finally, in terms of the economic fairness of the right-to-work law, a certified union does receive “compensation,” after a fashion, for representing non-members who decline to pay dues. A certified union gains monopoly power to represent all employees in the bargaining unit, including non-members who do not want union representation. That monopoly power enhances the union’s bargaining position, thereby allowing the union to negotiate for higher wages and other conditions of employment. This power comes at a price, namely, the requirement that certified unions provide certain services to non-members. In this respect, the requirement simply represents a regulatory cost of doing business for the union.
Nevertheless, we come here not to bury this decision, but to praise it. Despite its obvious shortcomings, if the decision somehow survives, it could become an invaluable tool to force governments at all levels to bear the costs of their regulations. At bottom, the state district court held that the government must justly compensate a business entity for the cost of complying with state and federal laws, or else withdraw the laws. This is the Takings Clause on PEDs — applied not only to Takings of property, not only to regulatory Takings, but also to Takings of time. Anytime the government requires any person or entity to do anything, the government would have to justly compensate them for their time. You, personally, could demand compensation for the time that the government forces you to spend complying with its laws and regulations. If the government had to budget for the costs that its laws and regulations impose on its citizens, the government would, no doubt, produce significantly fewer laws and regulations. Sound good?
Moreover, under the court’s reasoning, a state court could effectively invalidate a federal regulatory scheme on state constitutional grounds. Dislike some aspect of the Environmental Protection Act or CERCLA? Ever questioned the constitutionality of the Affordable Care Act? Just find a friendly judge at your local county court. Although the court’s opinion does not expressly endorse theories of state nullification of federal law, its reasoning would permit this result.
Of course, the state court’s decision is almost certainly not long for this world. Indiana will remain a right-to-work state. The edifice of federal labor law will remain intact. Still, for this brief moment, one can enjoy pondering the possible impact of this decision. How ironic if a pro-union decision became a tool for conservatives to slay the regulatory beast?
The decision’s longer legacy, if any, may be to serve as cautionary tale against results-oriented jurisprudence. As the saying goes, a loaded gun can point both ways. For instance, the concept of standing was developed by supporters of progressive legislation to insulate those types of laws from legal challenge; conservative jurists later embraced the doctrine to limit the power of the judiciary. Although the district court’s decision may cheer unions in the short term, in the longer term, those advocates may dislike profoundly the decision’s precedential impact.