Battle over RTW heats up in courts

When Lake Superior Court Judge John Sedia handed Indiana’s right-to-work law a pink slip, conventional wisdom held that the Indiana Supreme Court would overturn that decision and put the law back to work.

Commentators noted even though Sedia entered a declaratory judgment on one count of the complaint, he dismissed four other counts.

However, Sedia knocked down Sections 8 and 10 of the right-to-work law because they violated the Indiana Constitution’s prohibition against demanding services without “just compensation.” Those two sections, most in the legal community say, are the heart of the law.

Gruber

Without Section 8, which bars any requirement that an individual join a union and pay dues, and Section 10, which makes violating Section 8 a crime, Indiana does not have a right-to-work law.

If the Supreme Court affirms the Lake County order, “it could really turn (the law) on its head,” said Andrew Gruber, partner at Bingham Greenebaum Doll LLP. “Does the law survive if the decision is upheld? I don’t think so.”

Few expect Indiana’s right-to-work law would be left to die should the Supreme Court affirm. More likely, the Indiana General Assembly would again take up the measure, but some in the legal community believe for any new right-to-work law to hold muster with the courts, lawmakers will have to first rewrite the state’s constitution.

Two complaints

In James M. Sweeney, et. al. v. Gregory Zoeller, Attorney General of the State of Indiana, et. al., 45D01-1305-PL-52, Sedia provided a careful examination of state law, federal law, court precedent and the Indiana Constitution before he ruled that Indiana Code 22-6-6-8 and IC 22-6-6-10 violate Article I, Section 21 of the state’s constitution.

“There is no Court which is more loathe to declare any state statute unconstitutional than this one,” Sedia wrote in his order issued Sept. 5, 2013. “(Indiana Code) 22-6-6-8 and IC 22-6-6-10 stand clothed with the presumption of constitutionality. Debate regarding the wisdom or folly of this statute (about which the Court has purposely avoided using its title) lies in the political arena, not with the courts.”

Torr

Immediately after the ruling was issued, the attorney general’s office filed an appeal to the Supreme Court and vowed it would “aggressively defend the authority of the people’s elected representatives in the Legislature as we successfully defended this same statute from the same plaintiff who challenged it in federal court.”

The Sweeney complaint in state court is part of a two-pronged attack on the right-to-work law by the International Union of Operating Engineers Local 150. The union is also arguing James M. Sweeney v. Mitch E. Daniels, Jr., 13-1264, in the federal courts.

Both suits focus on Section 8, Subsections 2 and 3, of the measure but look at it through the lens of the Indiana Constitution and federal labor law.

The author of Indiana’s right-to-work law, Rep. Jerry Torr, R-Carmel, does not believe the union’s argument will convince the Supreme Court.

“We had a lot of awfully smart lawyers look at the language before we passed it,” he said. “I’m fairly confident it will be found to be constitutional.”

Torr had introduced a right-to-work bill in the Legislature since the 2004 session. He touted the benefits as attracting employers to Indiana and allowing individuals to make the choice themselves of whether or not they want to join a union.

If the Supreme Court agrees with the Lake County order, Torr said he is confident the Legislature would redraft the troubling language, using the Supreme Court’s opinion as a guide.

Rep. Ed DeLaney, D-Indianapolis, sees little chance the state’s highest court will affirm. The court has given “excessive deference” to the Legislature and passed up most opportunities to explain what the state’s constitution means to Indiana.

DeLaney

A strong opponent of right-to-work, DeLaney questioned how the courts could find that a corporation is a person (referring to the Citizen’s United decision by the U.S. Supreme Court) and not find that a union is a person. Instead, while federal law is requiring labor organizations to provide fair representation to all workers, even non-members, in a unit, the state is not allowing compensation for that representation.

DeLaney applauded Sedia’s decision. “I think it was well reasoned and rather courageous on the part of the judge,” he said.

Dale Pierson, general counsel for the International Union of Operating Engineers Local 150, said he was “very pleased in that the judge seemed to understand the constitutional argument we’re making.”

In the federal suit, the union is asserting the state steps outside the authority granted by Congress by not requiring employees to pay their “fair share” of the cost of collective bargaining. This section, Pierson said, allows for “free riding,” the term used to describe workers who do not pay union dues but still receive the benefits of representation.

Pierson maintained states are allowed to regulate union security clauses but that authority is limited to contractual requirements that all employees become members. Indiana’s right-to-work law goes beyond that by prohibiting any payment of dues, fees or assessments.

On the state level, the labor organization is arguing the same section violates the Indiana Constitution because the law is requiring unions to work without “just compensation.”

Nieman

The U.S. District Court for the Northern District of Indiana, Hammond Division dismissed the union’s federal argument. Consequently, Local 150 appealed to the 7th Circuit Court of Appeals and presented oral arguments Sept. 12.

Pierson was cautious to read too much into the 7th Circuit judges’ questioning, but he felt they seemed to understand the union’s point that Subsections 2 and 3 are pre-empted by federal law.

Constitutional questions

Kenneth Dau-Schmidt, professor of labor and employment law at Indiana University Maurer School of Law, is not so certain the Lake County decision will be overturned. He said Sedia made such a “tightly reasoned” argument that the moderate justices on the Supreme Court might accept it.

Dau-Schmidt

The union’s position that the taking of a product or service cannot be done without payment mirrors conservative ideals. If he were to put money down, Dau-Schmidt said he would bet that politics will prevail and Sedia’s decision will be reversed, but he would not bet a lot.

However, if the ruling is upheld, Dau-Schmidt said the only way Indiana could get another right-to-work law to stand up in court would be to amend the state constitution. The “taking clause” in Indiana’s founding document not only covers products, like many state constitutions, but goes further to also include services.

An amendment would likely be to remove the service language. But, again, that would put conservatives in an unusual position. The Republicans would be arguing that government does have the power to take services without providing compensation — not a traditional conservative view.

Ogletree Deakins attorney Todd Nierman is not persuaded by the constitutional argument.

“With all due respect, I believe (Judge Sedia’s) decision is wrong and ultimately will be overturned,” he said.

The court held the state is demanding the union provide services for free. Nierman countered Indiana is not doing that because it is not demanding unions represent anybody. A labor organization chooses to represent workers at a particular business and if the organization decides there are too many free riders, it can leave without any consequences.

Still, should the Supreme Court affirm the Lake County order, Nierman, like Dau-Schmidt, does not see a legislative solution. He questions how the General Assembly could rewrite the law to be constitutional.

Negotiations

Although Sedia stayed his order pending appeal, his ruling could have a practical impact. Nierman said at the negotiating table unions and employers could point to the decision.

Unions may argue for a provision to be added to contracts that if the Lake County ruling is upheld, then union security language, making membership a condition of employment, is revived, he said. Employers would likely counter the right-to-work law is still valid so security language is illegal.

“It’s not practical for unions and employers to wait and see” what the Supreme Court is going to do, Nierman said.•