For a labor law attorney like myself, today is Christmas morning at the Supreme Court.   In contrast to most labor law cases which reach the High Court and usually involve procedural and/or constitutional issues and labor law itself is only a side show (like Noel Canning later this term), the case at 1 First Street this morning is a meat and potatoes labor law matter with broad implications for my line of work – Mulhall v. UNITE-HERE.

 As my colleague Mike McGuire and I explain in Employment Law Daily today, the main issue in Mulhall is whether a neutrality agreement given by an employer to a Union to assist the Union in organizing its employees is a “thing of value” under Section 302 of the Labor Management Relations Act (LMRA) and thus against the law.   The case matters because labor unions do most of their organizing these days via neutrality agreements and card check—not traditional National Labor Relations Board (NLRB) secret ballot elections.   While it seems counter-intuitive that any employer would agree to a neutrality agreement, some, in fact, do, usually when they don’t have a choice about whether to be union or non-union because of political pressure, legislative fiat, etc.   In exchange for agreeing to neutrality, the employer can usually obtain a favorable “framework” for a future Collective Bargaining Agreement (CBA)—sometimes right on par with non-union competitors.

 It is hard to argue that a neutrality agreement has no value at all—indeed, in Mulhall, the employer agreed to neutrality and the Union campaigned for the employer in a ballot initiative, spending over $100,000 in the process.   The plain language of 302 would seem to suggest that such an agreement violates 302.   But the Unions have a strong argument that this type of “exchange” is no different than what happens at the bargaining table every day – the employer offering X, the Union offering Y.   Obviously, 302 did not intend to outlaw collective bargaining in general.   Rather its goal was to prevent employers from bribing union officials.   Is a neutrality agreement really the same thing as giving the Union bosses a trip to Vegas or cash in a bag?  That is the fundamental question the Court will have to answer.

 Another interesting wrinkle is that the case reaches the Supreme Court at only the Motion to Dismiss stage.   Labor unions, however, fear, that if Mulhall’s “theory” under 302 is even viable that neutrality agreements will be challenged everywhere.   Even if they eventually “win the war” on these cases, just having to fight the battle will drain valuable resources for a movement that has less and less money.

 Make no mistake about it – the outcome of Mulhall is critical to the future of labor organizing.  Stay tuned.