The Use of Union Dues for Political Purposes: A Legal Analysis

97-618 A CRS Report for Congress Received through the CRS Web The Use Of Union Dues For Political Purposes: A Legal Analysis June 2, 1997 John Contrubis Legislative Attorney Margaret Mikyung Lee Legislative Attorney American Law Division Congressional Research Service ˜ The Library of Congress The Use Of Union Dues For Political Purposes: A Legal Analysis Summary Under union shop agreements, labor unions must establish strict safeguards and procedures for ensuring that non-members’ dues are not used to support certain political and ideological activities which are outside the scope of normal collective bargaining activities. The “union shop” or “agency shop” agreement essentially provides that employees do not have to join the union, but must support the union in order to retain employment by paying dues to defray the costs of collective bargaining, contract administration, and grievance matters. In a line of decisions, the Supreme Court has addressed this issue and has concluded that compulsory union dues of non-members should not be used for political and ideological activities which are outside the scope of the unions’ collective bargaining and labor-management duties when non-members object to such use. Seven Supreme Court decisions have held that such union dues exacted from dissenting non-members were not to be used for political and ideological purposes and would have to be refunded in an expedited way to dissenting nonmembers in accordance with proper procedural safeguards: (1) International Association of Machinists v. Street, 367 U.S. 740 (1961); (2) Railway Clerks v. Allen, 373 U.S. 113 (1963); (3) Abood v. District Board of Education, 431 U.S. 209 (1977); (4) Ellis v. Brotherhood of Railway Clerks, 466 U.S. 435 (1984); (5) Chicago Teachers Union v. Hudson, 475 U.S. 292 (1986); (6) Communications Workers of America v. Beck, 487 U.S. 735 (1988); and Lehnert v. Ferris Faculty Association, 500 U.S. 507 (1991). In the 105th Congress, bills have been introduced which would allow labor organizations to use these dues and fees for political purposes only when the employee affirmatively, in writing, so authorizes. Other bills provide that labor organizations disclose the amount of union dues and agency fees used for political purposes and other specified activities. Finally, there are some bills that would repeal those provisions that require an employee join a union as a condition of employment. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Labor Union Political Activity Under the Federal Election Campaign Act of 1971, as Amended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Background of Union Security Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Supreme Court Decisions Concerning The Use of Compulsory Union Dues for Political Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Congressional Legislation Prohibiting the Use of Compulsory Union Dues for Certain Political Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Digest of Legislation from the 105th Congress . . . . . . . . . . . . . . . . . . . . . . . . . H.R. 59 (National Right to Know Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . H.R. 928 (Union Members Right to Know Act of 1997) . . . . . . . . . . . . . H.R. 1303 (Restoring Trust in Government Act of 1997) . . . . . . . . . . . . . H.R. 1625 (Worker Paycheck Fairness Act) . . . . . . . . . . . . . . . . . . . . . . . S. 9 (Paycheck Protection Act) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S. 179 (Campaign Finance and Reform Disclosure Act of 1997) . . . . . . . . S. 497 (National Right to Work Act of 1997) . . . . . . . . . . . . . . . . . . . . . . 14 14 14 14 15 15 15 16 The Use Of Union Dues For Political Purposes: A Legal Analysis Introduction In 1988, the Supreme Court, in Communications Workers of America v. Beck (hereinafter referred to as the Beck case), ruled against organized labor and held that non-union employees could not be required to pay full union dues if some of those funds were to be used for political and other ideological purposes.1 Under § 8(a)(3) of the National Labor Relations Act (NLRA),2 a labor union and an employer can enter into a contractual agreement requiring all employees in the bargaining unit to pay union dues as a condition of employment no matter whether such employees became union members or not. The Supreme Court in Beck concluded that § 8(a)(3) of the NLRA (1) does not permit a labor union to expend funds on non-related union activities such as lobbying and political activities when dues-paying non-member employees object and (2) authorizes only those dues and fees necessary to the duties relating to labor-management relations.3 In 1991 the Supreme Court in Lehnert v. Ferris Faculty Association, expanded the scope of the Beck holdings to include also public sector employees so that such employees may not be compelled to subsidize political or ideological activities of public employee unions.4 During the 1992 presidential election year, on April 13, 1992, President George Bush issued Executive Order 12800 requiring federal contractors to post notices informing employees of their rights under the Beck decision. Non-union employees of federal contractors were to be told that the union dues that they pay may not be used to support political activities which they were opposed to, and the Secretary of Labor was to issue rules providing for financial disclosure and reporting requirements for labor unions in order to provide for some form of enforcement of the Beck holdings.5 However, when President Bill Clinton took office, he repealed former President Bush’s Executive Order when he issued Executive Order 12836 on 1 487 U.S. 735 (1988). 2 Codified at 29 U.S.C. § 158(a)(3). 3 Beck, supra, at 751-54, 762-63. 4 500 U. S. 507, 522 (1991). 5 Exec. Order No. 12800, April 13, 1992, Notification of Employee Rights Concerning Payment of Union Dues or Fees, 1992 U.S.C.C.A.N. B 22. CRS-2 February 1, 1993 providing for the revocation of certain executive orders concerning federal contracting.6 Prior to the Beck and Lehnert decisions, the Supreme Court regularly re-visited this issue in a line of decisions which held that labor unions cannot use dissenting non-union employees’ dues for political and ideological activities outside the scope of the activities related to collective bargaining. Such cases include: (1) International Association of Machinists v. Street, 367 U.S. 740 (1961); (2) Railway Clerks v. Allen, 373 U.S. 113 (1963); (3) Abood v. District Board of Education, 431 U.S. 209 (1977); (4) Ellis v. Brotherhood of Railway Clerks, 466 U.S. 435 (1984); and (5) Chicago Teachers Union v. Hudson, 475 U.S. 292 (1986). These cases will be discussed in more detail in part four of this report. Although this report will not discuss the case in more detail since it does not concern unions, one should also note that in Keller v. State Bar of California, 496 U.S. 1 (1990), the Supreme Court held that an integrated state bar, that by statute is the regulatory body for the legal profession in that state and requires the payment of mandatory dues by its members, is analogous to a union, and therefore the use by the bar of mandatory dues to fund political and ideological activities, where such expenditures were not necessarily and reasonably incurred for the purpose of regulating the legal profession or improving the quality of the legal services available to the people of the state, violated the integrated bar members’ First Amendment rights. Labor Union Political Activity Under the Federal Election Campaign Act of 1971, as Amended Generally, political activities by labor unions in federal elections are prohibited.7 The Labor Management Relations Act of 1947 prohibited labor union contributions to federal election campaigns.8 The Federal Election Campaign Act of 1971, as amended (FECA), generally continued this broad prohibition of labor union activities and funds in federal elections. However, the FECA provided for three broad exemptions to this general prohibition of labor union political activities in federal elections: (1) communications by a labor organization directed at its members or their families on any subject: (2) non-partisan voter registration and get-out-the-vote activities by a labor organization which are directed to its members or their families: and (3) the establishment and administration of a political action committee or separate segregated fund (commonly known as a PAC or SSF) for the purpose of the solicitation of contributions to such fund for political purposes.9 Generally, any other type of political activity by labor unions in federal elections would be prohibited 6 Exec. Order No. 12836, Feb. 1, 1993, Revocation of Certain Executive Orders Concerning Federal Contracting, 1993 U.S.C.C.A.N. B 24. 7 2 U.S.C. § 441b(a) (prohibiting contributions and expenditures by labor organizations). 8 Ch. 120, Tit. III, § 304, 61 Stat. 136, 159 (1947) (Now codified at 2 U.S.C. § 441b(a)). 9 2 U.S.C. § 441b(b)(2). CRS-3 under the FECA, and labor union contributions and expenditures concerning federal elections outside these exceptions would be prohibited. Various advisory opinions of the Federal Election Commission (FEC) have further clarified the proper roles of labor unions in federal elections. A teacher’s union, according to the FEC, could pay for the expenses of interns working in a Member of Congress’ mobile office as long as their activities were non-political and exclusively related to the performance of the Member’s official duties.10 Also it was concluded that a labor union could circumvent political contribution requirements if it bought voter poll results from a candidate’s campaign committee.11 A labor organization could not pay for travel and living expenses of its members who were serving as delegates to a national nominating convention.12 Funds received by a labor PAC for the sale of membership lists would be treated as a contribution to the PAC.13 A labor union’s PAC funds could be used to pay the expenses of lobbying activities conducted by labor union officials.14 A labor union’s contributions to state and local candidates should specify that such funds cannot be used for federal candidates.15 And a labor union PAC can solicit employees of subsidiary corporations for contributions when the corporate PAC solicits such employees even though the employees are not union members and the subsidiary corporation is not subject to a union contract.16 Recently, the FEC revised its regulations concerning the scope of a labor organization’s participation in federal elections. Most notably, the restrictions placed on labor union communications to the general public, and to union participation in voter registration and get-out-the vote-drives, are directed at preventing express advocacy17 and coordination with any candidate or political party. The revised regulations permit a labor organization to make registration and get-out-the-vote (GOTV) communications to the general public if such communications: (1) do not expressly advocate the election or defeat of a clearly identified candidate(s), or candidates of a clearly identified political party or (2) are not prepared or distributed with the coordination of a candidate(s) or political party (will subsequently be 10 FEC Advisory Opinion No. 1979-25, June 19, 1979. 11 FEC Advisory Opinion No. 1980-19, March 14, 1980. 12 FEC Advisory Opinion No. 1980-64, July 9, 1980. 13 FEC Advisory Opinion No. 1981-7, March 9, 1981. 14 FEC Advisory Opinion No. 1983-4, Feb. 18, 1983. 15 FEC Advisory Opinion No. 1988-18, May 20, 1988. 16 FEC Advisory Opinion No. 1990-25, Dec. 14, 1990. 17 Expressly advocating is defined as any communication: (1) which uses specific phrases, such as “vote for” or “vote against,” in order to urge the election or defeat of a clearly identified candidate; or (2) which a reasonable person would interpret as advocating the election or defeat of a clearly identified candidate. 2 C.F.R. 100.22. The courts are currently at odds over the second factor of this definition. See FEC v. Furgatch, 807 F.2d 857 (9th Cir. 1987), cert. denied, 484 U.S. 850 (1987), Maine Right to Life Committee v. FEC, 914 F.Supp. 8 (D. Maine 1996), aff’d 98 F.3d 1 (1st. Cir. 1996). CRS-4 referred to as “coordinated” or “coordination”).18 A labor union may also distribute to the general public, official registration and voting information and forms and absentee ballots (if permitted by applicable State law) provided that such distributions do not contain express advocacy and are not coordinated.19 A labor organization may also donate funds to State or local government agencies to help defray the costs of printing and distributing these materials.20 Moreover, a labor organization may also prepare and distribute to the general public, the voting records of Members of Congress and voter guides, provided that the these materials do not contain express advocacy and that there was no coordination involved.21 The revised regulations also permit a labor organization to support or conduct voter registration or GOTV drives aimed both at employees outside its restricted class22 and the general public, provided that: (1) the labor organization does not expressly advocate the election or defeat of a clearly identified candidate(s), or candidates of a clearly identified political party; (2) the labor organization does not coordinate with any candidate(s) or political party; (3) the services are not primarily directed at individuals favored by the labor organization; (4) the services are made without regard to the voter’s political preference; (5) the workers conducting such services are not paid only to register or transport voters supporting one or more particular candidates or political party; and (6) at the time these services are provided, the labor organization notifies, in writing, those receiving information or assistance regarding registration or voting of the availability of these services without regard to a potential voter’s political preference.23 Lastly, a labor organization may donate funds to qualified nonprofit organizations to stage candidate debates.24 Moreover, various federal court decisions have determined the legality of certain types of labor union activities involving federal elections. For example, in a 1957 case, the Supreme Court held in United States v. United Automobile Workers that the expenditure of labor union funds in connection with a federal election would be prohibited to the extent that such activity amounted to electioneering for a particular candidate or political party.25 The Court asserted that the legislative history of the provision of the Federal Corrupt Practices Act prohibiting labor union contributions and expenditures in federal elections would disallow the expenditure of union dues 18 11 C.F.R. § 114.4(c)(2). 19 11 C.F.R. § 114.4(c)(3). 20 Id. 21 11 C.F.R. § 114.4(4), (5). 22 A labor organization’s restricted class is its members and executive or administrative personnel, and their families. 11 C.F.R. § 114.1(j). 23 11 C.F.R. § 114.4(d). 24 11 C.F.R. § 114.4(f)(3). 25 352 U.S. 567, 592 (1957). CRS-5 to pay for commercial broadcasts that are designed to urge the public to elect a certain candidate or political party.26 In United States v. Boyle, in 1973, the United States Court of Appeals for the District of Columbia Circuit, in affirming the conviction of a labor union president for consenting to unlawful contributions to federal candidates, held that there are compelling governmental reasons for justifying the federal prohibition against labor union contributions and expenditures in federal elections despite First Amendment free speech and association rights of the labor union.27 The Court of Appeals in Boyle concluded that for a labor union disbursement to be illegal under federal law, it must be shown that the labor organization: (1) made a contribution or an expenditure, (2) in connection with a federal election, and (3) for the purpose of active electioneering.28 In a 1972 Supreme Court decision in Pipefitters v. United States, reversing certain convictions of labor union officers concerning the use of a political fund, the Court concluded that a legitimate labor union political fund must be separate from the labor union in that there must be a strict segregation of the political fund’s monies from the union’s dues and assessments.29 The Court noted that, while former 18 U.S.C. § 610, which prohibited labor organizations from making contributions or expenditures connected with a federal election, might be interpreted to prohibit the use of union funds to establish and maintain a union political fund for the purposes of soliciting and making political contributions in federal campaigns, the provision of the Federal Election Campaign Act of 1971 allowing labor unions to establish separate segregated funds or political action committees may have impliedly repealed § 610.30 Background of Union Security Agreements At issue is whether compulsory labor union dues may be used by a union for political purposes, and, if so, under what restrictions or conditions may such dues be used. But in order to understand that issue properly, it is necessary to understand the various types of union security agreements between employers and labor unions which require employees to provide some form of financial support to the unions as a condition of employment. One type of security agreement is the so-called “closed shop” whereby the employer agrees to employ only members in good standing with the union. This type of agreement was recognized by the National Labor Relations 26 352 U.S. at 585-87. 27 482 F.2d 755, 758 (D.C. Cir. 1973), cert. den. 414 U.S. 1076 (1973). 28 Id., 760. 29 407 U.S. 385, 414 (1972). 30 Id., 432. CRS-6 Act of 1935 (NLRA), popularly known as the Wagner Act,31, but was later prohibited by the Labor Management Relations Act of 1947.32 Another type of a union security agreement is the agency shop agreement whereby the employees do not have to join the union or have full union membership in good standing within thirty days, but must support the union by paying a sum of money equivalent to union dues in order to retain employment.33 Most agency shop agreements provide for a service fee which includes an initiation fee as well as certain dues which are paid by full union members. Another form of a union security agreement is the union shop, which does not condition employment on union membership, but requires that employees join the union after a certain grace period on the job and remain members during the term of the labor-management agreement.34 A “maintenance of membership” clause in a union contract is another form of union security which imposes no obligation to join the union, but requires that one remain a member once voluntarily becoming one until the expiration of the collective bargaining agreement.35 Other less formal union security agreements are: (1) a dues-checkoff provision, (2) a fair-share agreement, or (3) a hiring-hall provision. The dues-checkoff provision does not require anyone to join a union or retain union membership, but simply requires that the employer shall deduct from the salary of the union members their union dues and credit that amount to the union. A fair-share agreement would require all employees to pay the prorated share of the union’s collective bargaining and representational expenses, but not irrelevant expenses. The hiring-hall provision is a device for job security in certain industries such as in the maritime and construction industries whereby the union and the employer agree that the union-hall is to be the exclusive mode for job referrals.36 31 See ch. 372, § 8(3), 49 Stat. 452 (1935). See Radio Officers Union v. NLRB, 347 U.S. 17, 41 (1954) holding that the legislative history of the NLRA indicated that Congress intended the utilization of union security agreements to compel the payment of union dues and fees. 32 The Labor Management Relations Act of 1947 is popularly titled the Taft-Hartley Amendments of 1947. See ch. 120, § 101, 61 Stat. 140-141 (1947), amending § 8(3) of the NLRA and renumbering it § 8(a)(3). This section is codified at 29 U.S.C. § 158(a)(3). 33 See generally, Joseph Jenkins, LABOR LAW, v. 2, § 4.9 (Cincinnati: W.H. Anderson Co., 1969). 34 Under the National Labor Relations Act, as amended, union shop agreements are permitted whereby employees must obtain membership in the union within 30 days of being employed, or within 30 days after the effective date of the agreement, whichever is later. See 29 U.S.C. § 158(a)(3). However, under the Railway Labor Act (RLA), the union security requirements are substantially the same as in NLRA except that the period whereby employees are required to join a union is 60 days rather than 30 days. See 45 U.S.C. §§ 151-158. 35 Robert Gorman, Labor Law, Unionization and Collective Bargaining, 641-42 (St. Paul: West Publishing Co., 1976). 36 Id., 642-43. CRS-7 In 1956, the Supreme Court in a unanimous opinion in Railway Employees’ Dept., A.F.L. v. Hanson upheld the union shop provision of § 2, Eleventh of the Railway Labor Act, as amended,37 which provided that notwithstanding the law of any state, a carrier and a labor organization may make an agreement requiring all employees within a stated period of time to become members of the labor organization provided that there is no discrimination against any employee and provided further that membership is not denied or terminated for any reason other than the non-payment of periodic union dues, fees, and assessments.38 The Court found that the union shop provision of § 2, Eleventh was within the power of the Congress under the Commerce Clause and did not violate either the First or the Fourteenth Amendments.39 The Hanson Court noted that it is argued that the union shop agreement forces employees into ideological and political associations which violate their freedom of conscience, freedom of association, and freedom of thought. However, the Court intimated that if the union shop arrangement were used to impose membership conditions other than the payment of periodic dues, initiation fees, and assessments, which involve ideological or political associations which members may be opposed to, there may be First Amendment problems which, while not on the record and not addressed by the Court, might need to be addressed in the future.40 Supreme Court Decisions Concerning The Use of Compulsory Union Dues for Political Purposes Several years after the Supreme Court upheld the validity of union security agreements, it was faced with the issue of whether a union may use funds raised by it pursuant to a union-shop agreement41 to support candidates for public office against the wishes of dissenting employees. The Court, in International Association of Machinists v. Street,42 found that such expenditures fall outside of the scope of reasons which justified union shop agreements.43 The Court asserted, however, that any dissent by employees to the use of labor union funds for political causes is not to be presumed, but must be made known by them to the labor union. Moreover, only those employees who had identified themselves as being opposed to the political uses of their funds would be entitled to relief.44 37 64 Stat. 1238, codified at 45 U.S.C. § 152, Eleventh. 38 351 U.S. 225, 228, 238 (1956). 39 Id., 238. 40 Id., 236. 41 The union shop authorization in the Street case was pursuant to § 2, Eleventh of the Railway Labor Act (64 Stat. 1238, 45 U.S.C. § 152, Eleventh). 42 367 U.S. 740 (1961). 43 Id. at 767. 44 Id., 774. CRS-8 The Court was quick to note that this holding would not curtail the traditional political activities of labor unions, but required only that labor unions must not support those activities against the expressed wishes of dissenting employees.45 The Court also suggested the following two possible remedies: (1) an injunction against expenditures for political causes opposed by complaining employees in the amount of union dues exacted from them which is the proportion of the union’s total expenditures for political purposes to the union’s total budget, or (2) restitution to each dissenting employee of the portion of his or her dues which was spent by the union for political purposes.46 In 1963, the Supreme Court in Railway Clerks v. Allen reaffirmed that, under § 2, Eleventh of the Railway Labor Act, labor unions cannot, over an employee’s objection, use exacted funds to support political activities which such employees oppose.47 The Allen Court extended Street, finding that “it would be impractical to require a dissenting employee to allege and prove each distinct union political expenditure to which he objects,”48 but retained its requirement that such opposition be made known to the union by each dissenting employee. The Allen Court reaffirmed the remedies suggested by the Street Court, but offered suggestions of its own. It suggested a practical decree which would order: (1) a refund to the dissenting employee of a portion of the exacted dues in the same proportion that the political expenditures bore to the total union expenditures, and (2) a future reduction of dues from the dissenting employee by the same proportion.49 The Court placed the burden of determining the appropriate proportions on the unions since they were in possession of the relevant materials. In 1977, the Supreme Court, in Abood v. Detroit Board of Education, extended Street and Allen to encompass dissenting non-union public employees,50 basing its decision, however, on constitutional grounds that were not at issue in the prior cases. While a labor organization can constitutionally expend funds for the expression of political and ideological views which are not germane to its collective-bargaining activities, it can only finance such expenditures from the dues of non-dissenting employees.51 Dissenting, non-union employees have a constitutional First Amendment right to prevent a labor union from using a proportionate share of their service fees for certain political and ideological activities unrelated to the union’s collective-bargaining activities.52 45 Id., 770. 46 Id., 775. 47 373 U.S. 113, 118-19 (1963). 48 Allen, supra, at 118. 49 Id., 122. 50 431 U.S. 209 (1977). 51 Id., 235-36. 52 Id., 234. Cf., Buckley v. Valeo, 424 U.S. 1, 22-23 (1976) in which the Supreme (continued...) CRS-9 The Abood Court noted that in determining a remedy, the objective of the Court would be to devise a method to prevent the compulsory subsidization of political and ideological activities by dissenting, non-union employees without restricting the union’s ability to require all employees to pay for the union’s collective-bargaining activities. As it had previously in Street and Allen, the Abood Court, in remanding the case for further proceedings, suggested remedies which included: (1) a refund of that portion of the exacted dues in the proportion that union political expenditures bore to the total union expenditures and (2) a reduction of future union dues to dissenting non-union employees by the same proportion. In Ellis v. Brotherhood of Railway Clerks, the Court was asked to determine the validity of a rebate scheme, in which a labor union collected dues from employees and used them for certain political and ideological activities, later paying a rebate to employees who dissented from the political and ideological use of such dues.53 The Court noted that under the rebate scheme the union obtains an involuntary loan for those political and ideological activities to which the dissenting employees object.54 Since there were readily available acceptable alternatives to such union borrowing, such as advance reduction of dues and/or interest-bearing accounts, the Court found that a union cannot be allowed to use the dissenting employees’ funds even temporarily. Thus, the Court found that although the rebate scheme reduces the statutory violation, it does not eliminate the violation.55 In reaching its decision, the Court developed the following test for determining whether certain activities must be paid for by dissenting employees subject to a labormanagement agreement: “... the test must be whether the challenged expenditures are necessarily or reasonably incurred for the purpose of performing the duties of an exclusive representative of the employees in dealing with the employer on labormanagement issues.” Under such a standard dissenting employees could be required to pay their fair share of: (1) the direct costs of negotiating a collective bargaining contract; (2) the direct costs of administering such a contract; (3) the costs of settling grievances and disputes; and (4) certain costs of activities or undertakings by a labor union to implement or effectuate the duties of the labor union as the exclusive representative of the employee.56 The Court found that dissenting employees could be charged for such union activities as: (1) conventions which are essential to the labor union’s discharge of its duties as a collective-bargaining agent; (2) labor union social activities which are reasonably related to the union’s collective bargaining activities; (3) labor union publications which report on labor-management relations and collective bargaining activities; (4) organizing expenses for the purpose of 52 (...continued) Court held that contributions to organizations for the purpose of spreading a political message were protected by the First Amendment. 53 466 U.S. 435 (1984). 54 Id., 443. 55 Id., 444. 56 Id., 448. CRS-10 making the labor union stronger; and (5) litigation expenses incurred in negotiating and administering a labor contract or in settling grievances and disputes.57 Two years later, in Chicago Teachers Union v. Hudson,58 the Court was presented with an issue involving the procedural safeguards related to the collection of agency fees by a union. Under the agency shop agreement between the union and the Chicago Board of Education, “proportionate share payments” which approximated 95 percent of the regular union dues were deducted from nonmembers’ paychecks. The union established a three-stage procedure with the union’s administration to consider non-members’ objections to such deductions. The Court found that the union’s procedure failed to minimize the risk that the exacted fees of non-union employees might be used for impermissible ideological and political purposes.59 The Court concluded that this procedure was inadequate even though the exacted funds of the non-members were placed in an escrow account. The procedure contained three fundamental flaws: (1) failure to minimize the risk that non-union employees’ contributions might be temporarily used for political and ideological purposes; (2) failure to provide sufficient information to non-members about the basis of their proportionate shares and the method of determining their “advance reduction of dues”; (3) failure to provide a reasonably prompt decision by an impartial arbitrator in determining whether or not a non-member’s dues should be further reduced.60 Accordingly, the Supreme Court held that the constitutional requirements for the union’s collection of agency fees from non-members would include: (1) an adequate explanation for the basis of the fee; (2) a reasonably prompt opportunity to challenge the amount of the fee before an impartial arbitrator; and (3) the establishment of an escrow fund for the amounts reasonably in dispute while any challenges are pending. The Supreme Court remanded the case to the district court for further proceedings consistent with such holdings.61 Like the prior decisions, the 1988 Supreme Court decision in Communications Workers of America v. Beck held that § 8(a)(3) of the National Labor Relations Act does not permit a labor union to spend funds exacted from dues-paying non-union employees on certain activities unrelated to collective bargaining when those employees object to such expenditures.62 The Court found that § 8(a)(3) of the National Labor Relations Act was like § 2, Eleventh of the Railway Labor Act in that it authorized the exaction of only those dues which would be necessary to 57 Id., 448-53. 58 475 U.S. 292 (1986). 59 Id., 309. 60 Id., 304-07. 61 Id., 310. 62 487 U.S. 735 (1988). CRS-11 “performing the duties of an exclusive [bargaining] representative of the employees in dealing with the employer on labor-management issues.”63 In examining the legislative history of § 8(a)(3), the Court found that Congress wished to afford non-members adequate protection by allowing the collection of only those fees which would be necessary to finance collective bargaining activities. Even though Congress under § 8(a)(3) did not in any way limit the uses for which the unions could expend such fees exacted from non-members, such silence was not to be interpreted to mean that there was congressional acquiescence in the use of funds for activities that were unrelated to collective bargaining activities.64 Congress’ purpose in providing for compulsory unionism was to force employees to bear their fair share of the costs related to negotiations, administration of collective bargaining agreements, and the settlement of disputes, but not to support union political activities which they oppose. Under § 8(a)(3), Congress’ justification for the union shop would limit the union’s expenditures which can be passed on to non-members only to those relating to labor-management relations. The Court concluded that it was not the intent of Congress under § 8(a)(3) of the National Labor Relations Act to allow unions in agency shop agreements to have free rein to exact dues from non-members in any amounts they please and then to spend them on activities which are unrelated to collective bargaining activities. Beck, however, does not extend to union members. The only way that such an employee may fall under the ruling in Beck is to first resign his union membership and then object to the use of his exacted dues for political purposes. The last case concerning the use of agency fees decided by the Supreme Court was Lehnert v. Ferris Faculty Association.65 In Lehnert, the Court upheld the constitutionality of the Michigan statute providing for agency-shop agreements in the public sector, and set forth a three-part test for determining permissible non-political and non-ideological uses for the service fee that non-members are required to pay the unions for their services as sole collective bargaining agent for all employees. The Michigan statute applied to faculty members of Ferris State College, a public educational institution, who are represented by the Ferris Faculty Association (FFA), a local bargaining unit affiliated with the Michigan Education Association (MEA) and the National Education Association (NEA). The non-union faculty brought suit to challenge certain uses of the service fees which they were compelled to pay the FFA and which were equivalent to the amount of dues required of a union member. They claimed that the use of fees for purposes other than the negotiation and administration of the collective bargaining agreement was in violation of their rights under the First and Fourteenth Amendments of the Constitution. The Supreme Court established a test, derived from the preceding line of cases, for determining whether a particular expenditure of union funds could be charged to non-member employees. Chargeable uses must: (1) be germane to collective 63 Id., 752, quoting Ellis v. Railway Clerks, 466 U.S. at 447-48. 64 Id., 751-54. 65 500 U.S. 507 (1991). CRS-12 bargaining activities; (2) be justified by the governmental interest in the maintenance of labor peace and the prevention of “free riders” who benefit from the union’s collective bargaining activities without contributing to the costs of such activities; and (3) not add significantly to the burdening of free speech inherent in the existence of an agency or union shop.66 The Court also rejected the petitioners’ contentions that they could only be charged for collective bargaining activities undertaken directly for their local unit and that there must be a direct link between an activity and a tangible benefit to the local unit.67 Four activities were found by the Supreme Court to be chargeable to the nonmembers. First, non-members should subsidize NEA program expenditures for collective-bargaining services provided in states other than Michigan and reportage of such activities in the MEA publication, the Teacher’s Voice. Second, nonmembers may be charged for the reportage of general information in the Teacher’s Voice, such as news about teaching and education generally, professional development, unemployment, job opportunities, MEA award programs, and other matters that are neither public nor political, benefit all, and do not additionally burden First Amendment rights.68 Third, non-members may be charged for the cost of participation by local-unit delegates in the NEA and MEA conventions and the Coordinating Council meeting. And finally, strike preparations are chargeable to non-members, even where the contemplated strike would be illegal under state law if it actually occurred, because the strike preparations constitute part of collective bargaining strategy and do not additionally burden First Amendment rights.69 The Supreme Court also ruled that four other uses may not be charged constitutionally to the non-members.70 First, lobbying other than for ratification and implementation of the collective bargaining agreement is not chargeable to nonmembers.71 Second, a union program aimed at securing funds for public education in Michigan and reportage on this program in the Teacher’s Voice were not chargeable to non-members72 because they were public-relations and lobbying-type activities unrelated to ratification and implementation of the collective-bargaining agreement. Third, litigation that does not concern the local bargaining unit and reportage of such litigation in union publications may not be supported by funds from non-members.73 Finally, public relations activities of the local unit which are 66 500 U.S. at 519. 67 500 U.S. at 522-24. 68 500 U.S. at 529. 69 500 U.S. at 530-32. 70 Although a majority of the Court agreed on the judgments enumerated in the opinion with regard to whether a use could be charged to non-members, several opinions used different analyses to arrive at the same conclusion. The rationale given in the text above is that of Justice Blackmun, joined by Chief Justice Rehnquist and Justices White and Stevens. 71 500 U.S. 519-22, 559-60. 72 500 U.S. at 527, 559-60. 73 500 U.S. at 528, 555 & 560. CRS-13 designed to improve the image of the teaching profession may not be charged to nonmembers.74 Congressional Legislation Prohibiting the Use of Compulsory Union Dues for CertainPolitical Purposes In the 105th Congress, several bills have been introduced which are aimed at a labor organization’s ability to use union dues and agency fees for political purposes. Several of the bills would allow labor organizations to use these dues and fees for political purposes only when the employee affirmatively, in writing, so authorizes.75 Other bills provide that labor organizations disclose the amount of union dues and agency fees used for political purposes and other specified activities.76 Finally, there are some bills that would repeal those provisions that require an employee join a union as a condition of employment.77 An examination of the bills introduced in the 104th Congress reveals that similar provisions were under consideration.78 In other recent Congresses, legislation was introduced which provided for certain notification requirements by labor organizations to all of their employees within their bargaining unit or units at least annually, and to new employees within 30 days, concerning information relating to the use of dues for political or lobbying expenses.79 Moreover, such legislation would have prohibited the use of compulsory union dues of non-union members for such political purposes as: (1) voter registration drives; (2) get-out-the-vote campaigns; (3) campaign materials; (4) partisan political activities used in connection with any broadcasting, direct mail, newspaper, magazine, billboard, telephone bank, or similar political communication or advertising; (5) establishing, administering, or soliciting contributions to a separate segregated fund or PAC; (6) any other expenditure in connection with any federal election including primary elections, political conventions or caucuses.80 The proposals under consideration would mostly codify the Supreme Court’s decisions in Street, Abood, Ellis, Chicago Teachers Union, Beck, and Lehnert. These decisions have interpreted the NLRA and the RLA as restricting the use of compulsory union dues by labor organizations, providing for the disclosure of union expenditures, and notifying employees of their right not to join a union as a condition 74 500 U.S. at 528-9, 559. 75 See generally, H.R. 1303; S.9; S. 179; 105th Cong., 1st Sess. 76 See generally, H.R. 928; H.R. 1303; S. 179; 105th Cong., 1st Sess. 77 See generally, H.R. 59; S. 497; 105th Cong., 1st Sess. 78 See H.R. 3208; H.R. 3543; H.R. 3580; H.R. 3820; S. 581; S. 1788; S. 1953; 104th Cong., 2d Sess. 79 See generally, S. 7; H.R. 3470;, 103d Cong., 1st Sess.. See also, H.R. 708, 103d Cong., 1st Sess.; H.R. 2307; H.R. 3106; H.R. 3470, 103d Cong. 1st Sess. 80 See, e.g., H.R. 2895; and S. 615, 100th Cong., 1st Sess. (1987); S. 2595, 101st Cong., 2d Sess. (1990); cf., H.R. 5033, 101st Cong., 2d Sess. (1990). CRS-14 of employment (the payment of agency dues or fees would be required). However, the various proposals tend to go beyond the Court’s interpretations of the statutes. One major difference, which appears in several bills, is the provision that prohibits labor organizations from collecting any dues or fees not related to collective bargaining, contract adminstration, or grievance adjustment unless the employee has agreed, in writing, to pay such dues or fees. This provision would, apparently, allow all employees, not only dues paying non-member employees, to decide whether their dues or fees can be used for unrelated purposes. Two other proposals, which differ from judicial interpretations, would eliminate those provisions in the NLRA and the RLA which permit employers, pursuant to a collective bargaining agreement (union security agreement), to require an employee to join a union or pay union dues or fees as a condition of employment. Digest of Legislation from the 105th Congress H.R. 59 (National Right to Know Act) This bill amends the National Labor Relations Act and the Railway Labor Act to repeal those provisions that permit employers, pursuant to a collective bargaining agreement (union security agreement), to require employees to join a union or pay union dues or fees as a condition of employment (including provisions permitting railroad carriers to require, pursuant to such an agreement, payroll deduction of union dues or fees as a condition of employment). H.R. 928 (Union Members Right to Know Act of 1997) This bill amends the Labor-Management Reporting and Disclosure Act to require labor organizations to include in their reports to the Secretary of Labor, information regarding the use of employee dues and fees, including itemization of sums spent on political and other specified activities. The bill would also require labor organizations to provide the employees they represent with complete copies of the annual report. H.R. 1303 (Restoring Trust in Government Act of 1997) Provides that a labor organization may not collect any dues or fees not related to collective bargaining, contract administration, or grievance adjustment unless the employee has agreed, in writing, to pay such dues or fees. Such an agreement must be renewed annually. The bill also requires a labor organization to post notices informing employees of the above rights and other rights under § 7 of the National Labor Relations Act; and also amends § 201(b) of the Labor-Management Reporting and Disclosure Act (codified at 29 U.S.C. § 431(b)) to require labor organizations to report, to all members and nonmembers, expenses, by function classification, in sufficient detail to allow members and nonmembers to determine whether such expenses were related to collective bargaining, contract administration, or grievance adjustment. CRS-15 H.R. 1625 (Worker Paycheck Fairness Act) Provides that a labor organization may not collect any dues or fees not related to collective bargaining, contract administration, or grievance adjustment unless the employee has agreed, in writing, to pay such dues or fees. Such an agreement shall remain in effect until revoked. This bill sets forth the civil liability of a labor organization that violates its provisions. The liability consists of specified damages, attorney’s fees and other reasonable costs. A civil action may be brought in any Federal or State court of competent jurisdiction by any one or more employees for and on behalf of (a) the employees, or (b) the employees and other employees similarly situated. There is a 2-year statute of limitation which may be extended by a year where a willful violation has occurred. The bill also requires a labor organization to post notices informing employees of the above rights and other rights under § 7 of the National Labor Relations Act; and also amends § 201(b) of the Labor-Management Reporting and Disclosure Act (codified at 29 U.S.C. § 431(b)) to require labor organizations to report, to all members and nonmembers, expenses, by function classification, in sufficient detail to allow members and nonmembers to determine whether such expenses were related to collective bargaining, contract administration, or grievance adjustment. S. 9 (Paycheck Protection Act) This bill amends § 316 of the Federal Election Campaign Act (2 U.S.C. § 441b) to make it unlawful, except with separate, prior, written, voluntary authorization of each individual, for labor organizations to collect from or assess its members or nonmembers any dues, fees, or other payment if any part of it will be used for political activities. Authorization by members or nonmembers will remain in effect until revoked and may be revoked at any time. S. 179 (Campaign Finance and Reform Disclosure Act of 1997) Provides that a labor organization may not collect any dues or fees not related to collective bargaining, contract administration, or grievance adjustment unless the employee has agreed, in writing, to pay such dues or fees. Such an agreement must be renewed annually. This bill also requires a labor organization to post notices informing employees of the above rights and other rights under § 7 of the National Labor Relations Act. A copy of such notice shall also be given to each employee not later than 10 days after the first day of employment. The bill amends § 201(b) of the Labor-Management Reporting and Disclosure Act (codified at 29 U.S.C. § 431(b)) to require labor organizations to report, to all members and nonmembers, expenses, by function classification, in sufficient detail to allow members and nonmembers to determine whether such expenses were related to collective bargaining, contract administration, or grievance adjustment. CRS-16 S. 497 (National Right to Work Act of 1997) This bill amends the National Labor Relations Act and the Railway Labor Act to repeal those provisions that permit employers, pursuant to a collective bargaining agreement (union security agreement), to require employees to join a union or pay union dues or fees as a condition of employment (including provisions permitting railroad carriers to require, pursuant to such an agreement, payroll deduction of union dues or fees as a condition of employment).