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.

*I just posted a lengthy follow-up post, here.