Union dues hike spotlights need for high-court intervention

By Steven Greenhut
June 27, 2017

Sacramento —A recent action by one of nation’s largest public-employee unions illustrates the importance of an Illinois case that might make its way to the U.S. Supreme Court sometime next year. The technical dispute involves the complex process by which public-sector unions assess dues to those who don’t want to be members. But the real issue is more fundamental to a free society: Should people be forced to fund groups they find offensive?

The Service Employees International Union Local 1000, which represents 95,000 California state employees, earlier this month increased the dues assessed on those employees who are known as “non-germane objectors,” or NGOs. These are people who have opted out of paying for the union’s political activities. Because of a 1977 U.S. Supreme Court decision, they are still required to pay for expenses related to collective bargaining.

Last year, the SEIU local spent $13.7 million as part of a bargaining process to hike members’ wages. “The union members who voted on the contract favored it by a 90 percent margin,” according to a Sacramento Bee report, “but aspects of the deal were unpopular among some workers.” To pay those costs, the union hiked dues on these NGOs by 6 percent, thus pushing dues payments for nonmembers to 73 percent of the full amount paid by full-fledged members of the union.

That Supreme Court’s 40-year-old Abood decision allows unions to make such dues assessments for so-called “agency fees.” The theory sounds plausible: It’s a violation of the First Amendment to force employees to fund political causes they might oppose, but those same employees benefit when the union secures higher wages and benefits for them. The high court was concerned that, if employees could opt out of all their dues, they would essentially become “free riders” on any contract deals negotiated on their behalf.

But the latest SEIU Local 1000 dues hike, and the objections from the group “We Are Local 1000,” illustrate the tenuous nature of the court’s “split the baby” approach. These so-called “dissidents” oppose myriad aspects of the union, its leadership and priorities. They say union officials are overpaid. They argue that the union lacks transparency. They claim the leadership is out of touch with its members. One can debate these issues, of course, but there’s no question these critics are now forced to pay even more to fund a group they oppose.

The key problem with Abood is that it ignored a simple reality: Everything a public-sector union does, even in issues related to collective bargaining, involves a political question. For instance, if a union secures more generous pension benefits for its members, those pensions are paid for by taxpayers. Increased benefits often run up unfunded liabilities, or debt, and that crowds out other services. Higher wages have myriad budgetary implications and potentially can lead to tax increases or cutbacks in other areas of government.

Furthermore, these public-sector unions negotiate job protections for their members. It is indeed a public-policy question when, say, teachers’ unions use the collective-bargaining process to secure seniority-based layoff rules, such as the “Last In, First Out” system that protects older workers at the expense of younger teachers. One California case argued (successfully, in the lower court, but overturned by the California Supreme Court) that these protections cause some poor students to be deprived of their right to a quality education, as defined in the California Constitution, because layoff rules protect a percentage of ill-performing teachers.

These are all political questions, and employees who are forced to subsidize the union are therefore forced to subsidize public policies that they might abhor. This issue was spotlighted by current Supreme Court Associate Justice Samuel Alito, who in a 2014 majority opinion practically invited a challenge to Abood when he wrote that “no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support.”

That case was Knox v. Service Employees International Union Local 1000. Ironically, it involved the same Sacramento-based union that just upped its fees on nonmembers. In the Knox case, the union imposed a special $12 million temporary assessment for a “political fight back” fund. The union did not provide a special “Hudson” notice for this emergency fee, as spelled out in a 1986 high-court case (Chicago Teachers Union v. Hudson) that requires unions to send annual notices detailing their political and nonpolitical spending.

By a 7-2 vote in the Knox case, the Supreme Court required unions to provide midyear Hudson notices for these special assessments. And by a 5-4 vote, the court ruled that, for such assessments, nonmembers need to “opt in” affirmatively, rather than be forced to “opt out.” Many observers believed the court was getting ready to ditch the Abood distinctions and possibly require unions to shift entirely to an “opt in” system for all of their assessments. Imagine that – allowing people to choose whether they want to belong to and fund an organization, rather than be forced to do so!

The Orange County-based Friedrichs v. the California Teachers’ Association case was the answer to Alito’s challenge. During oral arguments, Chief Justice John Roberts asked for the “best example of something that is negotiated over in a collective bargaining agreement with a public employer that does not present a public-policy question.” As Moshe Marvit detailed in In These Times, the California solicitor general used the example of mileage reimbursements, to Roberts retorted: “That’s money. That’s how much money is going to have to be paid to the teachers. If you give more mileage expenses, that costs more money.”

However, the death of conservative Associate Justice Antonin Scalia in 2016 left the decision in that much-watched case in a 4-4 tie. But a new case is challenging the identical issue. Mark Janus is an Illinois state worker who must pay dues to the American Federation of State County and Municipal Employees. Illinois’ rules are similar to California’s. Neither is a “right to work” state, so government employees must pay bargaining-related dues to unions as a term of employment.

The Supreme Court has yet to accept Janus for review, but “the appellants have practically invited the lower courts to rule against them in order to get to the Supreme Court quickly,” according to Tim Yeung, writing in a California labor-related blog. With new Associate Justice Neil Gorsuch now on the high court to replace Scalia, most conservatives once again are optimistic that the days of forced dues payments might be coming to an end in those states that require them. (As I wrote recently for the California Policy Center, some unions are making preparations for a new world in which they must convince public employees to part with their dues payments.)

“It’s quite common for a union’s chargeable/non-chargeable calculation to change because it is supposed to be tied to the union’s actual expenditures, which fluctuate from year to year,” according to Sam Han, California director of the Freedom Foundation, writing in response to the SEIU’s recent assessment. “Regardless, the U.S. Supreme Court absolutely needs to strike down mandatory union dues requirements once and for all. That would cut through a lot of the difficulty for employees involved in what is now a pretty cumbersome system.”

In other words, the system isn’t only unfair, but it’s unnecessarily complex. Under current rules, public employees must make payments, review the union’s calculations and, potentially, challenge any alleged discrepancy. Of course, the unions certainly will fight to maintain the privilege they now enjoy.

“This is really about a secret, unaccountable group of people, who put out inaccurate and uninformed claims through an anonymous website,” said SEIU Local 1000 President Yvonne Walker, in response to the group critical of the new dues assessment, per the Bee article. “No one knows who they are. But their messages and actions are identical to anti-union, right to work forces who are seeking to take away the rights of our members.”

That statement captures the arrogance of the union approach. If you try to take away their “right” to take employees’ money without consent, then that amounts to an unfair lack of accountability. Actually, the best way to assure that unions are accountable for the money they spend is to make the process voluntary. It is, as Justice Alito expressed, the “bedrock principle” of the First Amendment that people get to choose the groups they support.

Steven Greenhut is contributing editor for the California Policy Center. He is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

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