US Supreme Court Knox Public Sector Unions
The Supreme Court’s recent decision in Knox v. Service Employees International Union, Local 1000 comes as the latest attack on public-sector unions. Knox imposes new requirements on the procedures by which public-sector unions collect mid-term special assessments and dues increases for “nonchargeable expenses” from “fee payers,” employees who are represented by the union but who are not union members. The effect of these new requirements will undoubtedly be a reduction in public-sector unions’ revenues. Although unions should be able to implement these new requirements to their dues-objector systems without significant hardship, Knox strongly suggests that the Supreme Court’s conservative majority has designs to impose more severe regulations on both public- and private-sector unions’ procedures for collecting funds from fee payers.
In Knox, the Union imposed a 25% mid-term increase in dues which it described as a temporary assessment to build a political fund to defeat an anti-union measure. There was absolutely no doubt whatsoever that the purpose of the increase was to use the additional moneys for political purposes. The Union did not send a new Hudson notice to fee-payers; nor was a thirty-day opt-out procedure available to non-members. The Supreme Court held that the Local violated the First Amendment rights of fee-payers by assessing fees from non-members to fund political activities by not issuing a fresh Hudson notice.
Knox specifically compels three changes to public-sector unions’ agency-fee collection procedures. First, public-sector unions must not require fee payers to fund political speech, even if the speech involves matters directly relating to public employees’ collective-bargaining rights. Second, if a public-sector union will levy a mid-term special assessment or increase in dues or fees, then the union must issue a new Hudson notice to fee payers. The new Hudson notice must specify the activities that the assessment or fees will fund. And third, public-sector unions must apply an “opt in” standard to fee payers for a mid-term special assessment or a fee increase. That is, public-sector unions can only collect the mid-term special assessment or the fee increase from fee payers who expressly give the union permission to collect such money; the fee payer must grant the union permission before the union collects the funds. The Union cannot simply collect the moneys and then permit fee payers to object to the special assessment or fee increase. This “opt in” standard will significantly impair public-sector unions’ ability to collect funds from fee payers. In short, fee-payers no longer have the burden of opting out of a special assessment or dues increase; the burden is now on the union to persuade the fee payer to opt-in to the assessment or dues increase. In all likelihood, this will mean that non-members will not pay the same share as full members for mid-term special assessments or fee increases.
Although public-sector unions should be able to adapt to Knox without much difficulty, the broadly-written majority opinion should concern both public- and private-sector unions. The conservative majority in Knox implies that the “opt in” standard should apply to any special assessment or fee increase sought from fee payers, not just nonchargeable expenses. According to Justice Sotomayor, the majority also “strongly hints” that the “opt in” standard should apply to any collection of funds from fee payers.
By Sean D. Graham