Does an agreement stipulating that an employer will remain neutral and give access to employee information in exchange for a union’s support of an employer-friendly ballot initiative, constitute a “thing of value” in violation § 302 of the Labor-Management Relations Act; or, must a thing of value be monetary for purposes of § 302?
In 2004, UNITE HERE Local 355 (“Local 355”) entered into an agreement with Hollywood Greyhound Track, Inc. (“Mardi Gras”), the employer of Martin Mulhall. Mardi Gras agreed to help Local 355 unionize Mardi Gras’s employees by remaining neutral in the process and giving Local 355 access to its facilities and employee information. If the unionization effort was successful, Mardi Gras would recognize Local 355 as the exclusive bargaining agent for its employees. In exchange, Local 355 promised to support a Florida ballot initiative that would allow casinos to operate slot machines in Broward and Miami-Dade Counties. Mulhall opposed the unionization effort and sought to block the agreement under § 302 of the Labor-Management Relations Act. Mulhall argues that under § 302 Mardi Gras’s promises are “things of value” and thus constitute an illegal payment from an employer to a union. Local 355 disagrees and contends that cooperative employer-union agreements have long been considered lawful. The Eleventh Circuit held that an employer’s promises in union-organizing agreements may constitute “things of value,” implicating § 302. The Supreme Court’s decision will impact the future of cooperative employer-union agreements and the way that employees and unions try to unionize.
Questions as Framed for the Court by the Parties
Whether an employer and union may violate § 302 of the Labor-Management Relations Act by entering into an agreement under which the employer promises to remain neutral to union organizing, grants union representatives access to the employer’s property and employers in exchange for the union’s promise to forego its right to picket, boycott, or otherwise pressure the employer's business?
On August 23, 2004, Petitioner UNITE HERE Local 355 (“Local 355”), entered into an agreement with Respondent Hollywood Greyhound Track, Inc. (“Mardi Gras”), the employer of Co-Respondent Martin Mulhall. Mardi Gras promised to facilitate Local 355’s efforts to unionize Mardi Gras’s employees by remaining neutral in the unionization process and providing the union with access to its facilities and employee information. If a majority of employees supported unionization, Mardi Gras would voluntarily recognize Local 355 as its employees’ exclusive collective bargaining agent. In exchange, Local 355 promised to support a Florida ballot initiative that would allow casinos in Broward and Miami-Dade Counties to operate slot machines. Local 355 also promised not to take any economic action against Mardi Gras such as picketing or boycotting.
Mulhall opposed the unionization effort, and he petitioned the United States District Court for the Southern District of Florida to enjoin enforcement of the agreement under § 302 of the Labor-Management Relations Act (“LMRA”). The LMRA, an amendment to the National Labor Relations Act (“NLRA”), prohibits an employer from paying, lending, or delivering a “thing of value” to a labor union representing its employees. The district court dismissed the complaint, ruling that Mulhall lacked standing to seek relief. The United States Court of Appeals for the Eleventh Circuit reversed the district court’s dismissal.
On remand, the district court again dismissed the complaint, this time ruling that Mulhall failed to assert a violation of § 302. The district court held that union-organizing assistance is not a “thing of value” under § 302, and that Mardi Gras merely offered union-organizing assistance when it provided Local 355 with employee information, access to its facilities, and a promise to remain neutral.
Mulhall appealed to the Eleventh Circuit, which ruled that union-organizing assistance can be a “thing of value” under § 302 if it is offered as “payment” to fulfill an obligation. The Eleventh Circuit again reversed the district court, holding that Mulhall sufficiently alleged a cause of action. That is, a jury could find that Local 355’s support for the ballot initiative was an improper “payment” for Mardi Gras’s union-organizing assistance.
The Supreme Court granted certiorari to determine what counts as a “thing of value” under § 302 of the LMRA, and whether the statute implicates cooperative union-organizing agreements between employers and unions.
The issue before the Court is whether an agreement between an employer and a union to facilitate a union-organizing campaign may, under some circumstances, violate § 302. Local 355 argues that its agreement with Mardi Gras does not implicate § 302 because the agreement merely lays out the ground rules for Mardi Gras’s voluntary recognition of the union. On the other hand, Mardi Gras argues that its promises should be considered “things of value” because that term includes intangible, non-monetary benefits, and Mardi Gras’s promises served as consideration for Local 355’s promise to refrain from taking economic action against Mardi Gras and to provide support for the ballot initiative. This case implicates the scope of employee choice in the context of unionization and the future of cooperative agreements between employers and unions.
Mardi Gras argues that the purpose of LMRA is not to promote union organization but to protect employees’ free choice to unionize. Mardi Gras claims that a voluntary recognition agreement, such as the one here, removes employee choice because the employees do not have a choice in the arrangement. Mardi Gras supports a broad interpretation of the term “thing of value” under § 302 to include a union’s “desire to have the thing” because such an interpretation discourages collusion by unions and employers and further protects employee choice.
Amici for Local 355 argue that the NLRA does promote cooperative agreements between employers and unions. In support of Local 355, the United States argues that voluntary recognition agreements actually protect employee choice. According to the United States, the voluntary recognition process ensures peaceful and orderly unionization because the employees’ decision to unionize or not unionize is protected under the process by the force of law. Indeed, the United States points out that voluntary recognition agreements have long been considered lawful, and such agreements have been enforceable in federal court.
The Council on Labor Law Equality (“COLLE”) argues on behalf of Mardi Gras that voluntary recognition agreements often serve union interests over employee interests, and that voluntary recognition can coerce employees to submit to unionization. COLLE suggests that employer neutrality provisions make it likely that employees will not be fully informed about the advantages and disadvantages of unionization. Moreover, COLLE points out that in a traditional unionization campaign, employees vote for unionization by secret ballot supervised by a federal agency, while in voluntary recognition campaigns employees vote without federal supervision or even anonymity in many cases.
Local 355 notes that the neutrality provision at issue in this case merely required that the employer refrain from attempts to influence its employees. Local 355 contends that requiring an employer to speak out against unionization goes against the NLRA’s policy of protecting an employer’s freedom of speech. Additionally, Local 355 argues that the provisions granting the union access to employee information and facilities have long been considered legal and that ruling otherwise would cast doubt on decades of precedent.
EFFECT ON INDUSTRIAL PEACE
In support of Mardi Gras, the National Federation of Independent Business (“NFIB”) and the Cato Institute (“Cato”) argue that union organizing agreements undermine industrial peace. NFIB and Cato assert that these types of agreements essentially enable extortion of employers because they allow unions to wage economic war against employers who refuse to sign union organizing agreements. In turn, NFIB and Cato argue that small businesses are especially at risk because they do not have the resources to deal with unionization campaigns.
In contrast, the United States argues that reading § 302 to prohibit cooperative employer-union agreements undermines the federal policy of promoting peaceful labor relations through voluntary employer-union agreements. The United States asserts that the NLRA’s underlying purpose is to promote industrial peace through voluntary agreements. In the United States’ view, interpreting “thing of value” as encompassing a union’s “desire to have the thing” could end up prohibiting union-organizing agreements as well as any collective bargaining agreement between an employer and a union.
At the heart of the parties’ dispute is a question of statutory interpretation; the Court’s interpretation will determine whether Mardi Gras’s agreement with Local 355 is legally enforceable. The parties disagree on the meaning of § 302 of the LMRA, which prohibits an employer from giving money or some “other thing of value” to a labor organization. Local 355 argues that the phrase includes only things that have monetary value. Mardi Gras claims that it includes anything that is desired by the union. In addition, the two sides disagree as to whether the enumerated exceptions to § 302 imply a congressional intent to preclude any further exceptions.
MEANING OF “OTHER THING OF VALUE”
Mardi Gras argues that the term “things of value” should be read to include the concessions that it made to the union in this case. Arguing that the plain language of the statute bolsters its interpretation, Mardi Gras states that the Supreme Court has already made clear that § 302 requires a literal construction. In Mardi Gras’s view, a literal, common-sense interpretation would mean that whether something is a “thing of value” depends only on whether someone values or wants it.
Local 355 counters this literal construction by arguing that Mardi Gras’s theory puts no limits on what could be a thing of value and that the term should be read in conjunction with the rest of the phrase. Local 355 argues that, in Mardi Gras’ construction, the statute’s reference to “money” just prior to “thing of value” would render the former term superfluous. Local 355 points out that since money is clearly a thing of value, it would just be subsumed by the phrase “thing of value” if the term was meant to be as broad as Mardi Gras suggests. Therefore, Local 355 argues for a reading of “other thing of value” as inclusive only of property that is not money but which has monetary value.
However, Mardi Gras argues that the plain language of § 302 clearly indicates that Congress intended to broadly define “other thing of value.” This follows, in Mardi Gras’s interpretation, from the fact that “money” is listed separately from “other thing of value.” In addition, Mardi Gras argues that the overall structure of the statute is to set forth a general prohibition and then to list specific exceptions, so it follows that § 302 should be read broadly. Accordingly, Mardi Gras argues that the phrase includes some things that do not have an easily ascertainable monetary value. In Mardi Gras’s view, value can depend on the desire for a thing, and valuable concessions like remaining neutral during the unionizing process can be considered “other thing[s] of value.” Mardi Gras points out that Local 355 valued these concessions, and that it would make little sense to enter into a contract where the exchange had no value to one of the parties.
Countering this argument, Local 355 concedes that it values Mardi Gras’s concessions. However, Local 255 asserts that § 2’s prohibition is on things of monetary value, noting that the modifier “any” comes before “money,” not “other thing of value.” Local 355 thus contends that the modifier “any” is quantitative because the term “money” is definitive, therefore “things of value” must also be quantifiable. In addition, Local 355 points out that 29 U.S.C. § 186(d)(2) distinguishes felony and misdemeanor charges based on the amount in question. Thus, in Local 355’s view, if the term “other thing of value” were meant to include things that do not have a monetary value, it would be difficult to determine whether or not the crime should be classified as a felony or misdemeanor.
Notwithstanding its contention that there need not be monetary value, Mardi Gras suggests that its concessions did have some quantifiable value because Local 355 spent over $100,000 to uphold its end of the agreement and securing those concessions.
SECTION 302 EXCEPTIONS
Mardi Gras argues that by allowing union organizing contracts, Local 355 is essentially seeking an implicit, judicially created exception to § 302. Mardi Gras argues that if Congress intended to create an exception for receiving valuable concessions (e.g., allowing access to employees, giving employee contact information), it would have included it with the nine other exceptions in § 302(c) (codified at 29 U.S.C. § 186(c)). In Mardi Gras’s reading of the statute, the fact that Congress has amended the statute various times suggests that § 302(c) provides the finite list of exceptions; accordingly, any exceptions not listed are not implied.
Local 355 responds that, although Congress has the power to modify the statute as it sees fit, this does not preclude inherent exceptions to § 302. In essence, Local 355 argues that not enforcing union organizing contracts would be so counterproductive to the goals of § 302 that the statute must be read to contain some inherent exceptions. Local 355 argues that contracts often contain provisions that do not provide monetary value, but still fulfill an obligation, such as arbitration clauses, union security clauses, and no-lockout promises. Local 355 notes that there is no exception for contracts with these provisions, but courts generally understand that they are enforceable between employers and unions. In these examples, Local 355 asserts, courts have upheld contracts where employers have functionally engaged in the same type of conduct demonstrated here, trading an economically valuable concession for union promises such as an agreement not to strike.
Local 355 also argues that this is a typical contract that courts have upheld numerous times under § 301(a) of the LMRA (codified at 29 U.S.C. § 185(a)), which Congress enacted at the same time as § 302. Local 355 claims that because § 301(a) grants jurisdiction to hear § 302 cases in addition to hearing cases involving collective bargaining agreements, the Eleventh Circuit’s decision runs contrary to the established practice of enforcing these types of contracts.
Citing the Supreme Court’s decision in Brogan v. United States, Mardi Gras argues that courts cannot narrowly limit statutes, no matter how compelling such limitations may seem. Mardi Gras relies on the Brogan Court’s refusal to narrow a broadly written criminal statute. Here, Mardi Gras believes that creating an exception to § 302 is akin to narrowing a broadly written statute, and that the Court should therefore construe the statute broadly.
The Court will decide whether an employer-union agreement to facilitate a union-organizing campaign may, under some circumstances, violate § 302. The Court must determine whether Mardi Gras’s concessions are “things of value” within the meaning of the LMRA and therefore unlawful. Local 355 argues that its agreement with Mardi Gras does not implicate § 302 because the agreement merely lays out the ground rules for Mardi Gras’s voluntary recognition of the union. On the other hand, Mardi Gras argues that its promises should be considered “things of value” because that term includes intangible, non-monetary benefits, and Mardi Gras’s promises served as consideration for Local 355’s promise to refrain from taking economic action against Mardi Gras and to provide support for the ballot initiative. The Court’s decision will impact the future of cooperative employer-union agreements and the scope of employee choice in the context of unionization.
- Benjamin Sachs, The Court and the Future of Unions: Private Sector Edition, On Labor, Aug. 9, 2013.
- Bruce Vail, Supreme Court Scrutiny of ‘Neutrality’ Pacts Could Be Another Blow to Unions, In These Times, Jun. 27, 2013.