On Tuesday December 11, 2012 Michigan, the birthplace of the nation’s organized labor movement, became the country’s 24th right-to-work state. This short excerpt from pages 81-83 of my 2002 book, Capitalism and Commerce, explains the propriety of right-to-work laws.
Before the Norris-La Guardia and National Labor Relations Acts (NLRA) in the 1930s, the employment relationship consisted of voluntary exchange contracts between employers and employees. A return to the common law of contracts, property rights, and tort would permit each person to decide if he wanted to contract with or join any union for representation services. Under such an arrangement there would be competitors among labor organizations and the possibility of having workers represented by a variety of unions and other workers having no representatives. Instead, they would bargain for themselves as individuals.
Before these acts, an employer had the common-law right to fight the unionization of his company. The employer could enter into “yellow dog contracts” with the employees in which the two parties would agree not to have a union—one reason for such contracts was the desire of the employees to avoid the loss of work and wages that would occur during strikes. Because these agreements were voluntary, they must have been to the mutual benefit of both parties. In addition, before the 1930s, the employer was free to attempt to persuade workers that unionization would not be to their benefit. Also, in his efforts to gain loyalty to his firm, the employer could refuse to hire workers who wanted to engage in union-related activity. The employer also had the common-law right to establish a company union. Then, of course, the company always had the right to voluntarily agree to hire workers who belonged to a specific union.
Unions were subject to the antitrust laws before Norris-La Guardia—not so thereafter. The National Labor Relations Act then destroyed the common-law right of an employee to join a union of his own choosing or to represent himself. After such New Deal legislation, unions operated with the help of laws and court decisions to force employees to join them to gain a monopoly of particular jobs. Unions were free to use violence (picketing) against competing workers and intimidation against the employers through the strike.
After a union has been certified as an exclusive bargaining agent, it is presumed to have majority support indefinitely (unless there is a decertification election) even if all the workers who originally chose it are no longer with the company. Section 8(a) 3 of the National Labor Relations Act empowers unions with monopoly bargaining privileges to agree with employers that all workers represented by the unions must join the union or at least pay union dues. Section 14(b) of the Act permits states to forbid such arrangements. Twenty-one right-to-work states have chosen to do so by banning all forms of union security. In these states workers can be forced to have a union (selected by majority vote) represent them, but they cannot be forced to join or pay dues to any unions. However, in the twenty-nine other states, security clauses are permitted. In these states, workers who do not want to be represented by a union (but are forced to because of monopoly representation) may be compelled to pay for the unwanted representation or be fired. Nonunion (i.e., union-free) workers who don’t want to become members of a union may be forced to pay dues (or their equivalent) as a requirement of their employment.
If a union security agreement specifies a union shop then the worker must join the union after a probationary period. However, if it specifies an agency shop, the worker does not have to join the union but must pay dues or their equivalent. In an agency shop, workers do not have to become members, but they all must pay dues or “service fees” to the unions that represent them. Unions employ a free-rider argument to justify this coercion. They argue that, without the imposition of forced dues, some workers would choose to receive the benefits of union representation but not pay for them. The goal of compulsory union dues is apparently to prevent free riders. Of course, if a union simply represented those who wanted it, there would be no free-rider problem. The union’s free-rider problem stems from section 9-A of the National Labor Relations Act that requires that a certified union be the exclusive representative that bargains with the employer for all workers, both union and non-union. Unions that have gained monopoly bargaining privileges by majority vote must represent all workers, whether those workers want it to or not. The unions created the free-rider problem themselves when they persuaded the authors of the NLRA to permit monopoly bargaining. They now use monopoly bargaining as an excuse for forced dues!
By empowering labor unions the government did away with the old common-law rules of contract, property, and tort that applied equally to all involved parties. They were replaced with a coercive legal framework designed to help labor union leaders attain their goals. As a result, common-law courts were replaced by administrative tribunals (e.g., the National Labor Relations Board) which could be relied upon to implement prounion policies. The government thus promoted unions by failing to apply laws of equal applicability to unions and employers alike, used its power to support unions, and allowed unions to use force in pursuit of their ends.
Dr. Edward W. Younkins is Professor of Accountancy at Wheeling Jesuit University. He is the author of Capitalism and Commerce: Conceptual Foundations of Free Enterprise [Lexington Books, 2002], Philosophers of Capitalism: Menger, Mises, Rand, and Beyond [Lexington Books, 2005] (See Mr. Stolyarov’s review of this book.), and Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism [Rowman & Littlefield Pub Incorporated, 2011] (See Mr. Stolyarov’s review of this book.). Many of Dr. Younkins’s essays can be found online at his web page at www.quebecoislibre.org. You can contact Dr. Younkins at firstname.lastname@example.org.