On Feb. 1, 2012, Indiana enacted the first right-to-work law adopted in this country in the last 10 years. The law prohibits employers and unions from making mandatory union membership (a standard provision in most union contracts) part of their labor contracts. As a result, employees in Indiana covered by union contracts will be able to decide for themselves whether or not they want to join the union and pay union dues. Indiana has become the 23rd state to enact such a law and the first in the Midwestern industrial belt to do so in decades.

The motivation behind the Indiana right-to-work law undoubtedly stemmed from several factors. On the one hand, it is likely to weaken the power of unions in Indiana as a result of the inevitable loss of members and their dues. Equally, if not more significant, Indiana can now point to the new law when it competes against other states in attracting new business. As a right-to-work state, Indiana will be viewed more favorably to prospective new employers, particularly compared to other states in the industrial Midwest and Northeast, which do not have (and are not likely to enact anytime soon) similar laws. Indiana’s image as a pro-business environment is thus likely to be enhanced. In this regard, it is probably not a coincidence that the Indiana legislature passed the law on the eve of the Super Bowl when the state will be in the national spotlight.

Aside from benefitting Indiana’s image as a pro-business environment, what else is significant about this development? First, it represents another serious setback to organized labor in general. At a time when union membership in the entire country (particularly in the private sector) is at an all-time low, this is yet one more blow to the image of unions as an economic and political force. To the extent other states feel compelled to enact similar measures, organized labor could suffer more setbacks. It also comes at a time when organized labor and its supporters have been under pressure from several fronts. Last year, the NLRB faced major criticism for its efforts to challenge Boeing’s decision to locate work in the generally nonunion environment of South Carolina (also a right to work state) instead of locating that work in its unionized facilities in the state of Washington. In addition, President Obama has struggled to win approval of his nominees to the NLRB. In the states of Wisconsin and Ohio, collective bargaining has been the subject of major confrontations. Significantly, however, at least on the state level, the confrontations to date have involved collective bargaining rights of only public sector employees. The Indiana right-to-work law is the first state effort to directly impact the role of unions in the private sector.

What happens next? No one can predict the impact of Indiana’s right-to-work law on union membership in the state or the time it will take to occur. In all likelihood, the impact on Indiana employees covered by existing union contracts will occur gradually since the law only applies to union contracts entered into after March 14, 2012. On the other hand, should Indiana’s action succeed in attracting new business, it is likely other states will begin to debate whether they must take similar steps. Similar bills have already been introduced in Maryland, Missouri, New Hampshire, New Jersey and West Virginia. In response, organized labor in those states will inevitably respond by vigorously defending their status. In this election year, in which the political discourse at all levels is going to be spirited to say the least, it is fair to say the debate over right-to-work laws, both as a reflection of labor/management tensions and as part of the competition of states to attract new business, will be well worth following.