By Alan B. Morrison, Lerner Family Associate Dean for Public Interest & Public Service at George Washington University Law School.*
The issue before the Supreme Court in Knox v. SEIU, decided June 21, 2012, was what procedures the union had to follow in order to allow non-members, who are required by law to support the union’s collective bargaining activities, to object to a special assessment that was going to be used in large part for political and other advocacy work that non-members claim they had a right not to support with their money.
To know what side Justice Samuel Alito and his four colleagues were going to take, a reader only had to go to page 3 where he discusses the budget battle in California that prompted the special assessment that was challenged in Knox. He describes the debate “and in particular the consequences of growing compensation for public employees backed by powerful public sector unions” like SEIU (emphasis added). If the issue is whether a “powerful” public-sector union or dissenting individuals will prevail, the smart money would not be on the union.
The conclusion that the union had to do more than it did was supported by seven Justices, and thus a ruling against it would not have been particularly noteworthy on its own. But the holding of the majority and how it got there are quite remarkable. First a little background. It is now an accepted part of labor law that, except in so-called right-to-work states, individuals who are not union members must pay their share of the costs of collective bargaining that results in contracts that benefit them as well as union members. But the Supreme Court has ruled that not every dollar that a union collects from its members as dues is properly attributable to collective bargaining, and over the years a system has developed under which non-members can object to paying those additional amounts. Thus, each year non-members have a right to opt-out and pay less than members pay, without having to give any reason for doing so, with the amount based on a formula derived from last year’s audited union expenses. Knox involved a special assessment, rather than a regular payment, and the issue was what were the rights of the would-be dissenters in that situation, where there was at least the possibility that some of those who did not dissent from the annual payment, might want to opt-out of the special assessment.
Initially, the union took the position that no separate opt-out was available, on the theory that the non-member would have the impact of the special assessment spending taken into account in next year’s annual allocation. It then agreed to apply the current year percentage to allow those who had previously filed timely objections to the annual amount to pay a corresponding reduced assessment. That did not satisfy everyone, and a class action was filed on behalf of all 28,000 non-members seeking notice and an opportunity to opt-out of paying any portion of the assessment (which they considered to be wholly political). The union lost in the district court and then appealed (which at least in hindsight was not a good decision) and prevailed (2-1). The Court then agreed to hear the case, and not surprisingly concluded that the union had not done all it should have done.
The majority did not simply rule that all 28,000 class members were entitled to notice and an opportunity to opt-out. Instead, they concluded that, rather than allowing the union to use an opt-out, it was forbidden by the First Amendment from collecting this special assessment (and probably any other one as well) unless the non-members affirmatively agreed to pay it. Although limited to special assessments, the rationale of the opinion virtually invites a challenge by the National Right to Work Committee to the long-standing rule that opt-outs are sufficient for annual payments purposes. Although Justices Sonia Sotomayor and Ruth Bader Ginsburg concurred in requiring notice and an opt-out to all 28,000 non-members regarding this special assessment, they did not join in the opt-in rationale. Moreover, as their opinion demonstrated, no one had asked for an opt-in rule, the issue had not been briefed, and amici who might want to be heard were foreclosed from making their views known. The Court just went there on its own, which makes this case even more troubling than Citizens United, where the Court at least ordered supplemental briefing before deciding a constitutional claim that had been abandoned by the plaintiff in the lower court.
There are several other bothersome aspects to the majority opinion. First, after the Court granted cert, the SEIU, whether wisely or not, decided to try to moot the controversy by agreeing to pay back any amount paid by any class member who wanted it. The Court rejected that effort, finding that there was still a dispute about the form of the notice that the union proposed. But the ruling on the merits by the majority makes the form of notice irrelevant in this case and for the future because the Court has established a new rule of law, requiring no notice unless the union wants to try to persuade some of the non-members to make additional payments to a union that they have chosen not to join. Because the union had already satisfied everyone who wanted their money back, which is the functional equivalent of an opt-in, it is hard to see how the case was not moot, at least on the theory advanced by the majority. Perhaps this case falls into the category of non-mootness, when a majority decides it wants to reach the merits.
Second, Justice Stephen Breyer’s dissent (at 9) noted the fact that the union was willing to pay the costs of arbitrating disputes about the correctness of the allocation formula, but Justice Alito rejected that argument (page 19, note 8) because “the painful burden of initiating and participating in such disputes cannot be so easily relieved.” That rejoinder seems rather at odds with numerous recent decisions by this same five Justice majority in which the glories of arbitration as an important federal policy have been the impetus for rejecting almost every argument against arbitration brought by employees (like the plaintiffs in Knox) and by consumers. Arbitration may not be an appropriate answer here, but the majority surely should have explained why here and not elsewhere.
Third, in an apparent effort to show that the Court is being even-handed, the majority cites Citizens United on page 21 to show that unions, like corporations, have political rights. But corporations do not have to give anyone the right to opt out (let alone the right not to opt-in), and so the Court’s analogy is reminiscent of the old saying that the rich and poor alike are forbidden from begging in the streets or sleeping under the bridges of Paris.
As I have previously written in my ACS Issue Brief, "Saved by the Supreme Court: Rescuing Corporate America," the five member conservative majority of the Court has a very strong record of voting for corporations when the chips are down. There was no corporation in this case, although since these same general principles apply in private sector unions as well, there may well be in the next one. But in the battles being fought in legislatures and elsewhere, it is often unions who are among the few standing up for the rights of consumers, workers, and minorities. Thus, every blow to unions – even powerful public-sector ones – makes life a little easier for corporate America, which may explain what was going on in this case.
*Morrison did an unpaid moot court for the lawyers for the SEIU.