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backGLOBALtalk April, 2012

USA: Indiana's New Right to Work Law Presents Bargaining Options for Employers and Unions

Employers with operations in Indiana might be surprised by a little publicized provision in the state's new Right to Work law – it applies only to labor agreements that are "entered into, modified, renewed, or extended after March 14, 2012" and does "not apply to or abrogate written or oral contracts or agreements in effect on March 14, 2012." This carve out provides employers with unique, but fleeting leverage in their union negotiations. As a result, employers must act quickly.

Potential Bargaining Strategy

If an employer's labor agreement expires before March 14, 2012, the employer should consider whether completing the negotiations and executing the agreement before March 14, 2012 is consistent with its bargaining objectives. A union may be more "flexible" in bringing these negotiations to a close if it realizes that by doing so it would keep the union security and the check-off clause in the agreement for its entire term. On the other hand, if negotiations extend beyond March 14th, the union security provision would not be included in any labor agreement executed thereafter by operation of law.

For labor agreements set to expire on or after March 15, 2012, the new law seems to permit an employer and its union to engage in early negotiations and agree on a "modification or extension" of the current contract so long as the modification or extension was effective on or before March 14, 2012. Unions might be willing to modify and/or extend their current labor agreements for several years in exchange for an extension of the union security provisions in the modified or extended agreement. Employers should evaluate the concessions a union might exchange now in order to extend the union security clause for a substantial period of time beyond March 15, 2012.

Impact on Contractual Dues Check-off Provision

Although labor agreements "entered into, modified, renewed, or extended" on or after March 15, 2012 cannot contain a union security clause, the labor agreements can contain a dues check-off provision. Because the dues check-off provision is a mandatory subject of bargaining, employers cannot automatically delete the check-off clause from the labor agreement. Rather, the employer must negotiate in good faith with the union regarding its deletion.

A recent decision by the Ninth Circuit Court of Appeals requires employers to evaluate whether to propose limiting the duration of the dues check-off clause. In Local Joint Executive Board et al. v. NLRB, the Ninth Circuit rejected the NLRB's long held view that a dues check-off clause expired when the collective bargaining agreement expired. Rather, the court held that in a right to work state, the dues check-off continued in effect following the expiration of the labor agreement unless it provided otherwise. Consequently, if the parties agree to continue the dues check-off provision in any successor agreement, the company should consider proposing that the provision provide that it is "in effect only during the term of this agreement."

FAQs for Employers

Q1: What effect will Indiana's Right to Work law have on the union security/union shop clause and check-off provisions in the Company's current labor agreement?

A:   If the labor agreement is in effect on March 14, 2012, these provisions will be in effect for the term of the labor agreement. If the labor agreement is "entered into, modified, renewed or extended" after March 14, 2012, then as of that time, the parties cannot include a union security clause in the agreement.

Q2: Can the parties agree to a dues check-off provision in a labor agreement executed on or after March 15, 2012?

A:   Yes. The new Right to Work law does not affect a dues check-off provision. That provision remains part of the labor agreement until the parties agree to delete it during regular contract negotiations. However, under most authorization cards, the employee only agrees to have union dues checked-off as long as he/she is a union member. Consequently, if an employee effectively resigns from the union, the employee can also revoke his/her dues check-off authorization card at any time and is not limited to the revocation "window" contained in the authorization card. In contrast, if the dues check-off authorization card provides that dues will be checked off if the employee "is no longer a member of the union," the employee can revoke the authorization card only during the revocation "window."

Q3: Assuming the labor agreement no longer contains a valid union security clause but does contain a valid dues check-off clause, should the Company continue to check-off the dues of employees who wish to remain union members and to pay union dues under the contractual check-off provision pursuant to signed authorization cards?

A:   Yes. The check-off clause remains in effect for employees who choose to remain union members and who wish to have their union dues checked-off under the contractual check-off provision.

Q4: If an employee orally requests the Company to discontinue the check-off of union dues after resigning from the union, should the Company accept and give effect to an employee's oral resignation from the union?

A:   No. An employee must inform the union in writing that he/she is resigning union membership; and must advise the Company in writing he/she has resigned union membership and that he/she now wishes to cancel his/her union dues check-off authorization.

Q5: Can the Company tell employees about their rights under Indiana's new Right to Work law?

A:   Yes. The Company can tell employees:

(1) that the new Right to Work law was adopted;

(2) after the current labor agreement expires (on or after March 15, 2012), they will no longer be required to be union members or pay union dues as a condition of employment as of the expiration of that labor agreement; and

(3) that they have the right to resign union membership and cease dues check-off following the termination of the current labor agreement if they so choose.

Q6: When the current labor agreement expires, can the Company unilaterally delete the union security/union shop clause from this agreement?

A:   If the labor agreement is executed on or after March 15, 2012, the employer can unilaterally remove the union security/union shop clause from that agreement. For agreements expiring before March 15, 2012, the employer is obligated to negotiate over the removal of both the union security and dues check-off clause before March 15, 2012; but if no settlement is reached by March 15, 2012, then the Company can unilaterally remove the union security clause from the agreement; but, must negotiate over the removal or retention of the dues check-off clause.

FAQs by Employees

Q1: Does Indiana's Right to Work law revoke both the union security/union shop clause and the union dues check-off clause in the labor agreement?

A:   For labor agreements in effect on March 14, 2012, the union security and dues check-off clauses will remain in effect for the term of that agreement. For labor agreements executed on or after March 15, 2012, the union shop will be revoked by the new law on the effective date of the agreement but the dues check-off clause remains in effect until the parties delete it through negotiations.

Q2: If I signed a union dues check-off authorization card, do I have to wait until the revocation "window" in the card before revoking my dues check-off card?

A:   Not if it is after March 15, 2012 and your labor agreement was renewed after March 15, 2012 and you also choose to resign from the union. If you do not resign your union membership, your check-off authorization card could obligate you to continue to pay dues unless you revoke the check-off authorization card during the revocation window.

Q3: What is a revocation "window"?

A:   By law, at a minimum, the revocation "window" is the 10-day period immediately preceding the anniversary date of your signature on the dues check-off authorization card or the 10-day period preceding the termination of the labor agreement. You should examine your authorization card to determine if your union allows for a longer period than the absolute legal minimum.

Q4: Can I remain a union member and have my union dues checked-off under the labor agreement's check-off provision, if I so choose?

A:   Yes. Unless you take an affirmative step and resign, you will continue to be a union member and will continue to have union dues checked-off from your paycheck.

Q5: If I decide to remain a union member and have my union dues checked-off from my paycheck, can I change my mind later and request that the Company stop checking off my union dues immediately?

A:   Yes, but only if the labor agreement was renewed after March 15, 2012 and if you effectively resign from the union before requesting the revocation of your dues check-off authorization.

Q6: If I decide to remain a union member and continue to have union dues checked-off, can I withdraw from union membership later without the union being able to get me fired for not being a union member in good standing?

A:   Yes, if your labor agreement was executed on or after March 15, 2012, or if it does not contain a union security clause.

Q7: How do I withdraw from union membership?

A:   The most effective way to withdraw or resign from the union is to send the union a certified letter, return receipt requested, identifying yourself and your employer and expressly stating that you are "withdrawing and resigning from the union as of (date)." It is your choice as to whether you resign or remain a union member. Your choice will not affect your job rights in any way.

Q8: How do I revoke my union dues check-off authorization card?

A:   First, you must resign from the union. Then, you must send both the Company and the union a certified letter, return receipt requested, expressly stating that you are "revoking your check-off authorization card on file at [insert name of company]." If an employee effectively resigns from the union, the employee can revoke his/her dues check-off authorization card at any time and is not limited to the revocation "window" contained in the authorization card. In contrast, if the dues check-off authorization card provides that dues will be checked off if the employee "is no longer a member of the union," the employee can revoke the authorization card only during the revocation "window."

Q9: Will resigning from the union affect my job rights?

A:   No. You will continue to be covered under the current labor agreement as though you were a union member.

Q10: Will the union continue to represent me if I resign from the union?

A:   Yes. By law, the union must continue to represent non-union employees in negotiations and contract administration as long as it is the bargaining representative of the bargaining unit. If the union does not do so, you can sue the union in court or file an unfair labor practice charge with the National Labor Relations Board.

Q11: What happens if I resign my union membership?

A.   As a general rule, an employee who resigns his/her union membership: (1) cannot attend union meetings; (2) cannot vote in elections for union officers or plant stewards; (3) cannot vote to ratify a labor agreement; (4) cannot vote to strike, (5) cannot hold union office, and is not subject to union rules, union discipline or union fines.

Q12: Where can I learn more about my rights?

A.   There are a number of sources. You can contact HR, you can contact the National Labor Relations Board in Chicago or in Indianapolis, or you can contact the National Right to Work Foundation in Springfield, Virginia.

Source: Baker & McKenzie - GAI

For more information or to contact Baker & McKenzie, please click here.

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