U.S. Appeals Court upholds union restrictions in 2017 N.C. Farm Act

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  • The 4th U.S. Circuit Court of Appeals has upheld union restrictions included in North Carolina's 2017 Farm Act.
  • The provisions ban lawsuit settlements that would force a farm owner to recognize a union or collect union dues.

The 4th U.S. Circuit Court of Appeals has ruled in favor of provisions in North Carolina’s 2017 Farm Act dealing with labor unions. Judges ruled the state can ban lawsuit settlements that force farm owners to recognize unions and collect their dues.

The ruling reverses a trial court, which had labeled one part of the law unconstitutional.

“Section 20.5 of North Carolina’s 2017 Farm Act contains provisions making it illegal to enter into two types of contractual agreements: (1) any settlement agreement conditioned on an agricultural producer’s union affiliation (the Settlement Provision) and (2) any agreement that would require an agricultural producer to process dues checkoffs for its farmworker-employees (the Dues Provision),” wrote Judge Diana Gribbon Motz.

A union group called the Farm Labor Organizing Committee challenged the law in federal court. FLOC argued that the settlement and dues provisions violated the First and 14th amendments to the U.S. Constitution, along with federal law.

A trial judge agreed that the settlement provision violated the Constitution. The trial court blocked that part of the law from taking effect while allowing the rest of the Farm Act to stand.

“Agriculture and agribusiness account for one-sixth of the state’s economy and employ about 15% of its workforce,” the 4th Circuit opinion noted. “The vibrance of the state’s agricultural community has resulted in North Carolina becoming a major producer of tobacco, Christmas trees, soybeans, corn, hay, and cotton.”

Judges also highlighted the fact that 95% of N.C. farm workers are “Latinx, primarily of Mexican descent.” FLOC argued in court that the challenged law hurt its efforts to work on behalf of those workers.

Appellate judges disputed the group’s interpretation of the settlement provision.

“The Settlement Provision … prohibits parties from agreeing to any settlement that is conditioned on an agricultural producer’s affiliation (or non-affiliation) with a labor union,” according to the opinion. “FLOC urges us to resist this natural reading of the Settlement Provision and hold instead, as the district court did, that the provision prohibits an agricultural producer from entering into any (and every) settlement agreement with a labor union. FLOC’s reading, however, cannot be reconciled with the Settlement Provision’s unambiguous text and
statutory context.”

“[T]he Settlement Provision is not aimed at precluding settlements based on who the parties are but rather what those settlement conditions say,” Gribbon Motz wrote.

The 4th Circuit judges agreed with the trial court in upholding the portion of the law banning forced union due collections.

“Agriculture is North Carolina’s largest industry, which makes it a subject of great interest for state legislators,” according to the opinion. “The state also embraces its right-to-work policies and has worked repeatedly to strengthen them. In addition to these general bases for enacting Section 20.5, both challenged provisions respond to discrete legislative concerns.”

“The Settlement Provision addresses what some legislators viewed as the coercive practice of using unrelated litigation to pressure agricultural producers into collective bargaining agreements,” Gribbon Motz wrote. “This practice, in the estimation of the North Carolina legislature, reduced an element of choice for agricultural producers in deciding whether to affiliate with a union.”

“As for the Dues Provision, processing dues checkoffs requires an agricultural producer to ‘deduct union dues from their employees’ pay each week, consolidate those deductions into one payment, and transfer the payment to FLOC monthly,’” according to the opinion  “As the State puts it, dues checkoffs agreements require agricultural producers to ‘expend their own resources to collect dues on the union’s behalf’ and essentially act as a union’s treasurer. The nature of this arrangement, the State asserts, imposes ‘significant administrative and relational costs on farmers,’ particularly when there are ‘problems and confusion with [a farmworker’s] union membership status.’

Judge Toby Heytens joined Gribbon Motz’s opinion. Judge Julius Richardson wrote a one-page concurrence agreeing with the result.

“[E]ven the broad reading of that [settlement] provision — that it bars all settlement agreements between an agricultural producer and a labor union — does not violate the First Amendment,” Richardson wrote. “The First Amendment protects collective action undertaken to obtain meaningful access to the courts. But the broad reading doesn’t lock parties out of the courtroom. Just the opposite: It locks parties inside the courtroom.”