May You Live In Interesting Times . . .

State legislators walking out, organized labor sitting in. Terms like "right to work" and "collective bargaining" have been grabbing headlines, as have more stilted versions like "right to work for less" and "Collective bargaining – we bargain, you collect." Probably not since 1981 and the firing of the air traffic controllers by President Reagan has such a rumpus been raised over labor issues that have no foundation in the National Labor Relations Act. That's right – the Act has no jurisdiction here.

Right to work legislation – which makes it unlawful for employers and unions to require compulsory union membership, dues, fees or payments in order for individuals to get or keep a job – is purely a matter of state rights. Section 14(b) of the Act puts the issue squarely in the hands of the states, providing: "Nothing in this Act [subchapter] shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law." Some 22 states (and the territory of Guam) have enacted right to work legislation.

The same goes for public sector collective bargaining. While most private employers/employees are covered under the Act, others are not: public employers/employees (federal, state and local), supervisors, independent contractors, agricultural laborers, and those covered under other statutes like the Railway Labor Act (covering railroads and airlines).

So, when they talk in Wisconsin about limiting collective bargaining rights for public employees, it is purely a state law issue. In Indiana, bargaining with state employees was authorized under gubernatorial executive order until 2005, when it was eliminated, also by executive order. Many units of local government and other non-covered entities engage in bargaining under various local ordinances or even on a permissive basis, often drawn on purely political lines.

The patchwork quilt of federal, state and local law has resulted in vastly different outcomes for labor unions in the public and private sectors. In 1983, when the Bureau of Labor Statistics first started tracking these figures, total union membership was at 20.1 percent of all workers in the U.S. However, by 2010, that figure had dropped to 11.9 percent. There is no question that unions have been steadily bleeding members over these three decades.

But, there is a stark contrast between the public and private sectors in that regard. In 2010, the private sector (covered by the Act) showed union membership falling from 16.8 percent to only 6.9 percent – meaning 93.1 percent of private sector employees are not union members. Compare this with the public numbers: in 1983, union membership in the public sector was at 36.7 percent; in 2010, that number was almost dead-steady at 36.2 percent.

There are numerous arguments to be made from these numbers depending on your political perspective, but there is no question that organized labor in the public sector has been insulated – whether by politics, law or choice – from the market (or other) factors that have led to its plummet in the private sector. So, while right to work and public sector collective bargaining may be state rights issues, they are also survival issues for big labor, which has already lost millions of dues-paying members in the private sector. Regardless of whether the legislation that prompted legislators to go on strike in Wisconsin and Indiana is viewed as a blessing or a curse – like the proverb in the title – it certainly makes for interesting times.

Ryan Poor is a partner at Ice Miller LLP. Poor provides labor and employment law advice and counsel, including representation in litigation in state and federal court and before administrative bodies, collective bargaining negotiations, arbitrations, and labor relations services, assistance with employment contracts and separation agreements, and the development of policies, procedures, and training programs. If you have labor and employment questions, you can contact Poor at (317) 236-5976 or ryan.poor@icemiller.com.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.

March 2, 2011