It's the Law: Governor Daniels Signs Indiana's Right-to-Work Bill

Indiana is now the nation's 23^rd right-to-work state.  As we previously informed you, last week the Indiana House of Representatives passed right-to-work legislation by a vote of 54-44.  Today, by a vote of 28-22, and without any changes to the House's version, the Senate also passed that legislation.  This afternoon, Governor Daniels signed the bill into law.

What follows are answers to many Frequently Asked Questions regarding Indiana's Right to Work Law.

1.         What does Indiana's Right-to-Work Law prohibit?

Indiana's Right-to-Work Law ("RTW") makes it a Class A misdemeanor to require an individual as a condition of employment to:

(A)       Become or remain a member of a labor organization;

(B)       Pay dues, fees, assessments or other charges to a labor organization; or

(C)       Pay to a charity or another third party an amount that is equivalent to, or a pro rata part of, dues, fees, or other charges required of a member of a labor organization.

2.         Does RTW outlaw labor unions in Indiana?

No.  RTW simply prohibits the payments noted in #1 above as a condition of employment.

3.         When does RTW become effective?

March 14, 2012.

4.         Are any private sector Indiana employers excluded from RTW?

RTW applies to all employers with one or more employees in Indiana, with the exception of employees or employers subject to the Railway Labor Act or employees employed on property over which the United States government has exclusive jurisdiction.  As a result, RTW applies to nearly all Indiana employers. 

5.         Does RTW apply to construction industry employers and unions?

Yes, unless the limited exceptions in #4 are applicable.

6.         How does RTW affect current collective bargaining agreements?

Under RTW, contracts in effect as of March 14, 2012, will not be affected.  However, once any such contracts expire, are modified, renewed, or extended, then RTW's prohibitions will apply.

7.         How does RTW affect collective bargaining agreements that are being negotiated now but are ratified or take affect after March 14, 2012?

RTW would apply to these agreements.

8.         Who investigates violations of RTW?

An individual who is employed by an employer may file a complaint that alleges a violation or threatened violation of RTW with the Indiana Attorney General, the Indiana Department of Labor, or the prosecuting attorney of the county in which the individual is employed. 

9.         Can an individual sue for a violation of RTW?

Yes.  If an individual is injured because of an actual or threatened violation of RTW, that individual may bring a civil action in state court.  The court can award a successful plaintiff:

(A)       The greater of:

(i)        The actual and consequential damages resulting from the violation or threatened violation; or

(ii)        Liquidated damages of not more than $1,000;

(B)       Attorneys' fees, litigation costs, and expenses;

(C)       Declaratory or injunctive relief; and

(D)       Any other relief the court considers proper.

10.       How does RTW affect provisions in post-March 14, 2012 collective bargaining agreements that require employees to pay into certain union-related funds?

RTW only applies to agreements between "employers" and "labor organizations."  A "labor organization" is defined by RTW as an organization, agency, union or employee representation committee that exists, in whole or in part, to assist employees in negotiating with employers concerning grievances, labor disputes, wages, rates of pay, or other terms and conditions of employment If the funds to which the contributions are made do not exist to assist employees in negotiating with employers as discussed above, or employment is not conditioned upon employees' contributing to those funds, RTW would not be violated by post-March 14 collective bargaining agreement provisions that require employees to pay into certain union-related funds.

11.       How does RTW affect provisions in post-March 14, 2012 collective bargaining agreements that require employees to make payments directly to a union that the union then sends to certain funds or that the union sends back to employees in the form of a wage supplement?

Unions, obviously, are included in the definition of a "labor organization" under RTW.  If in a post-March 14, 2012 collective bargaining agreement an employee's continued employment is conditioned upon payment to a union of any type of dues, fees, assessments, or charges, then such provisions would violate RTW.

12.       How does RTW affect provisions in post-March 14, 2012 collective bargaining agreements that require employers to make payments to certain union-affiliated funds?

RTW has no effect on such payments, as the payments are being made by employers and not employees, and employees' continued employment is unrelated to such employer payments.

13.       If an employee in a bargaining unit decides, under RTW, not to be a union member or pay any equivalent or pro rata fees, assessments etc., does the collective bargaining agreement apply to the employee?

Yes.  Even though the employee is not a union member and is not paying any type of dues, fees, or other assessments to the union, the employee remains a member of the bargaining unit, and the collective bargaining agreement applicable to that bargaining unit applies to the employee.

14.       If an employee in a bargaining unit decides, under RTW, not to be a union member or pay any equivalent or pro rata fees, assessments etc., does the union have to process the employee's grievances and represent the employee in arbitration?

Yes.  Under the National Labor Relations Act ("the Act"), a union is required by law to represent all individuals in a bargaining unit equally, regardless of whether individuals are, or are not, members of the union.  Unions have the discretion, however, to determine whether particular grievances should be taken to arbitration—but unions cannot exercise their discretion discriminatorily.

15.       If an employee in a bargaining unit decides, under RTW, not to be a union member or pay any equivalent or pro rata fees, assessments etc., can unions charge non-members fees to process grievances?

No.  The National Labor Relations Board ("the Board") has held that unions must treat members and non-members identically when providing grievance processing services.  As a result, the Board has held that unions violate the Act if they charge non-members the cost of providing a service that members get for free (even though members pay dues). 

16.       If an employee in a bargaining unit decides, under RTW, not to be a union member or pay any equivalent or pro rata fees, assessments etc., can the union prohibit the employee from voting in any internal union matters, including in collective bargaining agreement ratification votes?

Yes. The National Labor Relations Act permits unions to enact bylaws or rules that exclude non-members from participating in internal union votes, including contract ratification votes.

If you have questions about right-to-work's impact on your business, please contact any of Faegre Baker Daniels' labor lawyers.