Supreme Court To Decide Whether Neutrality Agreements Are Legal Under 66-Year-Old Anti-Bribery Law

Last Wednesday, the Supreme Court of the United States heard oral argument in UNITE HERE Local 535 v. Mulhall, one of the most significant labor cases in recent decades—the culmination of an effort by the National Right to Work Defense Foundation to have neutrality and card check agreements declared criminal violations of the anti-bribery provisions of the 1947 Taft-Hartley Act.

The union seeks to overturn a decision by the 11th Circuit Court of Appeals that a neutrality agreement is a “thing of value” that Section 302 of the Taft-Hartley Act could prevent employers from giving to any union or union official.

The neutrality agreement at issue was between UNITE HERE and Mardi Gras Gaming in Florida.  The company agreed to remain neutral, furnish the union with a list of employees, and provide worksite access to union organizers.  UNITE HERE agreed to back a job-creating casino gambling ballot initiative, to spend more than $100,000 on the effort, and not to picket or strike Mardi Gras during its unionization drive.

The so-called National Right to Work Defense Foundation, which helped Mulhall, a Mardi Gras employee, bring the case, argued that “card check” agreements are also illegal things of value.  Trade unionists often refer to the Right to Work group as the “Right to Shirk” or the “Right to Starve” as its mission has nothing to do with encouraging job creation but is solely directed at undermining unions financially by opposing any requirement that beneficiaries of union representation be required to contribute financially to any union.  According to the National Right to Work group, card check agreements are inherently corrupt because they deprive workers of a secret ballot vote.  But the Supreme Court long ago recognized that card check procedures are a valid basis for an employer to grant union recognition.  It would take a major shift in labor law to hold that employers could grant recognition using card check procedures, but could not agree to do so in advance.

If the Supreme Court agrees with the 11th Circuit ruling, the consequences for unions, especially those which have made neutrality and card check agreements a central part of their organizing strategy, could be severe.  More than half of successful unionization campaigns in recent years involve a neutrality agreement in which the employer agrees not to campaign against unionization and the union typically agrees not to disparage the employer while attempting to round up majority support for union representation.

Before the hearing, general counsel of the AFL-CIO, told the New York Times that the Right to Work group’s legal theory to bar such agreements “would criminalize a wide swath of ordinary, voluntary labor-management relations.”  If Section 302 applies, “parties cannot agree to this, the employer can’t give it unilaterally and the union can’t even ask for it.”

At the Wednesday hearing, the attorney representing the United States government, which filed a friend of the court (amicus curiae) brief supporting the Union, framed the issue as “whether it's a Federal crime for an employer to say to a union: You guys want to organize? I will let you come into my plant and address the employees. In fact, better yet, we will have a debate, management on one side, union on the other. Come into our hall to do that.” The attorney argued such a scenario would constitute a Federal crime under the view the National Right to Work group urges the Supreme Court to adopt. 

The union lawyer pointed to the benefits of preorganization agreements for achieving the goals of federal labor law. “Many employers and unions find agreements such as this useful to avoid conflict during organizing campaigns,” the union lawyer argued.  “They are efficient.  They avoid the hard feelings that come in many contested organizing campaigns and thereby create a good environment for collective bargaining.”

But several justices seemed concerned by the union’s agreement to spend $100,000 on a gambling initiative campaign in exchange for the employer’s promises, even though Section 302 deals only with employer payments and transfers of “things of value” to unions, and not the reverse.  Justice Sonia Sotomayor, a liberal justice whose vote could be critical to the union, expressed her feeling that “it does feel like a bribe to the employer.”

“It was actually the union’s own exercise of its speech and petition rights as it campaigned for the passage of the initiative that would allow the company to get into business in the first place as a casino,” the union lawyer responded.  “So, if the violation turns on the union’s exercise of its own First Amendment rights, then there’s a more severe problem here than Section 302.”

In a positive sign for the union, a number of justices expressed concern that the Right to Work group’s argument would create an expansive exception to the regulation of unionization campaigns by the National Labor Relations Board, by making any voluntary concession by an employer to a union a criminal violation of the law—even without an inducement such as the union’s agreement to campaign for a state initiative or not to picket or strike.

Mulhall’s lawyer did not resist this extreme interpretation of his client’s position.

“So this is to say that the National Labor Relations Act prohibits employers from providing access to their premises, from granting a union a list of employees, or from declaring itself neutral as to a union election?” Justice Elena Kagan asked.

Mulhall’s lawyer agreed, prompting Justice Anthony Kennedy to remark, “Do you acknowledge that your answer to Justice Kagan is contrary to years of settled practices and understandings?”

The Court is expected to decide the case within the next few months.  For those who wish to hear the entire one-hour argument, it is available here.  

By Ted Franklin | November 18, 2013

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