Do ‘Right to Work’ Laws Violate the Constitution’s Article I Contracts Clause? [Updated]

No
State shall enter into any Treaty, Alliance, or Confederation; grant Letters of
Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold
and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex
post facto Law, or Law impairing the Obligation of Contracts, or grant any
Title of Nobility.

—
Article I, Section 10, Constitution of the United
States

No, I didn’t
post this to highlight the prohibition against states’ granting any title of
nobility.  I posted it to highlight the prohibition against states’
enacting a law impairing the obligation of contracts—which the Supreme Court
has interpreted as a guarantee of the right to freely enter into
contracts.  

That guarantee does have
exceptions, of course, none of which includes the type of contract that state so-called
‘right to work’ laws bar.  Including the
ones passed today by the Michigan legislature, after springing out of nowhere
last week.  (Although maybe the
proponents of these laws think these statutes come within this exception
created by the current Supreme Court’s majority: any law that helps
corporations is constitutional.  It’s a
corollary to the majority’s maxim that any federal statute, such as ones
concerning compelled contractual arbitration, or labor unions, or federal-court
jurisdiction, be distorted beyond plausible recognition of the statute’s actual
language, if necessary, to favor corporations. 
This is known by them as “originalism” and “textualism.”  And known by others, not all of whom are
justices, as cute, pick-and-choose gimmickry.)

But as Slate’s
Matthew Yglesias points out today, what these bills do is use the force of
law—state law—to interfere with the right of contract between two private
parties: labor unions and private employers. 
In Michigan, the legislature actually passed two separate laws today:
one pertaining to labor contracts between labor unions and private employers,
the other pertaining to contracts between labor unions and public employers
(i.e., state and local governments).  But
as a constitutional matter, this doesn’t matter.

Yglesias
points out what does matter, although he argues it only as a matter of
hypocrisy, not as a possible violation of constitutional law.  After saying that the concrete economic
impact of these statutes is murky—something that Paul Krugman and most Angry
Bears would dispute (and have disputed)—he hits the nail on the head about the
actual nature of these laws:

[What is] not murky is the absurd hypocrisy that has
to go into making the case for right-to-work legislation.

The way this works is that if
there’s a labor union at a given business establishment that’s bargaining for
some higher pay or benefits or better work-rules or whatever it’s rapidly going
to find that there’s a free rider problem. Everyone in the relevant class of
workers gets the benefits whether or not they join the union. So something the
union is often going to want to bargain for is some kind of rule stating that
everyone hired in the relevant class has to join the union, or has to pay dues
to the union, or something else along those lines.

Now naturally an employer’s not
going to want to agree to that. But he’s not going to want to agree to higher
pay or more vacation days either. That’s why it’s a negotiation. A
right-to-work law is a law banning employers from making that
concession.

The impact, obviously, is to
make it hard to form strong unions in a given jurisdiction and thus make it a
more business-friendly jurisdiction. But note that this same trick works across
the board. You could just ban pay raises in general. Any one firm, after all,
faces a dilemma. On the one hand it would be more profitable to pay people less.
On the other hand, it’s also unprofitable to have everyone quit to go work for
some other higher-paying company. So a law against pay raises would make
everyone more profitable, spurring crazy business investment and job creation.
Except nobody does that because it would be (a) insane and (b) obviously
unfair. And yet the proponents of right-to-work laws are generally exactly the people most inclined to
stand up for freedom of contract under other circumstances.

And yet the proponents of right-to-work laws are
generally exactly the people most inclined to
stand up for freedom of contract under other circumstances, indeed.  They do this standing up in legislatures,
think tanks, and lobbying firms.  And in
court, including the Supreme one.  Some
of them doing this standing from the black-robes-wearing,
comfortable-leather-chair-sitting side of the courtroom bench.

Now that the gauntlet has been thrown, labor should pick
it up and take it to court.  There is, I
think, little doubt that these laws impair the obligation of current labor contracts and also impinge
upon the right to freely enter into contracts. 
The proponents of these laws will defend them on the ground that state
laws impairing the obligation of this particular type of contract isn’t what
the framers had in mind.  And undoubtedly
they’re right; it’s a historical fact that the Washington, Madison, and the
others considered union organizing right up there with sodomy and murder as unprotected by the Fourteenth Amendment, which they foresaw would be added
to the Constitution a few decades later, or by the clause in Article 1, Section
10, prohibiting states from impairing the obligation of contracts. 

But labor unions still should challenge the
constitutionality of these laws, even if they have to try to convince the courts, and
eventually the Court, that the laws are Letters
of Marque and Reprisal. 

Which, at least regarding
the Reprisal part, sounds about right. 


—-

UPDATE: Excellent, thorough article by Rick Ungar in Forbes today, titled “‘Right-to-Work’ Laws Explained, Debunked & Demystified.” Don’t miss it.