Neutrality Agreements Come Before Supreme Court

The U.S. Supreme Court heard arguments last week in a labor case that calls into question the legality of neutrality agreements, the prohibition of which could be a serious impediment to unionization campaigns like the one recently concluded at Pomona College. The attorneys who designed the Pomona union supporters’ neutrality proposal to the college were part of the same firm as attorney Richard McCracken, who argued the permissibility of neutrality agreements in front of the Court in Unite Here Local 355 v. Mulhall.

Neutrality agreements are deals between employers and union organizers in which employers pledge assistance to the union campaign while the organizers agree not to engage in disruptive actions such as strikes, protests, and picketing. To be decided by the Court in Mulhall is whether these types of quid pro quo exchanges would constitute bribery or extortion in violation of federal labor law.

In the Mulhall case, the union contributed $100,000 to support a ballot measure that would have benefited the employer, a casino, in addition to promising not to picket or strike. The monetary nature of this exchange brought it to the attention of the country's highest court, but the decision may also have ramifications for neutrality agreements that do not involve financial transactions.

McCracken sent a memo to UNITE HERE staff including Local 11, the chapter that Pomona dining hall workers voted to join, expressing concern over the potential impact of a decision confirming the argument that all neutrality agreements are an unlawful “thing of value,” or bribe, provided to the union by an employer.

“The consequences of the theory being right would be severe,” McCracken wrote in the memo. “It would mean an end to this method of organizing, which has proven successful not only in getting collective bargaining for tens of thousands of workers but also creating a constructive environment for negotiations.”

“[Neutrality agreements] are both sides agreeing to stand down," said Noel Rodriguez, an organizing director with UNITE HERE Local 11. "The company is giving up their right to run an anti-union campaign, and the union is giving up their right to economic action. There’s no reason why both sides shouldn’t be able to agree to a peaceful process."

The awaited decision could make it more difficult for organizers to successfully unionize under conditions where the employer has agreed not to wage an anti-union campaign or agreed to recognize a card-check vote, a process favored by union organizers that allows employees to sign cards indicating that they want to be represented by the union. Pomona’s pro-union dining hall workers and students fought for both types of agreements during the several years-long campaign that ended April 30.

During the long and often divisive unionization campaign at Pomona, the college granted organizers a "limited neutrality" agreement which indicated that the college would not run an active campaign against organizers. However, Pomona did not grant union supporters a "total neutrality" agreement in which it would have forfeited its legal ability to hold mandatory employee meetings to discuss the union. Union organizers held out on calling for a vote on unionization for several years as they campaigned for a full neutrality agreement, but ultimately decided to proceed without the agreement last April. 

Pomona president David Oxtoby said that the school’s reasoning for declining to enter into a total neutrality agreement during the dining hall workers’ campaign was not related to the concern that such an agreement would amount to a bribe.

“I don’t think that’s a position that Pomona would argue,” Oxtoby said. “We don’t see a reason, if an employer wants to grant neutrality and agree to a card check and not be involved at all, we don’t see any reason why they shouldn’t be allowed to.”

Oxtoby added that if, hypothetically, the decision in Mulhall had barred the college from making any kind of neutrality agreement before the dining hall workers’ unionization drive, such an outcome might have slowed the unionization struggle at the college further. 

“I suppose we couldn’t have said, ‘No, we will not hire union busters, and no, we will not run an active campaign,’—things that we agreed to from the beginning," Oxtoby said. "I think if anything, that might have slowed things down because we might not even be able to say that."

The outcome of the case will have no effect on Pomona's dining hall workers' campaign, since the vote to unionize has already passed.

According to Catherine Fisk, a law professor at University of California, Irvine Law School, the Court will need to distinguish what, if any, kinds of neutrality exchanges might constitute a “thing of value.” In Mulhall, the monetary political contribution may be more easily seen by the Court as a bribe. However, other trades, like an employer’s agreement to recognize a vote by card check, are less tangible than a monetary donation and may or may not be interpreted by the Court as an exchange of value.

It is also uncertain whether even an employer’s agreement to total silence, a major point at issue during Pomona’s unionization effort, could be disallowed as a bribe. Fisk said this outcome is less likely because an agreement to remain silent can benefit parties other than the union—it could benefit the community, students, and workers who do and do not favor a union alike.

Claremont McKenna College economics professor David Bjerk, who specializes in economic justice and fairness as well as law and economics, said that there is still a chance that the Supreme Court may interpret agreements to recognize card check or to exercise full neutrality as forms of bribery.

“From an economics perspective, having the ability to grant a procedure that would lower the costs of a unionization drive seems to be something of value, since it can be used as a bargaining chip,” Bjerk wrote in an e-mail to TSL.

Attorney Douglas Silverstein, a labor law expert with Kesluk & Silverstein in Los Angeles, said that he saw the possibility of the Supreme Court invalidating neutrality agreements, especially agreements that involve no monetary element, as unlikely.

“[Neutrality agreements] have been around a long time, and I think they’re a very well-accepted practice,” Silverstein said.

Even in the case of the monetary contribution to a ballot measure that is at issue in Mulhall, such donations are common because they often confer other benefits for the union itself, Silverstein said.

“Unions support political causes all the time—particularly when they are likely to result in jobs,” Silverstein said. 

According to Fisk, if the Supreme Court does decide that neutrality agreements are unlawful, it will likely remand the case to a lower court to define specifically which kinds of agreements are impermissible.