Seventh Circuit Strikes Municipal Right-To-Work Law, Splitting with the Sixth Circuit 

Labor & Employment Alert

October 15, 2018

On September 28, 2018, the Seventh Circuit affirmed a ruling striking down a right-to-work ordinance passed by the village of Lincolnshire, Ill., holding that the National Labor Relations Act does not grant local governments the power to, among other things, bar mandatory union membership.

In 2015, Lincolnshire passed an ordinance purporting to forbid (1) the mandatory use of hiring halls, (2) dues check-off arrangements, and (3) union security provisions in collective bargaining agreements. With respect to union security agreements, the ordinance specifically forbade any requirement that workers join a union, compensate a union financially, or make payments to third parties in lieu of such contributions. It barred any requirement that employees be vetted or referred for employment by a union. Finally, the ordinance prohibited employers from making any payments to unions on workers’ behalf except pursuant to a revocable written, signed authorization.

A collection of unions sued Lincolnshire, asserting that the NLRA preempted the ordinance. Lincolnshire claimed it was empowered to enact the ordinance under section 14(b) of the NLRA, which permits states and territories to bar compulsory union membership as a condition of employment. Lincolnshire claimed it was entitled to exercise the state’s power because it is a political subdivision of Illinois. The district court granted summary judgment in favor of the unions. Lincolnshire appealed to the Seventh Circuit.

The Seventh Circuit reviewed the ordinance and found that all three challenged provisions were preempted by the NLRA. But since section 14(b) gives states authority to pass right-to-work laws (but does not address hiring halls and dues checkoffs), that was not the end of the analysis as to the validity of the union-security provision.

Based on the plain language of section 14(b) alone, which speaks of “State or Territorial law,” the ordinance was unlawful because there is no reference to local legislation. The court acknowledged, though, that it is sometimes true that a state’s power to pass a law may be delegated, even if the statute does not explicitly say so. Not so here, the court determined, because labor law is “one of the rare areas in which Congress has preempted the field.” Therefore it would not make sense to allow states to re-delegate the limited power given by section 14(b) because then “no one would be able to figure out what is legal and what is not.”

Consider that as of 2012, the United States had more than 90,000 general and special-purpose governments and almost 7,000 local governments in Illinois alone. An employer’s duty to bargain could “shift from day to day, or month to month, or job to job.” Workers could be subject to different agreements at different job sites in different municipalities. As the court explained in rejecting Lincolnshire’s argument that employers could handle differing municipal laws since they already deal with separate state laws, even tolerating some variance between states does not negate the NLRA’s goal of national uniformity. For these reasons, the court concluded that interpreting the words of section 14(b) to permit delegation to local units of government would “do violence to the broad structure of labor law.”

As discussed by the court, its ruling regarding the union-security provision is in line with a similar, though dated, ruling by Kentucky’s highest court, but conflicts with a 2016 ruling by the Sixth Circuit that held that a municipality had the power under section 14(b) to enact union security clauses. Both the Kentucky court and Sixth Circuit held that hiring hall and dues checkoff provisions were outside the scope of section 14(b) and thus preempted by the NLRA. Given the circuit split on the union security issue, counsel for Lincolnshire has already announced its intention to appeal the ruling to the Supreme Court.

Related Practices

For more information contact please contact Orly Henry at (312) 382-3106 or