In a decision upholding the free speech rights of public employees represented by but not belonging to a union, the U.S. Supreme Court held last week that a public sector union must provide the requisite “Hudson notice” and receive affirmative consent from nonmembers prior to imposing a special assessment or other mid-year dues increase. Knox v. Service Employees Int’l Union Local 1000.
The case involved the Service Employees International Union (SEIU), which represents certain state employees in California. Under state law, public sector employees may vote to create an “agency shop” arrangement, whereby all bargaining unit employees are represented by a union. While employees in an agency shop are not required to join the union, they are required to pay a “fair share” or “agency fee” associated with collective bargaining costs (so-called “chargeable” expenses). These nonmembers are not required, however, to fund a union’s non-chargeable expenses, such as those for political and ideological purposes.
In Teachers v. Hudson, the Supreme Court laid out the procedural requirements with which a union must comply when collecting annual agency fees. These requirements include providing notice of the percentage of fees that fund non-chargeable expenses and the opportunity to opt out of contributing to these expenses. In this case, SEIU sent its annual Hudson notice in June 2005, informing employees that approximately 56% of its total expenditures would be dedicated to chargeable expenses and 44% would fund non-chargeable expenses, and giving nonmembers 30 days to opt out of contributing to the non-chargeable expenses.
Later that summer, and after the opt-out window under the annual Hudson notice had closed, SEIU sent bargaining unit employees a second notice indicating that, for a limited time, their fees would be raised in order to fund a SEIU political initiative. Nonmembers were not given an opportunity to opt out in the second notice; however, nonmembers who had objected pursuant to the earlier notice were required to pay 56% of the special assessment, rather than the full amount. The petitioners filed suit on behalf of 28,000 nonunion employees who were obligated to financially support SEIU’s political initiative, arguing that they should have been given a new opportunity to opt out of the special assessment.
Writing for the majority of the Court, Justice Samuel Alito began by noting that allowing unions to collect fair share fees from nonmembers is a “significant impingement” on the nonmembers’ First Amendment rights because it constitutes a form of compelled speech and association. Although this practice has been justified by the notion that nonmembers should not be allowed to free-ride on the union’s efforts, the Court called such a scheme an “anomaly.” Due to these First Amendment concerns, the procedures unions use to collect fees from nonmembers must be “carefully tailored to minimize the infringement” on nonmembers’ free speech rights. read more…