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California Lawsuit Challenges Mandatory Agency Fees

If the California Teachers Association and its parent, the National Education Association, represent Goliath, then ten teachers and a small union alternative called the Christian Educators Association International are fitting stand-ins for David. They’re taking on the CTA with a lawsuit aimed squarely at California’s “agency-shop” law, which they claim violates public school teachers’ First Amendment rights by forcing them to pay annual union fees, even when they’re not union members. The Washington, D.C.–based Center for Individual Rights is representing the teachers, with help from Jones Day, an international law firm. Needless to say, the CTA isn’t happy. Spokesman Frank Wells denounced the suit as a “baseless challenge intended to dilute worker rights,” insisting that “the concept of agency fees is sound.”

But is it? California law does allow for “mandatory monopoly bargaining,” which means, where public education is concerned, that teachers must pay dues or “fees” to a labor union in order to work at a public school. Teachers may “resign” from the union, which frees them from paying the portion of their dues that would be spent for politics. They’re still required, though, to pay an “agency fee” for other union services, such as collective bargaining—whether they want those services or not. And even if a teacher does resign from the union, he must send a letter every year by a specified date to receive a rebate for the political portion of his dues. In short, the onus is on the teacher if he wants the union to respect his independence.

The rationale for collective-bargaining fees is that even nonmembers benefit from collective bargaining; there should be no “free riders.” But the line between what counts as a “chargeable” fee and what constitutes outright political activity has become blurrier over the years. As the plaintiffs’ lawyers argue, unions use their power “to extract compulsory fees as a convenient method of forcing teachers to pay for activities that have little to do with collective bargaining.” They point to The California Educator, CTA’s highly political magazine, which the union claims as a chargeable collective-bargaining expense. They also note how union leaders deemed a recent Gay-Lesbian-Bisexual-Transgender (GLBT) conference to be “predominantly chargeable.” The plaintiffs also maintain that the NEA, which receives a portion of fees from every CTA member, classifies expenditures that have little to do with collective bargaining—such as expensive staff junkets—as chargeable.

Thus, the teacher-plaintiffs want the court to “declare that California’s practice of forcing non-union members to contribute funds to unions, including funds to support their collective-bargaining activities, violates the First Amendment, and enjoin Defendants [the union] from enforcing this unconstitutional arrangement.” The legal terrain for such an argument is more favorable than it has ever been, thanks to recent Supreme Court rulings.

Some background: in 1977, in Abood v. Detroit Board of Education, the Court ruled that compulsory dues are unconstitutional and that unions could collect only those fees necessary for collective bargaining and sundry other representational activities. (The justices extended their ruling to private unions 11 years later, in Communication Workers of America v. Beck.) In 1986, in Teachers v. Hudson, the Court set out specific requirements that unions must meet to collect fees from nonmembers without violating their First Amendment rights. But nonmembers blanched as unions took a more expansive interpretation of the Court’s decisions. And so the justices last year issued a somewhat sterner rebuke in Knox v. Service Employees International Union,Local 1000. In that case, brought by the National Right to Work Foundation, the justices ruled 7–2 that the SEIU could not force its nonmembers to pay the portion of union dues spent on political activities—even if the union believed it was for the workers’ own good. In 2005 and 2006, as part of its campaign to defeat Governor Arnold Schwarzenegger and a pair of ballot initiatives that would reduce union power and reform pensions, the SEIU imposed a temporary, 25 percent across-the-board dues hike on its dues-paying members and some 28,000 fee-paying nonmembers alike. The union argued that campaigning against the initiatives would benefit all workers. Had this view prevailed, it would have eradicated the legal distinction between politics and collective bargaining. But even liberal justices Sonia Sotomayor and Ruth Bader Ginsburg saw through it and voted with the majority.

Further, Justice Samuel Alito’s majority opinion in Knox raised two crucial points that may bode ill for future forced political activity by public-sector unions, especially as it pertains to nonmembers. Alito said that the unions’ existing “opt-out” rules aren’t sufficient to protect individuals. “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,” he wrote. Instead, unions should afford nonmembers the chance to “opt in” to special fees if they want to contribute to organized political campaigns. At the same time, Alito questioned whether public employees who want no part of the union should have to pay fees at all. “[B]y 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 rights of nonmembers,” Alito wrote. “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 prevail.”

The Center for Individual Rights cites Knox in the opening paragraph of its suit. How things will play out in district court in California isn’t clear yet. But it’s worth noting that right now, workers in 26 states and the District of Columbia must pay union dues as a condition of employment. The other 24 states are “right-to-work” states, where workers can choose whether or not to join. If the California case winds up before the Supreme Court, the justices will get an opportunity to extend their Knox reasoning to its logical conclusion and give all workers a real choice.

Larry Sand, a retired teacher, is president of the California Teachers Empowerment Network. This article originally appeared in City Journal on July 11th, entitled “Opportunity Knox,” and is republished here with permission from the author and the publisher.

Opportunity Re-Knox

A recently filed lawsuit in California picks up where Knox v. SEIU left off.

In a case brought to the Supreme Court by the National Right to Work Foundation last June, the justices ruled 7-2 that the Service Employees International Union could not force its members to pay the part of union dues that goes for political activities, even if the union felt it was for the workers’ own good. As I wrote at the time,

Actually this decision didn’t break any new ground. Unions haven’t been allowed to force workers to pay for their political agenda since the 1970s and 1980s when several landmark decisions were handed down by the court. But SEIU Local 1,000 in California tried to hoodwink the rank and file. The case probably never should have reached the high court, but their involvement became necessary in order to overturn a decision from the far left Ninth Circuit Court of Appeals (or as it’s affectionately known to us left coasters – the Ninth Circus), which has become a regular occurrence these days.

The Wall Street Journal explained the specifics of SEIU’s chicanery,

The California SEIU local attempted to end run these protections in a special 2005 election and the midterms in 2006, amid a furious debate about union government perks. The SEIU joined a “Political Fight-Back Fund” to defeat two propositions that would have given then-Governor Arnold Schwarzenegger the ability in some cases to modify salaries, benefits and pensions. To fund this advocacy, the SEIU imposed a temporary 25% hike in union dues, never providing its 28,000 non-union members the Hudson notice that would have let them opt out.

The SEIU argued that lobbying against the ballot initiatives was really work on behalf of all workers. Yet that would erase the legal distinction between politics and collective bargaining. These activities may be especially fungible in public employee practice already, but this was too much even for liberal Justices Sonia Sotomayor and Ruth Bader Ginsburg, who concurred with the majority on the narrow if obvious grounds of technical precedent.

The chutzpah here is dazzling. As Steve Greenhut noted,

It’s ironic that SEIU took money from nonmembers to specifically battle a statewide proposition that would have stopped them from being able to take such money in the future. There’s something disturbingly totalitarian about that – making me give you money that you can use to stop me from exerting my rights.

In a lesser-known but very important ruling, the court went beyond Knox and addressed two larger issues:

1. Should union members have to opt out of paying the political part of union dues? (The way things stand, the default position is “in” and a worker must take action to opt out.) With Justice Samuel Alito writing the opinion,

… the court concluded that a longstanding precedent — that the First Amendment demands that non-union members covered by union contracts be given the chance to “opt out” of such special fees — was insufficient. Instead, the majority said, non-members should be sent a notice giving them the chance to “opt in” to the special fees. (Emphasis added)

2. Should public employees be forced to pay any union dues at all? (At this time, workers in 26 states and Washington, D.C. must pay union dues as a condition of employment. The other 24 states are “right-to-work” states where workers can choose whether or not to join.) Alito again,

Because a public-sector union takes many positions during collective bargaining that have powerful political and civic consequences, the compulsory fees constitute a form of compelled speech and association that imposes a significant impingement on First Amendment rights. (Emphasis added.)

As Huffington Post blogger Cole Stangler wrote at the time,

Knox v. SEIU could lay the foundation for future legal challenges over unions’ political spending and the dues collection process in general.

And lay the foundation it did on both counts.

Last week, the Center for Individual Rights, in conjunction with international law firm Jones Day, filed a suit in California. CIR’s press release explains that the litigation was initiated

… on behalf of 10 California teachers and the Christian Educators Association International, challenging the constitutionality of California’s “agency shop” law, which violates the First Amendment by forcing public school teachers to pay annual fees to support powerful teachers’ unions extensively involved in political activity. The suit was filed against the lead defendants, the California Teachers Association (CTA) and the National Education Association (NEA), as well as ten affiliated local teachers’ unions, and local school officials.

The lawyers in this case claim that the lines between “chargeable” or “agency fee” and “political” are very blurry and that the unions use their power

… to extract compulsory fees as a convenient method of forcing teachers to pay for activities that have little to do with collective bargaining. For example, the CTA considers the publication and dissemination of The California Educator, its internal and highly political magazine, to be a mostly “chargeable” collective bargaining expense. The CTA likewise deems programs dealing with gays and lesbians, including a “GLBT Conference,” to be predominantly “chargeable.” Also, the CTA spends millions of dollars every year on political contributions, mostly to support Democratic Party causes. The NEA, which receives a portion of the fees paid by every California public school teacher, likewise classifies expenditures as chargeable even though they appear to have little to do with collective bargaining, such as programs advancing various education policies or expensive conferences for NEA staff.

The litigation also addresses right-to-work issues,

Given the severe and ongoing infringement of Plaintiffs’ rights to free speech and free association, Plaintiffs respectfully request that this Court declare that California’s practice of forcing non-union members to contribute funds to unions, including funds to support their collective-bargaining activities, violates the First Amendment, and enjoin Defendants from enforcing this unconstitutional arrangement.

Needless to say, the unions are not happy about the lawsuit. CTA spokesman Frank Wells, speaking in boilerplate language, said that it is a “baseless challenge intended to dilute worker rights.” He went on to say that the claims are “another baseless attack on the concept of agency fees” and that “the concept of agency fees is sound.”

If the suit isn’t settled at the local level, it could wind up in the Supreme Court. Should that happen, the justices could take their opinion in Knox one step further and make joining a union voluntary. What a victory for liberty that would be! Greenhut is right – there is something indeed “disturbingly totalitarian” about forced union dues. It’s time to take Knox to its logical conclusion and give all workers the freedom to choose.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.

U.S. Supreme Court Rebukes Union Totalitarianism

For people who truly are interested in a just and fair society, there’s one easy way to sort through some seemingly complex issues: turn the tables. If, for instance, one is debating a controversial law affecting a particular group, it’s best to think about how fair it would seem if that law were applied in the same way to you.

On Thursday, the U.S. Supreme Court issued a verdict in the case of Knox v. Service Employees International Union, Local 1000, showing how deeply it understands that basic concept. By a 7-2 vote, the high court slapped down the union for deducting money from its employees’ paychecks and using it to fight against two California campaign initiatives – without giving its nonmembers a chance to opt out of these political campaign contributions.

Critics of the decision are blasting it, as one union official put it to the Sacramento Bee, as another “attack on the right of public sector workers to act collectively.” But let’s apply our test to these outraged union spokespeople. What if their money was deducted by force from their paycheck and used to support conservative tax-limiting initiatives or Republican candidates? Would they be OK with that? We know the answer.

Fortunately, the Supreme Court recognized by a 7-2 vote – with two liberal justices dissenting – the enormous free-speech issues at stake here. Ruled the court, “Public-sector unions have the right under the First Amendment to express their views on political and social issues without government interference. … But employees who choose not to join a union have the same rights. The First Amendment creates a forum in which all may seek, without hindrance or aid from the State, to move public opinion and achieve their political goals. ‘First Amendment values [would be] at serious risk if the government [could] compel a particular citizen, or a discrete group of citizens, to pay special subsidies for speech on the side that [the government] favors.’ United Foods, 533 U. S., at 411. Therefore, when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent.”

The Hudson notice refers to the requirement that nonmembers, who must pay union dues in union-shop states such as California to cover the portion of union efforts used to negotiate salary and benefit matters on all workers’ behalf, have a chance to opt out of those portion of the collected dues used for political purposes. It’s a simple concept outlined by the justices above: People who choose not to belong to a group should not be forced by the government to pay for that group’s political priorities, especially given that those priorities often fly in the face of the beliefs of nonmembers. If you disagree with me, then I’m sure you won’t mind having a portion of your salary deducted to help candidates who advocate policies chosen by me, not you.

While the decision simply upholds basic tenets of freedom and fairness, it should indeed be viewed as part of the growing national backlash against the special privileges that unions – especially those in the public sector – have come to enjoy in recent years thanks solely to their political power. It’s ironic that SEIU took money from nonmembers to specifically battle a statewide proposition that would have stopped them from being able to take such money in the future. There’s something disturbingly totalitarian about that – making me give you money that you can use to stop me from exerting my rights.

I’ve been shocked by the totalitarian tactics that unions routinely use, such as their attempt in San Diego to void a pension-reform election by appealing to a statewide board of their cronies who were expected to declare the vote an unfair labor practice. Fortunately, the courts nixed that idea. But unions don’t ever apply my basic fairness test. Their goal is simple – exert whatever benefits them at the time, regardless of how wantonly it crushes basic constitutional precepts. Just look at how the SEIU Local 1000 handled the specific dues issue at hand.

As the court explained,  “In June 2005, respondent, a public-sector union (SEIU), sent to California employees its annual Hudson notice, setting and capping monthly dues and estimating that 56.35 (percent) of its total expenditures in the coming year would be chargeable expenses. A nonmember had 30 days to object to full payment of dues but would still have to pay the chargeable portion.”

After that 30-day time period expired, the union then imposed a huge surcharge on dues – a 25 percent assessment that would be used for the 2006 election. Because the 30-day opt-out period had expired, union officials figured they had come up with a clever way to circumvent the law. Nonmembers had to pay the amount and they provided no opt-out provision for the temporary dues increase. Eventually, the union offered to return the dues, but the court ruled that it is not a moot case – the union can collect dues, use them for political purposes and then after the political damage is done simply return the money if anyone bothers to sue.

Here’s the court again:  “Under the First Amendment, when a union imposes a special assessment or dues increase levied to meet expenses that were not disclosed when the regular assessment was set, it must provide a fresh notice and may not exact any funds from nonmembers without their affirmative consent.” That’s clear and that’s fair.

The justices also made it clear that they are open to consider the entire matter of whether it’s appropriate for unions to have the opt-out provision rather than the more sensible opt-in requirement. Currently, union members and nonmembers have their dues taken out of their paychecks by force and there’s nothing they can do about it if they want to keep their jobs. In practice, unions make it extremely formidable to opt out. They provide a small window of opportunity, require complex paperwork and union members who opt out at times report harassment and intimidation by the union authorities.

Think of it this way – how fair would it be if, say, the cable company took the money for the full-package cable programming and forced you to file paperwork once a year to get a portion of it back if you chose a less-comprehensive set of programming? What if they played games with the numbers so they could keep more money than they should be allowed to keep?

The dissenting opinion, written by liberal Justice Stephen Breyer and joined by Elena Kagan, stated, “The decision is particularly unfortunate given the fact that each reason the Court offers in support of its ‘opt-in’ conclusion seems in logic to apply, not just to special assessments, but to ordinary yearly fee charges as well. At least, its opinion can be so read. And that fact virtually guarantees that the opinion will play a central role in an ongoing, intense political debate.”

Their main problem, then, was not the substance of the majority opinion, but their concern that the court is intruding too deeply into the opt-in/opt-out debate – a political debate that is coming to California voters in the form of another “paycheck protection” initiative in November.

But, regardless of how California’s fickle voters vote, it is entirely unfair to require this system whereby the union takes the money and the member or nonmember must plead for a portion of it back. The majority got it right when it cut to the chase: “The general rule – individuals should not be compelled to subsidize private groups or private speech – should prevail.”

What a refreshingly fair and just ruling – and a reminder that the days of union special privilege might be subsiding.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity