Mike Pence Favors Free Riders: Right-to-Work the Indiana Way

Indiana passed a right-to-work in 2012. In general, right-to-work means that a state is allowed to pass a law that forbids a union and employer to enter into an agreement that requires an employee to be a union member as a condition of employment.

But what if the state law, in addition, requires the union to pay to represent employees who opt of being a member, and thereby opt out of paying dues or non-member fees?

Mike Pence, as governor, signed this bill into law.

Recently, a federal appeals court voted 2-1 to uphold the law.

The union argued that the law went beyond barring mandatory dues payment-- it also unconstitutionally obligated unions to pay for services for non-members (for example, by taking their cases to arbitration, a costly exercise).

The majority dismissed this argument on technical grounds, saying that the union did not brief the issue earlier.

The dissenting opinion, by Judge Diane Wood, said this:

Until now, however, reimbursement for the benefits that the union must confer on the nonmember has been a different matter, and for good reason. If there is no way to compel the nonmember employee to pay the actual cost of the services the union is obligated to provide for him, a classic “free-rider” problem arises. Free-riding is a potential problem whenever a collective good (such as the union services here) is involved. If the good (or service) can be priced individually (that is, the seller can ensure that only the buyer obtains the benefit), free-riding will not be a problem. But if each person in the group obtains the benefit of the collective good whether or not she pays for it, then there is a risk that the supply of the good will diminish, or in the limiting case will disappear altogether.

To read the case (Sweeney v. Pence), click here.