Cover Story

Right to work Under Siege:

Unions, State Officials Seek to
Undermine Pro-Growth Law

by D. Dowd Muska

arlier this year Ray Bacon, executive director of the Nevada Manufacturers Association, expressed concern over the future of Nevada’s right-to-work law. At a luncheon held by the Northeast Nevada Development Authority, Bacon, referring to the considerable political muscle flexed by unions in the 1996 election, told the business group, "It’s not too soon to be thinking about 1998." He warned of a serious challenge to Nevada’s right-to-work law in the 1999 legislative session. "I’m not sure we’ll have the votes to keep it," he told the gathering.

Right-to-work laws have always been controversial. But today they seem to be under fire as never before, and not just from attempts by unions and their political allies to repeal the right to work. Schemes to extract money from non-union workers at unionized workplaces—which clearly violate the right-to-work principle—are increasingly employed by union leaders. In Nevada such an attempt has not only been made, but has been defended by Attorney General Frankie Sue Del Papa—all the way to the state’s Supreme Court. Del Papa’s actions are but one battle in a renewed campaign to reestablish compulsory unionism in Nevada.

The Origin of Compulsory Unionism

During the New Deal, union officials pushed through Congress the National Labor Relations Act, also referred to as the Wagner Act. President Franklin D. Roosevelt eagerly signed the bill into law in 1935, thus establishing compulsory unionism as national policy. The Wagner Act set up the National Labor Relations Board (NLRB) as the authority on labor-related disputes—state and federal courts no longer had jurisdiction. And not surprisingly, FDR quickly stacked the NLRB with members sympathetic to compulsory unionism and coercive union procedures (the NLRB has consistently sided with union bosses throughout its six decades, even under allegedly union-hostile Republican administrations).

The Wagner Act radically altered labor relations in the country. Several actions by the Supreme Court have reduced the massive powers it grants to union bosses (for example, it is now illegal to force a worker to be a full union member), but most of the Wagner Act’s provisions are still the law of the land today. Since 1935, the right of workers to set the terms of their employment has been in serious jeopardy. If an employer concludes a "substantial number" of its employees want unionization, it can appeal to the NLRB to certify union representation. Also, both the employer and a union can sign an agreement for representation, with no input from affected workers. Only through a certification election—held when an employer objects to possible organization—can an individual employee have any say in whether his or her workplace will be unionized. And even then a simple majority of all voting workers are all that is necessary. In a company of 100, if merely 20 employees vote—11 in favor—the union wins the right to represent all employees.

Federally-mandated compulsory unionism worked exactly the way union bosses wanted it to. According to one U.S. Labor Department estimate, in the decade after the passage of the Wagner Act the number of dues-paying American employees rose from 3.7 million to 15 million. (In 1970, total union membership peaked at 17 million). Huge sums of money from union dues filled Big Labor’s coffers, and the political influence of activist unions grew and grew. Many unions did achieve sensible worker protections as well as generally higher wages for their members, but the power granted to labor bosses by compulsory unionism soon led to many forms of corruption.

Taft-Hartley Offers Relief

During World War II union leaders called more than 13,000 strikes, and the year after the war saw another 5,000 work stoppages. Due to Big Labor’s abuse of its compulsory power during such a critical national crisis, the public quickly grew disenchanted with the concept of mandatory union membership and representation. In 1947, a Republican Congress passed (over President Harry Truman’s veto) the Taft-Hartley Act. Section 14(b) of Taft-Hartley permits states to pass right-to-work statutes. These laws affirm that no employee within a state’s borders can be compelled to pay any dues to a labor union. (In order to pay no dues, however, a union member must resign from the union, and thus give up any privileges membership may offer.)

Currently, 21 states—most located in the southeast and mountain west—have passed right to work laws: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Iowa, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming. Nevada adopted its right-to-work law in 1952.

While the freedom to refrain from paying union dues certainly is an advantage employees in right-to-work states have over their colleagues in compulsory unionism states, right-to-work laws do not grant workers the ability to set the terms of their own employment. If a union has organized a particular workplace, and signed a collective bargaining agreement with the employer, the union has an exclusive right to represent all employees. So while a union objector does indeed save money by avoiding union membership, the worker must still accept representation he or she may be strongly opposed to.

Right to Work’s Economic Benefits

While union leaders continually cite studies demonstrating that union workers earn higher wages than non-union workers—and caricature anti-compulsory union statutes as "right-to-work for less" laws—there is significant evidence to indicate that families in right-to-work states enjoy a higher standard of living than those in compulsory unionism states. Wages are, after all, only one factor, and to focus solely on the size of workers’ paychecks is to overlook other economic realities.

"Money income," wrote James T. Bennett in his 1994 study of right-to-work versus compulsory unionism states, "varies widely across states, regions, and cities, but so does the tax burden which reduces the family income, as do prices of goods and services which are purchased with after-tax income." Bennett determined that the cost of living in right-to-work states is significantly lower. "On average," he found, "residents in … states without right-to-work laws pay 24.5 percent more for food, housing, health care, transportation, utilities, property taxes and college tuition than in right-to-work states." By analyzing both the cost of living and the burden of taxation, Bennett concluded real household income in right-to-work states is $36,540—$2,852 more than states without right-to-work laws.

But the economic benefits of right to work do not end there. One statistic relating to job growth is truly staggering: right-to-work states created 2.68 million manufacturing jobs between 1960 and 1993, while compulsory-unionism states lost 1.36 million manufacturing jobs. Dr. Thomas J. Holmes conducted a study for the Federal Reserve Bank of Minneapolis in 1996 and confirmed what many right-to-work advocates have claimed for years. States which choose not to compel employees to pay union dues attract manufacturing business much more than do their compulsory-unionism neighbors. Holmes studied "border" states, such as North Dakota and Minnesota, Texas and Oklahoma, and Virginia and Maryland. "On average," Holmes concluded, "manufacturing employment increases by one-third when one steps over the border" to a right-to-work state.

"In short," summarized David Kendrick of the National Institute for Labor Relations Research, "Holmes ... uncovered the most conclusive evidence to date that state policies encouraging cooperative and voluntary relations between labor and management have played a crucial role in the exodus of manufacturers to the 21 right-to-work states."

Further proof of businesses’ attraction to right-to-work states came from an executive of Fantus, a corporate relocation firm. A vice president of Fantus told the Greater Twin Falls, Idaho Chamber of Commerce, "Approximately 50 percent of our clients … do not want to consider locations unless they are in right-to-work states. As a result, states that are not right-to-work states, and the communities in them, are eliminated from consideration in the initial phase of the site selection process, no matter how strong other advantages for a facility might be."

But union officials ignore the pro-growth record of right-to-work laws, and to protect the power granted to them by federally-mandated compulsory unionism vigorously fight the passage of new such laws. Despite the growing commitment many in this country have to free-market economics, Big Labor has been extremely successful in its efforts to oppose extensions of the right to work. It has been over 10 years since the last state right-to-work law was passed, and a national right-to-work act was soundly defeated in the Republican U.S. Senate last summer.

But union officials do not confine their opposition to the right-to-work principle to state legislatures. In workplaces across the country, unions have designed schemes to force nonmembers to pay up. In violation of the intent of right-to-work laws, more and more unions are attempting to extort fees from former members.

Del Papa: Undermining Nevadans’ Right to Work

The Nevada Supreme Court currently has before it just such a case, Cone v. Nevada Service Employees. In October 1994 three nurses of the University Medical Center of Southern Nevada resigned their membership from Service Employees International Union (SEIU) Local 1107. Annice Cone, Sharon Mallory and Karl Schlepp exercised their right under existing Nevada law to leave and have no further financial obligation to the union. Approximately 100 co-workers joined the three objectors. Facing a deluge of resignations—and a severe drop in funds—Local 1107 made a crude attempt to stop the flow. It posted ominous "Executive Board Policy" signs, warning that workers who left the union would be charged substantial fees for "grievance adjustment proceedings." The charges could include attorney fees of $200 an hour and a "hearing officer fee" of $350 an hour—fees that are allowed under the collective bargaining agreement reached between the hospital and Local 1107.

But regardless of the language in the contract, the union’s demand for fees for representation services clearly violates the spirit of Nevada’s right-to-work law. "In right-to-work states, the union bosses call this strategy ‘getting the camel’s nose under the tent,’" said Rex Reed, executive vice president of the National Right to Work Legal Defense Foundation, a Washington, D.C. public interest law firm. "They ease their coercive schemes into place quietly and slowly, and before you know it, they’ve replaced the right to work law with a compulsory unionism scheme."

Knowing the ramifications of Nevada’s right-to-work law, Cone, Mallory and Schlepp contacted Reed’s organization, which has worked since 1968 to combat union coercion of all kinds, including forced dues for union politics, union violence and violations of non-union employee rights in right-to-work states. In March 1995, Foundation attorney Glenn Taubman, a tenacious foe of illegal union tactics, filed a complaint on the nurses’ behalf with the Local Government Employee-Management Relations Board (EMRB), the Nevada state agency which has jurisdiction over labor disputes involving local government employees. (The NLRB does not have jurisdiction in this particular case since the nurses are recognized under Nevada statutes as public, not private sector, employees.)

Taubman’s complaint argued the fees allowed by the bargaining agreement are "facially illegal and invalid" under Nevada’s right-to-work law. It also charged that both the union and the hospital, by agreeing to the contract, "interfered with, restrained, coerced and discriminated against [the nurses] … in the exercise of their right, if they choose, to be non-members of the union, all in violation" of the law.

The EMRB rendered its decision in January 1996. Board chairman Christopher Voisin recognized the legal force of the nurses’ claims, and wrote that the union bosses’ discriminatory fee assessments had a "coercive and chilling effect on the employees in exercising their protected rights." His dissent went on to say that the union lawyers’ assertion that SEIU union bosses had the right to charge workers a "representation fee" was "beyond comprehension."

However, Voisin’s convincing objections to SEIU’s fee scheme fell on deaf ears with the board’s other two members. Tamara Barengo and David Goldwater (whose son is a Democratic Assemblyman from Clark County) disagreed with their chairman and held that the union could charge nonmembers a "reasonable service fee" for representation. Taubman and the nurses refused to accept defeat, and appealed the EMRB’s ruling to Clark County District Court.

And it was at this point that the state’s attorney general weighed in. But rather than defend Nevada’s right-to-work law, Del Papa chose to side with Local 1107. In a brief which demanded the court dismiss the nurses’ case, Senior Deputy Attorney General Jan Cohen, writing for the attorney general, defended the board’s decision to uphold the union’s actions as a "thoughtful and well researched." She further claimed SEIU Local 1107 acted within the law in discriminating against former union members—the service fees were not "discriminatory or coercive."

"[U]nion bosses are constantly attacking right-to-work laws in an effort to rake in billions more dollars in compulsory dues," said Reed Larson, president of the National Right to Work Legal Defense Foundation. "The scam pushed by Del Papa and the union bosses in this case is just such an attack."

In July 1996 the district court sided with the attorney general’s office and Local 1107, ruling against the three nurses. Taubman and his clients immediately filed an appeal to Nevada’s Supreme Court. In May, Del Papa filed legal briefs with the Court, continuing to uphold Local 1107’s fees. A decision by the Court is expected by the end of the year.

Ominous Signs for the Future

Some may conclude that declining union membership nationally—combined with Nevada’s status as a right-to-work state—must put union power in the Silver State at an all-time low. But there is growing evidence to indicate otherwise.

The state is currently the target of major union organizing efforts. In February AFL-CIO chief John Sweeney traveled to Las Vegas to make the city the starting point of a nationwide campaign to boost Big Labor’s slipping share of the nation’s private sector workforce. Sweeney announced that his organization would spend at least $6 million to "make Las Vegas a 100 percent union town." Reno has been targeted as well by organizers of the Hotel Employees and Restaurant Employees International Union, a notoriously militant labor organization.

As for campaign contributions at the state level, Sweeney and his colleagues needn’t worry. Big Labor already donates more money than any other special interest group in Nevada. As Las Vegas Sun columnist Jeff German wrote in April, "Organized labor’s return to Nevada politics is confirmed in the latest study of campaign contributions to state lawmakers. Labor ranks ahead of the casino industry, business community, mining industry and developers in contributions to the 63 members of the Nevada Legislature … Labor edged out the casino industry, contributing $576,575 to gaming’s $559,832."

Union power in the state has also been given a significant boost by Nevada’s chief executive. Last year Governor Bob Miller signed a executive order dictating that all contractors working on state-funded public works projects must select most of their employees from union hiring halls. (The legality of Miller’s executive order is also being considered by Nevada’s Supreme Court.)

And as the Cone case has demonstrated, Nevada’s own attorney general—an official sworn to uphold the laws of the state—has worked diligently to uphold a scheme that directly undercuts employees’ statutory right to avoid union financial obligations. The nurses in the Cone case may yet receive the justice they seek from Nevada’s Supreme Court, but only after overcoming legal obstructions thrown up by their own attorney general—a state official, it should be noted, who doubtless needs union support in her run for the governor’s office in 1998. Del Papa’s use of taxpayer dollars to subvert Nevada’s right-to-work law speaks volumes about the real influence of organized labor in the state. It seems reports of Big Labor’s death in Nevada are greatly exaggerated, and Bacon’s warning about the future of Nevada’s right-to-work law should not go unheeded.. u

D. Dowd Muska is a research analyst at NPRI and a contributing editor of the Nevada Journal.

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