Indiana Right-to-Work Law Constitutional, U.S. Court Says

An Indiana law that bars making the payment of union dues a condition of getting or keeping a job is valid under the U.S. Constitution, a divided federal appeals court ruled.

Twenty-four states have some form of such so-called right-to-work measures and most are “substantially identical” to Indiana’s law, the Chicago-based panel said in a 2-1 ruling today.

The decision comes almost a year after an Indiana trial court said the measure violated the state’s constitution. That ruling will be argued before Indiana’s Supreme Court on Sept. 4. A second state-court judge also ruled against the law. The state is appealing.

In addition to barring making union dues a condition of employment, the legislation signed by now-former Governor Mitch Daniels in 2012 says people can join worksite unions without paying any fees to that group or an equal amount to a charity.

Failure to comply with the legislation was made punishable as a misdemeanor.

Lawyers for the suing members of the International Union of Operating Engineers, Local 150 of the AFL-CIO, contended the law requires unions to represent nonmembers equally at the bargaining table, creating a “free rider problem,” according to the majority decision.

U.S. Circuit Judge John Tinder, writing for the majority, disagreed.

‘Justly Compensated’

“The union is justly compensated by federal laws’ grant to the union the right to bargain exclusively with the employer,” he and U.S. Circuit Judge Daniel Manion said. “The reason the union must represent all employees is that the union alone gets a seat at the negotiating table.”

They also concluded Indiana’s laws aren’t pre-empted by federal labor laws or U.S. constitutional guarantees of free speech, free assembly and free association.

Chief U.S. Circuit Judge Diane Wood dissented.

“The nonmember of the union will reap the benefits of being represented by the union during a grievance, for instance, but he will pay nothing for those benefits which might include a lay representative, maybe even a lawyer, investigative services and so on -- all things that cost the union real dollars to provide,” she said.

Both Tinder and Manion were appointed to the federal bench by then-President Ronald Reagan, a Republican, while Wood was named to the appellate court by Bill Clinton, a Democrat.

‘Free Ride’

“In short he will take a ‘free ride’ on the dues that union members make to the union,” Wood said.

Union attorney Dale Pierson, who argued the case before the panel, didn’t immediately respond to a voice-mail message seeking comment on the ruling.

The Countryside, Illinois-based local has members in northern Indiana, northern Illinois and northeastern Iowa. James M. Sweeney, president of and lead plaintiff for the union local, didn’t immediately respond to a voice-mail message seeking comment.

“Now that the federal courts have concluded the statute the people’s elected representatives in the Legislature passed does not violate federal law, we will argue that the statute also complies with the Indiana Constitution and ought to be upheld,” Indiana Attorney General Greg Zoeller said in a statement.

The case is Sweeney v. Pence, 13-1264, U.S. Court of Appeals for the Seventh Circuit (Chicago).

To contact the reporter on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn, Charles Carter

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