Final answer:
The statement is false; a free rider in the context of labor unions is an employee who benefits from union activities without paying union dues or being a member.
Step-by-step explanation:
The statement 'Free riders are employees who don't receive benefits from the union but still have to pay union dues' is False. In the context of labor unions, a free rider is an employee who receives benefits such as higher wages, collective bargaining rights, and safer working conditions that unions have secured, without being a member or contributing to the union through dues. This occurs because the improvements in pay and conditions negotiated by the union often apply to all workers in the bargaining unit, not just those who are union members.
Free riders may thus receive the benefits of the pay increase or better working conditions without helping to defray the union's costs by paying dues or participating in union activities. Company unions, as described, were a way businesses tried to establish a form of worker representation that did not have the same fees or independence as real unions, sometimes to undermine independent union efforts.