WASHINGTON, D.C. - (Mealey's) An appeal of a lawsuit by
nonunion employees who pay an annual fee to their union and are challenging
what constitutes proper notice of temporary mid-year fees assessed by a union
and used for political purposes is not moot, a U.S. Supreme Court majority
ruled on June 21, finding that a special assessment or increase in dues
requires a fresh notice and affirmative consent from nonunion members (Dianne
Knox, et al. v. Service Employees International Union, Local 1000, No.
10-1121, U.S. Sup.; See January 2012, Page 11) (lexis.com subscribers may access Supreme Court briefs for this case).
"Giving employees only one opportunity per year to make
this choice is tolerable if employees are able at the time in question to make
an informed choice. But a nonmember cannot make an informed choice about
a special assessment or dues increase that is unknown when the annual notice is
sent. When a union levies a special assessment or raises dues as a result
of unexpected developments, the factors influencing a nonmember's choice may
change. In particular, a nonmember may take special exception to the uses
for which the additional funds are sought," Justice Samuel Anthony Alito Jr.
wrote for the majority.
The Service Employees International Union, Local 1000,
and the State of California entered into a series of memoranda of understanding
controlling the terms and conditions of employment for employees, including a
provision requiring that all state employees in the bargaining units join the
union as formal union members or, if opting not to join, pay an "agency" or
"fair share" fee to the union for its representational efforts on their
behalf. The agency fee is calculated as a percentage of the union dues
paid by members of the union.
Each June, the union issues a notice as required under Teachers
v. Hudson (475 U.S. 292 ) to all nonmembers. The notice is
meant to provide nonmembers with an explanation of the basis for the agency
fee. Nonmembers have 30 days after each notice to object to the
collection of the full agency fee and instead elect to pay a reduced rate based
on the percentage ratio of chargeable expenditures to total expenditures.
All objections are to be resolved by an impartial decision maker.
On July 30, 2005, the union's Budget Committee proposed
an emergency temporary assessment to create a "Political Fight Back
Fund." It was stated that the fund would be used for a variety of
political expenses in response to several anti-union propositions on the
November 2005 special election ballot in California.
On Aug. 27, 2005, union delegates voted to implement the
temporary dues increase. On Aug. 31, 2005, the union sent a letter to all
members and agency fee payers stating that they were subject to the new
increase, which would be used "to defeat Propositions 76 and 75."
However, later, in response to inquiries, the union stated that the funds would
be used for political and collective bargaining actions.
Eight agency fee payers, representing nonunion employees
who objected to the union's 2005 Hudson
notice and those who did not object, sued the union in the U.S. District Court
for the Eastern District of California. The plaintiffs alleged that the
assessment violated their First, Fifth and 14th Amendment rights under 42 U.S. Code
Section 1983. Judge Morrison C. England Jr. granted the plaintiffs'
summary judgment motion. The union appealed.
A Ninth Circuit U.S. Court of Appeals majority on Dec.
10, 2010, reversed and remanded with instructions to deny the plaintiffs'
motion for summary judgment. It also reversed the denial of the union's
motion for partial summary judgment regarding the consent of nonobjectors under
law and remanded with instructions to grant the motion.
The agency fee payers petitioned the high court in
March. In June, the high court agreed to hear the appeal. During
the briefing process, the union moved to dismiss the case as moot based on a
Sept. 29 notice it sent offering refunds of the fee. Oral arguments were
heard by the high court on Jan. 10.
Writing for the majority, Justice Alito added that "by
allowing unions to collect any fees from nonmembers and by permitting unions to
use opt-out rather than opt-in schemes when annual dues are billed, our cases
have substantially impinged upon the First Amendment [to the U.S. Constitution]
rights of nonmembers. In the new situation presented here, we see no
justification for any further impingement. The general rule-individuals
should not be compelled to subsidize private groups or private speech-should
Chief Justice John G. Roberts Jr. and Justices Antonin
Scalia, Anthony M. Kennedy and Clarence Thomas joined in the opinion.
Other Constitutional Issues
Justice Sonia Sotomayor filed an opinion concurring in
judgment. She opined that nonunion members must be provided an
opportunity to opt out of contributing to solely political lobbying
efforts. However, she concurred only in the judgment because she could
"not agree with the majority's decision to address unnecessarily significant
constitutional issues well outside the scope of the questions presented and
briefing. By doing so, the majority breaks our own rules and, more
importantly, disregards principles of judicial restraint that define the
Court's proper role in our system of separated powers." Justice Ruth
Bader Ginsburg joined in that opinion.
Justice Stephen G. Breyer dissented, opining that there
is no reason to modify the unanimous decision in Hudson
(475 U.S. 292 ), which held that "the Union
cannot be faulted for calculating its fee on the basis of its expenses during
the preceding year."
He explained that "[t]he special assessment as
administered here has worked no constitutional harm upon those nonunion
employees who raised a general objection at the beginning of the year.
The union has honored their objections by subtracting from their special
payments the same 44% that it subtracts from each of their ordinary monthly
payments. . . . And we know that the special assessment here did
not even work temporary constitutional harm. That is because audited
figures showed that the union's total nonchargeable (e.g., political)
expenses for that year ended up as a lower percentage of total expenses
than the previous year. Hence the objecting nonmembers ended up being
charged too little, not too much, even with the special assessment thrown into
the mix." Justice Elena Kagan joined in that opinion.
W. James Young and Milton L. Chappell of National Right
To Work Legal Defense Foundation Inc. in Springfield,
Va., and Neal K. Katyal and Dominic F. Perella
of Hogan Lovells US in Washington
represent the nonunion employees. Jeffrey B. Demain and P. Casey Pitts of
Altshuler Berzon in San Francisco
represent the union.
James B. Coppess, Lynn K. Rhinehart and Laurence Gold of Washington filed an amicus
brief on behalf of the American Federation of Labor and Congress of Industrial
Organizations. Jeremiah A. Collins of Bredhoff & Kaiser and Alice
O'Brien and Jason Walta of the National Education Association, all in Washington, filed an amicus
brief on behalf of the National Education Association.
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