Welcome to Alabama, Right-to-Work State and Home of Agency Shops? | Practical Law

Welcome to Alabama, Right-to-Work State and Home of Agency Shops? | Practical Law

An Article about conflicts between federal law and state right-to-work laws, authorized by the Labor Management Relations Act (LMRA), and the application of federal or state law to union security clauses within federal enclaves in right-to-work states.

Welcome to Alabama, Right-to-Work State and Home of Agency Shops?

Practical Law Article 1-617-5644 (Approx. 15 pages)

Welcome to Alabama, Right-to-Work State and Home of Agency Shops?

by Practical Law Labor & Employment
Law stated as of 21 Jul 2015ExpandAlabama, Arizona, Arkansas...Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, Wyoming
An Article about conflicts between federal law and state right-to-work laws, authorized by the Labor Management Relations Act (LMRA), and the application of federal or state law to union security clauses within federal enclaves in right-to-work states.
A union shop is a workplace where an employee must join the union representing the employer's workforce within a certain time frame set by the employer and the union. An agency shop is a workplace where an employee must pay a fee to the union representing him in collective bargaining within a time frame specified by the employer's and the union's agreement. (See Oil, Chem. & Atomic Workers v. Mobil Oil, 426 U.S. 407, 409 n.1 (1976).)
Alabama is a right-to-work state that bars unions and employers from agreeing to create or maintain either union shops or agency shops through collective bargaining (see Ala. Code §§ 25-7-31, 25-7-32 and 25-7-34).
Despite this prohibition, Alabama is the home of agency shops created by collective bargaining agreements (CBAs) that Practical Law has analyzed in its What's Market Collective Bargaining Agreement Database. This Article explains these anomalous CBAs, provides links to their What's Market summaries and explains why labor attorneys should consider developing or seeking out expertise in government real property transfers if negotiating or administering CBAs on federal enclaves.

Federal Law on Union Security Clauses

In the National Labor Relations Act (NLRA), Congress provided that no federal law would preclude an employer from making an agreement with an independent union to require as a condition of employment membership in that union (29 U.S.C. § 158(a)(3)).
Unions historically negotiated agreements with employers to secure their position as bargaining unit representative. Those agreements, often called union security clauses, would be incorporated into the CBAs setting bargaining unit employees' employment terms and conditions and were used to ensure that the union would gather and retain members. In particular, the union security clauses made employment conditional on applicants' or employees' continued membership in, or financial support for, the union.
The three common types of union security clauses were:
  • Closed shop clauses, under which an employer was precluded from hiring anyone who was not a member of the union at the time of hiring.
  • Union shop clauses, under which an employer was required to terminate any bargaining unit employee the union identified as failing either to:
    • join the union within a specified time frame; or
    • maintain union membership in good standing.
  • Agency shop clauses, under which an employer was required to terminate any bargaining unit employee the union identified as failing either to pay:
    • a fee equivalent to the union's customary initiation fees and monthly dues (an agency fee) within a specified time frame; or
    • that agency fee at specified intervals, usually monthly.
Conversely, a workplace where there is no union security clause requiring membership in, or payments to, a union as a condition of hiring or continued employment was often called an open shop.
Through the Labor Management Relations Act of 1947 (LMRA) (29 U.S.C. §§ 141 to 187), Congress made sweeping changes to the NLRA. The LMRA, among other things:
In particular, Section 14(b) of the LMRA provided that nothing within the NLRA, as amended, or the LMRA should be construed as authorizing unions or employers to execute or apply agreements requiring membership in a labor organization as a condition of employment in any state or territory that prohibited those actions (29 U.S.C. § 164(b); see Oil, Chem. & Atomic Workers, 426 U.S. at 409 n.2 and Retail Clerks v. Schermerhorn, 373 U.S. 746 (1963)).
Currently, 25 right-to-work states prohibit unions and employers from agreeing to one of the following:
  • Union shop clauses.
  • Agency shop clauses.
  • Both union shop and agency shop clauses.
Each of these state right-to-work laws, authorized by US Code provisions concerning private sector employees covered by the NLRA, have no bearing on employees covered by the Railway Labor Act (RLA) (see Practice Note, Railway Labor Act: Overview).
Although Congress was aware of Section 14(b) of the LMRA implemented four years earlier, it amended the RLA in 1951 to permit covered rail and air carriers and enterprises and their employees to enter into union shop agreements despite any conflicts with any other federal law or the laws of any state or territory (45 U.S.C. § 152 Eleventh; see Ry. Emps.' Dep't v. Hanson, 351 U.S. 225 (1956)).

When Right-to-work Laws and Federal Labor Law and Policy Clash

The US Supreme Court has recognized that Congress has sanctioned a conflict between state right-to-work laws and federal labor law and policy, granting in most circumstances the state laws the right of way. In particular, while Section 8(a)(3) of the NLRA sets a national policy that union-security clauses other than closed-shop clauses are valid, Section 14(b) of the LMRA authorizes states and territories to exempt themselves from that policy through right-to-work legislation. (Oil, Chem. & Atomic Workers, 426 U.S. at 416-417.)
Federal courts have needed to resolve to what extent a right-to-work law can apply to workers:

Jurisdictional Questions in Intra-state Federal Enclaves

Under Article I, Section 8, clause 17 of the US Constitution, Congress may exercise legislative authority over lands that states have ceded and Congress accepted to form a seat for the federal government or permitted the federal government to purchase to erect forts, dockyards and other "needful" buildings. (U.S. Const. art. I, § 8, cl. 17). Congress may acquire derivative legislative power over territory in a state from that state through:
  • A consensual land acquisition.
  • A state's cession of legislative authority over land the federal government obtained through a non-consensual acquisition.
Depending on the terms of the legislation, deeds or other mechanisms under which the federal government acquired the state land, this derivative legislative power in these federal enclaves may range from:
  • Exclusive federal jurisdiction with no residual state police power.
  • Concurrent jurisdiction, where, in granting to the federal government authority that would otherwise amount to exclusive legislative jurisdiction over an area, the state reserves to itself the right to exercise, concurrently with the federal government, all of the same authority.
  • Partial jurisdiction, where, in granting to the federal government authority to exercise legislative jurisdiction over some matters, the state has carved out other matters for which it:
    • continues to exercise exclusive jurisdiction; or
    • grants the federal government concurrent jurisdiction.
  • No federal legislative jurisdiction with the transfer of strictly a proprietorial interest in land.

The Job Situs Test

In Oil, Chemical and Atomic Workers, the Supreme Court found that Section 14(b) of the LMRA does not allow enforcement of right-to-work laws where the employment relationship has a principal job situs is outside of a state having those laws (426 U.S. at 418). Applying its job situs test, the Supreme Court held that the Texas right-to-work laws did not void an agency-shop agreement covering a bargaining unit of unlicensed seamen, all who worked primarily on the high seas and only 10% to 20% of the time within the territorial bounds of Texas, even though:
  • Those employees' hiring location and residences were in Texas.
  • The employer's personnel records were in Texas.
  • The employees' paychecks were written in Texas.

Right-to-work Laws at Federal Enclaves

In Lord v. Local Union No. 2088, Electrical Workers, the US Court of Appeals for the Fifth Circuit addressed whether Florida's right-to-work law applied within a federal enclave over which the federal government had exclusive jurisdiction (646 F.2d 1057, 1058 (5th Cir. 1981) 646 F.2d at 1058). The court acknowledged that in the conflict between federal labor law and policy expressed in Section 8(a)(3) of the NLRA and state right-to-work laws, Section 14(b) of the LMRA generally resolves the conflict by directing that the federal law and policy yield to state laws (646 F.2d at 1062, citing Oil, Chem. & Atomic Workers, 426 U.S. at 416-417).
However, the court found that Section 14(b)'s directive that federal labor law and policy yield to a state right-to-work law applied only to areas where the state had power to legislate. Since Florida lacked legislative authority in the federal enclave in question, its right-to-work laws could not supplant conflicting federal labor law and policy expressed in Section 8(a)(3) of the NLRA and were unenforceable there. (646 F.2d at 1062-63.)
In a case preceding Lord, the Northern District of Texas similarly held that in a federal enclave, such as a military base, if the state ceded full legislative jurisdiction to Congress when ceding the land to the federal government, the governing law is:
In Vincent, the court concluded that Texas right-to-work laws did not apply to General Dynamics' employees who built military aircraft at an air force base plant on land over which the federal government predominantly had exclusive legislative jurisdiction. The plant developed and expanded on land to which different degrees of federal jurisdiction applied but nearly 98% of the bargaining unit employees worked on land subject to exclusive federal jurisdiction. The court applied federal union shop laws to the 2% of the bargaining unit that worked on plant land over which Texas had concurrent jurisdiction because:
  • The vast majority of employees worked exclusively under federal jurisdiction where Texas right-to-work laws were inapplicable.
  • The air force base plant in question:
    • appeared to be one job situs; and
    • was not practically divisible along federal-state boundary lines into different labor-force areas.
Conversely, when states reserve concurrent jurisdiction in transferring land to form federal enclaves, the state right-to-work laws trump federal labor law and policy. For example:

Federal Enclave Case Study from Fort Rucker, Alabama

The US Army base at Fort Rucker, Alabama is home to the US Army Aviation Center of Excellence. Like most military bases, there are civilian employees of military contractors providing various services, including manufacturing, testing and training armed forces personnel on how to use military equipment and vehicles. The International Association of Machinists has represented many of these contractors' employees.

Alabama Law

Under Alabama's public policy, the right of persons to work may not be denied or abridged on account of membership or nonmembership in any labor union or labor organization (Ala. Code §§ 25-7-30). Moreover, its legislature has expressly prohibited:

Federal Enclave Legislative Jurisdiction Analysis

Fort Rucker consists of several sections, which the federal government obtained from the state of Alabama at different times and under different terms and mechanisms, including:
  • The Fort Rucker Main Post, which the federal government acquired in a 1952 land transfer under which Alabama ceded exclusive jurisdiction over the land.
  • Shell Field, over which the federal government has only a proprietorial interest.
  • Cairns Field, which the federal government acquired in a 1982 land transfer that:
    • mentioned the State of Alabama retaining concurrent jurisdiction; and
    • contained many reservations of rights for Alabama that the Machinists later asserted undercut the reference to concurrent jurisdiction and rendered the state's jurisdictional interests over Cairns Field only partial.
The Machinists filed suit against one of the contractors with which it had a CBA, alleging that the employer breached an agency shop provision by failing to terminate two employees who refused to pay an agency fee. The employer counterclaimed seeking a declaration that the agency shop provision could not be applied to the two employees who worked at Shell Field and Cairns Field.
The Middle District of Alabama found that:
  • The State of Alabama retained jurisdiction over employees working at Shell Field, including one of the individuals at the center of the controversy in this case.
  • The express reference to concurrent jurisdiction in the land transfer that ceded Cairns Field to the federal government notwithstanding separate reservations of rights, must be read:
    • as retaining concurrent rather than partial jurisdiction over labor matters for employees at Cairns Field for the state; and
    • conveying less than exclusive jurisdiction to the federal government concerning labor law and policy at Cairns Field.

The Job Situs Test Analysis

Having resolved the initial legislative jurisdiction issue, the court then analyzed whether the job situs test from Oil, Chemical and Atomic Workers required it to apply the federal union security clause policy (like the court in Vincent, 427 F. Supp. at 789) because:
  • The vast majority of employees covered under the CBA worked exclusively in locations under federal jurisdiction, such as at the Fort Rucker Main Post, where Alabama right-to-work laws were inapplicable.
  • The sections of Fort Rucker in which bargaining unit employees worked:
    • appeared to be one job situs; and
    • was not practically divisible along federal-state boundary lines into different labor-force areas.
The court found that the job situs test did not require it to apply the CBA's agency shop provision to all bargaining unit employees, including those who worked in areas of the Fort over which the State of Alabama retained exclusive and concurrent legislative jurisdiction, because the Fort Rucker workforce had nearly the opposite set of facts from Vincent. Namely:
  • Most of the bargaining unit workers at Fort Rucker worked in areas where the state of Alabama retained concurrent or exclusive legislative jurisdiction.
  • The sections of Fort Rucker were practically divisible along federal-state boundary lines into separate labor-force areas.
  • The workers could not be said to work in a single job situs.
  • Even though the CBA set out terms about employees transferring from one section of Fort Rucker to another (and therefore going between federal and state jurisdictional zones) there was insufficient evidence that those types of transfers occurred and caused an interchange of ordinarily separate labor forces.

Application of Analysis to the Breach of Agency Shop Provision Claim

In light of its legislative jurisdiction and job situs test analysis, the court held that:
  • The CBA's agency shop provision was unenforceable under applicable Alabama law against the employees who worked at Shell Field and Cairns Field, respectively.
  • The employer did not breach the CBA by refusing to terminate the Shell Field and Cairns Field employees under the agency shop clause for failing to pay agency fees to the Machinists.

Lessons from Alabama

Employers may violate state law and face criminal sanctions and penalties if they bargain about or enforce union security provisions in a federal enclave within a right-to-work state. Labor counsel who negotiate or administer CBAs in federal enclaves within right-to-work states should consider developing or seeking out expertise in government real estate transfers. The terms of government land transfers largely decide what labor law will apply acre by acre on a federal enclave.
For more information about unique nature of CBAs from government contractors working on federal enclaves within right-to-work states, see the What's Market Collective Bargaining Agreement Database summaries of four CBAs from Fort Rucker, Alabama:
Besides the anomalous, partially-enforceable agency shop provisions, these summaries highlight other quirks worth exploring, such as:
  • How the CBAs of defense contractors often must be:
    • rigid to ensure continued compliance with government regulations and requests for production; and
    • flexible to allow the employers to adjust to government-imposed changes in operations or production.
  • how these agreements set the employment terms and conditions in NLRA-governed CBAs for the pilot job classification, which job classification typically is covered under RLA-governed CBAs.
  • The array of issues covered in the CBAs in part because the bargaining unit job functions vary greatly, such as from pilots, flight simulator instructors and computer programmers to janitors.

Explore the What's Market Collective Bargaining Agreement Database and Generate Custom CBA Provision Comparison Reports

To quickly generate a report comparing any of the 60 points Practical Law has analyzed in any of the summarize CBAs in the What's Market Collective Bargaining Agreement Database, such as the union security provisions:
  • Select which CBAs you would like to compare.
  • Click the "Compare" button.
  • Check the box next to "13. Union security" and "59. Links". (You could also select and compare any of the other 58 points of analysis completed for every CBA in the database).
  • Click the "Compare" button.
  • If desired, change:
    • the layout of the Practical Law What's Market -Deal Comparison report by clicking the "Change layout" link; or
    • the CBA provisions you wish to compare by clicking the "Change comparison" link.
  • Export your customized Practical Law What's Market - Deal Comparison report to:
    • Word; or
    • Excel.
  • Save or print your customized Practical Law What's Market - Deal Comparison report.