Indiana Supreme Court Upholds Indiana Right-To-Work Law

Monday, November 17, 2014

Labor unions continue to challenge the 2012 Michigan right-to-work law in pending cases in state and federal courts. The legality of that Michigan law recently received an indirect boost from the Indiana Supreme Court, which upheld the 2012 Indiana right-to-work law that is very similar to the Michigan law.

An Indiana labor union challenged, under the Indiana Constitution, the constitutionality of the Indiana right-to-work law on the theory that the right-to-work law demanded the union's services without "just compensation." Section 21 of the Indiana Bill of Rights, which is Article 1 of the Indiana Constitution, states, in part, that no "person's particular services shall be demanded, without just compensation." The Indiana Constitution is the state constitution that applies to Indiana citizens and the state government of Indiana. An Indiana trial court agreed with the union and ruled that the right-to-work law violated the Indiana Constitution by requiring the labor union to represent, without "just compensation," employees who opt out of paying union dues under the right-to-work law.

The Indiana Supreme Court reversed the trial court's decision and rejected the union's "just compensation" theory. The Indiana Constitution only protects "the liberty of Hoosiers from the reaches of their state government." The Indiana Constitution does not control the federal government and federal laws. But federal law, not Indiana law, establishes a labor union's "duty of fair representation" of all employees in a bargaining unit, regardless of whether an employee pays union dues. The Indiana Constitution "requires just compensation when the state demands particular services, not when the federal government does so." Because federal law, not Indiana law, requires labor unions to fairly represent all members, even ones who opt out of union membership, the Indiana right-to-work law does not violate Section 21 of the Indiana Constitution's Bill of Rights. Zoeller v. Sweeney, Case No. 45500-1309-PL-596 (November 6, 2014).

Similarly, in September, a federal appeals court upheld the Indiana right-to-work law against a union claim that the right-to-work law violated federal law. The court ruled that federal law did not "preempt" the part of the Indiana right-to-work law that prevent a requirement to pay "dues, fees, assessments, or other charges of any kind or amount to a labor organization" as a "condition of employment or continuation of employment." The right-to-work law also did not deny the union's constitutional "right to equal protection." Sweeney v. Pence, 767 F.3d 654 (7th Cir. 2014).

These decisions upholding the Indiana right-to-work law are not legally binding on courts reviewing the Michigan right-to-work law. But these decisions may foreshadow how Michigan state and federal courts will rule on labor union challenges to the legality of the Michigan right to work law. Unless the Michigan right-to-work law is judicially invalidated or legislatively repealed, which is extremely unlikely given the recent reelection of Governor Snyder and a Republican-controlled Michigan legislature, unionized employees will have the legal right to opt out of mandatory union membership as a result of the right-to-work law. The decisions about the Indiana right-to-work law indicate that labor unions may fail in their efforts to defeat the Michigan right-to-work law in the courts.

If you have any questions about these decisions and the Michigan right-to-work law, please contact the author of this Client Alert, your Butzel Long attorney, or any member of the Labor and Employment Law Group.

Gary Klotz

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