Jan 23, 2009

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SCOTUS: Service Fees Can Cover National Union Litigation

The Supreme Court has issued a decision about the rights of non-union employees in unionized jobs.

See, even if a bargaining unit chooses to be represented by a union, individual employees have the right (usually) to not be in the union.  But the Court decided long ago that unions can collect “service fees” from these employees to cover the expense of representing them.

Since then, there have been numerous fights over just what service fees can cover.  The prevailing rule has been that service fees must be “necessarily or reasonably incurred for the purpose of performing the duties of an exclusive representative…dealing with the employer on labor-management issues.”  Ellis v. Railway Clerks, 466 U.S. 435 (1984).  In other words, service fees can be collected for negotiating the collective bargaining agreement or otherwise representing the workers with the employer, but they can’t be used for political purposes like fundraising or lobbying to which the workers might be opposed.

In a rare unanimous decision (a unanimous labor case?  Is that possible?) the Court held in Locke v. Karass (07-610) that unions can collect service fees that go to the union’s national affiliate to help pay for national litigation.

In the case, Maine state employees argued that using service fees for national union litigation violated their 1st Amendment right of free association by requiring them to fund lawsuits that they didn’t believe were right.

Citing and extensively quoting its prior case law on service fees, the Supreme Court disagreed, saying

[U]nder our precedent the Constitution permits including [national litigation] in the local’s charge to nonmembers as long as (1) the subject matter of the (extra-local) litigation is of a kind that would be chargeable if the litigation were local, e.g. litigation appropriately related to collective bargaining rather than political activities, and (2) the litigation charge is reciprocal in nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national’s resources used for costs of similar litigation on behalf of the contributing local if and when it takes place.

Other than showing a textbook-worthy example of the difference between e.g. and i.e. (it would behoove most lawyers to pay attention to just that), the reasoning stands up for the most part.  I will admit, I was skeptical of the union’s chances up until I read the opinion.  But this makes sense:  if the litigation advances the interests of the employee (part 1) and isn’t unfairly weighted against the local, such that other unions are receiving a greater benefit from the pooling (part 2), then paying for national litigation actually fits straight into the acceptable line of charges delineated by the Court’s prior rulings.

Indeed, the Court pointed out that in Ellis, which set the standard for what was or was not chargeable, it approved the union’s charge to cover the expense of a national convention.  It said:

We can find no sound basis for holding that national social activities, national convention activities, and activities involvedin producing the nonpolitical portions of national union publications all are chargeable but national litigation activities are not.

This language is a suprising, stark statement from a unanimous Supreme Court.

Usually 9-0 decisions are either easy or vague.  Chalk this one up to the first column, I guess.