On Tuesday, May 12^th, a lunch panel was held at the Heritage Foundation in the Van Andel Center, where the topic of the day was local right-to-work ordinances. The host was James Sherk, a Research Fellow of Labor Economics at the Heritage Foundation.

Sherk gave an introduction of home-rule based right-to-work ordinances, a new phenomenon that has passed in twelve counties in Kentucky already. Four other counties are now considering passing right-to-work ordinances.

Since their passage the United Auto Workers union, along with several other unions, have filed a lawsuit against Hardin County and their ordinance in federal court.  

Kentucky’s home-rule statue allows counties to decide on matters of economic development. Since Warren County passed their own right-to-work ordinance eleven other counties that have followed, including Hardin County, the current center of the legal debate.

The two panelists who followed Sherk’s introductory remarks were Jim Waters and Jason Nemes. Jim Waters is the President of the Bluegrass Institute, Kentucky’s free-market think tank. Jason Nemes is an attorney with Fultz Maddox Hovious & Dickens PLC. Nemes’s firm is the one representing Hardin County in UAW v. Hardin County against the unions’ challenges.

Jim Waters explained the policy benefits of instituting right-to-work in Kentucky and how the counties who passed the ordinance have already benefited. Businesses and larger corporations will often prefer to expand in a right-to-work state, or now locality, rather than in a non-right-to-work state because of the freer and more flexible labor markets.

Which is necessary, because as Waters explained that of all the states surrounding Kentucky it is the only southern state without right-to-work and only one of six states with a split legislature.

He credits the organization Protect My Check with reaching out to him and the Bluegrass Institute on fighting the policy battle while they handle the legal battle. Waters also described specifically how the Bluegrass Institute has helped by focusing on educating the citizens of Kentucky and local leaders on the tangible benefits of right-to-work using data from sources like the National Institute for Labor Relations Research.

Some of these persuasive statistics cited by Waters included:

• Fulton County officials believe that their right-to-work ordinance will shave their unemployed rate by four to six percent.
• 4.9 Million young people moved from non-right-to-work states to right-to-work states in 2009.
• Individual incomes increased by $1,000 on average in Indiana after its state leaders passed right-to-work legislation.
• Warren County, the first county to pass right-to-work in Kentucky, has been considered for the locations of thirty new to Kentucky businesses.
• That real manufacturing GDP grew by eighty-seven percent from 2002-2012 for the twenty-two states that had right to work, but fell by two percent into states without it.
• Research by the World Bank shows that the three counties from right-to-work Tennessee that border non-right-to-work Kentucky grew by sixteen percent in the period from 2002-2012. Growth in Kentucky along that border during those ten years was only four percent.

After Water’s presentation, Nemes discussed the lawsuit against Hardin County’s right-to-work ordinance. Nine unions filed on the basis that counties do not have the proper authority to pass such economic measures. 

Nemes believes that the crux of the union’s argument, that localities cannot enact home-rule right-to-work ordinances under the National Labor Relations Act section 14.B, is flawed for two reasons. The first is that he thinks the National Labor Relations Act does not preempt Hardin County’s ordinance.

Nemes explained that before the federal government got involved in labor relations it was clear that counties could pass right-to-work ordinances.

Nemes specifies the Wagner Act and the Taft-Hartley Act as the departure points for those changes in the union argument. Nemes just so happens to also think that these arguments are false.

The second argument unions make is that then if the Wagner Act did not preempt the field then the Taft-Hartley act definitely did.

They make this claim because of section 14.B of the National Labor Relations Act which states:

 “nothing in this act shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any state or territory in which such execution or application is prohibited by state or territorial law.”

Unions claim that this passage was to offer some measure of protection to state authority, because Congress was intending to occupy the field.

Nemes has an answer to this theory as well. He points out that in the House and Senate reports on the Taft-Hartley act, as well as according to Senator Taft and to Representative Hartley, that it was never the intention of the NLRA to preempt the field.

Nemes explains that broken down 14.B means unions can have union security clauses unless a state has a clause saying otherwise. This would mean the union argument has no leg to stand on.

Nemes has little pity for the unions and says that they are reaping what they have sowed. He does not believe their common cry that right-to-work is unfair to them. He explains that there are two ways for unions to set up when they make the decision to represent workers.

The first is the one they always choose, it is be the exclusive bargaining agent for the workers. The second is to represent only their full, dues-paying members.

The first is always chosen, Nemes expounds, because being the exclusive bargaining agent means that they willing choose to represent all the workers, mainly because it means more money and more power.

Unions claim that right-to-work causes a free-rider problem because if they represent all workers, and some choose not to be forced to pay dues, then they are working for that worker for no money.

Nemes maintains this line of argument is ridiculous because the unions had the option to represent only dues paying members and elected of their own volition to represent all workers, even if they did not want to join.

Now that right-to-work is gaining steam in states all across the country, unions will just have to learn that what is good for the goose is good for the gander.