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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