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Tuesday, January 10, 2012

Corporate Court Hears Argument in Union Fee Case

Today, the Supreme Court will hear argument in the case of Knox v. SEIU, in which unions’ ability to engage in political advocacy on behalf of workers is at stake.

Service Employees International Union (SEIU) represents 1.8 million people in health care and public service. Non-member public employees are required by California state law to pay SEIU a “fair share fee” to defray the costs of union representation on their behalf. To that end, each year SEIU sends its non-members a notice, as required by the Supreme Court, which informs non-members of their fair share fee and of their right to object to paying non-chargeable expenditures including money spent for political advocacy. Those fees are calculated based upon expenses during the previous year and do not take into account unforeseen expenses.

In 2005, SEIU issued a valid annual notice informing non-members of the percentage of their dues which would be allocated to union representation and gave them 30 days to opt out of paying amounts associated with non-representation functions. The notice stated that dues were subject to change based on actual costs. A month later, SEIU imposed an emergency temporary assessment fee to defend against attacks on union plans and charged non-members who objected to the increase the percentage set forth in the initial notice as the amount associated with union representation. A group of nonmember state employees in California challenged this practice in a class action suit against SEIU.

Employees claim that SEIU’s failure to send out a supplemental notice when the union imposed a special assessment violated employees’ First and Fourteenth Amendments rights by forcing non-union employees to subsidize union political activities. SEIU counters that its notice was constitutionally and legally sufficient because the Supreme Court has recognized that the notice did not require an exact determination of the yearly expenditures, but merely a good prediction based upon the previous year’s audits. The Court previously recognized the impossibility of anticipating expenditures at the outset of the fee year and that once the union sent the original notice it need not send a second notice speculating how a fee increase might be spent. The district court found for the employees, but the U.S. Court of Appeals for the Ninth Circuit reversed, finding that a temporary fee increase did not require an additional notice.   

If the Supreme Court rules against the SEIU, it will erode the power of unions to fight back against new political attacks by making it harder to raise additional funds to respond.

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