Divided 7th Circuit affirms dismissal of RTW challenge

September 2, 2014

A split panel on the 7th Circuit Court of Appeals has affirmed the decision by a federal judge in northern Indiana to dismiss a lawsuit brought by a union challenging Indiana’s right-to-work law. The majority concluded the law does not violate the union members’ rights under the U.S. Constitution nor is it preempted by federal labor legislation.

After the right-to-work bill was signed into law in 2012 by Gov. Mitch Daniels, the International Union of Operating Engineers, Local 150, AFL-CIO, sued in federal and state court. The Indiana Supreme Court is set to hear arguments Thursday in a case involving the same parties at issue in the instant matter. In the state court lawsuit, a Lake County judge ruled last year the labor law violates the Indiana Constitution by requiring unions to provide services to non-members without receiving just compensation.

The plaintiffs in the federal appeal argued RTW law provisions in I.C. 22-6-6-3, -8, and -13 prohibiting unions from requiring all employees pay a “fair share” of the collective bargaining costs violates federal law.

“We noted at the outset that this legislation prompted vigorous debate, both in the general public and the Indiana Statehouse,” Judge John Tinder wrote for the majority, which includes Judge Daniel Manion. “But the legislative history and context of the Taft-Hartley Act make clear that the controversy is one that ought to be addressed and resolved at the level of legislative politics, not in the courts. 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.

“Right-to-Work laws like Indiana’s have existed since before the passage of the Taft-Hartley Act and the inclusion of Section 14(b) of the (National Labor Relations Act). Congress specifically reserved to the states the power to write and enforce laws of this nature, in accordance with individual states’ needs and wisdom. It is not our province to wrest this authority, which has been intact and undisturbed for over sixty-five years, from the states and erase the distinction between right-to-work states and non-right-to-work states,” he continued.

The 59-page opinion in James M. Sweeney, et al. v. Gov. Michael Pence, et al., 13-1264, includes a 28-page dissent from Chief Judge Diane Wood, in which she says the majority’s decision is either incorrect or it lays bare an unconstitutional confiscation perpetuated by our current system of labor law.

“In my view, the better view is the former: the majority has simply misunderstood the federal statutory scheme, taken as a whole. The plain language of section 14(b) of the National Labor Relations Act (NLRA) does not support such sweeping force for Indiana’s Right to Work law,” she wrote. “No ruling of the Supreme Court has gone this far, and the legislative section of 14(b) (for those who consider it relevant at all) is inconclusive.

“Even if, however, one thought that there were some ambiguity in the NLRA, the principle of constitutional avoidance provides a powerful reason to reject the majority’s holding,” Wood wrote, noting she would find I.C. 22-6-6-8(2) and -8(3) preempted by federal statute.


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