Key union strategy goes before Supreme Court

Decision on €neutrality agreements in the Mulhall case could set course for labor organizing

Proponents and opponents of organized labor are keeping a close eye on the case.
Saul Loeb / AFP / Getty Images

Mardi Gras Casino and Resort, a South Florida gambling, dog-racing and hotel complex, has been around in some form since the 1930s. What started as a pari-mutuel betting track is today a Las Vegas–style destination for beachgoers, part of Florida’s booming gaming economy responsible for 2,600 jobs and nearly $382 million in spending in 2012. But Mardi Gras has made national news for something else entirely: an explosive labor dispute now before the Supreme Court.

On Nov. 13, the court will hear oral argument in Unite Here Local 355 v. Martin Mulhall and Mardi Gras Gaming. It is the latest case testing the boundaries of workers’ right to organize and could be among the most significant labor-related decisions since John Roberts was appointed chief justice of the United States in 2005.   

At issue in Mulhall is the neutrality agreement, a contract widely used by private employers and unions to govern conduct and set ground rules for workplace unionization campaigns. About a decade ago, Mardi Gras employees began talking with Local 355 of Unite Here, a union focused on organizing hotel, casino and airport workers. Like other casino employees, they hoped that the union could help them bargain for better wages, benefits and working conditions. Local 355’s website motto — “Lifting South Florida above the poverty line" — reflects the measured aspirations of this area’s low-wage service sector.

In 2004, Local 355 and the casino signed a neutrality agreement. Mardi Gras promised to give the union access to and information about employees and to refrain from conducting an aggressive anti-union campaign. As part of the agreement, it consented to gauge union support by card check — a third-party review of cards signed by workers favoring unionization — instead of through an election. In exchange, Local 355 said it would not picket or strike and would help lobby for a ballot measure permitting slot machines in the county. The union spent about $100,000 campaigning for the ballot proposition, which narrowly passed in 2005.

Strategic litigation

The trouble started in 2008, when Mardi Gras refused to comply with the neutrality agreement. Local 355 initiated legal proceedings, and the casino invoked an unorthodox defense: The contract it signed was unlawful under an anti-corruption statute.

Federal criminal law prohibits employers and unions from trading money or other “things of value.” According to Mulhall and Mardi Gras, neutrality agreements flout this interdiction and improperly circumvent employees’ right to secret-ballot elections, set out in the National Labor Relations Act. According to Local 355, the law forbids bribery and corruption, not mutually beneficial agreements between cooperating employers and unions.

A powerful conservative nonprofit group opposed to organized labor helped shape Mardi Gras’ strategy. The National Right to Work Legal Defense Foundation (NRTW) — whose stated mission is to “eliminate coercive union power and compulsory unionism” — came to represent Martin Mulhall, a Mardi Gras employee opposed to the union.

Mulhall sued Local 355 and Mardi Gras, but the case was thrown out by a Florida district court. On appeal by Mulhall, the U.S. Court of Appeals for the 11th Circuit sent the case back down. In the appellate court’s view, the kinds of promises and information exchanged in neutrality agreements are things of value and therefore foster corruption as much as cash bribes do. Unite Here then appealed to the Supreme Court.

Little is known about Mulhall, who declined to be interviewed. Legal pleadings reveal that he has worked at Mardi Gras for more than 40 years, first as a betting clerk, then as a groundskeeper. There is no available information on why he opposes the union or why he chose to pursue a case that seeks no monetary damages. The NRTW did not explain how Mulhall came into contact with the group. Unite Here would not comment on the case.

Card-check neutrality

The NRTW has long opposed neutrality agreements and card checks, which often come together. In past union campaigns, so-called card-check neutrality has led to unionization at a higher rate than union elections. Labor organizers see this as proof that in the absence of an employer’s anti-union campaign, workers vote yes. The NRTW sees those results as evidence of improper coercion and union mischief.

Patrick Semmens, vice president of the NRTW, said that many workers are “victims of card-check instant organizing and neutrality agreements.” Unions’ increased reliance on these mechanisms, he wrote in an email, is part of a top-down strategy that violates workers’ rights.

“Instead of relying on the traditional shop-floor organizing methods, union officials are increasingly cutting backroom deals with company management that allow both sides to sell out the workers.”

Neutrality agreements have proliferated since the 1990s, in part because of a Supreme Court case prohibiting unions from talking to workers on private property. With such limitations in place and with a weakened National Labor Relations Board (NLRB) — the federal agency responsible for protecting workers’ right to organize — unions say they must rely on card-check neutrality to acquire employee contact information and protect workers from employers’ anti-union campaigns.

In hotels and casinos, where low-paid employees work odd hours on guarded premises, “neutrality agreements are the only way these places have ever been organized,” said economics professor Jeff Waddoups of the University of Nevada at Las Vegas. Card-check neutrality could also be relevant to community-based worker-organizing campaigns outside traditional union contexts, like those against Wal-Mart and fast-food chains.

“If an employer wants to keep a union out, they make them win an election,” Waddoups said. “The anti-union tactics are so well refined in this industry of labor consultants that it makes it almost impossible for unions to organize if they can’t do a card check.”

Intimidation persuades workers to vote against their own interests, according to Waddoups. His research on the hotel and casino industries shows a 15 to 20 percent wage differential between union and nonunion workers.

Unions amid NLRB decline

In 2009, Congress failed to pass the Employee Free Choice Act, which would have amended federal labor law to put the card-check process on the same footing as secret-ballot elections. That defeat coincided with congressional stonewalling of President Barack Obama’s appointees to the NLRB, including Craig Becker, an attorney at the AFL-CIO. (The union confederation filed a friend-of-the-court brief in Mulhall).

Obama appointed Becker to the NLRB during a 2010 Senate recess, but his term ended in 2011 after his nomination failed a second time to get a final vote in the Senate. A case challenging the validity of Becker’s and other recess appointments — known to court watchers as Noel Canning — has reached the Supreme Court and will be heard in January 2014.

The NLRB took another hit earlier this year when the National Right to Work Foundation won two high-profile appellate decisions preventing the agency from requiring employers to hang a simple know-your-right-to-organize poster in the workplace. The board, perhaps fearful of a broad ruling that would endanger all workplace notifications, did not appeal to the Supreme Court.

Even as the labor movement mourns the weakening of federal labor law, the worldview of the NRTW, the U.S. Chamber of Commerce and business interests is shaped by a belief that the NLRB unfairly privileges unions in the workplace. Employees are too often the victims and not the beneficiaries of organized labor, these groups say. And depending on how the high court rules in Mulhall, labor’s opponents might advance their cause to ensure what they call greater freedom from compelled association.

Mulhall, said Becker, “represents what is a longstanding effort on the part of the Right to Work Foundation to basically turn labor law upside down.” Labor law over the past 85 years has assumed “a process of bargaining between unions and employers that involve mutual accommodations.”

“Card check and neutrality have been called by different names, but even before the (National Labor Relations Act) was passed in 1935, you had voluntary recognition,” Becker said. “You had workers walk into the boss’s office saying, ‘We want a union.’”

Should a majority of the justices agree with Mulhall and the NRTW, workers will have one less way to realize that goal.

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