Int’l Union of Operating Eng’rs Local 399 v. Vill. of Lincolnshire, Nos. 17-1300 & 17-1325 (7th Cir. Sep. 28, 2018)
The Village of Lincolnshire, in an attempt to curtail labor union power, passed an ordinance to (1) forbid the inclusion of union-security or hiring-hall provisions in collective bargaining agreements, (2) forbid the mandatory use of hiring halls, and (3) forbid dues check-off arrangements. The Village claimed it could pass such an ordinance because it could exercise the power granted to the State of Illinois through section 14(b) of the National Labor Relations Act (“NLRA” or “Wagner Act”). Section 14(b) allows states to bar compulsory union membership as a condition of employment. Illinois does not have such a bar. The Village claimed that, in the absence of a state law forbidding the Village to legislate labor law, it had to power to do so.
A collection of labor unions sued the Village claiming that the ordinance violated the Supremacy Clause because the NLRA and Labor Management Relations Act (“Taft-Hartley Act”) preempted the Village’s ordinance.
In most instances, state law must yield to federal law. The U.S. Supreme Court has held that the NLRA occupies the field of labor law – meaning that federal labor law is supreme to state labor law. However, section 14(b) of the NLRA permits states to modify some points of labor law
The Seventh Circuit court first noted that the only part of the Village’s ordinance that could go into effect was the agency-shop provision as only the federal government could restrict the use of hiring halls and dues-checkoffs. The court then examined whether section 14(b) authorizes a state’s political subdivisions to act in the area of labor law.
The Village argued that the state could delegate its power to restrict agency shops to its political subdivisions. However, the court disagreed for myriad reasons. Since the ordinance would only impact labor in the Village, employers dealing with the Village would have to constantly evaluate if they were complying with the Village’s ordinance, other political subdivision’s ordinances, state law, and federal law. The United States has over 90,000 general and special-purpose governments. If each had the power to pass its own labor laws, it would create an “administrative nightmare.” The ordinance also did not limit its effect to employees whose primary situs was in the Village, as required by case law. Summarizing, the “consequences for the uniformity of national labor law would be catastrophic.”
However, as the Seventh Circuit acknowledges, the issue of whether a local law, such as a municipal ordinance, rather than a state law, falls within section 14(b) is far from a settled question. The Sixth Circuit held that section 14(b) does allow local laws to regulate union-security clauses. A circuit split means that the issue could be taken up by the Supreme Court.
The Court further acknowledged that a municipality may be liable for damages if it tries to pass such an ordinance. In this case, the plaintiff-unions brought their damages claim too late in the process, but damages could be awarded in a similar situation.