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Employment Blog

Right-to-Work Legislation and the Union “Free-Rider” Conundrum: The Rest of the Story

Authored by Ruder Ware Attorneys
Posted on February 27, 2015
Filed under Employment

This week, the Wisconsin State Senate passed the much maligned “right-to-work” bill—which now moves onto the State Assembly [and is anticipated to be signed into law by Governor Walker]. In reading about the controversial legislation, and talking to friends and colleagues about it too, I’ve repeatedly heard about one of the arguments against the proposed law—the so-called union “free-rider” problem. In response to often inadequate coverage of, or misunderstanding of, the union “free-rider” problem, I feel compelled to channel my inner Paul Harvey, and share the “rest of the story.” The “free-rider” problem is a response to right-to-work legislation proposals. The basic tenet of the “free rider” problem is that right-to-work laws create an inherently unfair environment in which labor unions are forced to exclusively represent a unit of employees that includes those who choose to opt out of becoming union members and paying union dues—the “free riders.” For many, this concern intuitively makes sense and provokes impassioned support. However, it may also be shown that the “free-rider” problem is not really a problem at all—keep reading.

The National Labor Relations Act, as interpreted by the National Labor Relations Board, has long permitted unions and employers to enter into “members-only” collective bargaining agreements, through which unions are only obligated to represent those employees within a designated bargaining unit that become union members and pay union dues—thus, avoiding the “free-rider” problem altogether. Generally, an employer is legally prohibited from recognizing and bargaining with a union for exclusive representation of a unit of employees—if the union does not represent a majority of the employees in the unit. In other words, it is illegal for an employer to bargain with or recognize a labor union in connection with a proposition for exclusive representation, if that union only has the support of a minority of the employees in the proposed bargaining unit [often called a “sweet heart union”]—based on notions of fundamental fairness [the notion that it is not right or fair for a minority of workers to be able to dictate the terms and conditions of employment for the majority of employees]. However, an employer may [but is not currently required to] recognize and negotiate with a minority union if the scope of representation is limited to “members only”—meaning only those employees who pay union dues [not all employees within a designated unit or classification of employees]. Presently, however, unions cannot force employers to negotiate “members-only” agreements. Nevertheless, “members-only” agreements are viable, and exist as a solution to the “free-rider” conundrum. 

One can, and should, debate the merits of right-to-work legislation—this debate is healthy, worth having and essential in our democratic society. However, the persuasive power of the union “free-rider” problem must, to some degree, be tempered against the availability of “members-only” collective bargaining agreements as a realistic solution.