Wednesday, March 11, 2015

Wisconsin Right to Work Legislation


I.                   Wisconsin’s Right-to-Work Law

 

            Wisconsin’s Right-to-Work Law was signed by Governor Walker on March 10, 2015. The new law prohibits a labor contract from containing provisions which require workers to join a union and pay dues as a condition of obtaining or continuing employment. Specifically, the new law prohibits private employers from negotiating union contracts that require an individual to:  (1) refrain or resign from membership or voluntary affiliation with a labor organization; (2) become or remain a member of a labor organization; (3) pay dues or other fees to a labor organization; or (4) pay any third party an amount that is in place of, equivalent to, or a portion of dues or other charges required by members of a labor organization. Anyone who violates this law is subject to criminal penalties for a Class A misdemeanor, which may constitute a fine of up to $10,000, imprisonment up to nine months, or both.

 

            It is important to note that the new law does not impede a worker’s rights under the federal National Labor Relations Act, nor does it prevent unionization of private sector workplaces. Employers cannot ban union membership, but they also cannot require it.

 

            Notably, on Tuesday, March 11, 2015, a lawsuit challenging the law was already filed in Dane County by the Wisconsin AFL-CIO and local chapters of the International Association of Machinists and United States Steelworkers Association. The complaint alleges that the law violates the state constitution because it deprives the unions of property without just compensation. Similar lawsuits have been filed in other right-to-work-states, including Indiana, but the claims have failed.

 

II.                Effective Date:  March 11, 2015

 

            The new law became effective immediately (as of March 11, 2015), but it only applies to collective bargaining agreements that are executed, renewed, modified, or extended on or after March 11, 2015. Thus, any existing, mid-term labor contracts that were signed before March 11, 2015 will remain in effect until the contract is renewed, modified, or extended. Employees under those existing contracts will still be required to pay union dues.

 

            Additionally, the institution of the new law does not mean that unionized workers can immediately withdraw union membership. Unionized workers who are currently under a contract that pre-dates the law may be required to remain a member and pay dues until the contract term has expired. Furthermore, most unions only allow members to drop during brief annual periods, and if the member does not do so, the membership automatically renews. Unions tend to make it difficult for workers to withdraw, and the text of the law does not specify how members can terminate their memberships.

 

 

 

III.             Employer Implications

 

            Due to the infancy of the law, it is hard to pinpoint the exact effects this new law will have on employers. However, Wisconsin is the 25th state to enact a right-to-work law, and it may be helpful to examine the effects similar laws have had on employers in other right-to-work states. Many right-to-work states report that the laws give employers more freedom in hiring and more leeway with wages. On the other hand, opponents of the law contend that right-to-work laws drive down wages. Opponents are also concerned that the law causes a “free-rider” problem because even non-unionize workers who do not pay union dues are covered by many collective bargaining agreements.

           

            One of the major effects of the law may be a significant decrease in union membership. In Michigan, for example, union membership reportedly declined by 48,000 members even as the workforce grew by 44,000 people in 2014. The sharp decline in membership has resulted in decreased union revenue and support from employees, which weakens the bargaining power of the union. Therefore, employers will have more bargaining power when negotiating labor contracts. For this reason, and many others, right-to-work states become more attractive to employers, thus bringing more jobs to the state. Right-to-works laws are expected to boost the state economy consequently.

           

IV.             Conclusion

 

Essentially, employers and employees are required to abide by existing, mid-term labor contracts even if they require membership dues. Any contracts executed, renewed, modified, or extended after March 11, 2015 cannot require union membership or payment of union dues as a condition of obtaining or continuing employment. Although the particular implications on employers remain to be seen, it is important that employers are aware of this new law when negotiating new labor contracts.

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