HB 1321
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
House Bill 1321 (Delegate Novotny)
Economic Matters
Labor and Employment - Right to Work
This bill specifies that an employer may not require, as a condition of employment or
continued employment, an employee or prospective employee to (1) join or remain a
member of a labor organization; (2) pay any dues, fees, assessments, or other charges to a
labor organization; or (3) pay any charity or another third party an equivalent amount in
lieu of a payment to a labor organization. The bill repeals various provisions of State law
that authorize or require an employer, including the State and units of government, to
negotiate the payment by an employee of a fee (service, maintenance, or representation
fee) to a labor organization to which the employee is not a member. The bill applies only
prospectively and may not be interpreted to apply to a collective bargaining agreement
entered into before the bill’s October 1, 2021 effective date.
Fiscal Summary
State Effect: General fund expenditures increase by $61,300 in FY 2022 for the Office of
the Attorney General (OAG). Out-year costs reflect annualization and elimination of
one-time costs. The bill’s criminal penalty provisions are not expected to materially affect
State finances.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
Revenues $0 $0 $0 $0 $0
GF Expenditure 61,300 71,600 73,800 76,400 79,100
Net Effect ($61,300) ($71,600) ($73,800) ($76,400) ($79,100)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: Local finances are not materially affected, as discussed below.
Small Business Effect: Potential meaningful.
 Analysis
Bill Summary: The bill allows an employee, or prospective employee, to pursue a civil
cause of action in circuit court against an employer that violates the bill’s provisions. If an
employer is found liable for a violation, the employee or prospective employee is entitled
to injunctive relief, damages, court costs, and reasonable attorney’s fees.
The Attorney General must (1) take any steps necessary to ensure effective enforcement of
the bill; (2) investigate all related complaints; and (3) commence and try all related
prosecutions. The bill specifies that the Attorney General has all the powers and duties
vested in State’s Attorneys under law with respect to criminal prosecutions related to the
bill’s provisions.
An individual who violates the bill’s provisions is guilty of a misdemeanor and is subject
to maximum penalties of imprisonment for one-year and/or a fine of $1,000. A person other
than an individual who violates the bill’s provisions is likewise guilty of a misdemeanor
but is subject only to a fine of up to $1,000.
The bill does not apply to (1) employers and employees covered by the federal
Railway Labor Act; (2) federal employers and employees; and (3) employers and
employees on exclusive federal enclaves. Any provision of the bill that conflicts with or is
preempted by federal law is unenforceable.
Current Law: State law specifies that it is the policy of the State that negotiation of terms
and conditions of employment should result from a voluntary agreement between
employees and the employer and, thus, each individual worker must be fully free to
associate, organize, and designate a representative for negotiation of terms and conditions
of employment. This process must be free from coercion, interference, or restraint by an
employer in (1) designation of a representative; (2) self-organization; and (3) other
concerted activity for the purpose of collective bargaining or other mutual aid or protection.
State law establishes a procedure for certifying a labor organization as the bargaining
representative for a workplace, and a majority of employees must vote in favor of joining
a union in order for a workplace to unionize.
Union Shops and Closed Shops
The federal Taft-Hartley Act of 1947 banned “closed shops,” which are places of
employment bound by an agreement to hire only the members of a particular union.
However, the Taft-Hartley Act, as amended, allowed for the continued existence of “union
shops,” which are places of employment that require employees to join a union within a
certain number of days after being hired.
HB 1321/ Page 2
Maryland law does not prohibit the existence of union shops. In cases where a union exists
in a workplace but employees are not required to join, State law allows a labor organization
to negotiate the assessment of a fee – sometimes called a service fee, shop fee, or agency
fee – to nonmember employees who receive wage increases and/or additional benefits
residually due to a collective bargaining agreement. If such fees are not included in a
collective bargaining agreement, they may not be assessed.
State Employees and Service Fees
State law authorizes collective bargaining with the exclusive representative of a bargaining
unit for service fees from State employees who are not members of that exclusive
representative. Thus, employees who are in a bargaining unit but are not members of any
employee organization generally must pay the service fee if a fee is successfully negotiated.
Likewise, employees who are dues-paying members of an employee organization that is
not the exclusive representative must also pay any negotiated service fee. Employees may
not be required to pay a service fee due to specified religious objections, but instead they
must pay up to an amount equal to the negotiated service fee to a nonprofit charitable
organization.
However, the U.S. Supreme Court reversed its position in 2018 on the right of a
public-sector exclusive representative to collect service fees from nonunion members. In
Abood v. Detroit Board of Education, 431 U.S. 209 (1977), the U.S. Supreme Court found
that, while an exclusive representative could collect a fee from nonunion members, the fee
revenues could not be used to support ideological causes not germane to the organization’s
duties as the collective bargaining representative. More than 40 years later, the
U.S. Supreme Court ruled in Janus v. American Federation of State, County, and
Municipal Employees, 585 U.S. __ (2018) that the state’s collection of agency fees from
nonconsenting public employees was a violation of the First Amendment and Abood is,
therefore, overruled. States and public-sector unions may no longer collect agency fees
from nonconsenting employees. Consequently, Maryland no longer collects service fees
from nonunion members.
State Expenditures: General fund expenditures increase for OAG by $61,324 in
fiscal 2022, which accounts for the bill’s October 1, 2021 effective date. This estimate
reflects the cost of hiring one administrator to investigate and process complaints. It
includes a salary, fringe benefits, one-time start-up costs, and ongoing operating expenses.
Position 1.0
Salary and Fringe Benefits $55,743
Operating Expenses 5,581
Total FY 2022 State Expenditures $61,324
HB 1321/ Page 3
Future year expenditures reflect a full salary with annual increases and employee turnover
and ongoing operating expenses.
As a result of the U.S. Supreme Court ruling in Janus, the State no longer requires nonunion
State employees to pay service fees. Thus, the bill codifies this existing practice. However,
OAG is still tasked with enforcing the bill’s ban on the payment of service fees.
Local Fiscal Effect: The circuit courts can likely handle any increase in litigation with
existing resources. The criminal penalty provisions of the bill are not expected to materially
affect local government finances or operations.
No longer collecting service fees from nonunion public-sector employees has no fiscal
impact on local jurisdictions as the U.S. Supreme Court prohibited this practice in Janus.
Small Business Effect: Prohibiting an employer or labor organization from requiring
employees to join, remain members of, or pay dues to a labor organization may reduce
wages and, thereby, lower operating costs for small businesses. In 2019, the national
median weekly earnings for private-sector union members were $1,025, while nonunion
members had median weekly earnings of $881. The effects will be felt most strongly in
industries with a strong union presence, such as transportation and utilities (18.7% of
employees are represented by unions), telecommunications (15.3% of employees are
represented by unions), and educational services (14.1% of employees are represented by
unions).
Additional Information
Prior Introductions: HB 163 of 2020 received an unfavorable report from the House
Economic Matters Committee. HB 126 of 2019 and similar bills, HB 264 of 2018 and
HB 531 of 2017, received unfavorable reports from the House Economic Matters
Committee. In addition, similar bills were introduced in the 2011 through 2016 sessions.
Designated Cross File: None.
Information Source(s): Office of the Attorney General; Department of Budget and
Management; Maryland Department of Planning; Maryland State Department of
Education; Governor’s Office; Maryland Department of Health; Comptroller’s Office;
Judiciary (Administrative Office of the Courts); Maryland Department of Labor; Maryland
Department of Aging; Maryland Department of Transportation; University System of
Maryland; Morgan State University; Baltimore City Public Schools; Charles, Frederick,
and Montgomery counties; Maryland Municipal League; City of Havre de Grace;
Department of Legislative Services
HB 1321/ Page 4
 Fiscal Note History: First Reader - March 4, 2021
rh/mcr
Analysis by: Richard L. Duncan Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 1321/ Page 5


Statutes affected:
Text - First - Labor and Employment - Right to Work: 2-322 State Personnel and Pensions, 6-407 Education, 6-504 Education, 16-414.1 Education, 15-904 Education, 15-132 Education, 4-304 Labor and Employment, 4-701 Labor and Employment, 4-702 Labor and Employment, 4-703 Labor and Employment, 4-704 Labor and Employment, 4-705 Labor and Employment, 4-706 Labor and Employment, 4-707 Labor and Employment, 4-703 Labor and Employment, 4-703 Labor and Employment, 16-309 Land Use, 3-502 State Personnel and Pensions