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U.S. Supreme Court Deals Defeat to Public-Sector Unions

[UPDATED]

The U.S. Supreme Court on Thursday made it more difficult for public-employee unions to extract special fee assessments from non-members for expenses such as ballot battles.

And over sharp dissents, the court required such unions, including teachers' unions, to gain the "opt-in" consent of non-members to face such special fees, instead of the more prevalent practice of making the employees take steps to "opt out."

"When a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent," Justice Samuel A. Alito Jr. wrote for the court in Knox v. Service Employees International Union.

It was the latest defeat for teachers' unions and other public-sector labor organizations in recent years at the high court, adding to their other recent woes in the political arena in a number of states. The vote was 7-2 on the basic issue of whether the unions must provide an extra Hudson notice for special assessments. The accounting statements are named for a 1986 decision known as Chicago Teachers Union v. Hudson.

But the court effectively voted 5-4 in favor of the idea that the unions may not extract funds from nonmembers without their "affirmative consent."

"We're very concerned about that part of the opinion," Justice Stephen G. Breyer said in reading part of his dissent from the bench on Thursday. His dissent on the special-notice and "opt-in" requirements was joined by Justice Elena Kagan.

Justice Sonia Sotomayor, in an opinion concurring in the judgment joined by Justice Ruth Bader Ginsburg, said she agreed that a special notice was required for special assessments intended to fund "solely political lobbying efforts."

But she said that with the "opt-in" ruling, Justice Alito and the rest of his majority—Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy, and Clarence Thomas—was breaking "our own rules" to "address unnecessarily" a constitutional issue that wasn't fully briefed and argued.

"Moreover, while the majority's novel rule is, on its face, limited to special assessments and dues increases, the majority strongly hints that this line may not long endure," Sotomayor said.

The case involves the intricate area of labor law involving the "agency fees," or service fees that public-sector unions charge nonunion members for collective bargaining benefits and other permissible costs. Several of the Supreme Court's key precedents in this area involve teachers' unions, though the case decided on Thursday arose from a unit of the SEIU that represents California state employees.

The high court has sided with anti-union forces on related issues in several recent cases, and the new decison is likely to be influential as teachers' unions and other public-employee labor organizations gear up to respond to state legislative measures aimed at curbing their collective bargaining rights.

The 3.2 million-member National Education Association filed a friend-of-the-court brief on the SEIU's side, as did the AFL-CIO, of which the 1.5 million-member American Federation of Teachers is affiliated.

The SEIU case involves a 2005 special assessment charged to union members and nonmembers alike for some political activities, including to fight two anti-union ballot measures backed by then-Gov. Arnold Schwarzenegger.

The union approved the Political Fight-Back Fund for such political expenses as television and radio advertising, direct mail, voter registration, voter education, and get-out-the vote activities.

Those who refuse to join public-employee unions must still pay "fair share," or agency fees because they benefit from collective bargaining. Under the Supreme Court's Hudson public-sector unions must provide an accounting to nonmembers and give them the chance to object to political spending or other nonbargaining-related costs (and thus not pay for them).

In its June 2005 "Hudson notice," the SEIU local reported that those nonmembers who objected to paying for costs that could not properly be charged to them would pay 56.35 percent of the full dues rate as their fair-share fee. The union's full dues rate was 1 percent of gross income.

In September of that year, the union increased dues to 1.25 percent of gross income. It did not provide an additional Hudson notice to nonmembers, and it continued to charge objectors the same proportion of dues as before the increase. The union knew that some of the additional money raised would go for collective bargaining and some to battle the ballot initiatives, which were defeated.

The next year's accounting under Hudson determined that only about one-quarter of the increase went for chargeable collective bargaining expenses, meaning that the objectors got back some of their money.

In his majority opinion, Justice Alito said it was not enough for non-members to get their money back in the next year's accounting.

"Here, for nonmembers who disagreed with the SEIU's electoral objectives, a refund provided after the union's objectives had already been achieved would be cold comfort," Alito said.

On the opt-in issue, Alito suggested that the common practice of requiring objectors to opt out became accepted despite its constitutional implications having never been fully explored by the court over decades of decisions in this area.

"By allowing unions to collect any fees from nonmembers and by permitting unions to use opt-out rather than opt-in schemes when annual dues are billed, our cases have substantially impinged upon the First Amendment rights of nonmembers," Alito said. "In the new situation presented here, we see no justification for any further impingement. The general rule—individuals should not be compelled to subsidize private groups or private speech—should prevail."

In his dissent, Justice Breyer noted that the "debate about public unions' collective-bargaining rights is currently intense" and that an "opt-in" requirement "can reduce union revenues significantly, a matter of considerable importance to the union."

"There is no good reason for the court suddenly to enter the debate, much less now to decide that the Constitution resolves it" by requiring the opt-in, Breyer said.

Patrick Semmens, vice president of the National Right to Work Legal Defense Foundation, a Springfield, Va.-based group that represented the non-union members who objected to the special assessment, said the decision "moves the ball forward" for his group's objectives.

"We don't think employees should be forced to pay dues or fees at all," Semmens said. "We wouldn't have been surprised if the court had ruled more narrowly."

Jim Zamora, a spokesman of the SEIU's Local 1000, the California unit involved in the case, told the Sacramento Bee that "unfortunately, this decision continues the attack on the right of public-sector workers to act collectively to impact their workplace on important issues."

Representatives of the NEA didn't respond to requests for comment.

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