Good news for SI-SHRM members and Indiana employers and employees in general. On February 1, 2012, Indiana Governor Mitch Daniels signed right-to-work legislation into law.

Right-to-work laws prohibit anyone from forcing a person to join or support a union as a condition of employment. That is to say, they protect an individual’s fundamentally American “right to work” without being forced to join, or pay any of his or her earnings, to a labor organization. Contrary to the claims of union propagandists, right-to-work laws do not in any way restrict a person’s right to join or pay dues to a union if he or she freely chooses to do so.

Indiana is the first state in the so called “Rust Belt,” a geographic area historically driven by large-scale manufacturing, to enact such legislation. Right-to-work measures are currently pending in Michigan, Missouri, and New Hampshire. Other Northeastern and Midwestern states have attempted to pass similar legislation, but have not been successful to date. Twenty-three states have enacted right-to-work laws, with Indiana being the first to do so in 12 years.

Unions claim that right-to-work laws depress area wages and benefits, although there is little support for this assertion. Employees in right to work states are, however, less attractive to unions as targets for organizing because they cannot be forced to join or pay money to a union. Consequently, right-to-work advocates argue that enacting such legislation makes a state more attractive to new businesses, which in turn, produces jobs. Should Indiana now see a marked increase in its ability to attract new businesses, neighboring states will be hard pressed to explain to their citizens why they have not enacted similar legislation.

Specific Features of Indiana’s Right-to-Work Law

Q: What does Indiana’s right-to-work law do?

A: Indiana’s right-to-work law prohibits anyone (including employers and labor organizations) from requiring a covered individual, as a condition of initial or continued employment, to: become or remain a member of a labor organization; pay dues, fees, assessments or other charges to a labor organization; or pay a charity or third party a dues equivalent.

Q: How does the new law affect labor agreements?

A: Any provision of a labor agreement (whether written or oral, express or implied) be- tween an employer and a labor organization which violates the new law’s prohibitions is null, void and unlawful and void. The new law only applies, however, to labor agreements entered into, modified, renewed or extended after March 14, 2012. It does not affect labor agreements that are already in effect on March 14, 2012.

Q: Are all employees protected by Indiana’s right-to-work law?

A: No, the new law does not apply to employees of federal, state or local governments, or employees covered by the Railway Labor Act.

Q: What are the consequences of violating Indiana’s right-to-work law?

A: A person who knowingly or intentionally violates the law’s prohibitions commits a Class A misdemeanor. An employee whose employer violates, or threatens to violate, this law may file a complaint with the attorney general or prosecuting attorney of the county in which he or she is employed. The attorney general or prosecuting attorney must investigate and, where a violation is found, enforce this law. Any person who is injured by a violation, or threatened violation, of this law may bring a civil action in State court. The court may award actual and consequential damages, a civil penalty of up to $1,000, equitable relief, attorney’s fees, litigation costs and such other relief as the court deems appropriate.

What the New Law Means for Indiana Employers

Right-to-work laws generally are good news for employers. Unions are reluctant to spend their limited resources seeking to represent employees in states which prohibit forced membership and dues. Unions also perceive right-to-work laws as encouraging what they call “free riders,” which are employees who unions accuse of taking advantage of the supposed benefits of union representation without paying union dues.

Despite this step forward, Indiana employers should remain alert to signs of union activity and continue regularly educating employees about the benefits of remaining union free. In an effort to make life easier for unions, the NLRB recently endorsed micro-unit organizing. This will make it much easier for unions to organize and represent very small groups of employees. Because it is easier to convince a few people to sign authorization cards and vote for a union than it is to convince dozens or hundreds, unions tend to be more successful winning elections among small groups of employees.

For the same reason, unions can be pretty confident those small groups will join the union and/or pay dues. Ironically, the combination of the new right- to-work law and the NRLB’s new rules may make Indiana employers particularly likely to be targeted for micro-unit organizing. If Indiana employers are not careful, they could find themselves confronting dozens of different small unit organizing campaigns and/or managing dozens of small unit labor contracts, despite the advantages of the new right-to-work law.