James M. Sweeney v. Michael R. Pence
200 L.R.R.M. (BNA) 3465
7th Cir.2014Background
- Indiana enacted the Right to Work Act (Feb. 1, 2012), forbidding requiring employees as a condition of employment to: join a union, pay dues/fees/assessments to a union, or pay an equivalent amount to a charity/third party. Sections 8–12 apply prospectively; Section 3 concerns construction-industry exceptions.
- International Union of Operating Engineers, Local 150 sued Indiana officials in federal court alleging: NLRA preemption and multiple federal constitutional violations (Fifth Amendment Takings, Contracts Clause, Ex Post Facto, Equal Protection, and First Amendment claims).
- The district court dismissed the federal preemption and constitutional claims; the union appealed to the Seventh Circuit.
- The Seventh Circuit majority affirmed dismissal, holding the NLRA (via § 14(b)) does not preempt Indiana’s prohibitions and the state law does not violate asserted federal constitutional rights. The opinion rests heavily on Supreme Court precedent and legislative history surrounding § 14(b).
- A separate dissent argued § 14(b) was read too broadly, that preemption should apply to Indiana’s ban on representation/agency fees, and that if not preempted the statute effectually confiscates union-provided services (possible Takings violation).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NLRA preempts Indiana § 8(2)-(3) and § 3(2)-(3) | Indiana may not bar collection of Representation (fair-share) fees; § 14(b) preserves only state power to ban agreements requiring full membership, not to bar reimbursements for representational costs | § 14(b) preserves broad state authority to prohibit union-security arrangements, including bans on compulsory payment of dues/fees or equivalent charitable payments | Not preempted: § 14(b) leaves states free to outlaw agreements requiring "membership," which courts (Retail Clerks, Gen. Motors, Beck) interpret to include financially equivalent representation fees; Indiana law stands |
| Whether criminal penalties or § 8(3)’s charity-payment ban are preempted | Union: NLRA (and § 19) preempts state prohibition on alternative charitable payments and possibly criminal enforcement of labor rules | State: Retail Clerks II preserves state power to enforce such statutes; § 19 presupposes existence of a union-security agreement and does not override § 14(b) | Not preempted: state enforcement and § 8(3) are valid under § 14(b) and statutory scheme |
| Takings and related due‑process/compensation claims | Dissent/Union: forcing unions to represent nonpayors without reimbursement is an uncompensated taking of property/services | Majority: union’s exclusive-bargaining rights and corresponding benefits (seat at table, exclusive representation) offset; union’s Takings claim was not raised below and is largely a federal-law consequence, not a state taking | Takings argument not reached as an independent winning claim; majority rejects the notion that Indiana’s law effects an unconstitutional taking |
| First Amendment / Equal Protection / Contracts / Ex Post Facto | Union: law burdens unions’ political speech (by reducing funds), impairs contracts, and may apply retroactively (Contracts/Ex Post Facto) | State: unions have no constitutional entitlement to nonmembers’ fees; statute is prospective (Section 13) and passes rational-basis review for equal protection; no retroactivity | Claims rejected: statute not applied retroactively; First Amendment/equal protection claims reviewed under rational basis and failed; Contracts/Ex Post Facto claims fail because law is not retroactive |
Key Cases Cited
- NLRB v. Gen. Motors Corp., 373 U.S. 734 (superseding interpretation of "membership" in § 8 context) (Supreme Court interpretive guidance on financial-core membership)
- Retail Clerks Int’l Ass’n v. Schermerhorn, 373 U.S. 746 (Supreme Court 1963) (§ 14(b) protects state power over agency/union-security agreements)
- Retail Clerks Int’l Ass’n v. Schermerhorn, 375 U.S. 96 (Supreme Court 1963) (legislative history and § 14(b) show Congress did not preempt states on union-security law)
- Communications Workers v. Beck, 487 U.S. 735 (Supreme Court 1988) (limits compelled fees to expenses "germane" to collective bargaining — the "financial core")
- Abood v. Detroit Bd. of Educ., 431 U.S. 209 (Supreme Court 1977) (duty of fair representation and permissible agency-fee framework)
- Int’l Ass’n of Machinists v. Street, 367 U.S. 740 (Supreme Court 1961) (union as exclusive bargaining representative entails duty to represent all employees)
- Garmon (San Diego Bldg. Trades Council v. Garmon), 359 U.S. 236 (preemption principle where state regulation conflicts with areas covered by the NLRA)
- Lodge 76, Int’l Ass’n of Machinists v. Wisconsin Emp’t Relations Comm’n, 427 U.S. 132 (state regulation preemption principles)
- Phillips v. Washington Legal Foundation, 524 U.S. 156 (Supreme Court 1998) (state compulsion to transfer private funds examined under Takings framework)
- Brown v. Legal Foundation of Washington, 538 U.S. 216 (Supreme Court 2003) (takings analysis for compelled transfer of private funds)
- Harris v. Quinn, 134 S. Ct. 2618 (Supreme Court 2014) (agency-fee/First Amendment limits in public‑sector context; recognizes competing First Amendment interests)