State Right to Work Law Not Violated by Mandatory Union Fees on Non-Members
State Right to Work Law Not Violated by Mandatory Union Fees on Non-Members
By: Danielle Team
Simms v. Local 1752, Int’l Longshoreman Assoc., 2016 U.S. App. LEXIS 17679 (5th Cir. 2016).Plaintiff-Appellant, Patrick Simms, alleged that the assessment of mandatory hiring hall fees on non-union members, as a condition of employment as a clerk, violated Mississippi’s right to work law. He was a non-union member and was employed by CSA Equipment Company, LLC (“CSA”). Pursuant to a collective bargaining agreement, CSA was required to hire its employees through a hiring hall operated by Defendant-Appellee, Local 1752. Employees who were union members paid dues to the hiring hall, while non-members paid hiring hall fees out of their paychecks. Simms, however, refused to make the required payments to Local 1752, and, as a result, his employment with CSA ended. Simms filed suit and argued that Local 1752 breached its duty of fair representation and argued that the payment agreement violated public policy. The United States District Court for the Southern District of Mississippi held that Simms failed to state a claim for breach of duty of fair representation and disagreed with Simms that the payment agreement was void against public policy. The court found that Mississippi’s right to work law was preempted by federal law and that the assessment of referral fees on non-union members was not prohibited. The Fifth Circuit reviewed de novo.First, Simms argued that Mississippi’s right to work law, Miss. Code Ann. §71-1-47, which prohibited compulsory union membership as a condition of employment, also prohibited the assessment of mandatory filing fees on non-union members. He argued that the fees amounted to “compulsory membership” under the National Labor Relations Act (“NLRA”), section 14(b) of 29 U.S.C. §164(b), because they acted as a substitute for membership dues. Simms contended that the NLRA did not preclude State regulation. Local 1752, on the other hand, argued that State law was preempted by the NLRA. In its analysis, the Fifth Circuit held that a hiring hall can assess fees on non-union members under the NLRA.The court found that historically, the NLRA permitted closed shop, union shop, and agency shop agreements. Closed shop agreements required individuals to become union members prior to beginning employment, while union shop agreements require membership after being hired. Agency shop agreements, on the other hand, require employees to make payments to the union after being hired, but do not require membership. The court noted that in the late 1940s closed shops were heavily criticized, but there was also fear of creating a “free rider problem.” Accordingly, section 8(a)(3) of the Taft-Hartley Act abolished closed shops, but allowed for limited union-security agreements in certain situations. The court distinguished between hiring halls and union-security agreements and concluded that requiring a non-union member to pay a reasonable referral fee to a hiring hall does not amount to “membership” under 14(b). Thus, the court decided that Mississippi’s right to work law was preempted by section 14(b) to the extent that it prohibited unions from assessing a penalty to non-members in the form of a hiring hall fee.Second, Simms argued that Local 1752 breached its duty of fair representation under the NLRA to act in good faith. The court found that his complaint did not meet the requirements of bad faith because all he alleged was that payment of the fees were mandatory to employment. Thus, the court held that Simms failed to state a claim alleging arbitrary, discriminatory, or bad faith conduct.
