Right-to-work laws prohibit employers from entering into union security or “closed shop” agreements with unions that require employees to join and financially support a union in order to obtain employment. Twenty-seven U.S. states presently have such laws. In some states that do not have these laws, cities have passed local right-to-work ordinances to apply to employers doing business in their city. These municipal-level efforts to address right-to-work issues are routinely challenged by labor unions as being preempted by the federal National Labor Relations Act (NLRA).

On such challenge was raised to a local right-to-work ordinance passed by the Village of Lincolnshire, Illinois. Illinois does not have a statewide right-to-work law; in 2015, Lincolnshire passed its own ordinance banning employers in the village from entering into union security agreements requiring that employees join a union, compensate a union financially, or make payments to third parties in lieu of such contribution.

On September 28, 2018, the United States Court of Appeals for the Seventh Circuit ruled in International Union of Operating Engineers Local 399, et al. v. Village of Lincolnshire, et al., that the NLRA prohibits local municipalities from passing right-to-work laws. In doing so, it affirmed the district court, which struck down Lincolnshire’s ordinance, finding it preempted by the NLRA based on its conclusion that Congress likely did not intend for the provision in Section 14(b) of the NLRA, which permits states to bar compulsory union membership as a condition of employment, to apply to municipalities. The Seventh Circuit explained that Section 14(b) does not allow the state to re-delegate that power to the municipalities. The court reasoned that allowing municipalities to create local laws governing organized labor – which is regulated almost exclusively by federal law – would create confusion about what is lawful and what is not, making compliance impossible and impractical.

This decision creates a circuit split, as in 2016, the United States Court of Appeals for the Sixth Circuit in UAW, et al. v. Hardin County Kentucky, et al. interpreted the same section of the NLRA but held that it does permit municipalities to make their own laws regarding union security clauses. The Sixth Circuit read Section 14(b) differently from the Seventh Circuit, holding that the word “state” as used in the section includes municipalities, and states may delegate their law-making authority to local governments.

The Seventh Circuit’s recent ruling and its opposite conclusion from the Sixth Circuit sets up a possibility that the issue may make its way to the United States Supreme Court. Until then, municipalities in the Seventh Circuit (Illinois, Indiana, and Wisconsin) are prohibited from passing right-to-work laws while those in the Sixth Circuit (Kentucky, Michigan, Ohio, and Tennessee) are free to enact such local legislation.