A recent story in the Washington Examiner reports on yet another assault against union power, this time in California, a stronghold of organized labor. The case, Friedrichs v. California Teachers Association, is yet the latest in a string of challenges to the venerable system of union representation that requires employees who are in a bargaining unit to contribute to the union coffers whether or not they choose to belong to the union. This is what is known as an agency-shop arrangement, also called an “organizational security agreement.”
That basic rule requiring all workers to pay union dues is subject to an important offset based on the 1988 Supreme Court decision in Communications Workers of America v. Beck, which held under the First Amendment that any dissident employees were entitled to carve out from their dues those moneys that were spent on the union’s political operations. The rationale was that the dues requirement in economic affairs prevents the individual worker from free-riding on the union’s efforts to secure higher wages and benefits, but that this rationale could not compel workers to contribute against their will to political activities to which they were opposed.
The nature of that division has always been difficult, and, as of late, there has been increasing concern about whether the line is maintainable -- or should be maintained. On one side stands the argument that, even on economic affairs, there is no direct alignment between dissenting workers and the union. Indeed, for many the idea of union solidarity is a myth. It is commonplace for some unions to adopt high risk/high return strategies, in which they are willing to take the risk of strikes or loss of position in order to push for higher benefit packages. That policy will favor workers with seniority (who are more likely stay on after job cutbacks) over junior workers, who will be the first to go. It will also favor workers who think the risk is worth the potential gain over those who prefer a steadier, if lower, stream of payments. There is, to say the least, something incongruous about forcing people to pay to implement bargaining strategies to which they are opposed. Yet the free-rider argument blissfully assumes that these conflicts never exist.
This issue has not attracted the attention of the Supreme Court, which has been content to draw the line between political and non-political action. That line was tested in the Court’s 2012 decision in Knox v. SEIU, where it was held that the union could not collect money in advance that it knew would be spent exclusively on political issues only to refund the sums to the dissenting workers during the next accounting period. Justice Samuel Alito treated that as an interest-free loan to the union, which violated the Beck rule. His opinion concluded with the far broader observation that the entire “opt-out" procedure might be suspect after all.
The Friedrichs case highlights the issue in question by asking just how this two-tier system should be administered. Once the union is put in charge of the refund program, obvious conflicts of interest about how it will be run arise. What sort of notice should be given to union members of their option to opt out of the political portion of their dues? Can the unions limit the time period in which the opt-out requests can be made? Can they use forms that are difficult to fill out? What sanctions, if any, should be imposed on unions that violate those rules or who are just plain tardy in making the needed refunds? May the union reserve, as is done in California, disability benefits only for those workers who are members of the union, such that opting out now costs the dissenting workers core economic benefits that the union is supposed to negotiate on their behalf?
The Friedrichs case puts these elements into the spotlight with its audacious claim that "California’s practice of forcing non-union members to contribute funds to unions, including funds to support their collective-bargaining activities, violates the First Amendment,” after which it asks the court to enjoin the practice. That goes against all sorts of Supreme Court precedents, and has to be regarded as a long shot at best. But the complaint indicates that all sorts of mid-level issues dealing with the time, place, and manner by which the offset is administered will be put into play. And the differential access to disability benefits raises the serious question of whether the union has acted even-handedly in dealing with the economic portions of the deal. After a recent key decision in union-dominated Michigan that found the state's right-to-work law applies to state employees, Friedrichs could similarly be the thin end of the wedge for upsetting the unhealthy balance under California law. Such a decision could not come soon enough.