A Kentucky trial court did not err in dismissing constitutional challenges to the validity of the state’s “Right-to-Work Act,” ruled a divided Kentucky Supreme Court. Specifically, the lower court ruled that the Act did not violate the Kentucky Constitution’s provisions requiring equal protection under the laws, prohibiting special legislation, prohibiting takings without compensation, and declined to rule on whether the Act was properly designated as emergency legislation. The Kentucky high court concluded that “rational basis review” was appropriate for evaluating the Act since it was expressly permitted by Section 14(b). Accordingly, it found that the legislature clearly established a rational basis for the Act—to promote economic development and job growth and to remove Kentucky’s economic disadvantages in competing with neighboring states. Chief Justice Minton filed a separate concurring opinion in which Justices Hughes and Venters joined. Justice Keller filed a separate dissenting opinion, in which Justices Cunningham and Wright joined, and Justice Wright filed a separate dissenting opinion in which Justices Cunningham and Keller joined (Zuckerman v. Bevin, November 15, 2018, VanMeter, L.).
Under Section 14(b) of the NLRA, Congress authorized states to enact right-to-work laws that prohibit union shop agreements and agency shop agreements. In 2017, the Kentucky legislature passed the Kentucky Right to Work Act. This legislation amended KRS 336.130(3) to provide that no employee is required to become, or remain, a member of a labor organization, or to pay dues, fees, or assessments to a labor organization.
Constitutional challenges. In May 2017, an action was filed against the Commonwealth challenging the Act on several constitutional grounds. Thereafter, the Commonwealth filed a motion to dismiss. The unions subsequently filed a motion for partial summary judgment. The trial court issued an order denying the unions’ motion and granting the Commonwealth’s motion.
Before the Kentucky Supreme Court was the question whether the trial court erred in dismissing constitutional challenges to the validity of the Act, specifically that it violated the Kentucky Constitution’s provisions requiring equal protection of the laws, prohibiting special legislation, prohibiting takings without compensation, and whether it was properly designated as emergency legislation.
Equal protection. The Kentucky high court’s analysis began with the presumption that legislative acts are constitutional. Sections 1, 2, and 3 of the Kentucky Constitution provide that the legislature does not have arbitrary power and shall treat all persons equally. Because nearly all legislation differentiates in some manner between different classes of persons, neither the federal nor state constitutions forbid such classification per se. Rather, the level of judicial scrutiny applied to an equal protection challenge depended on the classification made in the statute and the interest affected by it.
Currently, three levels of review may apply to an equal protection challenge. Strict scrutiny applies whenever a statute makes a classification based on a “suspect” class. Heightened rational basis scrutiny applies to quasi-suspect classes. Rational basis review was appropriate for evaluating the Kentucky Right to Work Act since it is expressly permitted by Section 14(b).
Rational basis review. Under Kentucky case law it has been recognized that statutes relating to labor and labor organizations are proper objectives for exercise of the Commonwealth’s police power. The legislature “in making police regulations has the right to make classifications based upon natural and reasonable distinctions, but is without right to exercise the power to classify arbitrarily and without any reasonable basis inherent in the objects of the classification.” A statute complies with Kentucky equal protection requirements if a “rational basis” supports the classifications that it creates.
The unions argued that the Act created a classification that had no substantial or justifiable basis. However, the high court concluded that the legislature is permitted to set economic policy for the Commonwealth. Even assuming that the Act created a classification that discriminated between labor unions and all other organizations operating in the state, or any sort of classification among union and nonunion workers, the court was unable to say that the legislation did not have a reasonable basis for doing so. Here, the legislature clearly established a rational basis for the Act—to promote economic development, promote job growth, and to remove Kentucky’s economic disadvantages in competing with neighboring states. Accordingly, the Act did not violate the equal protection provisions of the Kentucky Constitution.
Special legislation. Next, the high court considered whether the Act constituted special legislation in violation of Sections 59 and 60 of the Kentucky Constitution. The court noted that the purpose of these sections is to “prevent special privileges, favoritism, and discrimination, and to ensure equality under the law . . . [and to] prevent the enactment of laws that do not operate alike on all individuals and corporations.”
Special legislation is defined as arbitrary and irrational legislation that favors the economic self-interest of the one or the few over that of the many. Kentucky case law has long recognized a simple, two-part test for determining whether a law constitutes general legislation in its constitutional sense: (1) equal application to all in a class, and (2) distinctive and natural reasons inducing and supporting the classification.
In this instance, the Act applies to all collective bargaining agreements entered into on or after January 9, 2017. With the exceptions required by federal law, it applies to all employers and all employees, both private and public. It does not single out any particular union, industry, or employer. Thus, the legislature clearly established a rational basis for the Act.
Taking without just compensation. Next, the unions argued that the Act constituted a public taking of labor union property without just compensation, in violation of Sections 13 and 242 of the Constitution. First, they argued that the Act takes union property because unions are required to provide valuable services to all employees in a bargaining unit irrespective of union membership without being compensated in return. Second, they asserted that the Act takes from unions without compensation their valuable contract right that all employees share in the cost of representation in future renewals of CBAs. However, the court noted that other courts have held that unions are fully compensated for any loss of fees from nonmembers through the exclusive representation designation. This analysis applied equally to private sector employees. Because exclusive designation fully and adequately compensates unions for free-riders, the Act did not constitute a taking of private property without compensation.
Emergency legislation. Finally, the unions argued that the legislature impermissibly designated the Act as emergency legislation in violation of Section 55 of the Kentucky Constitution. The trial court reasoned that it was not the proper body to determine whether the stated emergency existed, and that the legislature was merely required to state an emergency purpose. In this case, although the unions disagreed, the high court was unable to conclude that the legislature’s proffered reason for an emergency had no rational basis. Therefore, it declined to disturb that determination. Accordingly, the court found that the union’s constitutional challenges to the Act were without merit.
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