Indiana Passes Right-to-Work Law

By: Robert J. Orelup and William E. Kelley, Jr.

Much attention has been given to the “Right-To-Work” bill during the current session of the Indiana General Assembly.  There have been walk outs, protests, and hotly contested hearings in both the Senate and the House.  There were also multiple discussions of proposed amendments, including a proposed state-wide referendum on the bill and a proposed carve-out for the construction and building trades.  However, those amendments were ultimately defeated, and Indiana has officially become the twenty-third (23rd) right-to-work state, having formally adopted this bill into law.  On January 25, 2012, the Indiana House passed House Bill 1001, and the Indiana Senate followed suit on February 1, 2012.  Governor Mitch Daniels formally signed the bill into law during the afternoon of February 1, shortly after passage by the Senate.

So what is the “Right-To-Work” law?  The bill creates a new law that provides that companies (including both construction and non-construction entities) cannot require individuals, as a condition of employment or continuation of employment, to (1) become or remain a member of a labor organization; (2) pay dues, fees, assessments, or other charges of any kind or amount to a labor organization; or (3) pay to a charity or other third party an amount that is equivalent to or a pro rata part of dues, fees, assessments, or other charges required of members of a labor organization As currently written, the bill would take effect on March 14, 2012.  In terms of how it affects current contracts or agreements, the bill provides that it would apply only to contracts entered into, modified, renewed or extended after March 14, 2012; the new law would not apply or abrogate contracts that were already in effect as of March 14, 2012.

We will have more to come on this major legislative development and what it may mean in practice.  In the interim, if you have questions about how or whether the new right-to-work law may affect your company, contact our Labor & Employment Services Group or any of the DSV attorneys with whom you work.