The Volokh Conspiracy

Last week, the U.S. Court of Appeals for the Sixth Circuit decided an interesting case concerning the collection of union dues for public school employees in Michigan. In Bailey v. Callaghan, a divided panel upheld Michigan’s Public Act 53 which provides: ““A public school employer’s use of public school resources to assist a labor organization in collecting dues or service fees from wages of public school employees is a prohibited contribution to the administration of a labor organization.” In other words, under this law, public school employee unions (including teachers’ unions) cannot rely upon payroll deductions to collect union dues and fees, but must shoulder the burden of collecting member dues themselves.

Unions challenged PA 53 on First Amendment and Equal Protection grounds. Judge Kethledge, joined by Judge Gibbons, made quick work of the union claims. Writing for the court, Judge Kethledge explained,

The theory behind their First Amendment claim runs as follows: unions engage in speech (among many other activities); they need membership dues to engage in speech; if the public schools do not collect the unions’ membership dues for them, the unions will have a hard time collecting the dues themselves; and thus Public Act 53 violates the unions’ right to free speech.

The problem with this theory is that the Supreme Court has already rejected it. “The First Amendment prohibits government from ‘abridging the freedom of speech’; it does not confer an affirmative right to use government payroll mechanisms for the purpose of obtaining funds for expression.” Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353, 355 (2009). Here, Public Act 53 does not restrict the unions’ speech at all: they remain free to speak about whatever they wish. Moreover, “nothing in the First Amendment prevents a State from determining that its political subdivisions may not provide payroll deductions” for union activities, id.; and payroll deductions are all that Public Act 53 denies the unions here. Seldom is precedent more binding than Ysursa is in this case.

Judge Kethledge rejected the union efforts to distinguish Ysura and summarily dispatched the Equal Protection claim under rational basis scrutiny.

Judge Stranch dissented, arguing Ysura did not control. Here is how she summarized her dissent:

The majority spills little ink in its dismissal of the school unions’ free-speech challenge. In doing so, it mischaracterizes the First Amendment interests at stake, glosses over key distinctions the Supreme Court requires us to observe, and averts its gaze from Act 53’s blatant viewpoint discrimination. Most concerning to me, however, is the majority’s refusal to engage in an analysis of viewpoint discrimination in light of Michigan’s explicit statement that the law’s purpose is to put a “check on union power.” The foundational requirement of viewpoint neutrality means little if a state may legislate with impunity to cripple the power of an unpopular group whose political views are objectionable to the state. The unanswered constitutional question in this case is whether the government may burden expression it disagrees with by selectively restricting access to public resources that facilitate that expression. The answer is no. The majority wrongly concludes otherwise.

This morning, a unanimous panel of the U.S. Court of Appeals for the D.C. Circuit, in National Association of Manufacturers v. National Labor Relations Board, struck down a new NLRB regulation requiring employers to post a notice of employee rights under the National Labor Relations Act on their properties and websites.  Judge Randoph wrote the opinion for the court finding that the various means of enforcing the rule violated various provisions of the NLRA.  Among other things, Judge Randolph concluded that if Section 8(c) of the NLRA prohibits the Board from finding an employer guilty of an unfair labor practice for posting a notice informing workers of their right not to join a union, it cannot be an unfair labor practice for an employer to refuse to post a notice informing workers of their right to unionize.  Judge Henderson also wrote a concurring opinion, joined by Judge Brown, articulating additional reasons to find the rule invalid.

Of note, the court did not rely upon its previous decision invalidating President Obama’s recess appointments to the Board.  This was at issue because the publication date of the rule in the Federal Register occurred after the expiration of Wilma Leibman’s term, at which point the Board was left with only two Senate-confirmed members.  This did not matter, Judge Randolph explained, because the Board actually promulgated the rule before Leibman’s term expired and thus before the NLRB lost its quorum.  While the date of Federal Register publication matters for determining when petitioners must challenge agency rules — it is such publication that puts regulated parties on notice — once an agency has actually finalized and filed its rule with the Office of the Federal Register, the agency’s action is complete.  Thus the Board had a quorum when it acted to promulgate the rule, even if other parts of the federal government had additional responsibilities to fulfill.

Another challenge to this rule is pending in the U.S. Court of Appeals for the Fourth Circuit.

On May 4, 1886, a peaceful labor protest turned violent after a bomb exploded and police fired on the protesters.  Eight activists were subsequently indicted and, according to the conventional account, railroaded at trial.  All were convicted and four were subsequently executed.

What if the conventional account of the Haymarket protest and trial are wrong?  The February 11 issue of National Review has an interesting article by John Miller on the scholarship of Timothy Messer-Kruse, author of two books (The Trial of the Haymarket Anarchists: Terrorism and Justice in the Gilded Age and The Haymarket Conspiracy: Transatlantic Anarchist Networks) that challenge the dominant Haymarket narrative.  Specifically, Messer-Kruse’s research questions whether the initial protests were peaceful, documents links between the protesters and violent anarchist networks, and — perhaps most importantly — shows that they were not railroaded by the state.  Late 19th century justice would not pass muster under today’s standards, but — given the standard of the time — the Haymarket protesters received a fair trial.  Prosecutors presented extensive evidence against them during the six-week trial, including forensic evidence that the allegedly peaceful anarchists were, in fact, responsible for the initial bombing.  

Miller’s article also recounts the initial reception to Messer-Kruse’s research among labor historians.  Whereas most prior historians had relied upon an account of the trial prepared by the defense, Messer-Kruse combed through the actual trial records.  More importantly, he was willing to follow the evidence, even if it undermined an ideologically  convenient narrative about an important event in labor history.  Yet old myths die hard.  As Messer-Kruse recounted in the Chronicle of Higher Education, it took some time before Wikipedia editors would allow revisions to the Haymarket Affair page, even though Messer-Kruse was citing original source documents.

An interesting debate has broken out among libertarians and free market advocates over the desirability of state right-to-work laws. (See my prior post here.) At Cato@Liberty David Boaz rounds up links and summarizes the competing claims.

I’m not a particular fan of unions as they’ve manifested themselves in the U.S. (Exposure to union thuggery and violence as a child will do that to a chap.) And given my generally libertarian orientation, I generally oppose government policies that place a finger on the scale in support of organized labor. At the same time, however, I’m not convinced that policies pushing in the other direction are much better.

As it happens, not all libertarians support right-to work laws. Gary Chartier, for instance, argues that right-to-work laws infringe upon freedom of contract because they prevent employers from agreeing to union shop contracts.

A “union shop” agreement between an employer and a union commits the employer to ensuring that new hires join the union within a specified period. Right-to-work laws ban union-shop agreements.

Let’s put it another way: They violate freedom of contract. . . .

Employers own the wages they will pay and the sites where work will be performed under such contracts. So it’s their right to dispense the wages and make the sites available specifically to union members, just as it’s their right, more generally, to trade with anyone they choose. . . .

Supporting a free society means embracing people’s freedom to form unions. And it means acknowledging that unions—and union-shop agreements—can offer both workers and employers something valuable.

Unions can help to secure workers predictable terms of employment and protect them against arbitrary dismissal. And a union contract can help make workplaces more predictable for employers, ensure that information is disseminated to workers, and reduce a variety of workplace transaction costs.

So, Chartier argues, if a given employer is willing to agree with a union to only hire union members, there’s no reason for the state to intervene. Provided any such agreement is voluntary, where is the harm? At Reason J.D. Tuccille adds:

The ideal role for the government in business-labor relations is to stay the hell out of it and let the parties work things out themselves. I may prefer one outcome or another, but I don’t have the right to enforce it by law, and that’s what right-to-work legislation does.

One argument for right-to-work laws is that such rules provide a counter-balance against an inherent pro-labor bias in federal labor law. But if that’s really the problem, it would seem the better solution would be to fix federal labor law, not endorse yet more government interference with private economic arrangements. Are there better libertarian arguments for right-to-work laws? If so, I’d like to hear them, for at the moment (and despite my anti-union sentiments), I’m not convinced.

UPDATE: For those interested in the economic effects of right-to-work laws, Matthew Kahn reports on his recent paper finding that labor-intensive industries do appear to like less-union-friendly jurisdictions.

SECOND UPDATE: Iain Murray and Ivan Osorio argue right-to-work laws are “more libertarian” than the status quo.

As expected, the National Labor Relations Board has dropped its complaint against Boeing in the wake of the machinists’ union’s ratification of a new labor agreement with the airplane manufacturer.

Today the National Labor Relations Board approved portions of a proposed rule to modify election procedures by a 2-1 vote.  Only some of the (relatively) less controversial reforms to accelerate the pace of union elections were adopted, primarily those concerning pre-election appeals to the NLRB. Board member brian Hayes, who had reportedly threatened to resign or skip the Board’s meeting, attended and cast the lone dissenting vote.  Hayes commented, ““It is not my nature to be obstructionist . . . I believe resignation would cause the very same harm and collateral damage to the reputation of this agency.”

Meanwhile, the AP reports that Boeing and the Macihinists union may have agreed to a new labor deal that effectively ends the dispute over Boeing’s decision to locate an aircraft assembly plant in South Carolina rather than Washington State.  If the tentative deal is approved, the AP reports, “the union would inform the NLRB that it has no further grievances with Boeing.”

This Wednesday, the National Labor Relations board is scheduled to vote on a controversial proposed rule to streamline and accelerate the union election process.  The Board is acting now  because it could lose a quorum  when the recess appointment of Craig Becker expires at the end of the year.  Only three of the NLRB’s five spots are filled, and (under New Process Steel v. NLRB) there must be three active board members to adopt a new rule.

NLRB Board Member Brian Hayes, the lone Republican currently on the Board, opposes the new rule and believes the Board is moving too quickly — and cutting procedural corners — to approve the new rule.  As he detailed in a letter to Rep. John Kline, Chairman of the House Committee on Education and the Workforce, Hayes claims he will not be allowed to review the rule and draft a proposed dissent before the rule is published and that this “would contravene longstanding board tradition and the Board’s own internal operating rules.”  According to Hayes, the Board traditionally allows a potentially dissenting member 90 days to review a rule or decision and draft a dissent prior to publication and only overturns existing case precedent (as this rule would) if at least three NLRB board members support the move.   NLRB Chairman Mark Pearce responded with a letter of his own alleging that Hayes’ account was “inaccurate and misleading.”  (Rep. George Miller (D-CA) added a letter of his own, requesting information from Hayes about his complaints and communications with outside parties.)

Last week, the NYT reported that Hayes could refuse to attend the NLRB’s meeting on Wednesday, or even resign, in order to deprive the majority of a quorum to adopt the rule.  (See also this WSJ editorial on the dispute and threat to resign.)  It’s unclear whether a failure to attend Wednesday’s meeting would be sufficient to stop the NLRB’s majority from going ahead with the new rule.  Resigning from the Board would do more than block this rule, however.  It would also prevent the Board from taking action on any matter whatsoever — something which will happen in any event when Becker’s recess appointment expires.

The NLRB is often the site of partisan infighting.  Democratic appointees tend to support unions and Republican appointees do not. Still, this level of partisan division — and mutual mistrust — seems worse than usual.  As GWU law professor Charles Craver told the NYT this was the worst he’d seen in 40 years — and the worst may be yet to come.  Stay tuned.

The National Labor Relations Board is proposing new regulations to accelerate the pace of union organizing elections. As the Washington Post reports:

The board is proposing to streamline a union election process that currently has workers vote within 45-60 days after a union gathers enough signatures to file a petition, a time many companies use to discourage workers from unionizing.

The new plan could cut that time by days or even weeks — depending on the case — by simplifying procedures, deferring litigation, allowing electronic filing of petitions and other documents and setting shorter deadlines for hearings and filings. . . .

It would:

— Allow electronic filing of petitions and other documents to speed up processing.

— Set pre-election hearings to begin 7 days after a petition is filed.

— Defer litigation of eligibility issues involving less than 20 percent of the bargaining unit until after the election.

— Eliminate pre-election appeals of rulings by an NLRB regional director.

— Reduce from 7 to 2 days the time for an employer to provide an electronic list of eligible voters.

The Board split 3-1 along ideological lines over this proposal, which earned cheers from unions and jeers from business groups.

Meanwhile, the NLRB’s case against Boeing is drawing criticism from the Washington Post editorial page and Secretary of Commerce nominee John Bryson, Ceo of Edison International. who until recently served on Boeing’s board. From the Post editorial:

The allegation that the company “transferred” jobs out of state is unconvincing because the jobs in South Carolina are new. The company has not cut jobs in Washington, nor has it demoted or slashed the wages of union workers. Boeing has added about 3,000 — albeit temporary — jobs in Washington since it announced its South Carolina plans and says it is likely to add more to keep up with demand for its commercial airliners.

Employers who engage in unfair labor practices should be penalized. But the NLRB’s move goes too far and would undermine a company’s ability to consider all legitimate factors — including potential work disruptions — when making plans. It also substitutes the government’s judgment for that of the company. This is neither good law nor good business.

Gov. Daniels (R-Indiana) is surely not the only politician who would have liked to have seen the fights over public sector unions, their pensions and their bargaining rights and all the rest, put off until another day. It puts President Obama and the other leaders of the Democratic Party in a tough bind. The arguments now raging around the issue(s) sound and feel, to me, a lot like the arguments over welfare policy in the mid-1990s. The Democrats had a big problem there, too – they had become associated, in much of the public mind, with the defense of the existing welfare system, and they didn’t have a very good answer to the question that Republicans (starting with Ronald Reagan) started asking: Why should hard-working taxpayers prop up this system, paying the “salaries” of those unwilling to work for themselves?

Only an act of political genius saved their bacon: President Clinton’s decision to jettison a portion of the existing Democratic coalition to lead the fight for a comprehensive welfare-reform package. Whether Obama and the other Democrats have it in them to do the same or not, I’m not sure – time will tell. They’re in the same tough spot; I suspect that accounts for their less-than-forthright support for the demonstrators in Wisoncin and elsewhere. It’s hard, once again, to come up with a good answer to the question: Why should the taxpayers of, say, New Haven Connecticut pay for policemen who can retire at an average age of 49 with an average pension of $74,400 (almost a full salary, for life, plus subsequent cost-of-living adjustments)? David Brooks in the NY Times had, I thought, the most insightful analysis of the problem a few days back; though friends of mine reflexively call it “union-bashing,” I think he struck just the right middle ground:

Let’s try to put aside the hyperventilation. Everybody now seems to agree that Governor Walker was right to ask state workers to pay more for their benefits. Even if he gets everything he asks for, Wisconsin state workers would still be contributing less to their benefits than the average state worker nationwide and would be contributing far, far less than private sector workers.

The more difficult question is whether Walker was right to try to water down Wisconsin’s collective bargaining agreements. Even if you acknowledge the importance of unions in representing middle-class interests, there are strong arguments on Walker’s side. In Wisconsin and elsewhere, state-union relations are structurally out of whack.

That’s because public sector unions and private sector unions are very different creatures. Private sector unions push against the interests of shareholders and management; public sector unions push against the interests of taxpayers. Private sector union members know that their employers could go out of business, so they have an incentive to mitigate their demands; public sector union members work for state monopolies and have no such interest. Private sector unions confront managers who have an incentive to push back against their demands. Public sector unions face managers who have an incentive to give into them for the sake of their own survival. Most important, public sector unions help choose those they negotiate with. Through gigantic campaign contributions and overall clout, they have enormous influence over who gets elected to bargain with them, especially in state and local races.

As a result of these imbalanced incentive structures, states with public sector unions tend to run into fiscal crises. They tend to have workplaces where personnel decisions are made on the basis of seniority, not merit. There is little relationship between excellence and reward, which leads to resentment among taxpayers who don’t have that luxury.

The politician, or the party, that can best sever the interests of the public sector unions from the private sector unions is going to prevail in this fight. Of course, that’s going to be difficult – perhaps impossible – for the Democrats to achieve; unlike welfare recipients and their advocates, public sector unions constitute part of the Democratic core (and a source for a gazillion dollars of funding for campaigns, overwhelmingly on the Democratic side). But I wouldn’t count them out quite yet; the Republicans are fully capable of squandering their natural advantage on this issue.