97-555 E
CRS Report for Congress
Received through the CRS Web
The Use of Union Dues for Political Purposes:
A Discussion of Agency Fee Objectors
and Public Policy
Updated June 19, 1998
Gail McCallion
Specialist in Labor Economics
Economics Division
Congressional Research Service ˜
The Library of Congress
ABSTRACT
The issue of the use by unions of dues and fees for political activities is receiving increased
scrutiny. In particular, many bills have been introduced in the 105th Congress that would
either codify the Supreme Court decision in
Beck, or strengthen the rights of employees to
object to the use of union dues or fees for political activities. This report discusses policy
issues raised by
Beck, and tracks legislation on the use of union dues for political activities
that has come before the 105th Congress. This report will be updated as needed..
The Use of Union Dues for Political Purposes: A Discussion
of Agency Fee Objectors and Public Policy
Summary
Union security agreements are agreements between employers and unions which
require employees to give financial support to unions as a condition of employment.
Individuals who are members of a bargaining unit covered by a union security
agreement, who object to the use of their dues for political purposes, are called
agency fee objectors. The right of non-member agency fee payers to object to the use
of their agency fees for political activities is often referred to as a
Beck right after the
Supreme Court ruling in
Communications Workers of America v. Beck. Under
current law, in order to pay a reduced agency fee, however, employees must be aware
of their right to object to payment of unions’ political expenses, and they must resign
their union membership. Concerns have been expressed about whether individuals
covered by union security agreements are being required to support political activities
to which they might object, and whether they are being adequately informed of their
right to object to the use of their dues for such expenditures.
Proponents of legislation to strengthen
Beck enforcement argue that unions are
not providing members with sufficient notice of
Beck rights, and the National Labor
Relations Board (NLRB) has not been vigorous enough in enforcement of
Beck. On
the other hand, labor unions argue that the increased scrutiny of unions is prompted
by the increased activism of unions and they assert that the real objective of proposals
to strengthen
Beck is the abolition of union security agreements altogether.
On May 21, 1998, the House began consideration of campaign finance reform
legislation. On June 11, 1998 the House defeated H.J.Res. 119 (Delay), a proposed
constitutional amendment. The first of 11 substitute amendments (H.R. 3502/White)
to H.R. 2183 (Allen/Hutchinson) was defeated on June 17. Some supporters of H.R.
3502 agreed to vote present, and allow the bill to be defeated, with the understanding
that it would later be attached as an amendment to H.R. 3526 (Shays/Meehan), the
second of the 11 substitute amendments that have been ruled in order. The
Shays/Meehan amendment would codify the
Beck decision. Four of the other
substitute amendments would require prior written authorization by employees for
union use of member or non-member dues and fees for political activities.
In February 1998, the full Senate considered campaign finance reform
legislation, for a second time in the 105 Congress. On February 23, 1998, Senator
th
Lott introduced S. 1663, the Paycheck Protection Act. The text of S. 25, as revised,
was offered by Senators McCain and Feingold as an amendment in the nature of a
substitute to S. 1663. On February 26, 1998, the Senate declined to invoke cloture
on S. 1663 or the McCain-Feingold amendment.
This report will be updated as needed.
Contents
Union Security Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Agency Fee Objectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Numbers of Agency Fee Objectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Executive Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Financial Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
State Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Legislation in the 105th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A Description of the Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Potential Effects of Proposed Legislation on Unions . . . . . . . . . . . . . . . . 17
List of Tables
Table 1. States That Permit Union Security Agreements . . . . . . . . . . . . . . . . . . 3
The Use of Union Dues for Political Purposes:
A Discussion of Agency Fee Objectors and
Public Policy
Unions can spend money to influence the political process through two principal
mechanisms. One mechanism is the use of separate segregated funds (called political
action committees (PACS)), which consist of voluntary union member contributions
and can be directly contributed to federal campaigns (called hard-money). Th
1
e
second mechanism is through soft-money, which is financed directly out of union
revenue, and consequently, is largely paid for by union member and nonmember dues
and fees. Soft-money cannot be directly contributed by unions to federal campaigns,
but may be used for: (1) contributions to state and local elections (including
contributions to national parties for use by state and local candidates); (2) public
service activities that promote the union’s public policy perspective (also referred to
as issue advocacy); and, (3) expenditures aimed at union members and their families
including internal communications, voter registration and get out the vote drives, and
the costs of administering a separate segregated fund (PAC).
Union security agreements, which are permitted for private sector workers in 29
states and the District of Columbia, require all individuals covered by a union
agreement to financially support the union through payment of agency fees. These
union member and nonmember dues and fees can be used for union soft-money
expenditures. This has raised concerns about whether individuals covered by unions
with union security agreements are being required to support political activities to
which they might object, and whether they are being adequately informed of their
right to object to the use of their dues for such expenditures.
This report looks at union security agreements and agency fee objectors, as well
as proposed executive and legislative action to address these issues. On May 21,
1998, the House began consideration of campaign finance reform legislation. On
June 11, 1998 the House defeated H.J.Res. 119 (Delay), a proposed constitutional
amendment. The first of 11 substitute amendments (H.R. 3502/White) to H.R. 2183
(Allen/Hutchinson) was defeated on June 17. Some supporters of H.R. 3502 agreed
to vote present, and allow the bill to be defeated, with the understanding that it would
later be attached as an amendment to H.R. 3526 (Shays/Meehan), the second of the
11 substitute amendments that have been ruled in order. The Shays/Meehan
1 U.S. Library of Congress. Congressional Research Service.
Political Spending by
Organized Labor: Background and Current Issues. CRS Report 96-484 GOV, by Joseph
Cantor. February 18, 1998.
CRS-2
amendment would codify the
Beck decision. Four of the other substitute amendments
would require prior written authorization by employees for union use of member or
non-member dues and fees for political activities.
2
On March 30, 1998, the House considered four separate bills related to
campaign finance under a suspension of the rules; two passed and two were defeated.
One of the defeated bills was H.R. 2608, the Paycheck Protection Act. A broad
bipartisan campaign finance reform bill (H.R. 3526, Shays/Meehan) was not
considered. Some House members, including proponents of H.R. 3526, began an
effort to get the 218 signatures necessary for a discharge petition which would force
the House to consider the legislation. In response, the Republican leadership agreed
to allow campaign finance legislation to come to the floor at the end of May 3
In February 1998, the full Senate considered campaign finance reform
legislation, for a second time in the 105 Congress. On February 23, 1998, S. 1663,
th
the Paycheck Protection Act, was introduced by Senator Lott. Among other things,
S. 1663 would require written, voluntary authorization before a union could use
member or nonmember dues or fees for political activities. On February 26, 1998,
the Senate declined to invoke cloture on S. 1663. S. 25 as revised, was offered on
February 23, 1998, by Senators McCain and Feingold, as an amendment in the nature
of a substitute to S. 1663 (amendment no. 1646). Among other things, amendment
no. 1646 includes a provision that would require unions to notify non-union members
of their right to request a refund of the portion of their agency fees that is used for
political activities. On February 26, 1998, the Senate declined to invoke cloture on
the McCain-Feingold amendment.
In October, 1997 the Senate had also declined to invoke cloture on the McCain-
Feingold bill; and on the Lott amendment to require written authorization before
unions could use member or nonmember dues or fees for political activities.
2 See: U.S. Library of Congress. Congressional Research Service.
Campaign Financing.
CRS Issue Brief 87020, by Joseph E. Cantor. Updated Regularly.
3 See: U.S. Library of Congress. Congressional Research Service.
Campaign Finance
Debate in the House: Substitute Amendments to H.R. 2183 (105th Congress). CRS Report
98-494 GOV, by Joseph E. Cantor. May 29, 1998.
CRS-3
Table 1. States That Permit Union
Security Agreements
ALASKA
MISSOURI
CALIFORNIA
MONTANA
COLORADO
NEW HAMPSHIRE
CONNECTICUT
NEW JERSEY
DELAWARE
NEW MEXICO
DISTRICT OF
NEW YORK
COLUMBIA
OHIO
HAWAII
OKLAHOMA
ILLINOIS
OREGON
INDIANA
PENNSYLVANIA
KENTUCKY
RHODE ISLAND
MAINE
VERMONT
MARYLAND
WASHINGTON
MASSACHUSETTS
WEST VIRGINIA
MICHIGAN
WISCONSIN
MINNESOTA
Union Security Agreements
Union security agreements are agreements between employers and unions which
require employees to give financial support to unions as a condition of employment.
These agreements are permitted by section 8(a)(3) of the National Labor Relations
Act (NLRA) and section 2 Eleventh of the Railway Labor Act. Twenty-nine states
4
and the District of Columbia currently permit union security agreements (see table).
Union security agreements and the requirement of financial support were permitted
under these labor laws, in part, in response to union concerns about so-called “free-
riders,” workers who benefit from a union’s collective bargaining efforts but do not
voluntarily choose to provide financial support to it.
However, section 14(b) of the NLRA grants states the right to supersede section
8(a)(3) and to enact right-to-work laws prohibiting union security agreements, if they
so choose. Twenty-one states currently have right-to-work laws. States may no
5
t
supersede union security agreements under the Railway Labor Act, which covers the
railroad and airline industries. In addition, it should be noted that the NLRA covers
only private sector employees. Union security agreements are prohibited in federal
employment. Union security agreements for state and local employees are
determined by state law: a few states allow such agreements, while most prohibit
them.6
429 U.S.C. Section 158(a)3, and 45 U.S.C. Sections 151-158.
For
5
more information on right-to-work laws see: U.S. Library of Congress. Congressional
Research Service.
Right-To-Work Laws: An Overview. CRS Report 95-805 E, by Gail
McCallion. Updated July 15, 1996.
6 Smith, Russell, Harry Edwards and R. Theodore Clark, eds.
Labor Relations Law in the
(continued...)
CRS-4
Over the years the courts have refined what constitutes permissible union
security agreements under section 8(a)(3) of the NLRA. The Supreme Court has
ruled that a union security agreement may not require an employee to actually join
a union but only to pay union initiation fees and dues.7 An employee who chooses
not to join is called a “financial core member” or “dues-paying non-member” because
he or she continues to provide financial support to the union but does not participate
in other union activities, such as membership meetings, election of union officers,
and ratification of contracts. A financial core member is not subject to union
discipline and is not covered by the by-laws of the union.8
Since the adoption by many states of right-to-work laws, much of the conflict
between right-to-work opponents and proponents has shifted to the courts. In
Communications Workers of America v.
Beck., the Supreme Court considered
whether or not employees covered by union security agreements who choose not to
join the union may be required to pay an agency fee equivalent to all union fees and
dues, or whether their liability should be reduced by a pro rata share of union
expenses that are attributable to expenses not germane to collective bargaining
(political and ideological expenses). In 1988, the Supreme Court ruled in
Beck that
these employees may only be charged a pro rata share of union dues and fees that are
attributable to collective bargaining, contract administration, or grievance
adjustment; they may not be charged a pro rata share of union dues and fees that are
attributable to union expenses for political or ideological purposes.9
Agency Fee Objectors
Individuals who are members of a bargaining unit covered by a union security
agreement, who object to the use of their dues for political purposes, are called
agency fee objectors. However, in order to pay a reduced agency fee, an employee
must be aware of his/her right to object to payment of union political expenses, and
then must express his/her objection to the union. In addition, in order to qualify as
an agency fee objector, a union member must resign his/her union membership.
Questions have been raised about whether unions are currently providing sufficient
notice of
Beck rights to agency fee objectors, and about how many individuals
currently choose to, or might choose to, avail themselves of their
Beck rights.
Some proponents of legislation to strengthen
Beck enforcement argue that
unions are not providing members with sufficient notice of
Beck rights, and the
NLRB has not been vigorous enough in enforcement of
Beck:
6(...continued)
Public Sector. NY, The Bobbs-Merrill Co., Inc., 1974. p. 595-597.
7NLRB v. General Motors Corp., 373 U.S. 734 (1963).
8 Feldacker, Bruce.
Labor Guide to Labor Law. Reston, Va., Reston Publishing Co. Inc.,
1990. p. 237.
9See: U.S. Library of Congress. Congressional Research Service.
The Use of Union Dues
For Political Purposes: A Legal Analysis.. CRS Report 97-618 A, by John Contrubis and
Margaret Mikyung Lee. Updated as needed.
CRS-5
Now, it’s been eight years since
Beck, and it’s only a few months ago, in
December, that the Labor Board issued its first decision regarding the
implementation of
Beck. So, we’ve had eight years of some significant
real uncertainty as to how
Beck is going to be implemented... Most recently
in the
California Saw and Knife case, the Labor Board decided that if
information is placed in a union newsletter about
Beck rights, that’s
sufficient. Although it also said that union members have to be told that
they do have
Beck rights in some fashion if they are a new employee in the
company. I’ve never understood why there has been so much opposition
to notice posting in the workplace following the approach of the Bush
Administration.10
On the other hand, labor unions argue that the increased scrutiny of unions is
prompted by the increased activism of unions under the AFL-CIO’s new president
John Sweeney, and assert that the real objective of proposals to strengthen
Beck
enforcement is the abolition of union security agreements altogether. Labor unions
argue that the NLRB and the Courts have provided thorough and detailed
requirements for unions to follow in providing notice to potential agency fee
objectors.
11 They also argue that they are democratic organizations, and union
membership is voluntary. They contend that increased attention to
Beck rights is
politically motivated:
First, workers in both the public and private sector are free to join a union
or not to join a union. It is flat out unlawful to restrict an employee’s
choice in this regard. If by “compulsory unionism” it is suggested that
employees today are being compelled to become union members, that is
simply not so...And finally, to return to
Beck, employees subject to union
security clauses are free to insist that their fee payments fund only those
union activities that are, in the Supreme Court’s words, “germane to
collective bargaining,” and not to fund lobbying, political, or other
activities of an ideological nature. In other words, no employee
10Testimony of Marshall Breger, Solicitor of Labor during the Bush Administration, before
U.S. Congress. House. Committee on Economic and Educational Opportunities.
Subcommittee on Employer-Employee Relations. Hearings on H.R. 3580, The Worker
Right to Know Act. 104 Congress, 2d Sess.
th
April 18 and June 19, 1996. Washington, U.S.
Govt. Print. Off., 1996. p. 5.
Testimon
11
y of Allison Beck, General Counsel of the International Association of Machinist
and Aerospace Workers, before the U.S. Congress. House. Committee on Education and
the Workforce. Subcommittee on Employer-Employee Relations. Hearings on Mandatory
Union Dues. 105 Congress, 1
th
st Sess. March 18, 1997. Washington, U.S. Govt. Print. Off.,
1997. p. 58-66. In addition, in a recent ruling, Service Employees International Union, 323
NLRB No. 39, March 21, 1997, the NLRB ordered an SEIU local to take affirmative steps
to notify individuals covered by the collective bargaining agreement of their rights to remain
nonmembers of the union, and to abstain from paying that part of agency fees attributable
to political expenditures.
CRS-6
represented by a union can be required over his or her objection to
financially support union political efforts.12
Numbers of Agency Fee Objectors
It is difficult to ascertain how many individuals avail themselves of the right to
object to the use of their union dues for political purposes because there are no
reported aggregate statistics on union security agreements nor on the numbers of
agency fee objectors. However, the U.S. Bureau of Labor Statistics (BLS) doe
13
s
publish data on union membership classified by various characteristics, including the
number of individuals who are members of unions and the number of individuals
who are represented by unions.
For all private nonagricultural wage and salary workers (excluding government
workers and agricultural wage and salary workers), BLS data for 1997 indicate that
9.3 million individuals age 16 and over were members of unions (9.8% of those
employed); and, 10.2 million individuals were represented by unions (10.8% of those
employed). Thus, in 1997, less than 1 million individuals (excluding government
workers and agricultural workers) were represented by unions but were not union
members.14
Those individuals included as represented by unions are: individuals who are
members of labor unions and employee associations; individuals whose jobs are
covered by union agreements without any union security clause who choose not to
join the union, and,
individuals whose jobs are covered by union security agreements
but who choose not to join the union.
Separate figures are not available on the numbers of individuals in jobs covered
by union security agreements who choose not to join the union. It is unlikely that
a large share of those individuals who were represented by unions in 1996, but were
not union members, were actually agency fee objectors. Many of the individuals who
were represented by, but were not a member of a union, were probably in jobs
covered by collective bargaining agreements without a union security clause.
12Ibid., p. 59-60.
1 3 BLS used to conduct periodic in-depth studies of union security provisions in collective
bargaining agreements covering 1,000 or more workers. The last such study, published in
May of 1982, covered 1,327 private agreements (excluding rail and airline agreements). The
May 1982 study found 83% of the agreements studied contained some form of union
security provision. Since these data do not include any agreements of under 1,000 workers,
and are over 15 years old, their usefulness is limited.
14If we examine BLS union membership and representation data for all wage and salary
workers 16 years and over (including government workers and agricultural wage and salary
workers) we see that in 1997, 16.1 million individuals age 16 and over were members of
unions (14.1% of those employed); and, 17.9 million individuals were represented by unions
(15.6% of those employed). Thus, in 1997, 1.8 million individuals (including government
workers many of whom cannot be covered by union security agreements, and agricultural
workers) were represented by unions but were not union members.
CRS-7
However, more individuals might avail themselves of
Beck rights if an
affirmative duty rested with unions to get written permission before using dues for
political activities. It is impossible to know how many individuals would choose to
pay reduced union dues under these circumstances.
15
Executive Actions
Efforts to strengthen
Beck rights and modify union financial reporting standards
have been considered, both through executive actions, and through proposed
legislation.
President Bush issued Executive Order 12800 on April 13, 1992 requiring
federal contractors to post a notice to employees informing them of their
Beck rights.
A final rule to implement the posting requirements was issued on November 2, 1992;
the posting requirement took effect 30 days later, on December 2, 1992.
On February 1, 1993, President Clinton issued Executive Order 12836,
rescinding President Bush’s Executive Order on posting of
Beck rights.
President Bush’s Executive Order required federal contractors to post notices
to employees of their
Beck rights. This Executive Order required all federal
contractors or subcontractors with grants of $25,000 or more, and with 15 or more
employees, to post a notice informing employees that they are not required to join a
union as a condition of their employment. In addition, the notices were to state that
while union security agreements requiring employees to pay periodic dues and fees
are valid under certain conditions, employees who are not union members may object
to paying compulsory union dues for purposes unrelated to collective bargaining,
contract administration, or grievance adjustment. Federal contractors and
subcontractors who failed to post the required notice were subject to contract
cancellation, suspension, termination, and debarment. Federal contractors in right-to-
work states, and where no union was formally recognized or certified were exempted
from the Executive Order. While the Executive Order would have affected only a
limited number of employers, i.e., federal contractors, it received wide attention from
both the labor and management communities.
Financial Reporting Requirements
The Labor Management Reporting and Disclosure Act of 1959 (LMRDA), also
known as the Landrum-Griffin Act, requires that unions file annual financial reports
with the U.S. Department of Labor (LM forms). In addition to requiring unions to file
financial reports, the LMRDA regulates other areas of union conduct as well; for
example, it sets standards for union trusteeships and requires unions to have
constitutions and bylaws.
1 5 Research on so-called free-riders (individuals who are covered by a union contract who
choose not to join) indicates that in 1985, anywhere from 6.4% (average for non-right-to-
work states) to 15.5% (average for right-to-work states) of individuals covered by collective
bargaining agreements chose not to join unions. Davis, Joe and John Huston. Right-to-Work
Laws and Free Riding.
Economic Inquiry, V. 31, January 1993. p. 52.
CRS-8
In 1992, President Bush requested that the U.S. Department of Labor (DOL)
reexamine the financial reporting requirements for unions under the LMRDA. The
DOL recommended revising these financial reporting requirements in a proposed rule
on April 17, 1992. A final rule was issued on October 29, 1992, with an effective
16
date of December 31, 1993, to apply to all financial forms filed by unions for fiscal
year 1992 and thereafter. The rule was subsequently withdrawn before its effective
date.
17
The final rule would have required unions to change the method of reporting for
LM financial reports filed with DOL. The new rule would have required reporting
of expenditures by functional categories. Prior to this proposed change, and
subsequent to its rejection on December 21, 1993, union expenditures were and are
reported by object categories (type of expense) rather than functional categories.
Object categories include officers’ salaries, office and administrative expenses, etc.
The proposed functional categories would have included: contract negotiation and
administration, organizing, strike activities, political activities, lobbying and
promotional activities, and other.
The Bush Administration argued that changes in reporting requirements would
provide members and the public with more useful information on where union
expenditures were going, and would enhance union democracy. Some advocates of
changing reporting requirements also argued that it would make
Beck enforcement
easier.
On February 10, 1993, the DOL, under the Clinton Administration and then
Labor Secretary Robert Reich, proposed a one-year extension in the effective date of
these final rules.1 DOL subsequently issued a final rule, which rejected most of the
8
changes proposed by the Bush Administration, on December 21, 1993. In addition,
19
the Clinton Administration chose to retain cash basis reporting rather than the
proposed accrual basis reporting, as the only allowable method for use in LM forms.
State Initiatives
Proponents of legislation to require written authorization before union dues and
fees can be used for political activities have been very active at the state level,
working to get legislation introduced in as many states as possible. There are also
several petition drives underway to get the issue on state ballots. Many of the state
initiatives would extend
Beck rights to all union members rather than limiting
coverage to agency fee payers. Other state initiatives are narrow in scope, covering,
for example, only automatic payroll deductions for union political action committees.
1657 FR 14244-14246.
1757 FR 49282-49290.
1858 FR 9418-9419.
1958 FR 67594-67604.
CRS-9
Four states (Idaho, Michigan, Washington, and Wyoming) have passed laws or
referendum, that in some way, restrict automatic pay deductions for union political
activities. In addition, California’s widely publicized Proposition 226, the Campaign
Reform Initiative, was defeated in California’s June 2, 1998 primary. Until recently,
Proposition 226 had been expected to pass. However, independent polling data
indicated its support was slipping as the primary approached. Opponents of
Proposition 226 believe its defeat was due to education of the voters about the
significance of the issue, and they argue that its defeat will have a chilling effect on
other state efforts to enact similar legislation or referenda. Proponents of
Proposition 226 contend that most voters believe Proposition 226 has merit, and only
massive spending by unions enabled Proposition 226 to be defeated.
Although the experience of the states provides useful information to federal
policymakers, there are also distinctions between state laws and proposed federal
legislation that make direct comparisons difficult. And, provisions and coverage in
state proposals vary considerably from state to state.
Legislation in the 105th Congress
On May 21, 1998, the House began consideration of campaign finance reform
legislation. On June 11, 1998 the House defeated H.J.Res. 119 (Delay), a proposed
constitutional amendment. The first of 11 substitute amendments (H.R. 3502/White)
to H.R. 2183 (Allen/Hutchinson) was defeated on June 17. Some supporters of H.R.
3502 agreed to vote present, and allow the bill to be defeated, with the understanding
that it would later be attached as an amendment to H.R. 3526 (Shays/Meehan), the
second of the 11 substitute amendments that have been ruled in order. The
Shays/Meehan amendment would codify the
Beck decision. Four of the other
substitute amendments would require prior written authorization by employees for
union use of member or non-member dues and fees for political activities.
On March 30, 1998, the House considered four separate bills related to
campaign finance under a suspension of the rules; two passed and two were defeated.
One of the defeated bills was H.R. 2608, the Paycheck Protection Act. A broad
bipartisan campaign finance reform bill (H.R. 3526, Shays/Meehan) was not
considered. Some House members, including proponents of H.R. 3526, began an
effort to get the 218 signatures necessary for a discharge petition which would force
the House to consider the legislation. In response, the Republican leadership agreed
to allow campaign finance legislation to come to the floor at the end of May under
an open rule.
In February 1998, the full Senate considered campaign finance reform
legislation, for a second time in the 105 Congress. On February 23, 1998, S. 1663,
th
the Paycheck Protection Act, was introduced by Senator Lott. Among other things,
S. 1663 would require written, voluntary authorization before a union could use
member or nonmember dues or fees for political activities. On February 26, 1998,
the Senate declined to invoke cloture on S. 1663.
CRS-10
The text of S. 25, as revised, was offered on February 23, 1998, by Senators
McCain and Feingold, as an amendment in the nature of a substitute to S. 1663
(amendment no. 1646). Among other things, amendment no. 1646 includes a
provision that would require unions to notify non-union members of their right to
request a refund of the portion of their agency fees that is used for political activities.
On February 26, 1998, the Senate declined to invoke cloture on amendment no. 1646.
An attempt to craft a compromise on the use of union and corporate funds close to
elections, in lieu of S. 1663, that would garner sufficient votes to permit an up or
down vote on the McCain-Feingold amendment, was introduced as an amendment
by Senator Snowe and Senator Jeffords (amendment no. 1647). Amendment no.
1647 was adopted by voice vote on February 25, 1998. In spite of the inclusion of
the Snowe-Jeffords amendment, cloture was not invoked on amendment no. 1646.
In October, 1997 the Senate had also declined to invoke cloture on the McCain-
Feingold bill and, on the Lott amendment to require written authorization before
unions could use member or nonmember dues or fees for political activities.
Other legislative proposals in the 105th Congress range from posting
requirements regarding employee rights to more extensive restrictions on unions.
Differing proposals contained in these bills include: requiring unions to receive
written permission to use an individual’s dues or agency fees for political purposes;
completely revamping union financial reporting requirements; or eliminating of
union security provisions altogether.
Proponents of these bills argue that there are essentially three
Beck-related
problems in need of legislative remedy, because, they argue, the NLRB has been
neither vigorous nor swift enough in enforcement of
Beck. The three
Beck problems
cited are: individuals are generally unaware of their
Beck rights; they have trouble
receiving refunds from their unions if they exercise their
Beck rights; and, the
appropriate amount of the refund is often in dispute. Proponents of stricter
20
Beck
enforcement argue that if unions want to retain the right to exclusive representation
and union security provisions, then they must be willing to more effectively notify
potential agency fee objectors of their
Beck rights and ensure that these rights can be
effectively exercised. Some proposed legislation would eliminate union security
provisions altogether.
Labor unions counter that they are democratically run organizations elected by
majority support and removed if the majority no longer supports them. They contend
that unions already have sufficient procedures in place to inform potential agency fee
objectors of their
Beck rights, as required by the NLRB. Labor unions argue that
proposed legislation is intended to punish unions for their political activism. Stricter
Beck enforcement is unnecessary, and greater scrutiny of union finances unwarranted
and unnecessarily burdensome, they argue. They believe current law already
2 0Testimony of Marshall Breger before U.S. Congress. House. Committee on Economic
and Education Opportunities. Subcommittee on Employer-Employee Relations. Hearings
on H.R. 3580, The Worker Right to Know Act. 104th Congress, 2d Sess. April 18 and June
19, 1996. Washington, U.S. Govt. Print. Off., 1996. p. 12-17.
CRS-11
represents a delicate balancing of the interests of the majority of workers in a union,
and the rights of workers in a minority:
...the collective rights of workers should not act to impinge upon an
individual’s right to independent expression, but equally nor should an
individual’s right to independent expression serve to nullify the collective
rights of the workers.21
A Description of the Bills22
S. 9 (Nickles), The Paycheck Protection Act would amend the Federal Election
Campaign Act of 1971 to require written authorization before any employee or
shareholder dues or fees could be used by corporations or national banks for political
activities; and, it would require written authorization before a union could use
member or nonmember dues or fees for political activities.
Introduced January 21, 1997; referred to Committee on Rules and
Administration. Hearings held June 25th, 1997 by the Committee on Rules.
S. 25 (McCain/Feingold), the Bipartisan Campaign Reform Act of 1997. The
current version of this bill, among other things, includes a provision that would
require unions to notify non-union members of their right to request a refund of the
portion of their agency fees that is used for political activities.
Introduced January 21, 1997; referred to the Committee on Rules and
Administration. Measure laid before Senate by unanimous consent on September 26,
1997. Considered September 29, 1997 by the Senate, modified by unanimous
consent, amendments SP 1258 through 1265 proposed. On October 7, 1997 cloture
on the Lott amendment (SP 1258) not invoked (52-48); first cloture on the bill as
modified not invoked (53-47). On October 8, 1997, second cloture on the bill as
modified not invoked (52-47). On October 9, 1997, third cloture on the bill as
modified not invoked (52-47); second cloture on the Lott amendment (SP 1258) not
invoked (51-48). The text of S. 25, as revised, was offered as an amendment
(amendment no. 1646) to S. 1663, the Paycheck Protection Act, on February 23,
1998; and was modified by amendment no. 1647 on February 25, 1998. A cloture
motion on modified amendment no. 1646 failed February 26, 1998 (51-48).
S. 65 (Hatch)/H.R. 480 (Herger), legislation to amend the Internal Revenue
Code of 1986 would, among other things, ensure that union members receive notice
of the portion of their dues used for political and lobbying activities.
21Ibid., Statement of Congressman Martinez, p. 3.
2 2 This section does not include the 11 substitute amendments that have been ruled in order
under H. Res. 442 for consideration in the House. See: U.S. Library of Congress.
Congressional Research Service.
Campaign Finance Legislation Debate in the House:
Substitute Amendments to H.R. 2183 ( 105th Congress). CRS Report 98-494 GOV, by
Joseph E. Cantor. Updated as needed.
CRS-12
S. 65 introduced January 21, 1997; referred to House Committee on Ways and
Means. H.R. 480 introduced January 21, 1997; referred to the Committee on
Finance.
S. 179 (Hutchinson), the Campaign Finance Reform and Disclosure Act of
1997. section 13, Rights of Employees Relating to the Payment and Use of Labor
Organization Dues, would amend sections 7 and 8 of the NLRA to specify that
employees could not be required to become union members under a union security
provision, but only to pay dues or fees for collective bargaining, contract
administration, or grievance adjustment (percentage verified by an independent
auditor). Notification of these rights in writing for each new employee would be
required, as well as annual written notification for all employees. In addition, posting
of section 7 rights would be required, including clarification that employees can only
be required to pay dues or fees attributable to collective bargaining, contract
administration, or grievance adjustment. S. 179 would also require that labor unions
with union security agreements permit agency fee objectors to remain union
members. Additionally, the bill would amend the Labor-Management Reporting and
Disclosure Act of 1959 (LMRDA) to require unions to file annual union financial
reporting forms with the DOL on a functional (rather than object) accounting basis.
Introduced January 22, 1997; referred to the Committee on Rules and
Administration.
S. 497 (Coverdell)/ H.R. 59 (Goodlatte), The National Right to Work Act,
would repeal the provisions of the NLRA and RLA, that require employees to pay
union dues or fees as a condition of employment.23
S. 497 introduced March 20, 1997; referred to the Committee on Labor and
Human Resources. H.R. 59 introduced January 7, 1997; referred to the Committee
on Education and the Workforce and the Committee on Transportation and
Infrastructure. Referred to the Subcommittee on Employer-Employee Relations
January 31, 1997. Referred to the Subcommittee on Aviation and the Subcommittee
on Railroads February 13, 1997.
S. 976 (Brownback), the Common Sense Campaign Reform Act of 1997
would, among other things, require written authorization before any employee or
shareholder dues or fees could be used by corporations or national banks for political
activities; and, it would require written authorization before a union could use
member or nonmember dues or fees for political activities. require prior, voluntary,
written authorization before unions could spend dues monies on political activities.
Introduced June 27th, 1997; referred to the Committee on Rules and
Administration.
Of
23
course, a national right-to-work law would obviate the question of agency fee objectors.
In the 104 Congress, a right-to-work bill, S.
th
1788, was brought up in the Senate, but on July
10, 1996, a motion to invoke cloture and allow a vote on the legislation failed by a vote of
68 to 31.
CRS-13
S. 1117 (Snowe) would, among other things, require prior, voluntary
authorization by members and nonmembers before a union could assess fees to be
used for political activities.
Introduced July 31, 1997; referred to the Committee on Rules and
Administration.
S. 1190 (Allard), the Campaign Finance Integrity Act of 1997 would, among
other things, In addition, the bill would require unions to submit annual reports to
dues paying members and nonmembers enumerating all expenditures and
contributions on political activities.
Introduced September 17, 1997; referred to the Committee on Rules and
Administration.
S. 1246 (Santorum), the Voter Empowerment and Campaign Disclosure Act
of 1997 would, among other things, require prior, voluntary, written authorization
by members and nonmembers before a union could assess fees to be used for political
activities.
Introduced October 1, 1997; referred to the Committee on Rules and
Administration.
S. 1561 (Warner), the Constitutional and Effective Reform of Campaigns Act
of 1997 would, among other things, require prior, voluntary authorization by dues-
paying nonmembers before a union could assess fees to be used for political
activities. S. 1561 would also require more disclosure of union annual financial
reports.
Introduced November 13, 1997; referred to the Committee on Rules and
Administration.
S. 1663 (Lott), the Paycheck Protection Act would, among other things, require
prior, voluntary authorization before any employee or shareholder dues or fees could
be used by corporations or national banks for political activities; and, it would
require written authorization before a union could use member or nonmember dues
or fees for political activities.
Introduced February 23, 1998 and considered by the Senate. Cloture motion
rejected (45-54) on February 26, 1998.
S. 1689 (Domenici), the Grassroots Campaign and Common Sense Federal
Election Reform Act of 1998. Among other things, S. 1689 would prohibit unions,
corporations and national banks from setting up separate segregated funds.
Introduced February 26, 1998; referred to the Committee on Rules and
Administration.
H.R. 480 (Herger), the Union Members Right to Know Act of 1997 would
amend the Internal Revenue Code of 1986 to require that tax exempt organizations
CRS-14
inform members of how much of their dues are used for political and lobbying
activities.
Introduced January 21, 1997; referred to the Committee on Ways and Means.
H.R. 928 (Christensen), the Union Members Right to Know Act of 1997 would
amend the LMRDA to require unions to file annual financial reporting forms with
the DOL on a functional (rather than object) accounting basis. This bill would also
24
require unions to report: names of the lobbyists they use for political activities; names
of PACs that received funds from the union; and, names of political candidates or
organizations that received money or in-kind assistance from the union.
Introduced March 5, 1997; referred to the Committee on Education and the
Workforce. Referred to the Subcommittee on Employer-Employee Relations March
21, 1997.
H.R. 1303 (Portman), Restoring Trust in Government Act of 1997. Title V,
Worker Right to Know, would amend sections 7 and 8 of the NLRA to specify that
employees could not be required to become union members under a union security
provision, but only to pay dues or fees for collective bargaining, contract
administration, or grievance adjustment (percentage verified by an independent
auditor). Annual written notification of these rights would be required for all
employees. In addition, posting of section 7 rights would be required, including
notice that employees can only be required to pay those dues or fees attributable to
collective bargaining, contract administration, or grievance adjustment. Additionally,
the bill would amend the LMRDA to require unions to file annual union financial
reporting forms with the DOL on a functional (rather than object) accounting basis.
This bill is similar, although not identical, to S. 179.
Introduced April 10, 1997; referred to the Committee on House Oversight and
the Committees on Education and the Workforce, Government Reform and
Oversight, and the Judiciary. Referred to the Subcommittee on Postal Service April
16, 1997. Referred to the Subcommittee on Employer-Employee Relations April 28,
1997. Referred to the Subcommittee on Crime May 7, 1997.
H.R. 1458 (Tiahrt), the Wage Integrity Act. This bill would amend the Federal
Election Campaign Act of 1971 to prohibit unions from spending funds withheld
from wages for political activities.
Introduced April 24, 1997; referred to the Committee on House Oversight.
H.R. 1625 (Fawell), the Worker Paycheck Fairness Act. When employees are
covered by a union security agreement, it would require the union to get prior,
2 4 Unions would be required to report the amount (and percentage of total expenditures)
spent annually on: contract negotiating and administration, organizing activities, strike
activities, political activities, and activities attempting to influence the passage or defeat, or
the content or enforcement of federal, state, or local legislation, and, activities related to
voter education and issue advocacy.
CRS-15
voluntary, written permission from the employees for any portion of their dues that
would be used for non-collective bargaining purposes. If a union violates that
requirement it would be liable for double the amount of dues or fees involved,
interest, as well as attorney’s fees. The Worker Paycheck Fairness Act would also
require employers to post a notice for employees of the requirement that a union
covered by a union security agreement must obtain written permission from
employees before dues could be used for political expenditures. It would also amend
the LMRDA to require unions to use functional reporting categories in their annual
LM reports. The DOL would be required to make available copies of these reports,
upon written request.
Introduced May 15, 1997; referred to the Committee on Education and the
Workforce. Referred to the Subcommittee on Employer-Employee Relations June
11, 1997. The Subcommittee on Employer-Employee relations held hearings July
9, 1997. Full Committee consideration and mark-up held on October 8, 1997. On the
same day ordered reported (amended) by voice vote.
H.R. 2147 (Smith), the Anti-Money Laundering and Paycheck Accountability
Act. This bill would require prior, voluntary, written authorization before any wages
could be withheld to be used for political activities.
Introduced July 10, 1997; referred to the Committee on House Oversight.
H.R. 2573 (Hayworth), the Election Reform in Campaigns Act would, among
other things, require labor unions to provide their members with information on the
use of their dues for political purposes.
Introduced September 29, 1997; referred to the Committee on House Oversight.
H. R. 2608 (Schaffer), the Paycheck Protection Act. Among other things, this
bill would require written authorization before any employee or shareholder dues or
fees could be used by corporations or national banks for political activities; and, it
would require written authorization before a union could use member or nonmember
dues or fees for political activities.
Introduced October 6, 1997; referred to the Committee on House Oversight.
Considered by the House, under suspension of the rules, on March 30, 1998. The
measure failed by a vote of 166-246.
H.R. 3019 (Smith), the Anti-Money Laundering and Paycheck Accountability
Act. This bill would give employees the right to not have payroll deductions used
for political activities by their union.
Introduced November 9, 1997; referred to the Committee on House Oversight,
and the Committee on the Judiciary.
H.R. 3315 (Snowbarger), the Fair Elections and Political Accountability Act.
Among other things, this bill would require written authorization before any
employee or shareholder dues or fees could be used by corporations or national
CRS-16
banks for political activities; and, it would require written authorization before a
union could use member or nonmember dues or fees for political activities.
Introduced March 3, 1998; referred to the Committee on House Oversight.
H.R. 3399 (Shaw), the Campaign Finance Improvement Act of 1998. Among
other things, this bill would require written authorization before any employee or
shareholder dues or fees could be used by corporations or national banks for political
activities; and, it would require written authorization before a union could use
member or nonmember dues or fees for political activities. The bill would also
require unions to use functional reporting categories in their financial reports and to
post these reports on the Internet.
Introduced March 5, 1998; referred to the Committee on House Oversight, and
the Committee on Education and the Workforce.
H.R. 3476 (Levin), the Campaign Finance Improvement Act of 1998. Among
other things, H.R. 3476 would require unions to give agency fee-payers reasonable
notice of their right to object to the use of their agency fees for political activities.
Introduced March 17, 1998; referred to the Committees on Education and the
Workforce, Government Reform and Oversight, the Judiciary, and House Oversight.
.
H.R. 3485 (Thomas), the Campaign Reform and Election Integrity Act of 1998.
Among other things, H.R. 3485 would require written authorization before any
employee or shareholder dues or fees could be used by corporations or national
banks for political activities; and, it would require written authorization before a
union could use member or nonmember dues or fees for political activities.
Introduced March 18, 1998; approved by the House Committee on House
Oversight.
H.R. 3526 (Shays), the Bipartisan Campaign Reform Act of 1998. Among other
things, H.R. 3526 would require unions to give agency fee-payers reasonable notice
of their right to object to the use of their agency fees for political activities.
Introduced March 19, 1998; referred to the Committees on Education and the
Workforce, Government Reform and Oversight, the Judiciary, and House Oversight..
H.R. 3581 (Thomas), the Campaign Reform and Election Integrity Act of 1998.
Among other things, H.R. 3485 would require written authorization before any
employee or shareholder dues or fees could be used by corporations or national
banks for political activities; and, it would require written authorization before a
union could use member or nonmember dues or fees for political activities.
Introduced March 30, 1998; referred to the Committee on House Oversight.
Considered by the House, under suspension of the rules, on March 30, 1998. The
measure failed by a vote of 74-337.
CRS-17
Potential Effects of Proposed Legislation on Unions
These bills include a variety of proposals that would, if enacted into law, have
an impact on unions. They include new posting requirements, requiring unions to
receive written permission to use an individual’s dues for political purposes,
revamping union financial reporting requirements, and eliminating union security
provisions altogether. Although labor unions object to all of these proposals, some
would be more onerous to labor unions than others.
Employer posting of
Beck rights, for example, would not create any overt
burden on a union. Posting would be the responsibility of the employer. The AFL-
CIO publicly stated its willingness to accept codification of
Beck rights during Senate
consideration of S. 25. However, unions have also argued that it is unfair to single
out
Beck rights for special posting requirements. They argue that if new employer
posting requirements are enacted, they should not be limited to
Beck rights, but
should include requirements to post employee rights to organize and join unions as
well. Two of the bills introduced in the 105th Congress include requirements for
posting of all section 7 rights, not limited to
Beck rights.
Unions oppose a new requirement that they receive written permission to use
dues for political purposes because of the administrative burdens it would entail and
because it might result in more individuals choosing to become agency fee objectors.
Supporters of this proposal argue that union members can only make educated
decisions if they are fully informed of their
Beck rights.
Proposed changes in union financial reporting requirements (from object to
functional reporting) are intended to provide union members with more information
so that they can make more educated decisions about the performance of their union
and its officers. However, labor unions contend that they are already democratically
run organizations and requiring functional reporting would create an undue financial
hardship on small unions. Unions also argue that they are already required to meet
extensive reporting requirements regarding their PACS and support for political
candidates, and further reporting requirements would be unreasonable.
Finally, vigorously opposed by unions are proposals to abolish union security
agreements, or to require unions to allow agency fee objectors to remain union
members rather than, as now, to withdraw from the union when they choose to
become an agency fee objector. Regarding membership requirements, one union
witness testified that:
Unions, like every other voluntary association, operate on the principle that
it is the right of the majority to decide the duties of membership, and that
those who desire to enjoy the privileges of membership are required to
become members of the organization and accept whatever responsibilities
come with membership....to force a union to allow dissidents who
withdraw from membership to retain the right to participate in membership
CRS-18
decisions would turn
Beck — and the First Amendment — on their
heads.25
Proponents of this provision argue that it is simply unfair to require individuals
to contribute to the costs of union representation, but be denied the right to have a
voice in the decision making of the organization. But, currently, that is the
consequence of exercising
Beck rights: in order to pay a reduced agency fee because
he or she objects to the use of dues for political purposes, the individual must give
up his/her union membership.
25Testimony of James Coppess, Communication Workers of America, before the U.S.
Congress. House. Committee on Education and the Workforce. Subcommittee on
Employer-Employee Relations. Hearing on Union Dues. 105th Congress, 1 Sess. Marc
st
h
18, 1997. p. 7-8.