Unions Using “Takings” Clause Arguments to Challenge Right-to-Work Laws

With more state legislatures looking to continue the trend of passing right-to-work laws forbidding unions from requiring non-members in the bargaining units they represent to pay any fees for their services, unions have taken their cases to the court system in an attempt to reverse the situation by using an argument that the laws constitute an illegal “taking” from the unions, the specifics of which I focused on in my previous blog.

However, this legal theory has had only limited success so far, and with a radically different administration about to come to power, the likelihood of its success going forward is murky at best.

In this second part of a two-part blog series, I turn back to Fred Perillo, a partner with The Previant Law Firm in Milwaukee, and Jessica Kastin, a partner with the employer-side law firm Jones Day in New York City, to discuss these issues.

Mixed Success Rate So Far

Currently, labor unions are challenging state-level right-to-work laws in the Wisconsin and West Virginia state court systems, as well as in federal district courts in Wisconsin and Idaho.

While the Wisconsin state trial court ruled in favor of the unions, the state appealed and successfully persuaded the Wisconsin Court of Appeals to stay the trial court’s decision, and the case is still going through the appeals process. In addition, a West Virginia state court sided with the unions by issuing an injunction blocking the state’s recently passed right-to-work law from going into effect (W. Va. AFL-CIO v. Tomblin, W. Va. Cir. Ct., No. 16-C-959, temporary injunction 8/11/16).

Meanwhile, recent cases in federal district courts have so far been successful for the states, with both the Eastern District of Wisconsin and the District of Idaho rejecting union claims that the states’ prevention of unions collecting fees from non-members were unconstitutional “takings” under the Fifth Amendment. Both cases are expected to be appealed.

Kastin notes that in these federal cases, the unions challenging the right-to-work laws asserted Fifth Amendment claims based largely on Seventh Circuit Chief Judge Wood’s federal Takings Clause argument in her dissent to the court’s decision upholding the Indiana right-to-work law.

The Seventh Circuit majority in that case, however, “argued that the Indiana law did not take property from the unions, but merely restricted the unions’ right to collect fees for its services. It also noted that unions are justly compensated under federal law by their role as exclusive bargaining representative with the employer,” Kastin explains.

However, Perillo argues that the issue is not yet settled law, as the Seventh Circuit is the only federal appeals court to hear such as case, and the specific “takings” clause issue was only mentioned in dicta by the majority over a strong dissent and not actually presented for decision in that case.

Effectiveness of Takings Clause Argument Still Unclear

Both Perillo and Kastin agree that while the results so far are mixed, it is still too early to say whether the takings clause argument will end up being a viable one in the long term.

Kastin points out that the reliance on the takings clause in the labor context is a non-traditional assertion of the protection which originates with the Fifth Amendment’s prohibition on the government taking private property for public use without justly compensating the private property owner. “Application in the labor realm is awkward because of the backdrop of the National Labor Relations Act and the system of union elections, the statutory duty of fair representation and employees’ freedom of choice with respect to union representation,” Kastin states.

Perillo, meanwhile, is a bit more confident in the viability of the takings clause argument, saying that it is a generally sound argument, with success dependent on the jurisprudence of the various states. “The core argument – that the government cannot impose representation duties while simultaneously prohibiting unions from collecting any compensation from the people who receive those services – is sound under the federal Takings Clause as well as takings jurisprudence in several states,” Perillo says.

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