The Right-to-Freeload Myth

COMMENTARY Jobs and Labor

The Right-to-Freeload Myth

Dec 10, 2012 3 min read

Research Fellow, Labor Economics

As research fellow in labor economics at The Heritage Foundation, James Sherk researched ways to promote competition and mobility.

"The trouble with our liberal friends is not that they are ignorant," President Reagan once quipped, "but that they know so much that isn't so." He could have been talking about the opposition to right-to-work legislation proposed in Michigan.

The chief argument against right-to-work laws is factually incorrect. Although most union members do not know it, the law does not require their union to negotiate on behalf of non-members.

The National Labor Relations Act permits, but does not mandate, unions to negotiate as the "exclusive representatives" of all employees at a unionized company. This means that all workers must accept the union's representation. They may not negotiate separately with their employer. Whether they like it or not, the union represents them.

Thus, unions have considerable leverage when bargaining with employers—they speak for every employee. But unions also have leverage over individual employees, since workers cannot bargain for themselves and must accept what their union negotiates. This enables unions to impose terms like mandatory dues on workers.

Many workers would be satisfied with their union and pay the dues. Others would not. Terry Bowman has worked at Ford Motor Co.'s Rawsonville plant for 15 years. He has long objected to United Auto Workers' Local 898 priorities. He would not voluntarily pay union dues.

But exclusive representation means Bowman and workers like him have no choice.

Right-to-work laws prevent unions from imposing mandatory fees, giving employees the right to work without paying union dues. Otherwise, right-to-work has no effect on collective bargaining. All other negotiations continue as before. What's wrong with that?

Unions object that right-to-work is actually "right-to-freeload." The AFL-CIO argues "unions are forced by law to protect all workers, even those who don't contribute financially toward the expenses incurred by providing those protections." They contend they should not have to represent workers who do not pay their "fair share."

It is a compelling argument, but untrue. The National Labor Relations Act does not mandate unions exclusively represent all employees, but permits them to electively do so. Under the Act, unions can also negotiate "members-only" contracts that only cover dues-paying members. They do not have to represent other employees.

The Supreme Court has ruled repeatedly on this point. As Justice William Brennan wrote in Retail Clerks v. Lion Dry Goods, the Act's coverage "is not limited to labor organizations which are entitled to recognition as exclusive bargaining agents of employees … 'Members only' contracts have long been recognized."

To be fair, most union activists are honestly mistaken on this point. Unions rarely negotiate members-only contracts. And when unions negotiate as exclusive representatives they must represent everyone equally. They cannot negotiate one wage for their members and the minimum wage for everyone else. But the law does not force them to represent non-members in the first place.

Unions do so anyway because their contracts hold some workers back. Seniority-based layoffs, for example, guarantee the job security of workers with more seniority at the expense of new hires. No matter how well new hires perform, they are laid off first. This explains why Milwaukee Public Schools recognized Megan Sampson as an "Outstanding First Year Teacher" in 2010 - but laid her off a week later.

A members-only contract makes a seniority system that ignores merit impossible. New hires would refuse to join. They would not stand first in line for layoffs. That would put the next-most junior employees on the chopping block, and they too would quit the union. No one wants to volunteer to be laid off first. Unions negotiate as exclusive representatives so they can force employees to accept provisions they would otherwise reject.

But these negotiation tactics undermine the case against right-to-work. Why should workers have to pay into a union for representation they don't want? Workers should have the freedom to decide how they spend their pay.

Obviously, unions want employees paying dues. Polling shows a quarter of Michigan's government employees would opt out of unions under a right-to-work law. Losing those members would cost Michigan's unions more than $100 million annually. That explains their ferocious response at the Michigan Capitol. But financial interests do not justify forcing workers to pay dues for representation that unions aren't required to provide.

James Sherk is a senior policy analyst in labor economics in the Center for Data Analysis at The Heritage Foundation ( ).

First appeared in The Detroit News.