Quantcast
Home / News / Unions can’t charge non-members for lobbying expenses

Unions can’t charge non-members for lobbying expenses

1st Circuit upholds decision of NLRB

A private sector union could not use agency fees collected from non-members to pay for lobbying expenses, the 1st U.S. Circuit Court of Appeals has determined.

In 2009, intervenor Jeanette Geary, a nurse who had quit the United Nurses & Allied Professionals, challenged the union’s use of her agency fees to lobby for bills in state legislatures. United Nurses is the exclusive bargaining representative at the Rhode Island hospital where Geary worked.

The National Labor Relations Board agreed with Geary that union lobbying expenses are not chargeable to so-called Beck objectors — employees in a unionized workplace who opt out of the union — and rejected the union’s argument that it could do so as long as the lobbying activities were related to collective bargaining.

The 1st Circuit affirmed on appeal.

In doing so, the court conceded that while the U.S. Supreme Court has not ruled definitively on whether private sector unions can charge lobbying expenses to non-members, dicta from its 1991 Lehnert v. Ferris Fac. Ass’n states that though expenses “germane” to collective bargaining are chargeable to dissenting employees, “those functions do not include political or ideological activities.”

“Applying Lehnert’s considered dictum to this case, we see no convincing argument that legislative lobbying is not a ‘political’ activity — at least as conducted here,” Judge William J. Kayatta Jr. wrote for the 1st Circuit.

The court also affirmed the board’s ruling that the petitioner union was required to provide Geary a letter verifying that its expenses were examined by an independent auditor.

The 22-page decision is United Nurses & Allied Professionals v. National Labor Relations Board.

‘Far-reaching implications’

NLRB spokesperson Edwin W. Egee declined to comment. The union’s attorney, Christopher Callaci of Providence, could not be reached for comment prior to deadline.

“The court said that, as a matter of law, this is the only way to decide the issue, which means a future NLRB is not going to be able to change this analysis. If another circuit wants to look at it differently, it will find itself reversed by the Supreme Court.”

— Glenn M. Taubman, National Right to Work Legal Defense Foundation

But Glenn M. Taubman of the National Right to Work Legal Defense Foundation in Washington, D.C., who represented the intervenor, applauded the court.

“They were honest in applying U.S. Supreme Court precedents,” he said. “Although they may be technically correct that there’s never been a Supreme Court private sector precedent exactly on point, if you look at the span of all the Supreme Court cases over many decades, the thing that really is consistent is protecting non-members from paying for political and ideological activity, and that’s exactly what lobbying is.”

Taubman also said the decision has “far-reaching implications.”

“The court said that, as a matter of law, this is the only way to decide the issue, which means a future NLRB is not going to be able to change this analysis, and so it will apply to compulsory dues-payers all over the United States,” he explained. “If another circuit wants to look at it differently, it will find itself reversed by the Supreme Court.”

Labor lawyer John D. Connor of Springfield, Massachusetts, said the decision’s impact should be blunted by the reality that private sector unions have less of a need to lobby than public sector unions and because they can still use member dues for lobbying as needed.

But from a policy standpoint, he said, “the case undoubtedly represents a further erosion of the balance between fairness, the idea that each member should pay their fair share for the burden of representation and individual freedoms of speech and association.”

Dennis M. Coyne, a union-side labor lawyer in Southborough, Massachusetts, said the decision illustrates how activist the NLRB has become under the current administration.

For example, Coyne noted, under the NLRB’s reasoning — affirmed by the 1st Circuit — a nurse’s union would not be able to use agency fee-payer funds to lobby for better masks to protect workers from the coronavirus, despite such activity epitomizing concerted activity to improve working conditions.

“In the COVID-19 era, when employers are asking workers to literally risk their lives for the employers’ benefit, the NLRB has now made more expensive unions’ ability to publicly advocate for safety laws,” he said.

Meanwhile, Coyne said, union attorneys should make note of the court’s ruling that the union had to provide an independent auditor’s letter detailing how funds were spent rather than a summary of the letter.

“This is a reminder to practitioners to review with union clients not only the funds used for lobbying, but their policies and processes for Beck objectors more generally,” Coyne said. “With the current employer-friendly NLRB rapidly overturning decades-old precedent protecting workers, anti-union groups will seek to use errors in these complex Beck objector processes to target unions and worker protections.”

Marc B. Gursky, a labor lawyer in North Kingstown, Rhode Island, said that a “fresh slate” might have created a different result, but because retired U.S. Supreme Court Justice David H. Souter was on both the 1st Circuit panel that decided the present case and the Lehnert court, “the union here had an uphill climb.”

“This is a case in which the union punched above its weight and missed wildly,” Gursky continued. “The portion of union dues attributable to collective bargaining-related lobbying would have been relatively small and non-members’ shares of those fees miniscule. They should have returned those fees to the objector and let it go.”

If the ruling provides any “ray of sunshine,” he added, it is the court’s refusal to apply the Supreme Court’s 2018 Janus v. AFSCME, Council 31 decision — in which it struck down state laws obligating public sector workers who opted out of their unions to nonetheless pay agency fees — to private sector unions as well.

Non-member objector

Geary is a former nurse at Kent Hospital, an acute-care facility in Warwick where United Nurses, a group of 15 local unions in Rhode Island, Connecticut and Vermont, served as the exclusive bargaining representative.

She and others resigned their union memberships in September 2009 and objected to their dues having been used to pay for activities they characterized as unrelated to collective bargaining, contract administration or grievance adjustment.

United Nurses lowered the agency fees the objectors would still have to pay but nonetheless required them to contribute to lobbying expenses for several bills in the Vermont and Rhode Island legislatures.

Meanwhile, while the union reported in writing that its expenses had been verified by an independent auditor, it declined to provide a verification letter from the auditor itself.

Geary subsequently brought her complaint to the NLRB, which agreed with her that the lobbying expenses were unrelated to collective bargaining.

The union petitioned for review, and the NLRB cross-petitioned for enforcement of its order.

Not germane

The 1st Circuit conceded that union activities for which expenses are chargeable can go beyond just direct dealing and negotiation with employers.

Additionally, “there is no conceptual reason for concluding that lobbying by a private sector union could never be necessary to the union’s performance of its collective bargaining duties,” Kayatta said. “So we are indeed left to conclude that, in theory, there exist instances in which an expense could reasonably be called both a form of lobbying and germane to collective bargaining.”

Meanwhile, no actual Supreme Court holding compels a conclusion that such expenses are either chargeable to Beck objectors or not, the judge continued.

However, Kayatta added, the Lehnert court stated in dicta that chargeable functions “germane” to a union’s collective bargaining functions do not include “political or ideological activities.”

Given that the Lehnert court based such a statement on its analysis of several cases, that should be deemed “considered dictum,” Kayatta further stated.

Applied to the case before him, Kayatta said, there was no convincing argument that legislative lobbying is anything other than non-chargeable political activity.

“Of course, the Supreme Court is not bound by its own dicta,” Kayatta said. “And as our foregoing discussion illustrates, the Court might well regard its actual holdings and reasoning as leaving room for the Board to interpret the statute either way. Unless and until the Court does so, however, we must regard the matter as settled. We uphold the Board’s decision on the Union’s lobbying expenses.”

Leave a Reply

Your email address will not be published. Required fields are marked *

*

 

/* code for sifitag */