S
P
E
C
I
A
L
R
E
P
O
R
T
|
When And How Public Sector Unions Can Collect Dues
From Non-Members
The collective bargaining laws of many states allow public
employers and unions to negotiate contracts which either require
individuals to be members of the union or to pay a so-called "agency
fee" to the union in lieu of customary union dues. On a fairly regular
basis, the national Right to Work Legal Defense Foundation in
Springfield, Virginia assists so-called "fair share" members in
challenging the agency fee assessments made by unions in lieu of
dues. A recent case involving El Dorado County, California gives a
good description of the range of issues normally arising in "fair
share" cases.
The El Dorado County Employees' Association (Association)
represents a wide variety of employees of El Dorado. The Association
is one of 40 affiliates of the Professional Employees' Union (Union)
which represents employees of local public agencies, cities, counties,
and special districts.
In April, 1995, the Association forwarded to its fair share
members a notice informing them that the County would begin to deduct
a fair share fee from their paycheck equaling 98% of full Union
dues. The notice explained that the Union used the fair share dues to
defray the costs of negotiating and administering the collective
bargaining agreement with the County, and claimed that the actual
costs for non-bargaining-related expenditures were less than 2%.
Enclosed with the notice provided by the Association was a
schedule of the Union's projected expenditures for 1995, based upon
expenditures for the previous fiscal year. The schedule identified the
major categories of expenses and placed an asterisk next to those the
Union deemed as "non-representational expenses." Included among
non-representational expenses were "ideological expenditures, social
events, gifts and donations, contributions to political education
funds, and blood bank." The notice further explained that the amount
of fair share fees did not include any expenses incurred for political
action, social activities, or organizing expenses.
The notice explained that if a nonmember challenged the fee, the
Union would set aside an additional 2% of his or her fair share fee in
an interest-bearing escrow account. The notice explained that a
nonmember could challenge the fee in writing within 30 days, and that
the challenge would be resolved by an arbitrator.
When the County began deducting the fair share fee, a group of
employees assisted by the Right To Work Legal Defense Foundation
brought a suit against the County. The suit alleged that the
procedures adopted by the Union did not meet federal constitution
requirements.
The court began its opinion by reviewing the law applicable to
fair share deductions. The court found that the Constitution allowed
unions to collect dues from non-members so long as the moneys
collected were in furtherance of collective bargaining. The court also
concluded that the First Amendment to the United States Constitution
"stands as a bar to such unions collecting money from nonmembers to be
spent on political and ideological causes with which the nonmembers
disagree and which are said to be unrelated to its duties as
collective bargaining agent."
The court found that federal law imposed three essential
requirements on unions seeking to collect fair share fees:
- The unions must provide nonmembers information as to the basis of
the calculation of the proportionate share of dues, including
verification by independent auditors;
- The procedures for collecting the fees must assure that the union
does not use dues paid by nonmembers, even temporarily, for purposes
which are unrelated to collective bargaining; and
- The union must adopt procedures which allow for an expedited
review of the amount of fair share dues.
Turning to the allegations raised by the nonmembers, the court
first addressed the question of whether the independent auditor must
verify the allocation between chargeable and non-chargeable expenses
in each major expense category. The court rejected the nonmembers
argument, finding that all an auditor need to do is to verify that
expenses claimed to have been made were in fact made in the areas
listed. The court ruled that the auditor need not make the judgment as
to whether the Union's categorization of certain expenses as
"chargeable or non-chargeable" was correct.
The nonmembers next alleged that the notice provided by the Union did
not provide adequate detail on why the Union decided that certain
charges were made for representational activity. In essence, the
nonmembers were requesting that the notice set forth the Union's
"proof" that expenses were related to representation.
The court rejected this argument as well. The court found that "it
seems unwise and impractical to dictate to the union the manner and
detail by which its notice must demonstrate that an expenditure is
chargeable. Such an approach would invite endless litigation as to the
exact words which a union must use in its notice." The court found
that the Union was only required to provide "sufficient information to
enable a nonmember to decide whether or not to object to the Union's
allegation and thereby make the Union offer such proof before a
neutral decision maker."
The nonmembers next argued that the "review" conducted by the
auditor was not a sufficiently exacting process and that the auditor
should conduct a "full audit" of the Union's books. Acknowledgin gthat
federal case law on the point has "been less than perfectly
consistent," the court ruled that it could not "find that the
auditor's review letter, which reports that the Union's financial
statements are in conformity with generally accepted accounting
principals, does not satisfy [the Constitutional] verification
requirement.
The nonmembers next argued that the Union's decision to set aside
in escrow an additional 2% of the dues collected from nonmembers did
not set aside a sufficient amount of money. The court found that it
was the burden of nonmembers to demonstrate that the 2% was not a
sufficient "cushion" to ensure that unions could not "under any
circumstances even temporarily use money obtained by virtue of an
agency shop agreement for political or ideological purposes." The
court found that the law only required the Union to escrow those dues
which are "reasonably in dispute," and that nonmembers did not
demonstrate that any more than the 2% cushion set forth by the Union
was "reasonably in dispute."
The last issue raised by the nonmembers was that the arbitration
process set forth by the Union was unreasonably lengthy. The process
envisioned by the Union could take as long as 14 months to conclude,
since the Union desired to wait until after the conclusion of the
fiscal year when the audit was completed to determine whether the fee
charged was accurate.
The court rejected the Union's arguments and found that the escrow
and arbitration procedure was too lengthy. The court found that "since
the nonmember can challenge the propriety of the chargeable expenses
for the current year by reference to the financial statement from the
previous year, the Union can not justifiably delay the challenge
procedure until after the end of the relevant fiscal year." The court
ruled that a 120-day arbitration procedure was the maximum which
should be allowed under the circumstances.
Prescott v. County of El Dorado, 915 F.Supp. 1080 (E.D.Calif. 1996).
|