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Supreme Court weighs employer-union organizing deals

News microphones wait to capture reactions from U.S. Supreme Court rulings outside the court building in Washington, June 25, 2013. REUTERS/
News microphones wait to capture reactions from U.S. Supreme Court rulings outside the court building in Washington, June 25, 2013. REUTERS/

By Amanda Becker and Lawrence Hurley

WASHINGTON (Reuters) - Supreme Court justices appeared reluctant on Wednesday to undermine agreements unions make with private-sector employers when organizing workers.

The court is examining deals known as "neutrality agreements," which have been in use for decades, and the case could change how unions go about organizing.

The U.S. Bureau of Labor Statistics says 11.3 percent of private sector workers belong to unions. The bureau has no data on neutrality agreements.

Several justices made remarks suggesting they were not inclined to conclude that all such agreements were a "thing of value" and should therefore be prohibited. But at the same time, some seemed troubled by one specific part of the agreement at issue in the case, in which the union agreed to support legislation that would benefit the company.

The case, Unite Here Local 355 v. Mulhall, was brought by an employee of Mardi Gras Gaming, a casino and dog track in Hollywood, Florida.

Martin Mulhall, the employee, said his employer violated the Labor Management Relations Act when it agreed to allow the union, Unite Here Local 355, onto its property to organize workers and when the company agreed to give the union contact information for employees in exchange for the union's support on a ballot initiative. The union ended up spending more than $100,000 to support the successful effort to pass a law that legalized slot machines in Miami-Dade and Broward counties.

"It does feel like a bribe to the employer," said Justice Sonia Sotomayor.

"THINGS OF VALUE"

The labor relations statute bars employers from providing "thing(s) of value" to unions and union officials. Under the law, anything deemed to be of value could potentially be viewed as a bribe.

Mulhall argued that the access Mardi Gras Gaming gave Unite Here was valuable during the union's unionization drive.

If the Supreme Court were to embrace the broad arguments made by Mulhall's attorneys from the National Right to Work Legal Defense Foundation Inc., which represents workers who do not wish to be organized, employers and unions that enter agreements containing such terms could be committing felonies, legal experts have said.

But it appeared from Wednesday's argument that the court would not go that far. Several justices, including Justice Elena Kagan, said that such a wide-ranging ruling would undercut the purpose of the law, which is to facilitate good relations between unions and employers.

"I would have thought that the premise and policies of the labor laws are to encourage a wide variety of employer-employee agreements," she said.

Justice Anthony Kennedy noted that the outcome sought by Mulhall's attorney, William Messenger, was "contrary to years of settled practices."

Along similar lines, Justice Stephen Breyer said that it would make little sense to include common elements of agreements between unions and employers, such as the employer providing a list of employees or the company allowing union access to its property, to be included within the definition of "things of value."

It would "create a mess," if they were not excluded, Breyer said.

Despite the skepticism expressed about Messenger's arguments, several justices mentioned the $100,000 spent on the ballot initiative as a cause of concern, even though the money was spent by the union and was not paid to the employer.

The union's attorney, Richard McCracken, responded that unions often support legislative efforts that will lead to more jobs for its members.

The case reached the Supreme Court after a federal trial court in Florida dismissed Mulhall's case, saying the law did not allow for such a claim. The 11th U.S. Circuit Court of Appeals reversed, saying that organizing assistance could be deemed a "thing of value."

A ruling is expected by the end of June. The case is Unite Here Local 355 v. Mulhall, U.S. Supreme Court, No. 12-99.

(Editing by Howard Goller and Dan Grebler)

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