Bench Memos

Will the Supreme Court Strike Another Blow for Worker Freedom?

On Wednesday, the U.S. Supreme Court will hear arguments in a case involving the rights of employees targeted in a unionization drive. Unions, plagued by decades of declining membership, obviously have a keen interest in the outcome of Unite Here Local 356 v. Mulhall. So, too, does the Obama administration, which filed a strong brief on behalf of organized labor that told the Court, in essence, “nothing to see here.”

In this case, Mardi Gras Gaming entered into a neutrality agreement with Unite Here, which wanted to unionize Mardi Gras’s employees in Florida. Mardi Gras agreed to give the union access to its premises, lists of employees and their addresses, and control over its communications about the union. It also agreed not to contest the union’s effort to use a card-check program — as opposed to a secret-vote — to win employee approval of unionization.

In exchange, the union agreed to not strike against or picket the company during the unionization drive. And, more important for Mardi Gras, Unite Here agreed to support a casino-gambling ballot initiative. Ultimately, the union spent $100,000 on that initiative.

Martin Mulhall, a Mardi Gras employee who opposed unionization, didn’t like that deal — especially the part about depriving workers of a secret-ballot vote. He sued, claiming that the neutrality agreement violated Section 302 of the Taft-Hartley Act. This provision of federal labor law prohibits an employer from giving money or a “thing of value” to any union or union official that “seeks to represent the employer’s employees.”

The Eleventh Circuit Court of Appeals ruled that the neutrality agreement was a “thing of value,” putting it in conflict with contrary views in two other circuits, the Third and Fourth.

Representing Mulhall, the National Right to Work Legal Defense Foundation (NRWLDF) argues that the union obviously believes the neutrality agreement is a “thing of value.” The Foundation points to a parallel suit filed by the union in which it attempts to force Mardi Gras to comply with the agreement. In that filing, Unite Here claimed that the company’s noncompliance had “increased organizing expenses and lost revenues for the Union.”

NRWLDF also argues that the Third and Fourth Circuits are wrong in their view that intangible benefits like those in this neutrality agreement are not a “thing of value” because “thing of value” is a statutory term of art used in many different federal statutes. Numerous court decisions hold that a “thing of value” includes both tangible and intangible benefits and should be broadly interpreted.

Section 302 was intended to prevent extortion in the labor-management arena. Karen Harned, the executive director of the NFIB Small Business Legal Center, told the New York Times, she is concerned that these neutrality agreements “are nothing more than extortion.” As she says, it is very difficult for small employers to fight union threats to picket or shut down a business or interfere with its customers and clients. They simply lack the resources “to fight back if they’re the subject of a union campaign to get them to sign a neutrality agreement.”

The Supreme Court should affirm the Eleventh Circuit’s opinion and toss out these types of neutrality agreements. From their censorship of unfavorable information about unions, to their imposition of anti-democratic card-check programs, these agreements clearly restrict the rights of employees who do not want to be forced into unionization and who want the ability to wage a fair fight to get their views across to their fellow employees — and to cast their vote on unionization in secret.

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