1. Right to work and prevailing wage: the legal consequences of the legislative outlook in missouri
December 9, 2016
SITE Improvement Association
Michael E. Kaemmerer
McCarthy, Leonard & Kaemmerer, L.C.

2. Overview Introduction to Right to Work (RTW) What RTW is Not
What Does RTW Mean for Unions?
What Does RTW Mean for Contractors?
Legislative Outlook: RTW and Prevailing Wage

3. INTRODUCTION TO Rtw
Despite the name, RTW is NOT a guarantee of employment
RTW IS a restriction on contractual agreements between employers and labor unions
RTW laws permit states to prohibit union-security agreements that would otherwise be lawful under Federal labor law
Union security agreements take two forms: “Union shop” or “Agency shop” agreement
Of the 26 states with RTW laws, 15 prohibit “Agency shop” agreements
All 26 states prohibit “Union shop” agreements are not allowed under RTW laws
A Union shop agreement, commonly known as union security, is one that allows the employer to hire anyone, but requires employees to join the union within a set number of days. Such agreements are not permitted under any RTW law.
An Agency shop agreement doesn’t mandate union membership but requires every employee to pay an agency fee to the union. At least 15 states with RTW laws prohibit agency shop agreements, and if passed in its current form, Missouri’s proposed RTW law would do the same.
Of the five RTW states that border Missouri, Kansas is the only state that does not prohibit agency shops.

4. Introduction to rtw How can states pass RTW laws?
The National Labor Relations Act (NLRA) is the federal body of law that encompasses labor law
The NLRA allows union-security agreements under Section 8(a)(3)
In 1947, the Taft-Hartley Act amended the NLRA and added Section 14(b) which effectively permits states to prohibit “agreements requiring membership in a labor organization as a condition of employment” and thus, pass RTW laws.
Section 14(b) can best be described as the exception to the general rule that the federal government has preempted, or retained control, of the field of labor relations regulation. Keep in mind that the NLRA permits union-security agreements, so 14(b) really paved the way for states to pass RTW laws without interference from the federal government.

5. INTRODUCTION TO Rtw: where are the RTW states?
The states in blue are RTW states, note that Missouri is bordered by five RTW states: Iowa, Nebraska, Kansas, Arkansas and Tennessee

6. What Rtw is not RTW is not a guarantee of employment
RTW has no effect on whether a company can operate as union or non-union
RTW laws cannot cross state borders when employees covered by an agreement perform work outside of the RTW state, even though the employee was hired within the RTW state
Oil, Chemical & Atomic Workers v. Mobil Oil Corp., 426 U.S (1976)
A very recent decision from a three judge panel in the Sixth Circuit held that counties and other municipalities in Kentucky, Michigan, Ohio and Tennessee can pass local RTW ordinances. It is the first time a federal appeals court has upheld a local RTW law. The Union in the case has requested a hearing from the full Sixth Circuit court of appeals. (Auto Workers v. Hardin County, 6th Cir. November 18, 2016)

7. What Rtw is not
RTW does not ban all involuntary relationships between workers and unions such as hiring halls or contractual dues-checkoff provisions.
Laborers Local 107 v. Kunco, Inc., 472 F.2d 456 (8th Cir. 1973)
Oil, Chemical & Atomic Workers v. Mobil Oil Corp., 426 U.S (1976)
The application of Section 14(b) to the states is very limited. For example, RTW laws cannot apply to hiring hall arrangements that are otherwise permitted by the NLRA. The Kunco case illustrates this point, noting that Section 14(b) does not ban all involuntary relationships between workers and unions, it merely allows the prohibition of agreements requiring membership in a labor organization as a condition of employment. A hiring hall which, although exclusive, does not require membership does not violate Section 8(a)(3) of the NLRA and is therefore not covered by Section 14(b).
With respect to contractual dues-checkoff provisions, the Supreme Court has clarified that Section 14(b) is only concerned with the state regulation of the post hiring employer-employee union relationship, not conditions of employment.

8. What does RTW mean for Unions?
No Union Security Agreements in Labor Agreements
No compulsory payment of money to Unions by employees
Employees can opt not to pay dues, but are still covered by the Labor Agreement
Unions still have to provide all the protections and benefits of the Labor Agreement such as wages, fringe benefits, etc., even to non- dues paying members
Non-dues paying members still receive negotiated for wages, health and welfare, pension, overtime, grievance procedures, etc.
RTW could impact the viability/stability of Union trust funds because of the prohibition on union security agreements and thus a decline in dues-paying members…

9. What does RTW mean for Contractors?
Decrease in dues-paying members = trust fund instability = potential withdrawal liability increased for contractors.
Union may not seek to renegotiate contract at end of a term
Employees may decertify (vote out) union
Even if employee is a non-dues paying member, Contractors will still have to pay benefits contributions for every hour worked by that employee
If RTW passes in Missouri, and depending on which version passes, Contractors will likely need to revise their Labor Agreements to remove Union Security clauses.
A decrease in dues-paying members could mean that unions may not seek to renegotiate a contract at the end of a term or that employees may decertify (vote out) the union. Both scenarios trigger withdrawal liability for the employer with respect to the Union funds.

10. Legislative outlook: right to work
Five Bills pre-filed for 2017 Legislative Session:
House Bill 42 (Identical to Senate Bill 19, but allows exception for existing agreements entered before law’s effective date like HB 131)
House Bill 91 (Identical to Senate Bill 19)
House Bill 131 (Identical to 2015 House Bill 116)
Senate Bill 19 (Identical to House Bill 91)
Senate Bill 21 (Applies to public employees)

11. Legislative outlook: right to work
Bills pre-filed for 2017 Legislative Session:
House Bill 131:
Prohibits required membership in a labor organization as a condition or continuation of employment
Prohibits required payment of dues, fees, assessments or other similar charges however denominated of any kind or amount to a labor organization or
In lieu of the payments listed above, prohibits payment to any charity or third party any amount equivalent to any dues, fees, assessments or other charges
Carves out exception for Labor Agreements and any other type of agreement entered into before the effective date of the proposed law (typically August 28, of each year).
Violators of the proposed law face a class C misdemeanor

12. Legislative outlook: right to work
Bills pre-filed for 2017 Legislative Session:
Senate Bill 19 (House Bill 91 is identical):
Prohibits required membership in a labor organization as a condition or continuation of employment
Prohibits required payment of dues, fees, assessments or other similar charges however denominated of any kind or amount to a labor organization or
In lieu of the payments listed above, prohibits payment to any charity or third party any amount equivalent to any dues, fees, assessments or other charges

13. Legislative outlook: right to work
Bills pre-filed for 2017 Legislative Session:
Senate Bill 19 (House Bill 91 is identical) (Continued):
Voids any agreement, understanding, practice, written or oral, between any labor organization and employer that violates the proposed law
Violators of the proposed law face a Class C misdemeanor
Any person injured as a result of a violation of the proposed law is entitled to injunctive relief and recovery of reasonable attorneys’ fees
Does NOT carve out an exception for Labor Agreements entered into prior to the effective date of the proposed law, if passed

14. Legislative outlook: right to work
Bills pre-filed for 2017 Legislative Session:
Senate Bill 21:
Applies to public employees
Prohibits deduction from earnings for dues, agency shop fees or any other fees paid to public labor organization
Unless the employee provides annual written authorization on a specific form consenting to such withholding
Requires labor organizations to maintain records of employee authorizations

15. Legislative outlook: prevailing wage
Eight Bills pre-filed for 2017 Legislative Session:
House Bill 44: Prohibits the Missouri Housing Development Commission from requiring a prevailing hourly wage to be paid to a contractor on a project eligible for a housing tax credit when in a Governor declared disaster area.
House Bill 78: Allows any public body to opt out of the provisions regarding prevailing wages for the construction of public works projects for which the contract awarded is $750,000 or less.
House Bill 79: Establishes the School Construction Act which exempts construction and maintenance work done for certain school districts from the prevailing wage requirement upon majority vote of the district's school board. This provision does not apply to school districts in Jackson, St. Charles, St. Louis, or Jefferson counties.
House Bill 104: Repeals Missouri's prevailing wage law. This bill changes the law to require contractors and subcontractors to pay employees state or federal minimum wage, whichever is higher. Contractors and subcontractors would be permitted to pay higher than the minimum wage if they chose, but that would not be a requirement. (Same as HB 1931 filed in 2016).

16. Legislative outlook: prevailing wage
Eight Bills pre-filed for 2017 Legislative Session:
House Bill 132: Identical to House Bill 78
House Bill 133: Identical to House Bill 79
Senate Bill 20: Repeals Prevailing Wage (similar to HB 104)
Senate Bill 29: Modifies the definition of “construction” for purposes of Prevailing Wage laws. Modifies the definition of “maintenance” for purposes of Prevailing Wage laws to include repairs to restore existing facilities to a previous state or condition or to improve the utility or enhance the appearance of existing facilities when the size, type or extent of the existing facilities is not changed or increased. Maintenance work would also include any improvement that does not exceed the original cost of the facility.

17. QuestionS Michael E. Kaemmerer mkaemmerer@mlklaw.com
McCarthy, Leonard & Kaemmerer, L.C.
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(314) (cell)