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Supreme Court Questions Labor-Management 'Neutrality' Pacts

The U.S. Supreme Court, which has been somewhat hostile to unions in recent years, on Wednesday examined a key union organizing tool. At issue: neutrality agreements, under which employers pledge to remain neutral during union organizing campaigns, and in exchange, the union promises not to picket, boycott or strike.

The anti-union National Right to Work Committee is challenging these agreements, contending that they are illegal under the 1946 Labor Management Relations Act. The purpose of that law was to promote industrial peace and avoid nasty, even violent clashes over unionization.

In light of that, courts have long upheld neutrality agreements, finding that they carry out the purpose of the law. And in recent decades, unions have found that neutrality agreements are their most effective organizing tool.

The agreement at issue before the Supreme Court on Wednesday was fairly typical. A Florida casino owner agreed to provide union organizers access to its workers, to recognize the union if a majority of workers signed up, and to arbitrate disputes. The union, in exchange, agreed not to boycott, strike or use other outside pressure tactics. It promised not to coerce employees, and it said it would support an initiative to allow casinos to expand their business with slot machines.

After the initiative passed, the casino reneged on the agreement and backed a lawsuit brought by the National Right to Work Committee on behalf of Martin Mulhall, a casino employee who objected to unionization.

The focus of Wednesday's argument was a provision of the labor law that bars employers from giving money or other "things of value" to unions.

Justice Anthony Kennedy acknowledged that neutrality agreements have been "fairly standard" in labor law, but he posited: What if the employer paid the union money not to organize?

Richard McCracken, the union's lawyer, said that the "statute focuses on what is paid, lent or delivered by the employer," and so that kind of payment would be illegal. In contrast, in this case, he said, all the union gave "was a promise not to strike, picket or boycott" and "not to coerce or threaten employees" during the course of the organizing campaign.

But "what about the support of the legislation to permit slot machines?" asked Justice Antonin Scalia.

Yes, said McCracken, the union did work to pass that legislation. That, however, didn't just serve the casino's interest, but "also the union's interest in having an industry and workers in the industry to represent." The union and its members ultimately spent an estimated $100,000 worth of time and money on the slots campaign.

Justice Sonia Sotomayor found the $100,000 "troubling." If it was spent to buy the neutrality agreement, "then that's corrupt," and could be criminal under the law, she said.

This wasn't a cash payment to the employer, replied lawyer McCracken. It was the "union's own exercise of its speech and petition rights" in campaigning for passage of an initiative. It is no different, he said, from the construction unions' lobbying right now for approval of the Keystone XL oil pipeline, knowing that it would create more jobs for union employees.

Chief Justice John Roberts focused on one aspect of the agreement — the provision that recognizes the union if a majority of the employees sign up. "Is the card check provision standard?" asked Roberts.

Yes, replied McCracken, adding that such agreements are almost universal for major hotels and casinos.

Next up to the lectern was Deputy Solicitor General Michael Dreeben, representing the government and supporting the union's position. Voluntary recognition of a union is not only permissible under the National Labor Relations Act, he told the court, it's a favored element of the law.

Roberts, however, suggested that the card check provision is coercive. The union organizer "comes up to you" and asks you to sign up, and there's a group of your fellow workers around.

"And he's a big guy," interjected Scalia.

But Dreeben was unfazed. "Some would argue that employers also have big guys," he said, and that "it's very coercive" for an employer to be on the factory floor frequently reminding employees "that there are a lot of costs to joining a union."

The agreement here does not recognize the union, noted Dreeben. All it does "is establish a perfectly lawful process ... so that employees can get information from the union about unionization." The things that were provided for in this neutrality agreement, he concluded, "have been elements of federal labor policy for decades." Under the other side's view, however, they would become a crime.

Last up was William Messenger of the National Right to Work Committee, representing Mulhall, the casino worker. He contended that the neutrality agreement here was criminal under the federal law because the casino agreed to provide things of value to the union — access to employees, for example.

Justice Elena Kagan was incredulous. What if an employer said, "I think that my employees should have a right to listen" to a union "and to decide for themselves whether they want to be represented," and the employer invited the union into its facility. "You're saying that the employer cannot do that?"

"That's correct," replied Messenger.

Still unconvinced, Kagan responded that Messenger wanted the court to say that the labor laws prohibit 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."

"Yes," Messenger said, because the employer is giving "the union control over its speech."

That answer, suggested Kennedy, "is contrary to years of settled practices and understandings."

Several justices pressed further as to the boundaries of Messenger's argument. But from left to right, they seemed puzzled.

Justice Ruth Bader Ginsburg noted that courts routinely have enforced agreements like these under other provisions of the labor laws. "It would be odd," she said, if the same agreements that are enforced under one section are criminal under another.

Scalia wanted to know how it was possible to have an agreement without "anything on the other side, no quid pro quo."

"It has no meaning to say you agree to something when you're not getting anything in return," Scalia said.

Kennedy wondered how a promise of "neutrality of speech" could be fit into a criminal statute that bars paying, lending or delivering a thing of value.

Under the law, Kagan noted, employers are required to give lists of employees to unions seven days after a union election is called. Was Messenger really "suggesting that if the employer gives it" one day earlier, "that's forbidden?"

"Yes," replied Messenger.

"So it goes within a period of 24 hours," Kagan said skeptically, from something that is forbidden to something that is required?

The court will answer those questions in its decision, expected by June.

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