Local governments may enact “right to work” laws, the U.S. Court of Appeals for the Sixth Circuit, in Cincinnati, has held. United Auto Workers v. Hardin County, No. 16-5246 (Nov. 18, 2016). The Court ruled that such a law is not preempted by the National Labor Relations Act. This is the first federal appellate court to weigh in on the issue.

Right to work laws prohibit workers covered by a collective bargaining agreement from being forced, as a condition of employment, to join or not to join, or to pay dues to a labor union. Although the NLRA authorizes “union security” agreements, Section 14(b) provides an exception if such agreements are prohibited by state or territorial law. Twenty-six states have enacted these laws.

In January 2015, Hardin County in the Commonwealth of Kentucky passed Ordinance 300, which provided that no person covered by the NLRA should be required as a condition of employment to become or remain a member of a labor organization, to pay dues, fees, or assessments to a labor organization, or to pay the equivalent of dues, fees, or assessments to any charity or third party. (The ordinance also sought to prohibit union hiring hall and dues check off agreements.)

The UAW and several other unions challenged the ordinance, arguing that it was preempted by the NLRA’s limitation on the passage of right to work laws to state or territorial governments — not political subdivisions thereof. The U.S. District Court for the Western District of Kentucky at Louisville agreed and held that a County ordinance was not “State law” under Section 14(b) of the NLRA and that the ordinance therefore was preempted by the NLRA under the “Garmon Doctrine” (set forth in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 247 [1959]). The Doctrine held that the NLRA preempts any state or local regulation of any activity the NLRA arguably protects or prohibits.

The Sixth Circuit reversed the District Court. It agreed with Hardin County that the phrase “State law” as used in Section 14(b) includes political subdivisions of the State. That is, to the extent Ordinance 300 prohibits employers from requiring membership in a labor organization as a condition of employment, it is not preempted and invalidated by the NLRA.The Court noted that political subdivisions are components of the state, within the state, that exercise governmental power of the state. Thus, the Court explained, the NLRA does not preempt local ordinances and, in fact, expressly permits state and local governments to pass right to work legislation. (The Court, however, invalidated the parts of the ordinance prohibiting hiring hall agreements and preventing dues check off because such provisions did not come within Section 14(b) and were subject to regulation under the Labor-Management Reporting and Disclosure Act.)

Other Circuit Courts have not weighed in on the subject, but likely will be called upon to do so as local governments look for ways to attract business if it is politically infeasible for the state in which they are located to enact a right to work law.