International Union of the United Ass'n of Journeymen & Apprentices of the Plumbing & Pipefitting Industry, Local Unions Nos. 141, 229, 681, & 706 v. National Labor Relations Board

Opinion for the court filed by Senior Circuit Judge LUMBARD. Dissenting opinion filed by Circuit Judge MIKVA. LUMBARD, Senior Circuit Judge: In bargaining for a renewal of labor management contracts in four right-to-work states, the Union1 insisted on clauses assessing non-union employees for the costs of union representation. International Paper Co. (the Company) responded that, in those states, such clauses were illegal under right-to-work laws. The National Labor Relations Board (NLRB) found that such clauses were not a mandatory subject for bargaining, and therefore insistence on the clauses was an unfair labor practice. 252 NLRB 181, [1980-81] CCH NLRB ¶ 17,596 (1980). The Union petitioned for review and the NLRB cross-petitioned to enforce its order. We grant enforcement of the Board’s order. The facts were found at an administrative hearing, Schlesinger, A.L.J., and are not disputed on appeal. Pipefitters at company plants in Springhill, La., Panama City, Fla., Natchez, Miss., and Camden, Ark. belong to Union Locals in the four states. Costs of union administration are borne by the locals; costs of negotiating a contract traditionally have been split between the locals and the international union. In 1974, Local 681 in Mississippi added a yearly assessment of two percent of wages to the existing union dues of $8.25 per month. Pipefitters at the Natchez, Miss., plant quit the Union rather than pay the assessment. Local 681’s membership in Natchez declined from 38 to 1, the last member being the shop steward who by virtue of his position was not required to pay dues.2 Of course, Local 681 remained obligated to represent the Natchez pipefitters even though none of them paid dues.3 Abood v. Detroit Board — 34 — of Education, 431 U.S. 209, 221-22, 97 S.Ct. 1782, 1792, 52 L.Ed.2d 261 (1977); Int'l Ass’n of Machinists v. Street, 367 U.S. 740, 760-61, 81 S.Ct. 1784, 1795-96, 6 L.Ed.2d 1141 (1961). When the Union opened contract negotiations with the Company in May 1977, it proposed clauses levying “representation fees” on non-member pipefitters. The Union’s final draft of the clauses was: The cost and expenses of representing all members of the bargaining unit, without regard to union affiliation or lack of same must be borne by all bargaining unit employees. Those unit employees who voluntarily choose not to become union members shall be required to contribute a pro-rata share of the costs and expenses incurred by the union that are directly related to enforcing and servicing the collective bargaining agreement. The representation fee will apply only when a collective bargaining agreement is in effect. Furthermore, in no case will the fee exceed the dues and assessments required of union members. Failure of any permanent employee to make payment of the representation fee each month and to maintain the payments during employment for dismissal after ten (10) days written notice to the employee and the company. The amount of the representation fee will be based upon an independent audit to determine those services performed by the union directly related to the collective bargaining process.... The Union and the Company reached agreement on all other contract provisions, but on September 28, 1977, the Company rejected the representation fee clauses on the grounds that they violated the right-to-work laws of Arkansas, Florida, Mississippi, and Louisiana.4 On October 17, the Union wrote to the Company to insist on the clauses, and to announce that picketing would commence at Natchez on October 31. The Company then filed its unfair labor practice charge. At the NLRB hearing, Judge Schlesinger ruled that representation fees were permissible under § 8(a)(3) of the National Labor Relations Act, 29 U.S.C. § 158(a)(3), which says: It shall be an unfair labor practice for an employer ... (3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: Provided, That nothing in this Act, or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization ... to require as a condition of employment membership therein on or after the thirtieth day following the beginning of such employment or the effective date of such agreement. ... But Judge Schlesinger then concluded that the representation fees were banned by the right-to-work laws of the four states under § 14(b) of the NLRA, 29 U.S.C. § 164(b), which provides: Nothing in this subchapter shall be construed as authorizing the execution or — 35 — application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial Law. The Union argued that fee-for-service clauses are the equivalent of “membership in a labor organization” under § 8(a)(3) but not under § 14(b). Such clauses, the Union claimed, are necessary to prevent “free riders” such as the Natchez employees. Judge Schlesinger concluded, however, that by passing § 14(b) Congress had deliberately allowed the States to make their own judgment on the issue of “free riders.” He held that the representation fee clauses were prohibited by State law under § 14(b), and the Union committed an unfair labor practice under § 8(a)(3) by bargaining to impasse for the clauses. The Board adopted Judge Schlesinger’s opinion that § 14(b) permitted states to ban representation fees and ordered the Union to cease violating § 8(a)(3) by its insistence on the fees; whereupon the Union petitioned for review and the Board cross-petitioned for enforcement. The legislative history of the Taft Hartley Act of 1947 which enacted § 14(b), clearly supports the Board’s ruling. Congress knew precisely what state laws it was validating when it passed § 14(b). See Air Transport Ass’n of America v. Professional Air Traffic Controllers Organization, 667 F.2d 316, 321 (2d Cir. 1981). The House report listed each state which had passed a right-to-work law or constitutional provision. H.R.Rep.No.245, 80th Cong., 1st Sess. 34, reprinted in I Legislative History of the Labor Management Relations Act of 1947 324 (1948). Among the enactments noted was the Arkansas statute at issue in this case. Another was the Georgia statute, Law No. 140 §§ 3-4, 1947 Ga.Laws 616, 618 (March 27, 1947) (codified as Ga.Code §§ 54-903-04 (1978)): § 54r-903 — No individual shall be required as a condition of employment or continuation of employment to pay any fee, assessment or any other sum of money whatsoever to a labor organization. § 54-904 — Any provision in a contract between an employer and a labor organization which requires as a condition of employment, or continuation of employment, that any individual ... pay any fee, assessment or other sum of money whatsoever to a labor organization, is hereby declared to be contrary to the public policy of this state. The Mississippi statute at issue here is almost identical to the Georgia statute above, which Congress practically incorporated by reference into the legislative history of § 14(b). Congress also knew about the free rider problem posed by such laws when it sanctioned such laws by passing § 14(b), as the report of the Senate Committee shows: A controversial issue to which the committee has devoted the most mature deliberation has been the problem posed by compulsory union membership. . . . [Ajbuses of compulsory membership have become so numerous there has been great public feeling against such arrangements. This has been reflected by the fact that in 12 States such agreements have been made illegal either by legislative act or constitutional amendment, and in 14 other States proposals for abolishing such contracts are now pending. Although these regulatory measures have not received authoritative interpretation by the Supreme Court [citation omitted] it is obvious that they pose important questions of accommodating Federal and State legislation touching labor relations in industries affecting commerce [citations omitted]. In testifying before this committee, however, leaders of organized labor have stressed the fact that in the absence of such provisions many employees sharing the benefits of what unions are able to accomplish by collective bargaining will refuse to pay their share of the cost. Report of the Senate Committee on Labor and Public Welfare presented by Senator Taft, 80th Cong., 1st Sess. 6, April 17, 1947, reprinted in I Legislative History, supra, at — 36 — 412. Senator Taft reported his bill, S. 1126, one week after Representative Hartley introduced H. 3020, whose § 13 was the textual precursor of the Taft-Hartley Act’s final § 14(b). Although the original Senate bill did not contain § 14(b), Senator Taft and Representative Hartley were of one mind on federal preemption of state law. On June 5,1947, Senator Taft explained the future § 14(b) to his peers as follows: Many states have enacted laws or adopted constitutional provisions to make all forms of compulsory unionism in such states illegal. As stated in the report accompanying the Senate committee bill, it was not the intent to deprive the States of such power. Cong.Rec. S 6602, reprinted in II Legislative History, supra, at 1543. Senator Taft added, “All we have done is to write in expressly what our committee report said.” Id. at 6604, reprinted in II Legislative History, supra, at 1546. Congress knew of the free rider problem; it knew of the state laws at issue here; it passed § 14(b) anyway. President Truman’s veto message specifically criticized § 14(b): “The bill’s stated policy of preserving some degree of union security would be abdicated in all states where more restrictive policies exist.” Cong.Rec. H 7503, reprinted in II Legislative History, supra, at 920-21.5 In short, the legislative history of § 14(b) supports the position of the Board. So does the Supreme Court. On June 3, 1963, the Court held that an “agency shop” agreement, requiring non-members to pay union dues, was the equivalent of membership under § 8(a)(3) and therefore permissible under the NLRA. NLRB v. General Motors Corp., 373 U.S. 734, 83 S.Ct. 1453, 10 L.Ed.2d 670 (1963). On the very same day, the Court held that because the agency shop was the equivalent of membership under § 8(a)(3), it was for that reason the equivalent of membership under § 14(b) and therefore amenable to prohibition by state law. Retail Clerks Int’l Ass’n v. Schermerhorn, 373 U.S. 746, 83 S.Ct. 1461, 10 L.Ed.2d 678 (1963). The connection between the § 8(a)(3) proviso and § 14(b) is clear. Whether they are perfectly coincident, we need not now decide, but unquestionably they overlap to some extent.. . . Whatever may be the status of less stringent union-security arrangements, the agency shop is within § 14(b). Id. at 751-52, 83 S.Ct. at 1464-65.6 The Union’s “representation fee” is a “less stringent union-security arrangement” than the fee in Schermerhorn because it is not set to equal union dues. The represen — 37 — tation fee thus escapes Schermerhorn’s holding, but not its rationale as restated in recent dicta: “Section 14(b) simply mirrors that part of § 8(a)(3) which focuses on post-hiring conditions of employment.” Oil, Chemical & Atomic Workers Int’l Union v. Mobil Oil Corp., 426 U.S. 407, 417, 96 S.Ct. 2140, 2145, 48 L.Ed.2d 736 (1976). See also id. at 427, 96 S.Ct. at 2150: “To summarize, §§ 8(a)(3) and 14(b) together exhaust the federal interest in the types of union-security agreements employers and unions may make. The closed shop is absolutely prohibited. Any lesser security agreement, though consistent with federal interest is sanctioned only if it harmonizes with state policy.” (Stewart, J., dissenting). The Union argues that not every practice permitted under federal law may be forbidden by the States. The Union cites several circuit court decisions holding that non-discriminatory union hiring halls, permissible under § 8(a)(3), may not be prohibited by right-to-work laws under § 14(b). Laborers Int’l Union of North America Local 107 v. Kunco, Inc., 472 F.2d 456 (8th Cir. 1973); NLRB v. Tom Joyce Floors, Inc., 353 F.2d 768 (9th Cir. 1965); NLRB v. Houston Chap. Ass’n Gen’l Con., 349 F.2d 449 (5th Cir. 1965), cert. denied, 382 U.S. 1026, 86 S.Ct. 648, 15 L.Ed.2d 540 (1966). These cases are clearly distinguishable. The regulation of union “membership” permitted to the states under § 14(b) applies only to post-hiring union security arrangements. Oil, Chemical & Atomic Workers, supra.7 Use of a union hiring hall precedes hiring, and therefore does not constitute “membership” under § 14(b). But the representation fees at issue here are clearly a post-hiring union-security arrangement. They fall within the ambit of § 14(b). Section 14(b) allows states to permit free riders. The Union and the dissent complain that free riders pose more of a burden today than they did when § 14(b) was enacted, but that argument is better addressed to Congress than to this court. A state law valid under § 14(b) in 1947 is valid today, and there is no serious question but that Congress in 1947 intended laws like Mississippi’s to survive federal preemption. Moreover, on the facts of this case Mississippi’s right-to-work law protects precisely those liberties Congress allowed the states to preserve. The men at the Natchez plant once belonged to the Union. They fled the Union when it raised its tax upon their labor. The dissent argues that the Union can force these men to choose between paying the fees they fled, or losing their jobs— and this notwithstanding state laws to the contrary. This is precisely the “compulsory unionism” Congress had in mind when it passed § 14(b), and this is the core of membership the Supreme Court has interpreted § 14(b) to encompass.8 Enforcement granted. Footnotes [1] The International Union of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local Unions Nos. 141,229, 681 and 706. [2] The other locals did not have similar problems. Locals 141 and 229 retained all of their members. Only two of 29 pipefitters represented by Local 706 refused to pay dues. [3] Judge Schlesinger suggested that the Union could disclaim any interest in representing the Natchez employees. The Board did not consider this point on appeal, and neither party has raised the issue here. [4] Ark.Stat.Ann. § 81-202 provides in part that “No person shall be denied employment because of membership in, or affiliation with, a labor union ... nor shall any person unless he shall voluntarily consent in writing to do so, be compelled to pay dues, or any other monetary consideration to any labor organization as a prerequisite to, or condition of, or continuance of, employment.” La.Rev.Stat.Ann. § 23:983 provides that “No person shall be required, as a condition of employment, to become or remain a member of any labor organization, or to pay any dues, fees, assessments, or other charges of any kind to a labor organization.” Miss.Const.Art. VII and § 198-A and Miss. Code Ann. § 71-1-47 provide that “No employer shall require any person, as a condition of employment or continuation of employment to pay any dues, fees or other charges of any kind to any labor union or labor organization.” Fla.Const.Art. I § 6 provides that “The right of persons to work shall not be denied or abridged on account of membership or non-membership in a labor organization.” This provision was construed to prohibit an agreement requiring nonunion members to pay their pro-rata share of bargaining and grievance costs, Florida Education Ass’n v. Pub. Empi. Rel. Com., 346 So.2d 551 (Fla.App.1977). [5] The dissent insists that in passing § 14(b) Congress intended state regulation only of closed or union shops. But President Truman’s veto message complained that § 14(b) allowed the states to ban all forms of union security, and both friends and foes of the Taft-Hartley Act agreed with that assessment. Senator Murray’s analysis of the bill concluded that “Section 14(b) ... expressly provides that in the case where the State law covering union-security agreements is more rigorous than the policy expressed in the bill such State law shall be unaffected.” Cong.Rec.S. 6665-66 (June 6, 1947), reprinted in II Legislative History, supra, at 1586, Senator Pepper said the section “leaves in effect all the strictures which any state may impose.” Cong.Rec.S. 6678 (June 6, 1947), reprinted in II Legislative History, supra, at 1596. Senator Morse specifically objected to § 14(b) “which completely outlaws any form of the union shop in those States that have enacted laws abolishing or making illegal all forms of union security.” Cong.Rec.S. 6613 (June 6, 1947), reprinted in II Legislative History at 1562. Clearly Congress equated membership with union security and considered the latter subject to state regulation. It is difficult to see how the agreement at issue can not be termed a union security agreement. [6] The General Motors and Schermerhorn cases neatly illustrate the Union’s dilemma: the agreement at issue must concern “membership” to be a mandatory subject of bargaining under § 8(a)(3), but must not concern “membership” in order to avoid state regulation under § 14(b). The dissent attempts to avoid this dilemma by stating that the agreement is a mandatory subject of bargaining under § 8(d) as regulating relations between employer and employee or as settling any term or condition of employment. This line of reasoning holds that an agreement concerning employee-union relationships falls under the NLRA provision governing employer-employee relations but not under the NLRA provision governing union security agreements. [7] Oil, Chemical & Atomic Workers Int’l Union v. Mobil Oil Corp., 426 U.S. 407, 96 S.Ct. 2140, 48 L.Ed.2d 736 (1976), held that § 14(b) did not permit Texas to ban an agency shop covering seamen. The Court reasoned that Texas law could only govern union-employee relationships where employees worked in Texas, because regulation of union membership permitted by § 14(b) applied to union-employee relationships on the job, after the employee had been hired. [8] If the Union can prove that every cent of union dues and fees is spent on collective bargaining, non-members will then pay exactly the same amount as members, yet the dissent would still hold that such a requirement is not the equivalent of membership.