Labor law and regulation has recently been a contentious topic of litigation and policymaking. That promises to continue through 2017, and we expect the Sixth Circuit to issue important decisions in this area. The Trump administration has pledged to loosen regulation on labor markets while, at the same time, making several public displays of reconciliation with national unions. At the Supreme Court, the vacancy left by the passing of late Justice Scalia assured a deadlocked tie in the Friedrichs case, just as the nomination of Judge Gorsuch to the Court may bring the opportunity to test longstanding precedent. And at the state level, legislatures continue to pass right-to-work laws over the opposition of organized labor.

Perhaps the most contentious issue in labor disputes today is the security or agency fee charged to non-members. These fees have proven controversial, and many on the right-to-work side of the divide see them as additional forced and unjustified contributions to labor unions.  The Sixth Circuit late last year issued a significant ruling regarding agency fees. In UAW Local 3047 v. Hardin County, the Court considered whether a municipality – here, Hardin County, Kentucky, along with several others – was permitted to ban, by ordinance and pursuant to home rule authority, union agency fees. The question was ultimately one of Section 14(b) of the NLRA. While the NLRA generally preempts state labor law, that section specifically authorizes states to pass right-to-work laws. The provision reads:

“Nothing in the subchapter shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law.”

In other words, “States or Territories” are permitted to regulate agency fees – but what about the political subdivisions of states? The Sixth Circuit held, to the surprise of many, that the language included Hardin County and other municipalities like it. The court reasoned that “State” in the provision includes not only a state as a whole, but also its political subdivisions. This conflicted with the interpretation of other courts on the matter.

This decision could have a significant impact on policymaking, especially in Ohio – the last of the Sixth Circuit’s states without a right-to-work law. In Columbus, the state legislature is already considering passing one, but the legislation is, nonetheless, running into the same headwinds that doomed S.B. 5 in 2011. Should the provision fail in either the state house or senate, a natural next move for right-to-work advocates may be county-by-county legislation in the mold of Hardin County. Ohio, after all, provides a similar measure of home rule authority as in Kentucky. With the Sixth Circuit’s notable decision, that option just became much more plausible.