The Supreme Court on Wednesday questioned whether changes are needed in a decades-old labor law that governs bargaining agreements between private-sector unions and employers.
In a case that has broad ramifications on how unions organize, the justices heard oral arguments on whether the 1935 National Labor Relations Act allows for "neutrality agreements," in which an employer promises not to block a union from seeking to organize its workers in exchange for certain provisions.
Under such deals, it's a crime for the employer to offer a union "things of value" -- a provision intended to prevent bribes, extortion and collusion.
The case centers on a 2004 pact between Unite Here, a union that represents hospitality industry workers, and Mardi Gras Gaming, owner of a Florida dog track and gambling casino. The union offered to run ads -- at a cost of $100,000 -- supporting a gambling ballot initiative the company wanted to pass. And it vowed not to strike, protest, picket or otherwise disrupt the company's business.
In exchange, the company promised to make it as easy as possible for the union to organize its workers, including giving it access to employee lists so that it could contact and recruit workers.
Longtime Mardi Gras Martin Mulhall employee sued, saying it was wrong for the company to hand over employees' personal information, including their home addresses. He argues the employee lists were valuable because the union was willing to spend $100,000 on the ad campaign to get them.
"Unions have compromised employee interests in exchange for this type of assistance," William Messenger, an attorney representing Mulhall, told the high court.
"They certainly have extorted employers. And here [the union] is willing to conduct a $100,000 political campaign for this information."
A decision ruling the arrangements illegal would bar unions from an increasingly common organizing tactic.
But generally, the justices challenged whether the Unite Here-Mardi Gras agreement -- or similar deals overall -- violates federal law.
"I would have thought that the premise and policies of the labor laws are to encourage a wide variety of employer-employee agreements," Justice Elena Kagan.
Justice Anthony Kennedy added that Mulhall's argument "is contrary to years of settled practices and understandings."
And Justice Stephen Breyer said considering the employee lists a thing of value, as spelled out in the 78-year-old NLRA, would "create a mess."
Still, some justices said they were bothered by the union spending $100,000 as part of the deal.
"Tell me why I'm wrong about that and tell me how I deal with that niggling problem I have about the $100,000, because it does feel like a bribe to the employer," Justice Sonia Sotomayor asked.
Attorney Richard McCracken, representing the union, responded that it wasn't a bribe because it "was not a cash payment to anyone" and that the union was only exercising free-speech rights as guaranteed in the First Amendment.
A federal district court ruled against Mulhall, who is getting help from the National Right to Work Legal Defense Foundation, saying there was no "indication" of corruption. But an appeals court reversed the decision, saying "organizing assistance can be a thing of value."
With member rolls dwindling in recent decades, unions increasingly have sought neutrality agreements with employers as a way to maximize their organizing potential -- even if it means giving up key concessions like promising not to strike. And employers like the deals because they curb labor's bargaining power.
While the deals are mutually beneficial, outlawing them would hurt unions far more than business.