Trouble with the Agency

In two separate and unanimous decisions last week the U.S. Supreme Court dashed organized labor's high hopes for its favorite device to circumvent the right-to-work laws that now forbid union shop contracts in 20 states: the agency shop.

Unlike union shops, in which all workers at a company are forced to join a union, the agency shop allows those who do not wish to join to pay a service fee equal to union dues. The fee ostensibly covers these workers' share of the collective bargaining cost. Four years ago, when an Indiana court ruled that the state's right-to-work law did not prohibit agency-shop contracts, labor leaders saw the chance to set up such shops in other right-to-work states. Twelve of the state right-to-work laws specifically ban agency shops as well as union shops, but labor hoped to use the agency in the remaining seven states despite the opposition of the attorney general in each state.

In one decision, which by itself was a victory for the unions, the Supreme Court last week found against General Motors and declared that agency shops are not illegal in all states. But in the other, the court ruled that a state court in Florida-where agency shops are not strictly prohibited by law-had the right to interpret the state's right-to-work law to mean that the agency shop is illegal. The Supreme Court thus said, in effect, that agency shops are legal only in states that do not object to them-which at present means only Indiana among right-to-work states.

Union leaders do not intend to give up, have spotted an opening to start their next battle on the issue. In its remarks in the Florida case, the court objected to unions charging the nonunion workers involved a service fee that was equal to union dues, which cover union services beyond collective bargaining. What if the agency-shop contract was modified to call for fees that are less than union dues? The labor leaders aim to find out.

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