7.08.2011

How Much Notice Must a Union Provide to Workers Before Spending Dues on Political Expenses?

The United States Supreme Court has granted review of a Ninth Circuit union fee decision that will consider:
  1. whether a state may condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a notice that includes information about that assessment and an opportunity to object to the fees; and
  2. whether continued public employment may be conditioned on the payment of union fees for purposes of financing political expenditures for ballot measures.  
In Knox v. Service Employees Int’l Union, Local 1000, a suit was filed by non-union California state workers against the Service Employees International Union (SEIU), the bargaining agent for state employees. California state employees who opt not to join the union are still required by state law and the collective bargaining agreement to pay a “fair share fee” to cover the cost of union representation on their behalf. However, the union is required to send the non-union employees a yearly notice explaining the basis for the fee assessment (known as a Hudson notice).

The Hudson notice is meant to provide non-union employees with notice of the fee assessment and percentage allocated to the union’s non-representational functions for activities such as political lobbying. The notice is also meant to provide an opportunity for employees to challenge the use of those fees, and o request their fees be reduced proportionally based on the amount spent for any non-representational activities.

In Knox, the SEIU properly issued its annual Hudson notice. However, the SEIU subsequently adopted a temporary mid-year fee increase for expenses not related to the union’s representation costs, but rather for a “Political Fight Back Fund” for use in opposing “anti-union” ballot propositions. The SEIU charged non-union workers, who originally objected to non-representational fees, 56.35% of the total assessment. This represented the percentage set forth in the SEIU’s original Hudson notice as the calculation related to the union’s representational function. The union did not issue a second Hudson notice, which prompted the non-union employees to file suit alleging a violation of their constitutional rights.

The non-union employees contend that the union’s subsequent assessment of the mid-year fee increase without a second notice violated its requirement to provide them with an explanation of the fee as well as an opportunity to challenge it. The trial court agreed.

The Ninth Circuit, in a divided opinion reversing the lower court and favoring the SEIU, concluded that a second notice was not required because the original notice could not be expected to provide an exact calculation of union expenditures, but only a reasonable prediction, like the one provided in the original Hudson notice. The non-union employees appealed, and the Supreme Court has agreed to hear the case, which will also include a review of whether continued public employment may be conditioned on the payment of union fees for purposes of financing political expenditures for ballot measures.


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