U.S. Supreme Court Will Decide The Legality Of Union Neutrality Agreements

It certainly was not the biggest news out of the U.S. Supreme Court this week, but the Court agreed to resolve a split among the Circuit Courts involving the legality of so-called neutrality agreements in union campaigns.

Neutrality agreements have become a very popular tool among unions.  In the typcial neutrality agreement, an employer will agree with the union to limit one-on-one sessions with employees or captive-audience meetings.

The Taft-Hartley Act, however, makes it unlawful for a union “to pay, lend, or deliver . . . any money or other thing of value” to an employer.  Thus, the question: is an agreement to remain neutral during a union organizing campaign a “thing of value” which a union “pays, lends or delivers” to an employer.

Before this year, two federal Circuit Courts had found that the Taft-Hartley Act did not apply to neutrality agreements, but last year in Mulhall v. UNITE HERE Local 355, the Eleventh Circuit Court of Appeals held that such agreements were prohibited under the law.  In Mulhall, the employer, a casino, agreed to neutrality in exchange for the union’s promise to contribute $100,000 to a campaign for a ballot initiative allowing more casinos.  Not your everyday neutrality agreement.  The Eleventh Circuit found that neutrality in that instance was a “thing of value” especially because the employer was getting something tangible of value in return.

It’s not at all clear that the Supreme Court will agree with the Eleventh Circuit, as this is the first case the Supreme Court has taken up on the issue.  Indeed, the wording of the statute suggests that while an agreement concerning neutrality may well be a “thing of value,” it cannot be “paid, lent or delivered.”  But even if the Court does affirm the Eleventh Circuit, it would not be surprising if an opinion was limited to the particular neutrality agreement here where money actually exchanged hands.

The result remains to be seen.

- Dan Handman

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