Will Labor Law Prompt Conservative Justices to Adopt a Radical Theory of State Action?

• Publication year: 2021
• Citation: Vol. 96

96 Nebraska L. Rev. 62. Will Labor Law Prompt Conservative Justices to Adopt a Radical Theory of State Action?

Will Labor Law Prompt Conservative Justices to Adopt a Radical Theory of State Action?

Joseph E. Slater(fn*)

TABLE OF CONTENTS

I. Introduction .......................................... 62

II. Private-Sector Union Security Clauses Do Not Involve "State Action" ......................................... 68
A. What Private-Sector Union Security Clauses Areand Are Not ....................................... 68
B. Basic State Action Doctrine ........................ 69
C. Hanson's Argument: Federal Preemption of State Contract Law is State Action? ..................... 77
D. "Forced Association" Creating State Action? ........ 80
E. Keller, the First Amendment, and the State Bar Comparison ....................................... 86
F. Unions as a Special Case and Race ................ 89

III. The Implications of Finding that Private-Sector Union Security Agreements Constitute State Action .......... 94
A. Incoherently Broad in Theory ...................... 94
B. Unbounded and Unworkable in Practice ........... 96

IV. Conclusion: A Better Approach To State Action ........ 98

I. INTRODUCTION

In the 2014 case of Harris v. Quinn,(fn1) five members of the U.S. Supreme Court issued an opinion which strongly implied, albeit in dicta, that a contract provision governing employment relations that two private parties voluntarily agreed to implicated state action sufficient to trigger constitutional rights. Were that not remarkable enough, the five justices who signed onto this opinion-Justice Alito, joined by Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas-

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were those normally identified as the Court's conservatives. Specifically, they seemed open to the idea that the First Amendment could apply to "union security" clauses in contracts negotiated by a union and an employer in the private sector. A union security clause is a provision in a union contract that requires employees in a union bargaining unit to pay at least some portion of normal dues to the union that represents them. Prior to Harris, one old Supreme Court case had found state action in such clauses,(fn2) and another old case had used the doctrine of constitutional avoidance in interpreting the relevant statute, indicating a concern that state action might be present.(fn3) But, more recent cases on the topic have dodged constitutional issues.(fn4)

Thus, Harris seemed to revive an extraordinarily broad theory of state action. Union security clauses in the private sector are negotiated between two entirely private entities, typically a union and a corporation. While the two private-sector labor law statutes-the National Labor Relations Act (NLRA), governing most private employment,(fn5) and the Railway Labor Act (RLA), governing the railroad and airline industries(fn6)-permit (and limit) such clauses, neither statute requires them, nor does either reward parties for adopting them. Further, such clauses would be entirely legal without the NLRA and RLA, and indeed, they existed prior to these statutes.(fn7)

This Article argues that the suggestion that private-sector union security clauses implicate the Constitution involves unconvincing and incoherent understandings of "state action" that the Court should explicitly reject. Harris indicated that a majority of the Supreme Court was willing to entertain a theory that would not only make all union security clauses in the private sector unconstitutional, but also would go well beyond the Court's broadest reading of state action in Shelley v. Kraemer.(fn8) Shelley found state action in private, racially restrictive covenants, but subsequent cases have left that precedent at best limited to its facts. While liberals pushed for this broad approach decades ago in an attempt to fight race discrimination by private parties before the era of antidiscrimination statutes, conservatives pushed for an analogous approach to state action specifically to attack unions as a form of government-forced association.(fn9) But in more recent decades, courts have hewed to a narrower view of state action. While the death of Justice Scalia prevented further exploration of this issue in an even

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more recent case involving union security clauses,(fn10) Harris showed that four current justices are willing to revive and greatly expand older visions. With President Donald Trump now having appointed a conservative justice to fill the vacancy left by Justice Scalia's death, this issue may soon resurface. The law in such an important area should not be left unclear; instead, courts should clearly reject the argument that private-sector union security clauses implicate state action.

Harris arose as a case about union security clauses in the public sector.(fn11) It has been long settled that state action exists in public-sector labor and employment relations because the state is the employer.(fn12) The seminal case on public-sector union security clauses,

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Abood v. Detroit Board of Education,(fn13) established that the First Amendment applied to these provisions. But Harris's suggestion that such clauses in the private sector implicate the First Amendment is striking. Harris did not explain how state action, a requirement for First Amendment violations,(fn14) could exist in private-sector union contracts. Nor did the older cases Harris cited, Railway Employees' Department v. Hanson(fn15) and International Ass'n of Machinists v. Street,(fn16) give any plausible explanation of how such contracts involved state action, although Hanson found such state action, and Street asserted that a real constitutional issue existed and thus required use of the canon of constitutional avoidance.

Still, the Harris majority discussed private-sector labor law for several pages and suggested that a constitutional problem existed there.(fn17) First, Harris criticized Hanson, a 1956 case which held that union security clauses under the RLA implicated the First Amendment, for not actually finding a First Amendment violation. Harris asserted that Hanson's failure to find a constitutional violation was inconsistent with other First Amendment doctrine.(fn18) The Harris majority stated that, in Hanson, "all that was held" was that the private-sector labor statute "was constitutional in its bare authorization" of union security agreements and nothing further.(fn19) The Harris majority also stressed that Street, another early RLA case, while decided on statutory grounds, "recognized that the case presented constitutional questions 'of the utmost gravity.'"(fn20) Further, the Harris majority quoted portions of Justice Black's dissent in Street, which argued that the union security clause in Street did violate the First Amendment.(fn21) While this was all dicta in Harris, it was striking, not just because it was entirely unnecessary to Harris's holding, but also because it was exhuming and apparently endorsing an old, extremely broad, and highly questionable approach to state action.

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This Article makes two basic points. First, union security clauses in the private sector do not implicate the First Amendment because there is no state action. The Article first describes union security clauses and examines the general principles and theories the Supreme Court has used to determine whether state action exists. It concludes that, under rules that have been well established in modern law, these clauses do not involve state action. While it may have been possible to construct a nonfrivolous argument for state action by extending a few theories from cases from the mid-twentieth century,(fn22) under consistent precedent dating back for several decades, private-sector union agreements do not constitute state action.(fn23)

The Article then examines other possible theories supporting state action: the Hanson opinion, arguments made by plaintiffs in private-sector cases urging that state action exists, and the analogy to mandatory state bar dues. It concludes that Hanson, the one case that actually found state action in private-sector union security clauses, is, on this point, thinly and poorly reasoned. Hanson asserted that the RLA involved state action essentially because, while the RLA does not require union security clauses, it preempts state "right to work" laws which would bar them.(fn24) But federal preemption of state laws, regarding voluntary provisions in employment or other private contracts, does not create state action. Further, union security clauses predate federal labor statutes and would exist without them. Under the default employment law rules that would govern in the absence of labor laws, employers could legally require employees to pay dues to almost any sort of organization as a condition of employment.

Next, the Article critiques the argument made by plaintiffs in these cases that state action should be found in labor law's "majority exclusive representation" model-the principle in the NLRA and RLA that, if a majority of employees in a bargaining unit properly select a union to represent them, the selected union exclusively represents all employees in the bargaining unit in matters of wages, hours, and working conditions. But labor statutes do not mandate the formation of unions(fn25) nor do they require union security clauses or reward parties for adopting them. If a union is formed, while both the NLRA and

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RLA require bargaining in good faith, neither requires the parties to enter into any contracts at all, much less to agree on any specific terms.(fn26) Also, corporate and agency law authorizes collective bodies to take actions that bind participants in the collective body, yet voluntary contracts entered into by such parties clearly do not trigger state action.

The Article then looks at Keller v. State Bar of...