                        March 14,   1961

Honorable David W. Ratliff, Chairman
Labor and Management Relations Committee 8.
Senate of the State of Texas
Austin, Texas
                           Opinfon No. WW- 1018
                            Re:     Whether the "agency shop"
                                    clause in labor union con-
                                    tracts contravenes Sec. 8a,
                                    Article 5154a;-Set, 2, Art.
                                    5207a; and Section 1, Art.
                                    5154g; V.A.T.C.S.

Dear Senator Ratliff:
     The Senate Committee on Labor and Management Relations
has requested an opinion as follows:
               "Does the 'agency shop! clause contravene
          exfsting statutes of the State of Texas by
          requiring that employees covered by the clause,
          who fail voluntarily to acquire or maintain
          membership in the union, as a condition of
          employment, pay to the union each month a
          service charge or fee as a contribution toward
          the administration of the agreement and the
          representation of such employees?'
     Your letter points out that many out-of-state companies
have negotiated collective bargaining agreements with various
unions containing "agency shop" clauses, which companies have
branch plants in Texas, and that some Texas corporations are
being pressed to sign contracts containing this clause, Your
Committee is interested in this problem to see if corrective
legislation is required,
       The standard "agency shop" clause I.73
                                            a contract between
the union and management,requires each employee who fails
voluntarily to acquire and maintain membership in the union,
as a condition of employment, to pay to,the union each month
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 month
Hon. David W. Ratliff, Page 2, (~~018)


after the contract goes into effect, and for each month there-
after in an amount equal to the regular monthly dues.
     Section 8a of Article 5354a, Vernon's Civil Statutes,
reads as follows:

               "It shall be unlawful for any labor
          union, labor organizer, any officer, any
          agent, or representative or any member of
          any labor union to collect, receive or de-
          mand, directly or indirectly, any fee,
          assessment, or sum of money whatsoever, as
          a work permit or as a condition for the
          privilege to work from any person not a
          member of the union; provided, however, this
          shall not prevent the collection of ini-
          tiation fees as above stated.” (Emphasis
          added).
     Section 2 of Article 5207a, Vernon's Civil Statutes,
reads as follows:

               "No person shall be denied employ-
          ment on account of membership or non-
          membership in a labor union."
     Section 1 of Article 5154g, Vernon's Civ11 Statutes,
reads as follows:
            I '!It3:shereby declared 30 be the public
         policy of the State of Texas that the right
         of Dersons to work shall not be denied or
         abridged on account of membership or non-
         membership-in any labor union or labor or-
         ganization 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 voluntary matter with each
individual worker, and to protect him 3.nhis right to continue
to work at his job, regardless of his decision. Section 1 of
Artfcle 5154a, V.C.S., 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
                                                             488%

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


          affect the public interest and are charged
          with a public use. The working man,
          unionist, or non-unionist; must be pro-
          tected. The right to work is the right
          to live. (Emphasis added).
     The Agency Shop Contract is of fairly recent origin.
Heretofore, the three usual types of unjlonsecurity have
been: the Closed Shop; the Union Shop; and the Maintenance
of Membership Arrangement.
     Under the Closed Shop contract the employer can hire only
union members, and 11sforced to discharge employees failing
to maintain their member*c‘hip
                             in good standing in the union.
     Under the Union Shop contract the employer can hire with-
out regard to union membership, but the'employee must become
a union member within a specified time and thereafter main-
tain his membership in good standing.
     The Maintenance of Membership Arrangement allows the
employer to hire wLthout regard to union membership or non-
membership, but during a specified limited time at the be-
ginning of the contract or of being employed, as the case
mLght be, every employee must decide whether or not he will
join or remain a member of the union. Those who choose to
join must remain members until the next so-called "escape
period'*which occurs at the beginning of each contract renewal.
However, those employees electing not to jo,inthe union are
free to remain as non-union employees for the life of the
existing collective bargaining 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 person not a member of the union.
Indiana, a right-to-work state, has held that the agency shop
is lawful under its laws, but did so on the ground that the
Indlana right-tozrk   law is penal in nature, and must, there-
fore, be strictly construed. There being nothing in the Indiana
statute which specifically prohibits the agency contract, the
court held 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.cCo. v. Hagberg,
159 N.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 contract when it enacted Section 8a of Article 5154a, by
whatever name it came to be called in later years. But aside
from Article 5154a, the agency shop contract violates Section 2
of Article 5207a and Section 1 of Article 5154g, since the re-
quired payment of the service charge is tantamount to compulsory
membership in a labor union, and upon failure to pay the service
charge, results in loss of the non-union worker’s job, if the
contract is enforced. The payment of the service charge makes
the non-union member subject to all of the pecuniary liabili-
ties of the union member, without any corresponding privileges.
He is, in effect, a disenfranchised union member against his
willl




     In A. F, of L. v. Mann, 188 S.W.2d 276 (Civ. App., 1945)
the Court was called on to construe Article 515&a. In con-
struing Section 8a of Art. 5154a, the Court referred to closed
shop contracts, and the arguments made by appellants that the
fee charged against non-union workers was a part of the cost to
such union in obtaining and maintaining 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 language at page 285:
               1t
                    enforced collection by unions
                    . l   .


          from non-union employees for such benefits
          as a right to-work is another matter,
          Carried to its logical conclusion, the
          same reasoning would justify such exactions
          on any job whereIn unions are involved,
          whether under closed-shop contracts or
          not; and ultimately could lead to the same
          policy toward all Labor, on the ground
          that all labor had benefited from union
          efforts. Thus the public interest is so
          affected by the practice prohibited in Sec.              !
          8% and the potential abuses and injustices
          to laborers who are not members of an or-
          ganized union, whether from choice or in-
          ability to become so, that the Legislature
          was warranted in forbidding such practice.
          (Emphasis added).
     If any Texas statutes affecting labor do not apply in any
given situation, it will be because the Congress has pre-empted
the field with its own legislation with regard to the particular
facts of the case. Certain acts and conduct, such as peaceful
picketing of an employer’s place of business in an Industry af-
                                                             4885

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 ,a prerequisite to obtai'ningor holding a job is a
different matte,r. Congress has made an exemption in favor of
the states in the Labor Management Relations Act, 1947, in
29 U.S.&A, Sec. 164 (b), which reads as follows:
               "Nothing in this subchapter shall
          be construed as authorizing the execution
          or application of a%greementsrequiring
          membership in a labor organization as a
          condition of employment in'any State or
          Territory in which such execution or ap-
          plication is prohibited by State or
          Territorial law."
     In Finney et al v, Hawkins, 54 S.E.2d 872, the Supreme
Court of Appeals of Virglnfa was called upon to.construe Vir-
ginia's "Right-to-Work" law, Section 1 of which reads as fol-
lows:
               'It is hereby declared to be the public
          policy of Virginia that the right of persons
          to work shall not be denied or abridged on
          account of membership or non-membership in
          any labor union or labor organization.'
     The Virginia court stated in the Finney case at page 877:
                "As pointed out in the state court
          decisions in State v. Whitaker, (45 S.E.2d 860)
             l>
          . . l  and Lincoln Federal Labor Union No,
          19129 v. Northwestern Iron & Metal Co., 149
          Neb. 507,31 N.W.2d 477, recent federal legis-
          lation makes clear that Congress did not intend
          to interfere with the right of States to pro-
          hibit agreements requiring membership in a
          labor organization as a condition of employ-
          ment.... 29 U.S.C.A. Sec. 164 (b)."
          ‘1
               l   . . .




               "There was evidence to be found in the
          acts of many States and of the Federal Con-
          gress to support the view that discrimination
          against employees because they did or did
          not belong to a union was against the public
          interest and should not be allowed. Laws
          merely regulating the union obviously would
          not accomplish that purpose. Basically,
Hon. David W. Ratliff, Page 6 ($0~1018      )


               agreements involving such discri-
               mination are hostile to our free
               enterprise system and to individual
               liberty of choice and action. Legis-
               lation that protects the citizen in
               his freedom to disagree and to decline
               an association which a majority would
               thrust upon him on the ground that it
               knows what is best for him, does no
               violence to the spirit of our funda-
               mental law, The protection of minorities
               is the boast of our institutions and a
               basis of their asserted supetiiority
               over totalitarian regimes. The results
               have demonstrated the value of the
               democratic process."
      In response to your question, we hold that the "Agency
Shop" clause in a contract between 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 'Agency Shop" clause in a contract
              between a labor union and management
              violates Sec. 8a, Art. 5154a; Sec. 2,
              Art. 5207a; and Sec. 1, Art. 5154g,
              V.C.S.

                           Yours very truly,
                           WILL WILSON
                           Attorney General of Texas


                           BY

                                Assistant
REF:rd
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