UPDATE: THIS BLOG POST HAS BEEN UPDATED BASED ON SEVERAL AMENDMENTS MADE TO THE LAW.
There has been a lot of press about the “right to work” legislation which has now been signed into law by Governor Mitch Daniels. While the official law has not yet been published, the bills were the Indiana House Bill No. 1001 and Indiana Senate Bill No. 269.
The new law is divisive. Unions suggest that it undermines their cause and weakens workers’ rights. Others suggest that it protects an employee’s right to choose how to spend his or her own paycheck. No matter what your opinion, the most important thing is to understand what the law does now that it has been signed into law, and what the penalties are for violating the law.
With some exceptions, the Right to Work law applies to employers with one (1) or more employees working in Indiana.
Effective Date & Retroactivity:
The Right to Work law applies to all contracts that are entered into, modified, renewed, or extended after March 14, 2012. The law is not retroactive.
The Right to Work law’s primary provision that will impact employers and unions is Section 8. Section 8 prohibits employers or unions from requiring an individual to pay union dues or contribute an equal or pro rata share of union dues or fees to a charitable organization.
Section 8 states, “A person may not require an individual to: (1) become or remain a member of a labor organization; (2) pay dues, fees, assessments, or other charges of any kind or amount to a labor organization; or (3) pay to a charity or third party an amount that is equivalent to or a pro rata part of dues, fees, assessments, or other charges required of members of a labor organization; as a condition of employment or continuation of employment.”
Section 9 goes on to state that any “contract, agreement, or practice, written or oral, express or implied” that violates section 8 between a labor organization and an employer is unlawful and void.
Available Remedies & Possible Damages:
Section 10 makes it a Class A misdemeanor if a person knowingly or intentionally, directly or indirectly, violates Secion 8.
Section 11 grants certain state agencies and officials with the right to investigate complaints and enforce compliance. However, the law does not require that an individual complaining of a violation file with the state agency or official.
Section 12 of the Right to Work Law also provides a private right of action to an individual if the individual suffers an injury as a result of the law being violated, or from a threatened violation. The law provides that an individual may be awarded:
- Actual and consequential damages, or liquidated damages of not more than one thousand dollars (whichever is greater);
- Reasonable attorney’s fees, litigation expenses, and costs;
- Declaratory or equitable relief, including injunctive relief; and/or
- Other relief considered proper by the court.
The Right to Work Law, and legislation on similar topics in other states if you are a multi-state employer, may have a real impact on your business. Employers should:
- Stay up to date on developments related to this proposed legislation;
- Review your current Collective Bargaining Agreements and other contracts relating to employment to determine if changes may be needed moving forward; and
- Contact an attorney if you feel action is necessary.
Please contact us if you have any questions regarding these matters.
The Indiana State Senate passed the Bill (28 votes for, 22 votes against) largely along party lines on January 23, 2012. (Click here for legislative history and updates.)
The House has yet to pass the Bill. Stay tuned for additional updates.
Indiana has become the first Right to Work state in the Rust Belt. Governor Mitch Daniels signed the Right to Work law today, Wednesday, February 1, 2012.
Employers and unions should review their contracts and policies to ensure they comply with the new law moving forward.