iOn February 1, 2012, Indiana adopted a right-to-work (“RTW”) law that prohibits a labor agreement from requiring an employee to join a union and/or to pay dues to the union as a condition of employment. The RTW Act was passed by the Indiana Legislature over opposition from Democratic lawmakers who engaged in a walkout for several weeks before action could ultimately be taken to pass the law. Indiana now joins 22 other RTW states, mostly in the south and west of the United States.
The Indiana law does not require employers to inform employees about the change in the law; however, employers may wish to do so. Keep in mind that the union has little or no incentive to inform employees about RTW issues. Indiana’s law does not affect public sector employers or private sector employers covered by the Federal Railway Act (airline and rail industries).
For those private sector employers with union-free operations in Indiana, the law will have little, if any, immediate impact. However, the new legal requirements complicate union organizing and create funding challenges.
However, for those private sector employers with operations in Indiana where a union represents employees and a current labor agreement is in effect that includes either a union shop or agency shop provision, life will change. A “union shop” provision is a provision within a labor agreement that provides that a company can hire nonunion workers but the workers must become union members within an agreed upon time after hire. An “agency shop” provision is a provision in a labor agreement whereby the union can collect dues payments from all workers but membership is not compulsory. Both union shop and agency shop provisions are commonly included in existing labor agreements. However, under current federal law, in those states without RTW, a worker can be forced to pay union dues against his/her will. Those states that prohibit membership or dues payment requirements as a condition of employment are referred to as “right-to-work” states.
The Indiana law contains a grandfather provision that exempts labor agreements already in effect on March 14, 2012. Therefore, if a labor agreement covering an Indiana facility has either an existing union shop or agency shop provision, those provisions may remain in effect until the labor agreement expires. For those employers who may be negotiating with a union either for a first time labor agreement or where a prior labor agreement has expired, time is running short for the union to try to get an agreement to include a union shop or agency shop provision in the newly bargained labor agreement.
Beyond the practical effects for those employers with Indiana operations, the new Indiana RTW law presents an important political question, especially for Midwestern states. Indiana is now the only state in the central Midwest that is a RTW state. Indiana’s law places immediate pressure on the legislatures of Michigan and Ohio to consider RTW laws. The Minnesota Legislature is now considering its own RTW law (by Constitutional amendment to be ratified later by Minnesota voters). While time will tell, it’s reasonable to expect that a RTW law will be passed by another Midwest state yet this year, or in the near future.
