Company Accords With Unions Questioned at U.S. High Court

The U.S. Supreme Court weighed a challenge to a decades-old labor organizing practice, hearing contentions that companies can’t legally promise to stay neutral or to provide organizers with a list of employees.

In an hour-long session today, the justices showed little inclination to outlaw such agreements, even as they struggled to square the accords with a federal labor law. The dispute turns on a provision that makes it a crime for an employer “to pay, lend or deliver” a “thing of value” to a union.

Justice Elena Kagan was among those who questioned whether that provision precluded neutrality deals.

“I would have thought that the premise and the policies of the labor laws are to encourage a wide variety of employer-employee agreements,” Kagan said.

The case before the justices involves an accord between a hospitality-services labor union and a Florida dog-track company. The accord called for the company, Hollywood Greyhound Track Inc., not to oppose the unionization campaign and for the union, Unite Here Local 355, to support a ballot initiative legalizing slot machines at tracks.

The union eventually spent $100,000 in support of the 2006 initiative. Hollywood Greyhound, which does business under the name Mardi Gras Gaming, installed slot machines after the initiative passed.

The accord is being challenged by Martin Mulhall, a Mardi Gras employee opposed to unionization. A federal appeals court said Mulhall’s lawsuit could go forward.

Justice Sonia Sotomayor said she was troubled by the campaign spending. “It does feel like a bribe to the employer,” she said.

Other justices voiced greater concern that a ruling in Mulhall’s favor would undermine legitimate agreements between unions and companies. Justice Stephen Breyer said Mulhall’s arguments had the potential to “create a mess.”

Justice Anthony Kennedy asked Mulhall’s lawyer to acknowledge that his argument “is contrary to years of settled practices and understandings.”

The case is United Here v. Mulhall, 12-99.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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