Bargaining Power

Understanding the rights of public sector workers in Tennessee

As numerous states threaten to curtail or even eliminate public employees’ collective bargaining rights, one question that might be raised is — can they do that? The answer is yes. Unlike the private sector, which is governed by the federal National Labor Relations Act (NLRA)[1], state and local governments are not subject to any uniform federal law regulating collective activity by public workers. Instead, each state decides whether and to what degree it and its political subdivisions will bargain with public employees.

In Tennessee, in contrast to many states, collective bargaining between local governments and unions is generally forbidden. Tennessee has elected to permit bargaining with just two groups of employees: teachers and transit workers. Aside from those two groups carved out by statute, Tennessee’s courts have consistently held that local governments have no authority to bargain with any organization representing or purporting to represent public employees.

However, Tennessee’s courts also recognize that public employees have a right to join and form unions, pursuant to the First and Fourteenth Amendments to the United States Constitution.

This article attempts to explain the organization and bargaining rights of public-sector employees today, particularly in Tennessee, by reviewing the development of public-sector labor law in the United States and in Tennessee. The article then considers the outlook for public-sector unions in Tennessee and the United States.

A Short History of Public-Sector Labor Law

Although public employees had been active in the labor movement that led to the passage of the NLRA in 1935, the NLRA by its plain terms excluded, and still excludes, public workers.[2] This was due to a number of factors, one of which was the judicial view that states, as sovereigns, could not be compelled to delegate or share with a third party the power to fix the terms and conditions of government employment. Moreover, courts generally held the view that public employees surrender their constitutional rights at the door as a condition of public employment.[3]

Another factor was the 1919 Boston police strike, which involved the majority of the Boston police force. That strike resulted in widespread violence and looting, and put into vivid relief the chaos that could ensue if public safety workers abandoned their positions. Even though the general labor movement recovered from the public relations blow dealt by the Boston police strike, labor leaders distanced themselves from it and from the public sector in general for many years.[4]

Although the NLRA does not include public workers, public workers do have a Constitutional right to form and join unions. Additionally, as noted above, most states do — at least for now — engage in some degree of collective bargaining with their employees. Following is a discussion of the development of these rights.

Public employees have the right to form and join unions flowing from the First and Fourteenth Amendments.  In the 1940s and 1950s, two lines of federal court cases led to the conclusion that public employees have the right to form and join unions. The first was the gradual softening of the hard line against recognizing the constitutional rights of public employees.[5] The second was the recognition that the First Amendment embodies a right to associate with like-minded individuals to express political views and ideas of public concern.[6] These two lines of cases together resulted in the conclusion that public employees have the right to form and join labor unions.[7]

Federal and state courts have recognized that if public employees have a constitutional right to form and join unions, there must be a companion right to be free from retaliation for exercising those rights. As the Supreme Court explained in 1979, “[t]he public employee surely can associate and speak freely and petition openly, and he is protected by the First Amendment from retaliation for doing so.”[8]

What constitutes protected activity and what constitutes retaliation is generally determined on a case-by-case basis. The Sixth Circuit has stated that unlawful retaliation in response to union activity could include discrimination, suppression, or censorship.[9] However, that court has also held that a state may differentiate between public employee organizations in access to facilities and bestowing benefits as long as there is a reasonable and rational basis for doing so.[10]

The Sixth Circuit has also stated that prohibited retaliation for union activity might take the form of questioning union employees about union meetings, transferring employees apparently causally related to union activities, or discipline apparently causally related to union activities.[11]

In sum, the retaliation analysis in the union context is similar to retaliation as to any other protected employment right. Additionally, note that public employees have a due process right to be represented by the representative of their choice during any disciplinary proceeding. Public employees therefore have a right to have a union representative present during any disciplinary proceeding.

Public employers are not required to engage in collective bargaining with their public employees.The courts have stopped short, however, of holding that the Constitution requires public employers to collectively bargain with their public employees. Thus, although a state may elect to engage in bargaining with certain public employees, unless the state consents, public employees have no right to collectively bargain with their employer. As the Supreme Court explained a case challenging a state agency’s refusal to deal directly with a union, “the First Amendment is not a substitute for the national labor relations laws … [it] does not impose any affirmative obligation on the government to listen, to respond or … to recognize the association and bargain with it.”[12]

Public employees have no right to strike. Courts have also stopped short of holding that a ban on strikes by public workers is unconstitutional. While the NLRA explicitly preserves the right to strike in private employment, the Federal Labor Relations Act, which controls labor relations between the federal government and its employees, expressly prohibits strikes.[13] Likewise, many states, including Tennessee, that have elected to engage in collective bargaining also impose statutory penalties, including job loss, for public employees who strike.[14] Finally, the Tennessee Supreme Court held over fifty years ago that strikes by public employees are illegal because “[i]t should be the aim of every employee of the government to do his or her part to make it function as efficiently and economically as possible. The drastic remedy of the organized strike to enforce the demands of unions of government employees is in direct contravention of this principle.”[15]

Tennessee forbids state or local government entities from bargaining with employee representatives absent an express grant of authority. Tennessee courts have consistently held that collective bargaining by local government entities is prohibited because no specific statutory provision authorizes governments to bargain. For example, in the 1957 case of Weakley County Municipal Electrical System v. Vick[16], the Court of Appeals considered whether to enjoin a strike and picketing by electrical system workers. Like other courts to consider the question, the court concluded that the picketing and strike were unlawful.

Unlike most courts from other jurisdictions to consider the question, however, the court did not rely on public policy considerations in holding that public employees were forbidden from striking. Instead, the court concluded that because the Tennessee Code provisions authorizing the establishment of the electrical system contained “no provision which could possibly authorize the collective bargaining contract demanded by defendants in the instant case,” the strike and picketing sought illegal aims and were properly enjoined.[17] In other words, since there was no specific grant of authority to the electrical system to authorize a collective bargaining contract, the electrical system was barred from engaging in bargaining.

Although courts applying Tennessee law have consistently held that government entities may not engage in bargaining with public workers absent an express grant of authority, some of them have. In the cases that have resulted in litigation, the courts have uniformly held that any contract or MOU entered into is void.[18] For example, in January of this year in in Simerly v. City of Elizabethton,[19] the Court of Appeals invalidated a collective bargaining agreement between an electric system and its workers.

The plaintiffs in Simerly were retirees of the Elizabethton Electric System and brought suit to recover health benefits they claimed were owed to them pursuant to the terms of a series of collective bargaining agreements (“CBAs”) negotiated with the IBEW and the Electric System Board between 1945 and 2005. In 2005, the Electric System was audited by the Tennessee Comptroller, which determined that Board was without authority to enter into the collective bargaining agreements. The Comptroller stated that in his view, the agreements were “null and void.”[20]

In the wake of the audit, the Elizabethton City Council dissolved the Board and took over management of the Electric System. One of its actions was to curtail the health benefits being paid to retirees. A number of retirees brought suit to enforce the agreement to pay the full amount of their health benefits as negotiated in the CBAs. The trial court held that Tennessee’s Electric Plant Law, which authorized the creation of municipal utility boards such as the one in Elizabethton, did authorize the Board to negotiate with the IBEW on wages and benefits. The City appealed.

The Court of Appeals reversed, citing the consistent case law that a municipality may not bargain with employee representatives absent express statutory authority. The Court noted that the Attorney General has explained that, unlike a private employer, a public employer cannot bind the future exercise of legislative authority:

[T]he prevailing view is that absent express or implied authority, a public employer cannot enter into a collective bargaining agreement. This statement of the common law has been followed by the Tennessee Courts and as such, represents the status of the law in Tennessee. The decisions of the courts in most jurisdictions reflect that any departure from the common law, to the extent that authority can be implied, is a matter of great public policy. If the courts were to imply such authority it would constitute “judicial legislation.” Since public employer-employee relationships are a matter properly addressed by the legislature, the legislature should formulate any change in policy.[21]

The legislature has never spoken to the issue of public employees’ collective bargaining rights in general — only to the rights of education professionals and transit workers.

The court in Simerly rejected the plaintiff retirees’ argument that the Electric Plant Law, which grants local electrical boards “all powers necessary or convenient to furnishing electric service,”[22] authorized bargaining with the union. The court’s rationale echoes the concern of early twentieth-century courts that permitting such negotiation would be in derogation of the rights of the government as the sovereign. In fact, the court quoted an opinion from 1893:

“Municipal corporations represent the public, and are themselves to be protected against the unauthorized acts of their officers, when it can be done without injury to third parties.... The protection of public corporations from such unauthorized acts of their officers is a matter of public policy, in which the whole community is concerned.” ... That a municipal corporation cannot and should not be bound by an ultra vires contract is a proposition that is well settled by authority, and sustained by reason and justice. To hold otherwise would be to vastly enlarge the authority of public agents, and permit them to bind a municipal corporation by contracts absolutely prohibited by law, and would thus expose the public to evils and abuses that the limitations and restrictions thrown around corporate officers are intended to prevent.[23]


The bottom line, then, is that “[w]hen a [political subdivision] fails to act within its charter or under applicable statutory authority, the action is ultra vires and void or voidable.”[24]

The Tennessee Supreme Court has not weighed in on collective bargaining for public employees in nearly thirty years.[25] It has the chance to do so now; the plaintiffs in Simerly filed a Rule 11 petition for review on January 28, 2011. The Court likely will not decide whether or not to grant the appeal until later this year. If it does grant review, the Court will have the opportunity to revisit the question of whether local governments may engage in collective bargaining with workers. It will also have the opportunity, for the first time, to address whether such a contract, if entered into, is void or merely voidable.

Tennessee has elected to engage in collective bargaining only with teachers and transit workers. Unlike Wisconsin and many other states, which have authorized collective bargaining with virtually all public workers since the late 1950s or 1960s, as of this writing Tennessee only permits bargaining with teachers and transit workers.

First, the Education Professional Negotiations Act (EPNA),[26] enacted in 1978, not only authorizes but requires local school boards to negotiate with a teachers’ union that has completed the recognition process set forth in the statute.[27] EPNA has resulted in widespread teacher organization in Tennessee, but as explained below, its future is in doubt. In 2010, education professionals comprised about 1/3 of all Tennessee workers represented by unions.[28]

Shortly after EPNA was enacted, the Open Meetings Act was amended to require that labor negotiations “be open to the public.” Tennessee is one of only about 11 states to require full public access to labor negotiations. The section of EPNA addressing mandatory subjects of bargaining specifically provides that “negotiations under this part shall be meetings within title 8, chapter 44.”[29]

Second, transit workers are the only group of public workers in Tennessee, other than teachers, who have the right to bargain with their employers.[30] The General Assembly granted this right in 1970, and was likely motivated by the fact that section 13(c) of the Urban Mass Transportation Act of 1964 requires that, as a condition to qualifying for federal mass transit funds, states allow mass transit workers to engage in collective bargaining with cities.[31]

As a practical matter, given that thousands of Tennessee’s public workers other than teachers and transit workers are members of unions, public employers need not, and certainly do not, ignore those unions. While a local government cannot enter into any type of written agreement with a union or other bargaining representative of its employees (other than teachers and transit workers), it is certainly acceptable to seek or allow input from employee representatives. Indeed, the Court of Appeals acknowledged such practices in the Simerly case, discussed above, noting that, “‘public employees have the right to form associations, and to meet and confer with their employers regarding employment matters ….’”[32]

Union or other representative input is accomplished through accepting input at public hearings, or even through more private channels, via a practice of meeting and conferring with representatives as stakeholders in a decision-making process. Additionally, as discussed above, union representatives must be included in disciplinary processes if that is the employee’s wish.

Outlook for public sector unions in Tennessee and U.S.

In 2010, approximately 36 percent of all state, local, and federal government workers were union members, as opposed to 7 percent of private workers.[33] Those numbers mean that a significant percentage of labor union membership is public workers. For example, about one-third of Teamsters members are local government employees.

Once a public entity is unionized it tends to stay unionized (in the absence of legislative action), which is a major reason that public employee unions have thrived even as private employer unions have steadily shrunk. The private sector is constantly shifting as businesses open, close, outsource, relocate, and so forth, but the public sector is generally static. Additionally, many government services are legal monopolies (e.g. police and fire). Thus, the public cannot “vote with its feet,” by going elsewhere if the service becomes expensive or inefficient. Lastly, public officials may tend to negotiate with unions with different objectives than do managers in the private sector. Private sector employers have a greater degree of responsibility for the continued financial viability of their organizations than do public sector employers.

At this writing there are movements afoot in Tennessee and a number of other states to restrict or eliminate public employees’ collective bargaining rights. Many cash-strapped states are struggling under the weight of hefty pension and benefit promises made to public employees in happier economic times. There are almost daily news reports of a particular city or state facing staggering unfunded pension liabilities, in addition to all their other budget woes. This exigent situation is causing public employers across the country to consider whether to fundamentally shift their dealings with employees, including looking at ways to curb the power of unions, or even eliminate them altogether. The debate has moved beyond finances to the more basic policy question of whether public employees should ever be permitted to bargain collectively. For example, it is frequently noted that when public employees engage in collective bargaining, they are negotiating with the same politicians who are beholden to the public employee unions for contributions, so that there is an inherent conflict of interest. The politician-employers thus have very little incentive to take hard-line positions in the negotiations. On the other side, union supporters argue that public employees should have the same rights as private employees. The debate is playing out across the country as well as here in Tennessee.

Tennessee repeal proposals. EPNA is under attack in the current legislative session, with companion bills pending in the House and Senate to repeal the law in its entirety.[34] The bill would replace EPNA with the provision that “[o]n or after the effective date of this act, no local board of education shall engage in mandatory collective bargaining with a professional employees’ organization or teachers’ union concerning the terms or conditions of professional service.”

The bill contains a provision to avoid impairing existing contracts, but once those contracts expire the bill would apparently prohibit their renewal or renegotiation: “Upon the expiration of a contract or agreement negotiated by a board of education and a professional employees’ organization, teachers employed by such board of education shall have the rights in their employment that are afforded to them under state law and the personnel policy applicable to them.”

The bill was introduced on January 18 and is currently being considered by committees in both the House and the Senate. Amendments made by the Senate Education Committee would clarify that teachers are prohibited from striking. Governor Haslam has not taken a position on the bill, but has proposed legislation making it more difficult for teachers to obtain tenure.

There is also a bill pending to eliminate payroll dues deductions for public employees where the dues are for “a political action committee or for dues for membership organizations that use funds for political activities.”[35] The bill was introduced on January 24, and is currently in the Senate State and Local Government Committee.

The federal landscape. As of this writing there is no movement afoot to repeal or significantly modify the Federal Labor Relations Act. The main news on the federal front in recent years has been the Public Safety Employer-Employee Cooperation Act (PSEECA), which would require all state and local governments to collectively bargain with public safety employees. The bill has been introduced several times since 1995. It seemed close to passage at the end of the last session, but did not. Although its passage seems unlikely given the current composition of Congress, it is discussed briefly here because it has been a perennial favorite with many lawmakers.

PSEECA, as most recently introduced,[36] would require states to pass legislation allowing collective bargaining with public safety employees, including the right to bargain over wages, hours, terms and conditions of employment and the right to fact-finding, mediation, arbitration, or comparable procedures to resolve impasse. Public safety employees are defined as firefighters, police, and some other emergency personnel. The law would prohibit strikes and would not affect right to work laws. It also would let states decide whether to engage in collective bargaining in several areas, including health benefits and pensions.

PSEECA further provides that if a state does not pass a conforming law, the Federal Labor Relations Authority, which oversees labor-management relations for federal employees, would step in and implement collective bargaining rights for covered public safety employees. This law would represent a 180-degree shift from the historic view of the state as a sovereign, immune from outside meddling in its outside employment affairs, as well as the view that there is an inherent danger in permitting public safety employees to organize and bargain. However, particularly since September 11, there has been enormous public support for the rights of and benefits due to firefighters and other public safety employees. Thus, the law may continue to be a contender for passage in the current Congress.

The landscape elsewhere in the U.S. According to the AFL-CIO, sixteen states are considering measures similar to Tennessee’s bill to restrict access to union dues for political purposes by forcing union employees to “opt-in” before their dues could be used for political activities. At this writing, there are numerous battles being played out across the country between union supporters and Republican lawmakers seeking to curb or eliminate collective bargaining rights for public employees, including in Ohio, Indiana, Colorado, and of course Wisconsin.

Additionally, California, Oregon, and Wisconsin — certainly among the most liberal states as far as workers’ rights are concerned — have already passed “deauthorization” laws, allowing public sector employees to petition to rescind a union shop agreement.

Conclusion

After many years as a somewhat dormant area of the law, the debate over what the labor rights of public employees are and what they should be promises to be a lively one into the foreseeable future.

Notes

  1. 29 U.S.C. § 151 et seq.
  2. See 29 U.S.C. § 152 (“[t]he term ‘employer’ … shall not include … any State or political subdivision thereof ….”). Note that question of whether an entity is or is not a “state or political subdivision thereof” is a question of federal, not state law. NLRB v. Natural Gas Util. Dist.of Hawkins County, 402 U.S. 600, 606-07 (1971).
  3. See generally, Joan Weitzman, The Scope of Bargaining in Public Employment (Praeger Publishers 1975), pp. 7-11 (discussing concept of sovereignty and illegal delegation of authority).
  4. See generally Morris A. Horowitz, Collective Bargaining in the Public Sector (Lexington Books 1994), pp. 18-20 (discussing public employee strikes and the Boston police strike in particular).
  5. See United Public Workers v. Mitchell, 330 U.S. at 94-96. Although the Court in Mitchell upheld the Hatch Act, which restricts the political speech of government employees, the Court began from the premise that government employees do have Constitutional rights.
  6. See, e.g., NAACP v. Alabama, 357 U.S. 449, 460 (1958) (it is “beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the ‘liberty’ assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech.”).
  7. See, e.g., McLaughlin v. Tilendis, 398 F.2d 287, 288-89 (7th Cir. 1968) (public school teachers have right to associate and join unions); Atkins v. City of Charlotte, 296 F. Supp. 1068, 1077 (W.D.N.C. 1969) (invalidating North Carolina law barring public employees from joining unions).
  8. Smith v. Arkansas State Hwy. Employees Local 1315, 441 U.S. 463, 465 (1979).
  9. Brown v. Alexander, 718 F.2d 1417, 1429 (6th Cir. 1983).
  10. Id. at 1423 (upholding Tennessee dues check-off statute’s requirement that 20 percent of employees be members of organization receiving dues).
  11. Wells v. O’Malley, 31 Fed. Appx. 886, at *2 (6th Cir. 2002) (holding that public official should have known such conduct was violative of employee’s First Amendment rights such that qualified immunity would be denied).
  12. Smith, 441 U.S. at 464-65 (citations omitted).
  13. 5 U.S.C. § 7311; see, e.g., Korte v. Office of Personnel Management, 797 F.2d 967 (Fed. Cir. 1986) (upholding constitutionality of federal statute); see also Clarry v. United States, 85 F.3d 1041, 1046-47 (2d Cir. 1996) (upholding President Ronald Reagan’s action of banning all striking air traffic controllers from federal employment for life, following 1981 Professional Air Traffic Controllers Organization strike).
  14. See, e.g., Tenn. Code Ann. §§ 49-5-609 to -610 (providing that non-tenured teachers who strike may be dismissed, and that tenured teachers who strike may forfeit their tenured status).
  15. Alcoa v. International Brotherhood of Electrical Workers, 308 S.W.2d 476, 480 (Tenn. 1957).
  16. 309 S.W.2d 792 (Tenn. Ct. App. 1957).
  17. Id. at 804.
  18. See Fulenwider v. Firefighters Ass’n Local 1784, 649 S.W.2d 268, 270 (Tenn. 1982) (individual had no enforceable right arising from informal labor agreement between city and firefighters’ union; “contracts between municipal corporations and unions representing their employees are unenforceable.”); Local 760 v. City of Harriman, No. E2000-00367-COA-R3-CV, 2000 WL 1801856 (Tenn. Ct. App. 2000) (contract with electrical workers void); Kraemer v. Luttrell, 189 Fed. Appx. 361 (6th Cir. 2006) (MOU between County and Deputy Sheriff’s Association unenforceable).
  19. No. E2009-01694-COA-R3-CV, 2011 WL 51737 (Tenn. Ct. App., Jan. 5, 2011).
  20. See id. at *2.
  21. Simerly, 2011 WL 51737 at *10 (quoting Tenn. Op. Atty Gen. No. 79-172, 1979 WL 33782).
  22. Tenn. Code Ann. § 7-52-114.
  23. Id. at *12 (quoting City of Nashville v. Sutherland, 21 S.W. 674, 676-77 (Tenn.1893) and Allmand v. Pavletic, 292 S.W.3d 618, 626 (Tenn. 2009)).
  24. Id. at *12.
  25. See Fulenwider v. Firefighters Ass’n Local 1784, supra n.18.
  26. Tenn. Code Ann. § 49-5-601 et seq.
  27. Tenn. Code Ann. § 49-5-605.
  28. See Bureau of Labor Statistics, Union Members Summary 2010 by state, available at http://www.bls.gov/news.release/union2.t05.htm (115,000 union members in Tennessee in 2010); and Tennessee Education Association information, http://www.teateachers.org/cms/Mission/10.html (claiming to represent 52,000 education professionals).
  29. Tenn. Code Ann. § 49-5-511(b).
  30. See Tenn. Code Ann. § 7-56-102(c),(d)
  31. See 49 U.S.C. § 5333(b).
  32. No. E2009-01694-COA-R3-CV, 2011 WL 51737, at *10 (Tenn. Ct. App., Jan. 5, 2011) (quoting Tenn. Op. Atty Gen., No. 98-168, 1998 WL 661332).
  33. See Bureau of Labor Statistics, Union Members Summary 2010, available at http://www.bls.gov/news.release/union2.nr0.htm. In 2010, a whopping 42.3 percent of all local government employees were union members, with 45.9 percent of all local government employees represented by a union. Additionally, in 2010 for the first time, the number of public workers who were union members was greater than the number of private workers who were union members (7.6 million public sector employees belonged to a union, compared with 7.1 million union workers in the private sector). See id.
  34. HB130 / SB113.
  35. HB159 / SB136. The Supreme Court upheld the constitutionality of a similar Idaho statute two years ago in Ysursa v. Pocatello Educ. Ass’n, 129 S.Ct. 1093 (2009).
  36. PSEECA was introduced as HR 413 / S1611 in the 111th Congress.

CATHY SHUCK CATHY SHUCK is a senior associate with the Knoxville office of Wimberly Lawson Wright Daves and Jones PLLC, a firm that represents management exclusively in all areas of labor and employment law. Cathy received her B.A. from Northwestern University and her law degree from Boalt Hall at the University of California, Berkeley, where she was a member of the Order of the Coif. Following law school she served as a law clerk to Judge William A. Fletcher of the U.S. Court of Appeals for the Ninth Circuit and to Justice E. Riley Anderson of the Tennessee Supreme Court. Prior to attending law school, Shuck worked for several years in the human resources field. She is an adjunct professor at the University of Tennessee College of Law.