With the passage of right-to-work legislation by Kentucky’s Senate and General Assembly, the Bluegrass State will be become the 27th right-to-work state when Governor Matt Bevan signs House Bill 1 into law this week. Kentuckians will no longer have to join a union as a condition of working.
With 27 right-to-work states, the remaining states will need to join the growing club to stay competitive. Illinois, a Kentucky neighbor, is under pressure to become right-to-work because it borders on Wisconsin, Indiana, Michigan, and Iowa, now all right-to-work states. It is relatively easy for businesses to migrate to right-to-work states.
Senate Majority Leader Mitch McConnell (R-KY) said, “Right-to-Work is a smart way to get America on the path to real recovery, and it’s critical to empowering workers and giving them more freedom to keep more of their hard-earned dollars to spend as they choose. This is why I have continually supported legislation at the federal level to enact right-to-work nationwide.”
President-elect Trump has repeatedly voiced support for right-to-work, and he will be able to sign such right-to-work bills into law if Congress sends them to his desk.
Before Republicans won control of Kentucky’s General Assembly on Election Day, leading to the legislation’s passage, right-to-work proceeded on a county basis. Over a dozen counties passed right-to-work legislation. This county-by-county approach was upheld in a decision by the Sixth U.S. Circuit Court of Appeals on November 18.
Burgeoning right-to-work measures are a reaction to an increasingly bold National Labor Relations Board, which during the Obama administration overturned decades of precedent to make it easier for unions to organize workers.
The NLRB, supposedly an impartial arbitrator between unions and employers, has reduced the time workers are given to consider whether they want to vote for union representation. It has allowed unions to organize small units of workers within firms. It has defined McDonald’s USA as joint employer of McDonald’s franchises, a move that if upheld by the courts could upend the franchise business in America.
When states pass right-to-work laws they protect their residents from being forced to pay 2% to 4% of their paychecks in union dues, initiation fees of about $50, and contributions to failing pension plans. Dues and initiation fees are often used to pay for political contributions. Some pension plans may be underfunded or simply may not exist when the new employees are ready to retire.
In addition, right-to-work laws make it easier for states to attract business, because many companies prefer to locate in right-to-work states. Warren County, Kentucky, got inquiries totaling $9 million in investment after it passed a local right-to-work ordinance in 2014, according to Ron Bunch, president and CEO of the Bowling Green Area Chamber of Commerce.
Similarly, when Wisconsin passed right-to-work legislation in 2015, it began to siphon off business from Illinois. Toolmation Services, a manufacturing company, relocated from Illinois to Kenosha, Wisconsin. Expect to see more business relocating to Kentucky.
The NLRB passed new union election rules, also known as “quickie-election” or “ambush-election” rules, in April 2015. The time between a petition to join a union and an election for union representation has shrunk from about 37 days to 17 days. This gives little time for workers to consider whether they want to join the union. Such rules will motivate more states and counties to move to right-to-work, to give workers a choice to opt out of unions.
Only after the speedy election would there be an NLRB hearing to decide the appropriate bargaining unit, defined as the group of workers who would be represented by the union. This is puzzling because the choice of bargaining unit could determine the outcome of the election.
Republican NLRB members Philip Miscimarra and Harry Johnson III, in a dissent from the rule, wrote, “To state the obvious, when people participate in an election, it is significant whether they actually have a right to vote, whether their vote will be counted, and whether the election’s outcome will even affect them.”
At the same time as the ambush election rules, the National Labor Relations Board has reduced the size of potential bargaining units. It used to be that unions would have to gain a majority of employees engaged in the same task at the same company—say mechanics working for Boeing, or retail clerks working for a department store. Yet in a decision involving Macy’s in 2014, the Board allowed unions to organize any subset of employees, as long as they had a “community of interest.” Cosmetic workers at Macy’s, or shoe salesmen at Bergdorf Goodman’s, could vote to be represented by a union without the rest of the store going along.
Unless employers can prove that a larger group of workers has a “community of interest,” unions can carve up workplaces into micro-units, depending on which employees are interested in signing up. An employer could have to negotiate with different unions at the same store, and employees have a greater chance of being swept into unions against their wills.
Under the NLRB rules, employers have to turn over not only company email addresses to the union, in order to allow the union to use company email to communicate with workers, but also personal email addresses. Even if employees do not want the union to have their personal email addresses, they have no right to privacy.
The future for right-to-work initiatives is bright. President-elect Trump may have the opportunity to sign legislation making right-to-work the law of the land. In addition, he has the opportunity to fill two seats at the NLRB, giving it a Republican majority and a new direction.
Diana Furchtgott-Roth is a senior fellow and director of Economics21 at the Manhattan Institute. Follow her on Twitter here.
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