WASHINGTON (Reuters) - The Supreme Court will hear a case on Wednesday that could have a major impact on the U.S. labor movement as it questions whether agreements often made between unions and private-sector employers over unionization campaigns violate an anti-corruption law.
The court is examining deals known as "neutrality agreements" in which employers agree not to campaign against unionization. The agreements have been in use for decades and the case could change how unions go about organizing.
If the justices find the pacts are a "thing of value," prohibiting employers and unions from entering into them, it would be a major blow to organized labor as it struggles to bolster membership, said those familiar with the practice.
"The stakes could not be higher for the union movement," Harvard University Law School Professor Benjamin Sachs said.
"Almost all of the successful unionizing efforts in the private sector in the last couple of decades have come through the type of private organizing agreements that are at issue in this case," he said.
The case, Unite Here Local 355 v. Mulhall, was brought by an employee of Mardi Gras Gaming, a casino and dog track in Hollywood, Florida.
Martin Mulhall, the employee, said his employer violated the Labor Management Relations Act when it agreed to allow the union Unite Here onto its property to organize workers, and when the company agreed to give the union contact information for employees in exchange for the union's support on a ballot initiative.
The labor relations statute bars employers from providing "thing of value" to unions and union officials. Mulhall argued that the access Mardi Gras Gaming gave Unite Here was valuable during the union's unionization drive.
A federal trial court dismissed Mulhall's case. The 11th U.S. Circuit Court of Appeals departed from precedent in two other circuits and reversed, saying that "it seems apparent that organizing assistance can be a thing of value."
If the Supreme Court agrees, employers and unions that enter into agreements with such terms could be committing felonies, legal experts told Reuters.
Arthur Smith, a Chicago-based attorney at Ogletree, Deakins, Nash, Smoak & Stewart who represents employers, said that the agreements between unions and employers today are very different than those used in the 1980s.
Smith said that in the beginning, neutrality agreements were very simple and stated an employer would remain neutral while a union attempted to organize a workforce.
Today, he said, popular add-ons include allowing the union to access the workplace, providing it with contact information and recognizing its position as a bargaining representative if the majority of employees sign commitment cards.
Unions have used the press and public demonstrations to wage "corporate campaigns" to convince employers to agree to these provisions in an environment where union density in the private sector has declined and it is increasingly difficult to win secret-ballot elections, Smith said.
Smith filed a friend-of-the-court brief supporting Mulhall on behalf of the Council on Labor Law Equality, a trade group that represents employers in labor disputes in federal courts.
Craig Becker, the general counsel of the AFL-CIO, the country's largest federation of labor unions, said that in Mulhall one section of the labor relations statute is taken out of context. Congress intended to criminalize the exchange of money and straightforward bribery, Becker said.
"This is about everyday accommodations between employers and unions that take place all the time," Becker said. The AFL-CIO filed a brief supporting the position of Unite Here.
Harvard's Sachs said the Supreme Court could decide that it should not have taken the case for procedural reasons, leaving for another day the issue of neutrality agreements.
Editing by Kevin Drawbaugh and Bill Trott