The Indiana Supreme Court has reversed a July 2014 ruling by Lake Superior Court Judge John M. Sedia that two provisions of the Indiana Right to Work (RTW) law are unconstitutional. In a 5-0 decision, written by Justice Dickson, the Court rejected the arguments expressed by International Union of Operating Engineers, Local 150 (Union) and its supporters that the RTW law violates Article I Section 21 (Section 21) of the Indiana Constitution.
The RTW law prohibits employers from requiring union membership or the payment of monies to a union as a condition of employment. Section 21 provides in relevant part that "[n]o person's particular services shall be demanded, without just compensation." The Court's decision was predicated on the fundamental notion that the RTW law does not involve the state demanding a union to provide services. The Union contended that the RTW law violates Section 21 because it causes the state indirectly to demand that a union provide services to non-member employees because the state knows that the National Labor Relations Act, a federal law, requires an exclusive-agency union to represent all employees in the bargaining unit, even if they are not union members. The Court found, however, that the RTW law, on its face, makes no state demand for services.
The Court explained that the drafters of the Indiana Constitution sought to protect the liberty of Hoosiers from state control. Therefore, the scope of Section 21 is limited to demands made by the state. Further, Section 21 does not limit federal power. Since federal law, not state law, imposes the duty of fair representation on exclusive-representation unions, Indiana's RTW law does not demand the union provide particular services and thus, the state need not ensure just compensation for the union's services.
Moreover, the Court explained, the federal law's requirement that unions represent all employees in the bargaining unit is actually optional — the union only incurs such an obligation when it chooses to be the exclusive bargaining agent, and its compensation for this choice is that it has the exclusive right to bargain with the employer. The Court noted that the RTW law makes no demand for services at all since a union could simply choose not to be an exclusive-agency union and, thus, avoid being required to represent non-members. The Court summarized its analysis by concluding that RTW does not violate the Indiana Constitution, as "Any compulsion to provide services does not constitute a demand made by the State of Indiana."
In his concurring opinion, Justice Rucker commented that the Court based its review on an analysis of the RTW law on its face. In such circumstances, the party challenging the laws' constitutionality must show that there is "no set of circumstances under which the statute can be constitutionally applied." Justice Rucker observed that, since labor contracts in effect on the RTW law's effective date were explicitly excepted from the RTW provision prohibiting making union membership a condition of employment, there is at least one circumstance under which the RTW statute can be constitutionally applied. Justice Rucker left the door open to the possibility that a challenge to how the challenged provisions of the RTW law are applied might lead to a determination of unconstitutionality. His concurrence suggests that a union could attempt to demonstrate that the RTW law in practice actually eliminates or reduces unions' compensation from dues or "fair share" payments. Or it could challenge the RTW law's constitutionality by demonstrating that when a union security agreement expired, it was unable to charge its members for union-provided services. He opined that, because there is a less onerous burden of proof when a claim of unconstitutional application of a statute is involved, a set of circumstances may exist under which a union could prove that the RTW law actually deprived it of compensation for particular services and, therefore, was unconstitutional. But, he concluded, "This is not that case."
While Indiana employers can heave a sigh of relief that the Indiana Supreme Court did not find RTW unconstitutional on its face, Justice Rucker's concurring opinion suggests that unions may not give up this fight and may try another run at the RTW statute, attempting to make a case that it is unconstitutional in its application. We will keep you posted on further developments.