They’re Mad As Hell and They’re Not 'Taking' It Anymore

If a utility company was forced to provide free services to those who objected to their presence and otherwise refused to pay for the company’s services, most people would not consider this fair to the company. The normal reaction would be to either force those objectors to pay something to the company or to not be entitled to the company’s services. However, many labor unions in states with right-to-work laws are claiming that this is exactly what those state governments are forcing upon them.

As a result, labor unions in states with right-to-work laws have challenged those laws in both state and federal courts, claiming that the situation amounts to an illegal “taking” of union property (namely, the fees that they would collect from non-members for providing union-related services) under either the Fifth Amendment of the U.S. Constitution (applicable to the states through the Fourteenth Amendment) or the individual state constitution’s equivalent. 

In this first part of a two part series, I look at the specific arguments made both for and against the "takings" clause theory. In the second part coming out in December, I will delve into the level of success this legal theory has had so far, as well as the likelihood for its success in the long term. 

Denying Unions the Right to Collect Fees = “Taking”?

The takings clause challenge to right-to-work laws argues that the State, by prohibiting fair share fees, denies just compensation to a union while at the same time imposing a duty to represent non-members in collective bargaining units.

Fred Perillo, a partner with The Previant Law Firm in Milwaukee, says that while the overarching theory is the basic argument in these challenges, the level of success in making the argument also depends on how each state interprets its own takings clause.

As an example, he points to the case making its way through the Wisconsin state courts, Machinists Local Lodge 1061 v. Walker (No. 2016 AP 820), for which he is the lead attorney. Specifically, he points to the fact that unions in Wisconsin have no choice but to either be exclusive majority representatives or cease to exist and that Wisconsin state law imposes a duty of fair representation upon unions. In addition, he points to the state’s tradition, both legal and historical, of requiring that just compensation for a taking must be made in legal money.

In this case, the State of Wisconsin has countered that there is no proximate link between the prohibition on collecting fair share fees and the duty of fair representation, that representation services are not property rights, and that “exclusive representation” is adequate compensation for the duty of fair representation in any case.

As for the “free rider” issue, where those who do not pay for union services are still entitled to full representation by the union, Perillo points out that the State and amici have argued that the State has an interest in allowing employees to receive free services without paying fees, because unions have no constitutional right to the collection of fair share fees.

“We have responded by pointing out that unions do have a constitutionally protected right to their own property and services under the takings clause, and that (by analogy to utilities) when they are forced to provide a product (representation) to customers (non-member employees), the customer nevertheless must pay for the product, even if they object to the utility being given a monopoly by the state,” Perillo says.

Jessica Kastin, a partner with the employer-side law firm Jones Day in New York City, argues that the Seventh Circuit Court of Appeals has already rejected this argument in a case involving Indiana’s right-to-work statute.

“The arguments made by the Seventh Circuit majority in response to Chief Judge [Diane] Wood’s dissent and by the States of Wisconsin, Indiana and Idaho are a good roadmap for the case that right to work laws are not necessarily unlawful ‘takings’ from a union,” Kastin says.

Further, Kastin points to a specific argument made by the State of Wisconsin, countering the unions’ position that their services are property that they are being forced to give away for free, in citing to precedent holding that attorneys may be compelled to provide services for free to indigent clients and that such compulsion is not an unlawful taking.

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