Tag Archive for Service Employees International Union (SEIU) Local 1000

My Outline of the June 21, 2012 U.S. Supreme Court Decision on a California Union’s Mandatory Fee Assessment on Non-Members to Fight Governor Schwarzenegger’s 2005 Ballot Measures

Today the United States Supreme Court issued a 7-2 decision in Knox et al. v. Service Employees International Union, Local 1000 related to the legality of public employee unions taking money from workers’ paychecks without permission and spending it on politics.

I’m sure labor lawyers and First Amendment lawyers are now writing lengthy and erudite analyses of this decision. I’m not a lawyer, but I will try to summarize the decision in layman’s terms based on the actual text of the decision. Then I will assert that the U.S. Supreme Court may be looking for a case to strike down the common union practice (in states that do not have “Right to Work” laws) of assessing mandatory charges from nonmembers’ paychecks for union bargaining and representation purposes.

What Is the Crux of the Decision?

First, here are two excerpts from the decision that generally summarize the Court’s opinion:

By authorizing a union to collect fees from nonmembers and permitting the use of an opt-out system for the collection of fees levied to cover nonchargeable expenses, our prior decisions approach, if they do not cross, the limit of what the First Amendment can tolerate. The SEIU [Local 1000 in California], however, asks us to go farther. It asks us to approve a procedure under which (a) a special assessment billed for use in electoral campaigns was assessed without providing a new opportunity for nonmembers to decide whether they wished to contribute to this effort and (b) nonmembers who previously opted out were nevertheless required to pay more than half of the special assessment even though the union had said that the purpose of the fund was to mount a political campaign and that it would not be used for ordinary union expenses. This aggressive use of power by the SEIU [Local 1000 in California] to collect fees from nonmembers is indefensible.

To respect the limits of the First Amendment, the union should have sent out a new notice allowing nonmembers to opt in to the special fee rather than requiring them to opt out. Our cases have tolerated a substantial impingement on First Amendment rights by allowing unions to impose an opt-out requirement at all. Even if this burden can be justified during the collection of regular dues on an annual basis, there is no way to justify the additional burden of imposing yet another opt-out requirement to collect special fees whenever the union desires.

This case has its origins in California, of course. California is NOT a Right to Work state, so employees in bargaining units (workers covered by a collective bargaining agreement) are required to pay “agency fees” to financially support certain union activities, even if they chose not to become actual union members. These union activities include contract negotiations and representation of employees in grievance and arbitration procedures.

In this Supreme Court decision, these fees are called “chargeable expenses.” They do NOT include expenses for political purposes. Under federal law, a public-sector union can bill nonmembers for “chargeable expenses” but it may NOT require them to fund its political or ideological projects.

Some state government employees represented by (but not members of) California’s Service Employees International Union (SEIU) Local 1000 objected to the union’s decision in the summer of 2005 to take additional money from their paychecks to support union political operations in opposition to what became four propositions backed by Governor Arnold Schwarzenegger on a November 8, 2005 special statewide election ballot.

Here are excerpts from the Supreme Court decision that provide important background:

  1. A 1986 U.S. Supreme Court decision (Chicago Teachers Local 1 v. Hudson) outlines requirements that a union must follow in order to collect regular fees for “chargeable expenses” from nonmembers without violating their rights. Unions must provide an annual notice to members and non-members represented by the union explaining how much money it planned to spend on on chargeable expenses and use that information to set and cap monthly dues.
  2. In the typical fashion of unions, the SEIU Local 1000 decided to violate the law when it did not serve its purposes. The union sent a notice in June 2005 to its members and represented nonmembers estimating that 56.35% of its total expenditures in the coming year would be chargeable expenses. Nonmembers had 30 days to object to full payment of dues, while being required to pay the percentage assigned to chargeable expenses. The notice stated that the fee was subject to increase without further notice.
  3. That same month, the Governor called for a November 8, 2005 special election for voters to consider ballot measures. Proposition 75 (paycheck protection for public employees) and Proposition 76 (state spending and school funding limits) were opposed by the SEIU Local 1000 as well as many other unions.
  4. After the 30-day objection period ended, the SEIU informed its represented employees via a letter dated August 31, 2005 that it was imposing an “Emergency Temporary Assessment to Build a Political Fight-Back Fund.” The letter explained that the union would use the fund to “defeat Proposition 76 and Proposition 75 on November 8,” and to “defeat another attack on [its] pension plan” in June 2006. The union noted that the fund would be used “for a broad range of political expenses, including television and radio advertising, direct mail, voter registration, voter education, and get out the vote activities in our work sites and in our communities across California.”
  5. The SEIU joined a coalition of public-sector unions in vigorously opposing these measures. Calling itself the “Alliance for a Better California,” the group would eventually raise “more than $10 million, with almost all of it coming from public employee unions, including $2.75 million from state worker unions, $4.7 million from the California Teachers Association, and $700,000 from school workers unions.The emergency political assessment was a temporary 25% increase in dues and a temporary elimination of the monthly dues cap.
  6. The SEIU Local 1000 did not provide a choice about paying into the fund to the 28,000 employees represented by the union but not members of the union.
  7. A group of nonmember state employees who were compelled to pay into the fund brought a class action against the SEIU alleging violation of their First Amendment rights.
  8. A federal district court ruled that the special assessment was for entirely political purposes and ordered the SEIU to send a new notice giving class members 45 days to object and to provide those who object a full refund of contributions to the fund.
  9. The federal Ninth Circuit Court of Appeals reversed the lower court decision by concluding that the SEIU’s procedures provided a reasonable balance and accommodation for the interests of the union, the employer, and the nonmember employees.
  10.  While this case was working through the court system, the SEIU Local 1000 offered a full refund of the assessment to nonmembers. It continued to claim that its procedure for handling the special assessment was legal.

The court states the following about the First Amendment in its decision:

  1. The First Amendment of the United States Constitution is about creating “an open marketplace” in which differing ideas about political, economic, and social issues can compete freely for public acceptance without improper government interference.
  2. Like-minded individuals have the right to associate for the purpose of expressing commonly held views.
  3. At the core of the First Amendment are certain basic conceptions about the manner in which political discussion in a representative democracy should proceed.
  4. The central purpose of the Speech and Press Clauses is to assure a society in which “uninhibited, robust, and wide-open” public debate concerning matters of public interest would thrive, for only in such a society can a healthy representative democracy flourish.
  5. Maintenance of the opportunity for free political discussion is a basic tenet of our constitutional democracy.
  6. The government may not prohibit the dissemination of ideas it disfavors, nor compel the endorsement of ideas that it approves.
  7. Closely related to compelled speech and compelled association is compelled funding of the speech of private speakers or groups.

From these principles, the Supreme Court concluded the following:

  1. When the State of California establishes an “agency shop” that exacts compulsory union fees as a condition of public employment, some employees may be forced to give financial support to an organization with whose principles and demands he may disagree. The principle to consider in this case is whether or not the union violated the right to free speech.
  2. The SEIU Local 1000 had no legal justification to make the assessment without providing a new notice. Because of the First Amendment, nonmembers should not be required to fund a union’s political and ideological projects unless they choose to do so after having “a fair opportunity” to assess the impact of paying for nonchargeable union activities.
  3. Because the U.S. Supreme Court has already recognized that a nonmember cannot be forced to fund a union’s political or ideological activities, what is the justification for putting the burden on the nonmember to opt out of making such a payment? Shouldn’t the default rule comport with the probable preferences of most nonmembers? And isn’t it likely that most employees who choose not to join the union that represents their bargaining unit prefer not to pay the full amount of union dues? An opt-out system creates a risk that the fees paid by nonmembers will be used to further political and ideological ends with which they do not agree.

The Supreme Court even observes that it’s an anomaly for the Supreme Court to infringe free speech rights when it allows unions to collect ANY money from nonmembers represented by the union. It has only accepted this “free-rider argument” (that represented workers who are not union members should have to pay their fair share for the union services that allegedly benefit them) because it sees an interest in furthering “labor peace.”

The decision juxtaposes its statement about rationalizing mandatory payments through the argument of “labor peace” with its observation that requiring objecting nonmembers to opt out of paying the nonchargeable portion of union dues – as opposed to exempting them from making such payments unless they opt in – represents a remarkable boon for unions. Then it proceeds to analyze the union practice of requiring its represented employees to “opt-out” of payments for political or ideological purposes:

Although the difference between opt-out and opt-in schemes is important, our prior cases have given surprisingly little attention to this distinction. Indeed, acceptance of the opt-out approach appears to have come about more as a historical accident than through the careful application of First Amendment principles.

My favorite section of the decision addresses what I’ve always noted as irony: that unions use mandatory paycheck withdrawals to fund campaigns against ballot measures that would protect workers from mandatory paycheck withdrawals to fund campaigns!

The effect on nonmembers was particularly striking with respect to the union’s campaign against Proposition 75 because that initiative would have bolstered nonmember rights. If Proposition 75 had passed, nonmembers would have been exempt from paying for the SEIU’s extensive political projects unless they affirmatively consented. Thus, the effect of the SEIU’s procedure was to force many nonmembers to subsidize a political effort designed to restrict their own rights.

My Predictions: I’m reading between the lines in this decision and surmising that some members of the U.S. Supreme Court are encouraging someone to pursue a case that would allow them to reconsider and perhaps strike down the right of unions to make mandatory withdrawals (without permission) for “chargeable expenses” from the paychecks of workers in bargaining units who are not members of the union. (Does the government’s quest for “labor peace” justify allowing unions to take money from the paychecks of nonmembers without permission?) The court also seems to want to explicitly address a broader question about whether or not it is a violation of First Amendment rights for a union to require nonmembers to use an “opt-out” system concerning routine paycheck withdrawals for political purposes. For example, the phrase “even if this burden can be justified” seems to be a hint:

To respect the limits of the First Amendment, the union should have sent out a new notice allowing nonmembers to opt in to the special fee rather than requiring them to opt out. Our cases have tolerated a substantial impingement on First Amendment rights by allowing unions to impose an opt-out requirement at all. Even if this burden can be justified during the collection of regular dues on an annual basis, there is no way to justify the additional burden of imposing yet another opt-out requirement to collect special fees whenever the union desires.

I suspect the National Right to Work Legal Defense Foundation will look for an appropriate and relevant case to pursue through the federal courts.