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.
“imparing the obligation of contracts” implies the state cannot interfere with the right to enter into contracts…
contracts of adhesion?
contracts to murder?
so much for “legal logic.”
Contracts of adhesion. Contracts to murder (or to commit other violations of criminal law). Those are two of the several exceptions to the constitutional right. They’re called public-policy exceptions.
And, actually, they do make sense. Otherwise, people could just contract away the law itself. And no one could make a serious argument that the Founders intended that, or thought even conceivably that that’s what they were doing.
Am I right in recalling that a contract to commit a criminal act is unenforceable? Would such a contract be null and void and both parties then be guilty of a criminal conspiracy?
I’ve made better trading and investment decisions that in my entire 15 years doing this observing this “Forex Kong Guy” at
The market calls and his take on global markets is absolutely uncanny / sickly accurate.
Contracts to commit criminal acts are absolutely null and void, Jack. And, depending on how far the plans went before one party backed out, the party who didn’t back out certainly could be indicted for criminal conspiracy–especially if that party was trying to enforce the contract.
you are doing a better job explaining this than i could.
i just wanted to point at the illogic of reasoning from “impairing the Obligation” to preventing certain kinds of contract in the first place.
clearly, as they say, the clause was written to keep congress from arbitrarily denying someone the rights due them under a legal contract. it is unlikely, and illogical, that this was meant to imply that the congress could not declare certain contracts to be illegal…
ah, but then the lawyers… contract law is full of contested claims as to what is or is not a legal contract, or even what “obligation” is implied by a contract. so we get another SC dance to prove that workers have no rights the employer or the State is bound to observe. (see Dred Scott)
Well, the right to freely contract (with exceptions to that right) also comes from the Fifth Amendment, which, among other things, bars the federal government from denying due process of law and also from “taking” property without just compensation–the latter being a favorite of the Republican and libertarian right. The Supreme Court has interpreted a “taking”–which, by virtue of the Fourteenth Amendment’s due process clause (virtually identical to the Fifth Amendment’s due process clause, except that the Fourteenth Amendment applies to state and local governments rather than to the federal government)–as meaning that the government can’t completely depreciate your property (like by flooding it as part of a Corps of Engineers project) without paying you just compensation. This is a hot, hot issue in zoning law and environmental law.
State law gives you the right to freely contract (with limitations). That itself is considered a “property” right that, under the Fifth and Fourteenth amendments, the government can’t arbitrarily remove from you.
Also, while you’re right that contract law is full of contested claims as to what is or is not a legally binding contract, or even what “obligation” is implied by a contract, that is very different than a prohibition against entering into a certain type of contract as against public policy (like contracting for murder or prostitution or selling stolen merchandise or defrauding someone or whatever). There may be a question about, say, what exactly the contract ws intended to do–and if the respective parties didn’t understand one another and thought they were contracting for different things (in legal lingo, there was “no meeting of the minds”), then there was no actual enforceable contract. But that has nothing to do with whether the government can pass a law barring certain types of contracts, or certain provisions in contracts, just for the hell of it–or because the Koch brothers want it. As for the types of contracts that are void as contrary to public policy, that’s pretty well-defined in law.
I more or less understand what you are saying here.
but i still think that you can’t get from “impairing the Obligation of contracts” to
ruling that an employer has the “right to contract” with individual workers as a means of denying the unions right to organize
if nothing else, one is “before the fact” and the constitutional proscription is of “after the fact.”
Yes, coberly, I understand that one is before the fact, the other is after the fact, and that therefore these are two separate things. But what I’m saying is that under longstanding Supreme Court jurisprudence, the contracts clause is interpreted as prohibiting the states from interfering with the right of contract, both before and after the fact, and that’s based partly on the belief that protecting one but not the other makes no sense and that therefore that was the intent of the Framers, and partly on the basis that, at least when joined with the Fourteenth Amendment, that’s what it means.
To a non-lawyer, it kinda looks like SCOTUS rejected the contracts argument in 1949, so unions would have to find someway to get the court(s) to reconsider–or is this wrong? If wrong, why the heck haven’t unions tried this? ( http://supreme.justia.com/cases/federal/us/335/525/case.html )
PJR, I just posted a lonnngg follow-up post on the main blog page, responding to your comment.