By:  Jeremy P.  Sherman, Esq.

In one of the most anticipated labor relations cases in decades, the United States Supreme Court heard arguments today in Unite Here Local 355 v. Mulhall on whether pre-recognition agreements that assist union organizing efforts are illegal.

Factual Background

Martin Mulhall, an employee of Mardi Gras Gaming in Florida (Mardi Gras) who opposed union representation, filed suit challenging a neutrality agreement between Mardi Gras and Unite Here Local 355. In the neutrality agreement, Mardi Gras promised to: (1) provide union representatives access to non-public work premises to organize employees; (2) provide the union a list of employees, their job classifications, departments, and addresses; and (3) remain neutral to unionization.  In return, Unite Here promised to support a casino gambling ballot initiative and spent more than $100,000 campaigning for the gambling initiative.  Additionally, if recognized as the bargaining agent for Mardi Gras employees, Unite Here promised to refrain from picketing or other economic activity against Mardi Gras. 

The Legal Claim

Mulhill alleged the organizing assistance agreement between Mardi Gras and Unite Here violated Section 302 of the Labor Management Relations Act (”LMRA”), 29 U.S.C. Section 186.  Section 302 makes it unlawful for an employer to give or for a union to receive any “thing of value,” subject to limited exceptions.  The district court dismissed the complaint for failure to state a claim because it found that the assistance promised in the neutrality agreement cannot constitute a “thing of value” under Section 302.  The United States Court of Appeals for the Eleventh Circuit, holding that organizing assistance can be a thing of value that, if demanded or given as payment, could constitute a violation of Section 302.  The Third and Fourth Circuits have held to the contrary.  With this split among the Circuit Courts, the United States Supreme Court granted review.

The Supreme Court Oral Argument

The LMRA, commonly known as the Taft-Hartley Act, was enacted in part to end abuses such as bribes paid to union organizers by employers.  So a focus of the questions raised by the Justices in today’s oral argument was how to define an employer payment of a “thing of value” to a union.  Justice Kennedy asked Unite Here’s attorney:  “So suppose the company manufactures widgets and the union says, we’ll spend $100,000 advertising your widgets if you sign the recognition agreement.”  Unite Here’s attorney said that would be lawful unless the union actually received widgets from the employer.  Justice Sotomayer told Unite Here’s counsel that she was troubled by the union’s promise to spend $100,000 to campaign for the gambling initiative, “because it does feel like a bribe to the employer.”  Unite Here’s attorney defended by saying the $100,000 was not a cash payment to anyone but an exercise of the union’s own First Amendment rights. 


If the Court rules against the labor union in today’s case, it would have a significant adverse impact on unions’ ability to organize the private sector workforce. Pre-recognition agreements such as the one at issue in the Mulhall case are the union organizing tactic of choice today for big labor.