While the National Labor Relations Board (NLRB) has been embroiled in controversy—overturning or modifying decades of precedent and having its appointments challenged in federal court—state legislatures have been busy drafting and passing right-to-work (RTW) and other pro-business legislation. RTW legislation prohibits employers and unions from agreeing to union security clauses during collective bargaining, thus leaving employees with a personal choice as to whether they will pay union dues for union representation. While experts disagree on the economic impact that RTW legislation has on state economies, it is clear that states are reexamining RTW as a way to become more attractive to business investment.
In 1947, a Republican Congress passed the Taft-Hartley Act, amending the National Labor Relations Act (NLRA), over President Truman’s veto. Among many changes to the Act, Taft-Hartley created Section 14(b) of the NLRA. This new section specified that nothing within the NLRA prohibited states from passing laws making forced membership in a labor organization illegal. This legislation largely was a response to an extensive post-war, concerted union organizing drive in many southern states, code-named Operation Dixie. Operation Dixie failed, leaving direct competitors for northern union jobs in nearby southern states.
At the same time post-war unions were attempting to push into the southern states, Section 14(b) of the NLRA led to intense debate during the 1950s. Almost every state considered RTW legislation. Today, there are 24 states with RTW laws, but after Oklahoma passed its legislation in 2002, nearly a decade passed without another state taking the plunge. Continued competition from non-union southern manufacturing facilities, strong overseas competition, and the recent economic downturn have left the former union stronghold “rust belt” states vulnerable to RTW legislation. In 2012, RTW appeared for the first time in a traditional “rust belt” state—Indiana.
Indiana Governor Mitch Daniels supported RTW legislation in 2012 after refusing to make it an issue in 2011. Governor Daniels pressed for RTW legislation after meeting with the leaders of several major companies, all of whom expressed that they would not bring jobs to Indiana without it. After debate and several protests at the state capitol, Governor Daniels signed the legislation on February 1, 2012. Union advocates loudly protested the new law during Indianapolis’ hosting of the Super Bowl that year.
The Indiana legislation followed the heated debate over collective bargaining rights in Wisconsin. In March of 2011, Wisconsin had passed laws banning most collective bargaining in public sector employment. Despite a heavy push from union supporters in Wisconsin, Governor Scott Walker convincingly won a 2012 recall election that was essentially a referendum on his support for the collective bargaining law.
While the benefits of RTW legislation continue to be debated, states in the Northeast and Central Midwest— historically areas of strong union support— are now seriously considering RTW bills. Many argue that with Indiana becoming the first “rust belt” state with a RTW bill, other states must now consider the issue to remain competitive in luring businesses and jobs.
Most recently Michigan—the very epicenter and symbol of U.S. union support, stunningly became the latest state to enact RTW legislation. The path RTW legislation took in the Wolverine state, though, was indeed filled with twists and turns. In the past, Governor Rick Snyder had publicly expressed that RTW was too divisive an issue given Michigan’s other pressing problems. That stance changed when labor unions sought to enshrine collective bargaining rights in the Michigan constitution with a referendum vote.
The ballot initiative was defeated by a margin of 58 percent to 42 percent in November 2012. In response, Governor Snyder expressed his support for RTW legislation following the November election and two bills were quickly proposed in the House and Senate. Despite raucous protests by union supporters around the state house, Michigan became the 24th state to pass a RTW law on December 12, 2012.
Since then, union supporters have been dealt two fresh blows in federal court cases challenging two anti-union pieces of legislation. First, on January 17, 2013, an Indiana federal district court dismissed the International Union of Operating Engineers’ challenge to the Indiana RTW law. Second, on January 18, 2013, the Seventh Circuit Court of Appeals (covering Wisconsin, Indiana, and Illinois) overturned a Wisconsin district court’s ruling that parts of the Wisconsin collective bargaining law were unconstitutional.
What is the future of further RTW efforts? Pennsylvania has introduced its own package of six bills aimed at giving workers the power to determine whether or not to join unions, with Republican lawmakers hoping to gain more support than during previous attempts at passing such legislation.
While Pennsylvania’s legislation faces a tough uphill battle from union supporters around the state, specifically from the southeastern part of the state, Republicans do control the governor’s office and both houses of the legislature. Currently, Pennsylvania is one of only four states having a Republican governor and a Republican-controlled legislature that does not have a RTW law.
Pennsylvania is not alone in revisiting this issue. Ohio is also a key participant in the RTW debate, but its Republican leadership has failed in the past to support the measure. With Michigan’s passage of RTW legislation, Ohio, a direct competitor with Michigan for many manufacturing jobs, has been rumored to be a target of renewed RTW efforts.
In the central Midwest, Missouri House Speaker Tim Jones found Michigan’s decision on RTW a catalyst for his own push to support RTW legislation. Jones recently endorsed both a ballot referendum and a general law concerning RTW. Republicans in Missouri hold a veto-proof majority in the state legislature and can pass any measure over Missouri’s Democratic Governor, Jay Nixon. While several previous bills on the issue have languished in the Missouri legislature without much action, Speaker Jones’ endorsement will provide for a more robust debate on the issue in the coming months.
In New England, the New Hampshire legislature passed RTW legislation for the second straight year. But, also for the second straight year, Governor John Lynch vetoed it in 2012 and his successor, Governor Maggie Hassan is likely to veto any future legislation. New Hampshire Republicans do not have enough votes to overcome the veto. Elsewhere in New England, Maine has been identified as another potential state where RTW legislation could be introduced.
Even states such as Virginia, which already has a RTW law, are seeking more stringent protection. On January 28, 2013, additional RTW legislation was narrowly defeated on a 20-20 tie vote in the Virginia Senate. That legislation sought to amend the Virginia state constitution with RTW provisions. Many other states, such as Alaska, Colorado, Maryland, and Montana have introduced failed bills in the past two years.
Both sides of the RTW debate have spent millions of dollars and many years researching the value of RTW legislation to state economies. Given the complexity of state economies and the lure of other incentives such as tax subsidies, personal and business income tax laws, and other economic and social incentives, it is impossible to gauge the true impact of RTW legislation. But, it is clear that states with RTW laws see a decrease in union membership over time.
A Final Note
While RTW’s economic benefits are still debated, it is clear the economic issues facing states today as they compete for jobs and business opportunities have made RTW legislation more and more popular. As federal agencies, especially the NLRB, become more prounion, state legislatures are taking up the banner for RTW legislation as a way to make their states more competitive in the future. It looks like Indiana and Michigan may be just the beginning of a new wave of RTW states. As many proponents of RTW have said, if RTW legislation can happen in Michigan, it can happen anywhere!