UPDATE: Indiana Supreme Court hears right-to-work arguments

The state’s right-to-work law violates the Indiana Constitution because it requires unions to provide services to non-members without compensation, an attorney representing labor groups told the state’s highest court Thursday.

But a lawyer for the attorney general said the constitutional provision in question would only apply if the state itself were demanding services without pay. In this case, the state is merely regulating a transaction between private entities, said Solicitor General Tom Fisher.

“This is standard regulatory fare,” Fisher said told the justices. “There’s nothing unusual about this law.”

The right-to-work law essentially frees workers from paying fees to unions they don’t join. The Republican-controlled legislature passed it in 2012 over the objections of Democrats and labor leaders—as well as thousands of union members who protested at the Statehouse—who said the law would lead to lower wages and unsafe workplaces.

Supporters said it would make Indiana a more attractive place to do business.

But two judges in Lake County have declared the law unconstitutional in separate cases, saying that it prevents unions from receiving the “just compensation” required by the Indiana Constitution because federal law requires them to provide services to non-union members.

The law “eviscerates the basic right that a person be compensated for the good and valuable services that a person provides in commercial endeavors,” wrote Lake County Judge George Paras.

On Thursday, Dale Pierson, a lawyer representing the International Union of Operating Engineers Local 150, told the court that unions granted bargaining rights at a company are required by federal law to represent all workers, even if they aren’t members. In the past, all workers at a company were required to become members and pay dues. But the right-to-work law changed that.

“We cannot collect any money any more [from all workers] and that’s a big loss for us,” Pierson told the court. “It jacks up the cost to the members.”

But Fisher said past court rulings have decided that the “just compensation” provision applies when the state is acting to take property or demands services. That’s not the situation with the right-to-work law, he said.

Therefore, he said, the court should treat right-to-work like other laws that regulate relationships between individuals and companies—such as those involving car rentals or utilities. He said if the court rules that the just compensation requirement applies to the unions, the state would likely face an “enormous number of challenges” involving other private transactions.

Justice Brent Dickson said the just compensation provision is also a part of the state’s Bill of Rights, which he called a sort of “deal” between individuals and the state about the types of limits government can and can’t put on its residents. The Bill of Rights protects citizens “from state power, not federal power,” he said. The law requiring the unions to provide services to all workers is federal.

But Pierson said that the federal law isn’t the issues. Instead, it’s the state law that caused the problems because it banned unions from getting paid for services.

Justice Steven David acknowledged the law is “certainly anti-union.” But he questioned whether unions are actually unpaid for the services. “The whole issue is about a reallocation of expenses,” he said. That’s because union members pick up the cost of services for those who aren't members.

And Justice Mark Massa said unions can choose whether to seek exclusive rights to represent employees of a particular company. It’s only then that the union would be required to provide services to all employees.

Thursday’s oral arguments were the first under new Chief Justice Loretta Rush. She got straight to work, interrupting Fisher just minutes into his arguments.

Rush, who was appointed to the court two years ago, replaced former Chief Justice Dickson, who stepped down from the top job but remains a member of the court.

The court took the right-to-work case under advisement and is expected to rule in the coming months.

The Supreme Court got involved after a Lake County judge ruled last month that Indiana's law was unconstitutional. That ruling came in a lawsuit brought by the United Steelworkers union, which represents more than 5,000 steel mill employees in northwest Indiana. The Supreme Court stayed the ruling until it could decide the issue.

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