March 14, 1961

HonorableDavidW. Ratliff, Chairman Labor and Management RelationsCommittee8. Senate of the State of Texas Austin,Texas OpinfonNo. WW- 1018
Re: Whether the "agency shop" clause in labor union contracts contravenes Sec. 8a, Article 5154a;-Set, 2, Art. 5207a; and Section 1, Art. 5154g;V.A.T.C.S.
Dear SenatorRatliff:
The Senate Committee on Labor and Management Relations has requestedan opinion as follows:

"Does the 'agencyshop! clause contravene exfsting statutes of the State of Texasby requiring that employees coveredby the clause, who fail voluntarily to acquire or maintain membership in the union, as a condition of employment,pay to the union eachmonth a service charge or fee as a contribution toward the administration of the agreement and the representationof such employees?'
Your letter points out thatmany out-of-statecompanies have negotiated collectivebargaining agreementswith various unions containing "agency shop" clauses,which companieshave branch plants in Texas, and that some Texas corporationsare being pressed to sign contracts containing this clause, Your Committee is interested in this problem to see if corrective legislationis required,
The standard "agency shop" clause I.73 a contractbetween the union and management, requires each employeewho fails voluntarily to acquire and maintain membership in the union, as a condition of employment, to pay to,the union eachmonth a service charge as a contributiontoward the administration of the contract and the representation of such employees. Such service charge is usually in.an amount equal to the union's regutar initiation fee'and a.month*s dues for,the first monthHon. David W. Ratliff, Page 2, (~~018)

after the contractgoes into effect, and for eachmonth thereafter in an amount equal to the regularmonthly dues. Section 8a of Article 5354a, Vernon's Civil Statutes, reads as follows:

"It shall be unlawful for any labor union, agent, labor organizer,any officer, any

or representativeor any member of any labor union to collect, receive or demand, directly or indirectly,any fee, assessment, or sum ofmoney whatsoever, as a work permit or as a condition for the privilege to work from any personnot a member of the union; provided,however, this shall not prevent the collection of iniabove stated.” (Emphasis

5207a,Vernon's Civil Statutes, tiation fees as added). Section 2 of Article reads as follows:

"Noperson ment on account membership in a Section 1 of Article reads as follows: shallbe denied employofmembership or nonlabor union." 5154g,Vernon's Civ11 Statutes,

I '!It 3:s hereby declared30 be the public policy of the State of Texas that the right of Dersons to work shall not be denied or abridged on account ofmembership or nonmembership-in any laborunion or labor organization and that in the exercise of such rights all persons shall be free from threats, force, intimidation or coercion."
It is clear from a reading of the foregoing statutes that it was the intention of the Legislature to make membership or non-membership in a labor union a voluntarymatter with each individualworker, and to protecthim 3.n his right to continue to work at his job, regardless of his decision. Artfcle 5154a,V.C.S., Section 1 of reads in part as follows:
"Because of the activities of labor unions affecting the economic conditions of the country and the State, entering as they do into practically every business and industrial enterprise, it is the sense of the Legislature that such organizations

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Hon. David W. Hatliff, Page 3, (WW- 101.8)

affect the public interestand are charged with a public use. The workingman, unionist, or non-unionist;must be protected. The right to work is the right to live. (Emphasisadded).
The Agency Shop Contract is of fairly recent origin. Heretofore, the three usual types of unjlonsecurityhave been: the Closed Shop; the Union Shop; and the Maintenance of MembershipArrangement. Under the Closed Shop contract the employer can hire only unionmembers, and 11sforced to discharge employees failing tomaintain theirmember*c‘hip in good standing in the union. Under the Union Shop contract the employer can hire without regard to unionmembership,but the'employeemust become a unionmember within a specified time and thereaftermaintainhis membership in good standing. The Maintenance of Membership Arrangement allows the employer to hire wLthout regard to union membership or nonmembership,but during a specified limited time at the beginning of the contract or of being employed, as the case mLght be, every employeemust decidewhether or not he will join or remain a member of the union. Thosewho choose to joinmust remainmembers until the next so-called "escape period'*

which occurs at the beginning of each contract renewal. However, those employees electingnot to jo,in the union are free to remain as non-union employees for the life of the existing collectivebargaining agreement. If it be argued that the Agency Contract does not require any person to become a member of a labor un$on as a prerequisite to obtaining or holding a job, then let it be noted that Sec. 8a of Article 5154a, supra, prohibits the coll&ction of any fee, assessment or sum of-money 'whatsoeveras a condition for the privilege to w.orkfrom any personnot a member of the union. Indiana, a right-to-work state,has held that the agency shop is lawfulunder its laws, but did so on the ground that the Indlanaright-tozrk law is penal in nature, and must, therefore, be strictly construed. Therebeing nothing in the Indiana statutewhich specificallyprohibits the agency contract, the courtheld that under a strict construction of the penal law the agency shop contract could not be considered to be covered by the Indiana act by implication. Meade, E1ectri.c

Co. v. Hagberg, 159N.E.2d 408 (Ind.App., 1959). While the Agency Shop Contract as a type of labor union con-Hon. David W. Ratliff, Page 4 (WW- 1018)

tract was not in vogue at the time of the enactment of Article 51fS4a,the Legislature certainly intended to cover this type of contractwhen it enacted Section 8a of Article 5154a, by whatever name it came to be called in lateryears. But aside from Article 5154a, the agency shop contractviolates Section

## 2 of Article 5207a and Section 1 of Article 5154g, since the required payment of the service charge is tantamount to compulsory membership in a laborunion, and upon failure to pay the service charge, results in loss of the non-unionworker’s job, if the contract is enforced. The payment of the service chargemakes the non-unionmember subject to all of the pecuniary liabilities of the union member, without any correspondingprivileges. He is, in effect, a disenfranchisedunion member againsthis willlIn A. F, of L. v. Mann, 188 S.W.2d 276 (Civ.App., 1945) the Court was called on to construeArticle 515&a. In construing Section 8a of Art. 5154a, the Court referred to closed shop contracts,and the argumentsmade by appellants that the fee charged againstnon-unionworkerswas a part of the cost to such union in obtainingandmaintaining union conditions and servicing the employees on the job. Indicative of the intent of the Court to apply Section 8a to more than the closed shop contract is the following languageat page 285:

1t . l . enforced collectionby unions from non-union employees for such benefits as a right to-work is anothermatter, Carried to its logical conclusion,the same reasoningwould justify such exactions on any job whereIn unions are involved, whether under closed-shopcontracts or not; and ultimately could lead to the same policy toward all Labor, on the ground that all laborhad benefited from union efforts. Thus the public interest is so affectedby the practiceprohibited in Sec. 8% and the potentialabuses and injustices to laborerswho are not members of an organized union, whether from choice or inability to become so, that the Legislature was warranted in forbidding such practice. (Emphasisadded). If any Texas statutesaffecting labor do not apply in any given situation, it will be because the Congresshas pre-empted the field with its own legislationwith regard to the particular facts of the case. Certain acts and conduct, such as peaceful picketing of an employer’splace of business in an Industry af- !"Therewas evidence to be found in the acts ofmany States and of the Federal Congress to support the view that discrimination against employeesbecause they did or did not belong to a union was against the public interest and shouldnot be allowed. Laws merely regulating the union obviouslywould not accomplish that purpose. Basically, 

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Hon. David W. Ratliff, Page 5 (~~-1018 )

fecting interstate commerce,has been held b the Supreme Court of Texas, in Ex Parte Twedell, 309 S.W.2d 83% **(x958),** to lie outside the jurisdiction of **our** state courts. But membership in a union as ,aprerequisite to obtai'ning or holding a job is a differentmatte,r. Congresshas made an exemption in favor of the states in the Labor Management RelationsAct, 1947, in 29 U.S.&A, Sec. 164 (b),which reads as follows:

"Nothing in this subchapter shall be construed as authorizingthe execution or application of a%greements requiring membership in a labor organizationas a condition of employment in'any State or Territory in which such execution or application is prohibitedby State or Territorial law."
In Finney et al v, Hawkins, 54 S.E.2d 872, the Supreme Court of Appeals of Virglnfawas called upon to.construeVirginia's "Right-to-Work"law, Section 1 of which reads as follows:
'It is hereby declared to be the public

policy of Virginia that the right of persons to work shallnot be denied or abridged on account ofmembership or non-membership in any labor union or labor organization.'
TheVirginia court stated in the Finney case at page 877:

"As pointed out in the state court decisions in Statev. Whitaker, (45 S.E.2d 860)

. . l l > and Lincoln Federal LaborUnion No, 19129v. Northwestern Iron & Metal Co., 149 Neb. 507,31 N.W.2d 477, recent federal legislationmakes clear that Congressdid not intend to interferewith the right of States to prohibit agreementsrequiringmembership in a labor organizationas a condition of employment.... 29 U.S.C.A. Sec. 164 (b)."

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l . . .Hon. David W. Ratliff, Page 6 ($0~1018 )

agreements involving such discrimination are hostile to our free enterprise system and to individual liberty of choice and action. Legislation that protects the citizen in his freedom to disagree and to decline an associationwhich a majority would thrustupon him on the ground that it knowswhat is best for him, does no violence to the spirit of our fundamental law, The protection of minorities is the boast of our institutionsand a basis of their asserted supetiiority over totalitarianregimes. The results have demonstratedthe value of the democraticprocess."
Shop"In response to your question,we hold that the "Agency clause in a contractbetween a labor union and management contravenes and is in violation of Section 8a of Article 5154a; Section 2 of Article 5207a; and Section 1 of Article 5154g of Vernon's Civil Statutes.

SUMMARY

The 'AgencyShop" clause in a contract between a laborunion andmanagement violates Sec. 8a, Art. 5154a; Sec. 2, Art. 5207a; and Sec. 1, Art. 5154g, V.C.S.

Yours very truly,

WILL WILSON AttorneyGeneral of Texas

BY Assistant REF:rd

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