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July 1, 2015|

Is It Curtains for Mandatory Public Sector Union Dues?

by Michael Toth|

MADISON, WI - MARCH 12: Thousands of demonstrators protest outside the Wisconsin State Capitol March 12, 2011 in Madison, Wisconsin. Organizers were expecting 200 thousand participants to attend the rally to voice their opposition to Governor Scott Walker public sector union reforms. (Photo by Scott Olson/Getty Images)

In America’s experiment with unionized government, 2005 was a watershed year. California was then in the second year of the Age of Arnold.

Elected on a pledge to put the Golden State’s dysfunctional fiscal house in order, Governor Schwarzenegger terminated the car tax on his first day in office. In his first year, the Republican and self-proclaimed Milton Friedman devotee successfully championed a balanced budget initiative and legislation putting a lid on spiraling worker-compensation costs.

His prime time address at the 2004 GOP convention portrayed the Republican Party as dedicated to the principles of free enterprise and to “getting government off your back.” The GOP was, he said, the natural home for fellow immigrants like him. The party faithful swooned, and the Bush camp took note of Schwarzenegger’s star power (and his approval ratings, which were above 60 percent). Days before President Bush’s reelection, Schwarzenegger appeared alongside him to rally voters in the decisive battleground state of Ohio.

The following year, the still-popular “Governator” declared war on teacher tenure, public sector union dues, and compensation for state workers. But the “Year of Reform,” as Schwarzenegger called it, culminated in a special election Waterloo for him. Unions deployed a $100 million war chest for the special election, depicting Schwarzenegger as an enemy of dedicated public servants and deeply beholden to corporate interests.

Arriving at a knife fight with a bratwurst, Schwarzenegger stood by as his union-busting initiatives (and with them, his center-Right agenda) were torn to shreds. And the debacle prompted Team Arnold to make a political about-face. The Governor hired a Democratic chief of staff, sought billions in infrastructure spending, and rebranded himself as an eco-warrior. By 2009, National Review dubbed Schwarzenegger “Governor Girly-Man” for acquiescing to the demands of California’s spendthrift special interests.

If public sector unions solidified the Golden State’s Progressivism, that is not all they did. California’s special election of 2005 also planted the seeds of a doctrinal shift in public sector labor law, back the other way: toward greater employee freedom and less union power.

Days before the balloting, several public employees sued their Service Employees International Union (SEIU) local for using their money to bury Schwarzenegger’s ballot initiatives against their wishes. Six years later, in Knox v. Service Employees International Union, Local 1000 (2012), the Supreme Court handed down a stinging rebuke of the union’s activities in the special election. “This aggressive use of power by the SEIU to collect fees from nonmembers is indefensible,” Justice Alito wrote. He went on to call the traditional rationale permitting unions to collect mandatory assessments from non-members “something of an anomaly.” Two years later, in Harris v. Quinn, the Court built on Knox, ruling that compelling home healthcare workers to contribute to a public sector union is unconstitutional.

For decades, the Supreme Court acquiesced in the requirement, common in labor agreements, that workers pay their share of a union’s collective bargaining costs incurred on their behalf. In Knox and Harris, Justice Alito, known for his deference to precedent, has suggested that the Court’s approach has been flawed all along. With the Court set to revisit this important matter next term, the Alito analysis of public sector union power deserves close attention.

School of Hard Knox

Under the rules then (and still) in place, the SEIU sent notice to “non-member” employees five months before the special election, informing them of the union’s fees for the upcoming fiscal year. This was an annual notice. The employees notified had chosen not to join the SEIU, but the union remained the exclusive collective bargaining representative, legally entitled to negotiate on behalf of union members and non-members in the same bargaining unit.

The collection of fees from non-union members is the crucial constitutional question in public sector labor law. It is well-established that workers may not be forced to join a union. Under certain circumstances, however, government workers may not avoid paying union fees even if they choose not to become union members. Where a majority of state workers in a bargaining unit elect a union to represent them in collective bargaining negotiations with the government, all employees in the unit may be required to pay the union an agency fee to cover the ensuing collective bargaining costs.

States can short-circuit the process by proscribing collective bargaining in the public sector (as Virginia, North Carolina, and South Carolina have done), or by precluding collective bargaining agents from charging agency fees to non-members. Absent contrary state laws, however, existing Supreme Court precedent permits unions to pass on their “chargeable” collective bargaining costs to non-members. The union’s expenses that are not related to collective bargaining, such as contributions to political campaigns, are not chargeable. They may not be recouped from non-members without their at least tacit consent. (As might be imagined, the question of consent would come up in the court cases.)

The SEIU’s June 2005 notice to non-members set the agency fee to be seized for the upcoming fiscal year at 99.1 percent of union dues. The notice further provided that non-members were entitled to pay a reduced agency fee of 56.35 percent of union dues if they requested a rebate within 30 days. The SEIU’s notice did not indicate that the agency fee was going to increase, though it advised that the fees were subject to change without further notification.

A month after the SEIU sent its annual notice, the union’s executives proposed a temporary 25 percent increase in employee fees to finance a “Political Fight-Back Fund.” Proponents were clear that the objective of this fund was, as its name suggested, political. It would underwrite “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.” The $12 million that SEIU officials expected to raise from this temporary assessment would not be tapped for the “regular costs of the union—such as office rent, staff salaries or routine equipment replacement, etc.”

The immediate focus of the “Political Fight-Back Fund” was the defeat of two of Governor Schwarzenegger’s propositions in the upcoming special election. One of them, Proposition 75, would have required workers to opt into contributing to the union’s political activities. Under the initiative, a government employee who did nothing would not line the union’s political coffers by default.

On August 31, 2005, SEIU members and fee-payers were notified that the union’s delegates had approved the dues increase. The assessment went into effect the following day. The experience of Edward Dobrowolski, Jr., one of the plaintiffs in Knox v. SEIU, illustrates the free speech problem with the temporary assessment. After receiving the notice, Dobrowolski called the union and indicated that he was a non-member and had requested, in June, a reduced agency fee when given the option to avoid paying for the union’s nonchargeable political expenses. The response: That was then, this is now. The area manager informed Dobrowolski that he could not stop the temporary fee increase because the union was “in the fight of our lives.”

Ultimately, the SEIU required non-members who were already paying reduced fees to pay the same reduced share—56.35 percent—of the temporary assessment, even though these workers had already registered their desire not to contribute any of their money to subsidize the union’s political speech. Non-members who failed to object to the payment of full agency fees in June were not afforded a new opportunity to object to the temporary assessment. They paid the full amount, notwithstanding the possibility that they disagreed with the anti-proposition positions that the “Political Fight-Back Fund” was taking.

The question for the Court in Knox: What is the appropriate process for assessing special fees for the purpose of financing political expenditures for ballot measures? To answer it, Justice Alito’s majority opinion considered established First Amendment norms. Alito noted that the government may not compel the endorsement of ideas; that individuals ordinarily may not be made to subsidize private speech; and that the waiver of constitutional rights is not presumed.

Relying on these principles, he maintained that the public employees must affirmatively consent to special assessments imposed for the purpose of political fundraising. Such assessments, he reasoned, subsidize the political message of the union, a private group. Since, under the Constitution, individuals may not be forced to subsidize private speech absent special circumstances, Justice Alito concluded that unions may not operate under the presumption that public employees who do not object to special assessments have consented to pay the requested dues.

The Justice acknowledged that in a 1961 case, Street v. Machinists, the Supreme Court held that employees who do not wish to contribute to a union’s political activities must affirmatively make known their dissent. In Street, however, the Court was interpreting a federal statute, not making a constitutional determination. After Street, the Court had not deliberated over whether unions may presume employees’ consent as a constitutional matter. Thus, Alito determined that the ordinary, well-established default applied: When it comes to a special assessment for political fundraising, non-union members must be taken as guarding their constitutional rights unless they speak up and tell you otherwise.

Knox is significant for two reasons.

First, the ruling constitutionalizes paycheck protection where the union seeks a special assessment for the purpose of political activities. In those circumstances, Knox provides to government employees nationwide exactly what Schwarzenegger’s thwarted Proposition 75 would have delivered to California’s public employees.

Second, Alito’s sustained discussion of the disparities between the agency-fee arrangements in the public sector and established free speech norms signaled that Knox would not be the last time the Court would wade into an area of the law—that dealing with public employment—that needed reform.

Whither Agency Fees?

Three years after Knox, the Supreme Court heard a challenge to the regular agency fees that unions charge non-members. This was Harris v. Quinn, brought by personal assistants who provided in-home care to patients suffering from disabilities. The state of Illinois paid the personal assistants through two state programs subsidized by Medicaid. Under the same basic arrangement that existed in Knox, the SEIU represented the personal assistants in collective-bargaining negotiations with the state, and extracted fees from all personal assistants, including the challengers, to defray the agency costs related to the negotiations. The challengers asserted that the mandatory assessments were unconstitutional under the First Amendment.

In Harris, Justice Alito again considered the case being argued before the Court against the backdrop of established norms. While in Abood v. Detroit Board of Education, decided in 1977, the Court upheld mandatory agency fees in public employment, Alito concluded that Abood did not apply here.

Unlike in Abood, which concerned public school teachers, the union here had virtually nothing to negotiate with regard to the employment terms of the personal assistants. They were deemed state employees only for the purpose of collective bargaining. Subject to minimal baseline requirements, individual clients, not the state, had complete discretion over the hiring of personal assistants. Without the state’s supervision, clients established the duties of the personal assistants. Personal assistants worked at the pleasure of their clients and could be terminated by the client without permission from the state. Nor was there any grievance procedure involving the union, in the event that a personal assistant wished to protest the terms and conditions set by a client. The state, to be sure, paid the personal assistants; but the union had no ability to negotiate higher wages for union members at the expense of non-members. All personal assistants received a uniform hourly wage set by statute.

Thus, the union’s obligation to represent equally the interests of all covered employees—the rationale given for the corresponding obligation of all employees to contribute to the union—had no force in this case.

Like Knox, Harris broke new ground. In Abood, the Court held that involuntary payments for the political activities of unions are unconstitutional. Harris marked the first time that what everyone agreed to be a collective bargaining cost was held unconstitutional. Beyond that, however, given that the Harris decision was premised on the unique employment status of the personal assistants, opinion is divided on the decision’s ultimate significance.

Law professor Alexander Volokh read the majority opinion as suggesting that the current Court is willing to end mandatory union dues for all public employees. Professor John Eastman characterized Abood  as “a ghoul, one of the walking dead,” in light of Harris.

Others view it as a narrow ruling that will not have much practical impact. Writing for the Harris dissenters, Justice Kagan suggested that the challengers to mandatory dues are unlikely to advance any further. The plaintiffs in Harris “devoted the lion’s share of their briefing and argument to urging us to overturn [Abood]” yet the majority could not “come up with reasons anywhere near sufficient to reverse the decision.” Notwithstanding the majority’s “potshots” and “gratuitous dicta,” Abood remains the law. Similarly, Jason Walta, an attorney for the National Education Association, likened the Harris majority to the “Big Bad Wolf of fairy-tale fame.” It “huffed, puffed, and huffed some more,” but could not bring down the “brick house of settled precedent.”

The effectiveness of Knox and Harris is obscured by the fact that the opinions work on two levels simultaneously. Their immediate significance is that they cabined the existing anomalies that privilege public sector unions. In each case, Justice Alito framed the issue as whether the status quo legal regime should be extended to cover new scenarios. In Knox, the question was whether the current arrangement allowing unions to assess dues from non-members for political purposes without their affirmative consent was warranted in the context of special assessments. In Harris, the question was whether the current arrangement permitting unions to collect collective bargaining fees from full-fledged public servants was legitimate where the employment relationship was essentially private.

In explaining why applying existing precedents was unjustified, however, Justice Alito also questioned whether the sui generis doctrines controlling public sector unionism are reconcilable with established free speech principles in the first place. Thus, in addition to their short-term impact, the opinions in Knox and Harris advance the long game of bringing union arrangements in public employment into the general First Amendment fold.

The gulf between public employment law and well-settled free speech tenets is evident in the Court’s peculiar statement (which Alito noted in Harris but found inapplicable) that mandatory agency fees are justified because unions have a statutory obligation to promote and protect the interests of non-members. As he pointed out in Knox, “If a community association engages in a clean-up campaign or opposes encroachments by industrial development, no one suggests that all residents or property owners who benefit be required to contribute.” Why should the situation be any different if the municipal council passes an ordinance that requires the community association to represent all residents in negotiations with the city over zoning laws?

The duty of fair representation, invoked by the Court as the reason for mandatory dues, has its origins in a 1944 Supreme Court case, Steele v. Louisville & Nashville R. Co. The Court ruled there that a labor union that negotiated with the employer to replace African American employees with white union members violated a federal collective bargaining statute. The Steele plaintiffs were in a tough spot, to say the least. Federal law permitted only one collective bargaining agent to negotiate with management, and the railroad union refused to admit the plaintiffs into their ranks because they were black.

The Steele ruling fixed the problem by reading into the statute a union’s duty to represent the interests of all employees, including the African American employees who could not become union members. In a concurring opinion, Justice Murphy excoriated the majority for not deciding the case on equal protection grounds. The Court, Murphy protested, mouthed “legal niceties, while remaining mute and placid as to the obvious and oppressive deprivation of constitutional guarantees.”

Even the most persuasive attorney would be hard-pressed to explain to the Steele plaintiffs how, as a result of their legal victory over a racist union, all covered employees must now contribute to unions. The misuse of Steele is further proof of the truth in Justice Alito’s remark that mandatory assessments are “something of an anomaly.” What should matter for public sector agency fees is whether the First Amendment permits their use, not whether they make policy sense as a result of a union’s statutory duty to represent all employees in a bargaining unit.

The First Amendment, moreover, has its own baked-in equal protection principle. All speakers are treated equally when, as the general rule provides, no speaker is legally obliged to subsidize the views of another.

It is true, then, that public sector unions have a duty to represent the interests of all covered government employees, but the duty is a constitutional one, imposed by the First Amendment, and it runs in favor of employee freedom of speech. The “core issues” of public sector collective bargaining—working conditions, wages, pensions, and benefits—“are important political issues,” Alito duly noted in Harris. Government employee unions represent the political views (and free speech rights) of all employees equally when employees who do not want to support their collective bargaining efforts are not assessed mandatory agency fees.

“The Great Law of Change”

Justice Alito’s effort to reform government employment law owes a debt to Edmund Burke, the great 18th century British parliamentarian. In a famous passage, Burke explained his guiding principle:

We must all obey the great law of change. It is the most powerful law of nature, and the means perhaps of its conservation. All we can do, and that human wisdom can do, is to provide that the change shall proceed by insensible degrees.

The true method of change for Burke, Harvey Mansfield explained in an essay entitled “Burke and Machiavelli on Principles in Politics,”[1] is legality—gradual developments by “insensible degrees.” Legal change, as understood by Burke, is not synonymous with all social change. Legal change respects established order, which rests on the foundations of prejudice and prescription. Prejudice was not a narrow-minded bias for Burke, but the presumption that long-standing traditions reflected the collective wisdom of humanity, stored in the “general bank and capital of nations and ages.” Prescription, the ancient doctrine that gives a person title to property after long-continued and uncontested possession, was, in Burke’s view, the manner in which society grew and developed by “insensible degrees,” building upon, rather than disrupting, the inherited traditions and practices of the past.

In Knox and Harris, Justice Alito has insisted that the change brought about by public sector unionism—collective bargaining with unionized public employees was once opposed by Franklin Roosevelt and George Meany, the longtime AFL-CIO president—be made consistent with legality, the well-established presumptions and prescriptions of the First Amendment. Alito has sought continuity, correctly presuming that anomalies in the law, as he calls them, produced by arbitrary rulings cannot withstand the test of time.

[1] Harvey C. Mansfield, “Burke and Machiavelli on Principles in Politics,” in Edmund Burke: The Enlightenment and the Modern World, edited by P.H. Stanlis (University of Detroit Press, 1967), pp. 49-79.

Michael Toth

Michael Toth is Senior Counsel for Special Litigation in the Office of the Attorney General of Texas. This commentary is the author's only, and does not necessarily reflect the views of the Attorney General of Texas or the Office of the Attorney General.

About the Author

Responses

Clawing Back the Right of Free Speech

by Daniel DiSalvo

Many say the Roberts Court has been exceptionally supportive of First Amendment principles. As Michael Toth ably details in his Liberty Forum essay, these principles have been at issue in two recent cases, Knox v. SEIU Local 1000 (2012) and Harris v. Quinn (2014). Both dealt with public employee unions and both were decided in…

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Let me start with a disclaimer. I was once a member of a union—albeit involuntarily. During college, I responded to Southwestern Bell’s ad for a part-time, 20-hour-a-week graveyard shift job designing Yellow Pages advertisements. I was offered the position, but was required to join the union as a condition of my employment. Had I been…

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