Supreme Court Considers Neutrality Agreements in Unite Here v. Mulhall
Unite Here Local 355 v. Mulhall, argued before the Supreme Court last Wednesday, presents the issue of whether neutrality agreements are, to some degree, prohibited by Section 302 of the National Labor Relations Act. Under Section 302, an employer may not “pay, lend, or deliver, or agree to pay, lend or deliver any money or other thing of value…to any labor organization, or officer or employees of a labor organization, that represents or seeks to represent the employer’s employees.” The statute also bars a labor union from requesting, demanding, receiving, or accepting, or agreeing to receive or accept, “any payment, loan, or delivery of any money or other thing of value prohibited.”
This case arises out of an agreement between the union (Unite Here) and the employer (Mardi Gras Gaming) in which Mardi Gras agreed to recognize Unite Here as the exclusive bargaining representative based on card-check procedure. This agreement gave Unite Here access to the premises of Mardi Gras during non-working time and access to lists of employee names and addresses to contact and recruit the workers. Additionally, it imposed an obligation on Mardi Gras to remain neutral on the question of unionization. In turn, Unite Here agreed to expend monetary and other resources to support a ballot proposition campaign supporting casino gaming.
Justices Consider Whether a Neutrality Agreement Constitutes a “Thing of Value”
Mulhall, a Mardi Gras employee, argued that the agreement violates Section 302 by improperly providing a “thing of value” to the union. Unite Here argued that these types of agreements are beneficial in that they avoid conflict during organizing campaigns, encourage efficiency, and promote a peaceful environment for collective bargaining, thus, serving the core objectives of the Labor Management Relations Act.
During oral arguments, the Justices seemed unconvinced by the contention that neutrality agreements are almost always illegal under Section 302. Justice Kagan’s questioning effectively demonstrated the disruption Mulhall’s position would cause to established labor law. She mused,
I would have thought that the premise and the policies of the labor laws are to encourage a wide variety of employer/employee agreements … that the idea is to get these parties together to reach agreements on a wide variety of things that matter to them regardless whether labor law specifically refers to that.
And, Justice Kagan later added,
So this is to say that the National Labor Relations Act prohibits employers from providing access to their premises, from granting a union a list of employees, or from declaring itself neutral as to a union election.
When Mulhall’s attorney replied that a neutrality agreement is a thing of value, Justice Kennedy was skeptical. He asked, “Do you acknowledge that… your answer to Justice Kagan…is contrary to years of settled practices and understandings?”
But while some Justices remained skeptical of Mulhall’s position, many of the Justices did appear to believe that the neutrality agreement in this case did involve a “thing of value” that potentially implicated Section 302. However, both Justice Breyer and Justice Sotomayor pointed out that while the plain reading of the text might support such an argument, such a reading cut against common place labor practices when looked at in conjunction with the rest of the NLRA. Justice Sotomayor suggested this conflict should be handled similarly to securities and antitrust law where conflicting provisions are read in the context of the statute as a whole.
The Future of Neutrality Agreements is Uncertain
It is unclear how the Court will rule on the case, but given Unions’ increasingly effective use of neutrality agreements, a ruling in favor of Mulhall will undoubtedly present a major roadblock to union organizing and collective bargaining in the future.
(There is an update on the Mulhall case here).