Thursday, June 21, 2012

Supreme Court's Knox Decision

SEIUThe Supreme Court issued its decision in Knox this morning and went against the union in a 7-2 decision.   It appears to mandate an opt-in system for special assessments and possibly dues increases (I haven't had time to more that skim the opinion, but there seem to be several questions left open).  Two Justices only concurred, and would limit their decision to the holding that a union can't collect nonchargeable funds from employees who earlier objected to such payments. Here's the official summary:

1. This case is not moot. Although the SEIU offered a full refund toall class members after certiorari was granted, a live controversy re- mains. The voluntary cessation of challenged conduct does not ordi- narily render a case moot because that conduct could be resumed as soon as the case is dismissed. See City of Mesquite v. Aladdin’s Cas- tle, Inc., 455 U. S. 283, 289. Since the SEIU continues to defend the fund’s legality, it would not necessarily refrain from collecting similar fees in the future. Even if concerns about voluntary cessation were inapplicable because petitioners did not seek prospective relief, there would still be a live controversy as to the adequacy of the refund no- tice the SEIU sent pursuant to the District Court’s order. Pp. 6−8.

2. Under the First Amendment, when a union imposes a special as- sessment or dues increase levied to meet expenses that were not dis- closed when the regular assessment was set, it must provide a fresh notice and may not exact any funds from nonmembers without their affirmative consent. Pp. 8−23.

(a) A close connection exists between this Nation’s commitment to self-government and the rights protected by the First Amendment, see, e.g., Brown v. Hartlage, 456 U. S. 45, 52−53, which creates “an open marketplace” in which differing ideas about political, economic, and social issues can compete freely for public acceptance without improper government interference, New York State Bd. of Elections v. Lopez Torres, 552 U. S 196, 202. The government may not prohibit the dissemination of ideas it disfavors, nor compel the endorsement of ideas that it approves. See, e.g., R. A. V. v. St. Paul, 505 U. S. 377, 382. And the ability of like-minded individuals to associate for the purpose of expressing commonly held views may not be curtailed. See, e.g., Roberts v. United States Jaycees, 468 U. S. 609, 623. Close-ly related to compelled speech and compelled association is compelled funding of the speech of private speakers or groups. Compulsory subsidies for private speech are thus subject to exacting First Amendment scrutiny and cannot be sustained unless, first, there is a comprehensive regulatory scheme involving a “mandated association” among those who are required to pay the subsidy, United States v. United Foods, Inc., 533 U. S. 405, and, second, compulsory fees are levied only insofar as they are a “necessary incident” of the “larger regulatory purpose which justified the required association,” ibid. Pp. 8−10.

(b) When a State establishes an “agency shop” that exacts com- pulsory union fees as a condition of public employment, “[t]he dis- senting employee is forced to support financially an organization with whose principles and demands he may disagree.” Ellis v. Railway Clerks, 466 U. S. 435, 455. This form of compelled speech and associ- ation imposes a “significant impingement on First Amendment rights.” Ibid. The justification for permitting a union to collect fees from nonmembers—to prevent them from free-riding on the union’s efforts—is an anomaly. Similarly, requiring objecting nonmembers to opt out of paying the nonchargeable portion of union dues―rather than exempting them unless they opt in―represents a remarkable boon for unions, creating a risk that the fees nonmembers pay will be used to further political and ideological ends with which they do not agree. Thus, Hudson, far from calling for a balancing of rights or in- terests, made it clear that any procedure for exacting fees from un- willing contributors must be “carefully tailored to minimize the in- fringement” of free speech rights, 475 U. S. 302−303, and it cited cases holding that measures burdening the freedom of speech or as- sociation must serve a compelling interest and must not be signifi- cantly broader than necessary to serve that interest. Pp. 10−13.

(c) There is no justification for the SEIU’s failure to provide a fresh Hudson notice. Hudson rests on the principle that nonmembers should not be required to fund a union’s political and ideological pro- jects unless they choose to do so after having “a fair opportunity” to assess the impact of paying for nonchargeable union activities. 475 U. S., at 303. The SEIU’s procedure cannot be considered to have met Hudson’s requirement that fee-collection procedures be carefully tailored to minimize impingement on First Amendment rights. The SEIU argues that nonmembers who objected to the special assess- ment but were not given the opportunity to opt out would have been given the chance to recover the funds by opting out when the next annual notice was sent, and that the amount of dues payable the fol- lowing year by objecting nonmembers would decrease if the special assessment were found to be for nonchargeable purposes. But this decrease would not fully recompense nonmembers, who would not have paid to support the special assessment if given the choice. In any event, even a full refund would not undo the First Amendment violations, since the First Amendment does not permit a union to ex- tract a loan from unwilling nonmembers even if the money is later paid back in full. Pp. 14−17.

(d) The SEIU’s treatment of nonmembers who opted out when the initial Hudson notice was sent also ran afoul of the First Amendment. They were required to pay 56.35% of the special as- sessment even though all the money was slated for nonchargeable, electoral uses. And the SEIU’s claim that the assessment was a windfall because chargeable expenses turned out to be 66.26% is un- persuasive. First, the SEIU’s understanding of the breadth of chargeable expenses is so expansive that it is hard to place much re- liance on its statistics. “Lobbying the electorate,” which the SEIU claims is chargeable, is nothing more than another term for support- ing political causes and candidates. Second, even if the SEIU’s sta- tistics are accurate, it does not follow that it was proper to charge ob- jecting nonmembers any particular percentage of the special assessment. If, as the SEIU argues, it is not possible to accurately determine in advance the percentage of union funds that will be used for an upcoming year’s chargeable purposes, there is a risk that un- consenting nonmembers will have paid too much or too little. That risk should be borne by the side whose constitutional rights are not at stake. If the nonmembers pay too much, their First Amendment rights are infringed. But, if they pay too little, no constitutional right of the union is violated because it has no constitutional right to re- ceive any payment from those employees. 


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Congrats James.

Posted by: Per Son | Jun 21, 2012 9:00:08 AM

Apparently the only First Amendment rights public-sectors workers have anymore is the right to a constitutionally-enshrined national Right to Work law.

Posted by: jason | Jun 21, 2012 10:36:12 AM

Thanks, "Per Son." Better than I had any reason to expect.

Posted by: James Young | Jun 21, 2012 11:17:47 AM

Supreme Court's strategy:

1. Announce that corporations (and unions, don't forget about unions, must mention unions so as to create a false equivalency and pretend the decision isn't about politics!) can spend unlimited amounts of money to buy... er, I mean, INFLUENCE political elections.

2. Strip unions of the ability to actually raise any money.

3. ...

4. Profit!

Posted by: Anon | Jun 21, 2012 5:37:44 PM

I liked the footnote about how "the painful burden of initiating and participating in [arbitration] cannot be so easily relieved." When the court is considering cases against a union, arbitration paid for by the union entirely is a "painful burden." When the court is considering cases against a corporation, arbitration paid for by the consumer is fair and reasonable.

Posted by: Max Kennerly | Jun 21, 2012 5:46:20 PM

In my world there are only closed shops, but the law is the law and this was faithful to it.

Posted by: Per Son | Jun 21, 2012 7:00:26 PM

@Anon - If stopping unions from taking money from nonmembers "Strip[s] unions of the ability to actually raise any money" then what does this say about their ability to raise money?

What right does the union have to influence, if it is dependent on forcing unwilling employees to pay for that influence?

Posted by: Sam Gompers | Jun 23, 2012 1:51:11 PM

Regarding your comment on "arbitration," Max, of course, unions' "impartial decisionmaker" process under Hudson is no such thing, as there is no "consent," even the minimal consent in the contracts of adhesion into which consumers enter (without commenting on the Court's jurisprudence on that issue). Of course, unions insist on fraudulently calling it "arbitration" nevertheless, and it is unfortunate that Justice Breyer perpetuated that fraud. Moreover, history has demonstrated that it's not a meaningful process (I have heard union lawyers refer to it as a "dog-and-pony show"). In fact, the AAA rules for it were written in a process initiated by four public-sector union bosses and to which the guy who actually WON Hudson --- my colleague Edwin Vieira --- was not invited to participate.

Posted by: James Young | Jun 23, 2012 5:43:26 PM

When i work for a corporation, i help produce profits that we now know can freely be used for political speech, unlimited by all of the parts of the corporation other than the CEO or board of directors, such as workers, shareholders, etc. I know i am not "compelled" to work for any particular employer, but poverty is a substantial concern. Can i know ask that any part of the profits i help produce be returned should the firm spend money for political causes i abhor? And, like the far out militias, what about forced taxation by the state for military actions of which i do not approve?

Posted by: james atleson | Jul 8, 2012 7:42:57 AM

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