2005 Report of the Subcommittee on Rights of Union Members and Non-Members

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1 AMERICAN BAR ASSOCIATION SECTION OF LABOR AND EMPLOYMENT LAW COMMITTEE ON STATE AND LOCAL GOVERNMENT BARGAINING 2005 Report of the Subcommittee on Rights of Union Members and Non-Members Robert T. Reilly Co-chair, Union John H. Gretzinger Co-chair, Management This Committee report presents cases decided under the law applicable to (A) the duty of fair representation and (B) agency fees, as those laws and precedents are applied to state and local government bargaining unit members. Generally, the law regarding the duty of fair representation is well established. The law regarding agency fees, however, is still taking some twists and turns, particularly in the public sector. A. Duty of Fair Representation / Other Rights of Union Members and Non- Members The duty of fair representation requires an exclusive bargaining representative to represent all members of the bargaining unit in good faith and without conduct that is arbitrary, capricious or discriminatory in nature. Vaca v. Sipes, 386 U.S. 171 (1967). Such duty arises in a variety of contexts, including grievance processing, contract administration, collective bargaining and access to union information. It also applies in certain non-bargaining situations that involve seniority, promotion and layoff. Where the duty has been breached, a cause of action may arise under state law or administrative regulation that creates liability for such breach upon a public employee organization and/or public employer. Varying remedies for breach of the duty include back pay, benefits and reinstatement. Apportionment of liability between the employee organization and the employer is typically derived from Vaca v. Sipes, 386 U.S. 171 (1967) and Bowen v. United States Postal Service, 459 U.S. 212 (1983). Baker v. Bd. Of Educ., Hoosick Falls Central Sch. Dist., 3 A.D.2d 678 (3d Dept. N.Y. 2004). In Baker, teachers who retired after a collective bargaining agreement expired but before a successor agreement was reached brought a DFR claim when they were not paid compensation for retroactive raises the union negotiated as part of that successor agreement. The union agreed that retroactive salary increases would be paid only to employees who were currently employed as of the date the successor agreement was reached. Although acknowledging that a union owes no DFR to retirees generally, the court found that the union owed a DFR to the specific retires at issue, given that there was a continuing nexus between the retirees former employment and negotiations over terms and conditions that would be retroactively applied to their periods of active employment. The court stated that the plaintiffs needed to show that the union s actions 1

2 in failing to represent them were arbitrary, discriminatory or in bad faith. The court found that plaintiffs made such a showing in this case because the union did not endeavor to balance the rights of the two classes of employees: current employees and those retirees for whom there existed the continuing nexus. The court found that the union simply failed to represent the plaintiffs at all and, thus, held that the union breached its DFR. Farber v. City of Paterson, 327 F.Supp.2d 401 (D.N.J. 2004). In Farber, the plaintiff claimed, inter alia, that the union breached its DFR by refusing to bring a grievance challenging her discharge from employment to arbitration and the union moved to dismiss the complaint. The union s stated reason for not bringing a grievance against the City employer to challenge the discharge was that the plaintiff was a provisional employee under the applicable civil service system. Interpreting New Jersey statutory law, the court found that the union s duty to process grievances must be performed with complete good faith, with honesty of purpose and without unfair discrimination against a dissident employee or group of employees. [It also found that the court had concurrent jurisdiction with the State Public Employment Relations Commission over DFR claims.] Based on the plaintiff s allegation that she was wrongfully terminated and had a legitimate grievance, but that the union nevertheless refused to process her grievance to arbitration, the court denied the union s motion to dismiss. Smith v. Bowers, 337 F.Supp.2d 576, 175 L.R.R.M. (BNA) 3237 (S.D.N.Y. 2004). In Smith, the plaintiffs DFR claim concerned alleged improprieties regarding a ratification vote and was intertwined with related claims brought under the LMRDA. The plaintiffs claimed that the international union [ILA], either directly or by sanctioning violative activities conducted by locals, completely disenfranchised members of three locals, provided inadequate notice and secrecy to voters in other locals, and coerced members of yet other locals to vote in favor of the contract. They sought, inter alia, a preliminary injunction prohibiting the union and employers from implementing the contract. The court found that a union does not breach its duty of fair representation unless its actions can be fairly characterized as so far outside a wide range of reasonableness that they are wholly arbitrary, discriminatory, or in bad faith and that a causal connection exists between the union s wrongful conduct and the alleged injuries. The court first reviewed the union s conduct under the LMRDA and found it to have been reasonable under the circumstances in that the union administered the election pursuant to the reasonable rules, regulations and qualifications stated in its Code of Ethics. The court then turned to the plaintiffs DFR claim and held that in light of the court s resolution of the LMRDA claims, and the heightened standards of proof that apply to DFR claims in the Second Circuit, plaintiffs failed to demonstrate a clear or substantial likelihood of success on the merits of their DFR claim. 2

3 Carbrera v. New York City, 2004 WL , 176 L.R.R.M. (BNA) 2012 (S.D.N.Y. 2004). In Carbrera, the plaintiff brought employment discrimination claims against her city employers and union and a related DFR claim against the union. The union moved to dismiss the DFR claim for lack of jurisdiction. The court stated that where a union has breached its DFR and there is evidence that discriminatory animus motivated the breach, such conduct may be actionable under Title VII. However, the court found that plaintiff never filed a charge of discrimination with the EEOC or appropriate local agency against the union. Thus, the court held that it lacked jurisdiction over plaintiff s DFR claim. Straker v. Metropolitan Transit Authority, 333 F.Supp.2d 91 (E.D.N.Y. 2004). In Straker, the plaintiff brought, inter alia, due process, conspiracy and discrimination claims against his transportation authority employers and a DFR claim against his union with respect to the employer s implementation of a mandatory drug test. The employer and the union both moved to dismiss. The plaintiff did not provide a urine sample for the test, claiming that he was physically unable to do so, given a medical condition, and the employer construed his non-compliance as a refusal and terminated his employment. The union grieved the termination and submitted it to arbitration, but the arbitration panel upheld the termination. The plaintiff, however, alleged that the union approached one of his physicians and instructed him not to cooperate during the arbitration hearing. The court found that such allegation stated a claim for a breach of DFR under New York State Law, under which it is necessary to show that the union s conduct was arbitrary, discriminatory, or in bad faith, and denied the union s motion to dismiss. Weber v. Potter, 338 F.Supp.2d 600, 176 L.R.R.M. (BNA) 2092 (E.D.PA. 2004). In Weber, a postal worker claimed, inter alia, that the union breached its DFR when it failed to properly frame the issues in his grievance by not citing the CBA articles in the grievance that he thought should have been cited. The court noted, however, that a union has broad discretion to determine what issues to raise in a grievance proceeding and how those issues are to be raised. The court found that the union pursued the grievance through all available steps up to arbitration and fully considered the plaintiff s description of events. The Court held that plaintiff did not show that the union acted arbitrarily, discriminatorily or in bad faith and granted summary judgment in favor of the union. Poe v. Hawai i Labor Relations Board, 105 Hawaii 97, 175 L.R.R.M. (BNA) 2422 (2004). 3

4 In Poe, the complainant, inter alia, challenged a determination of the Hawaii Labor Relations Board which held that the union did not breach its DFR when it failed to pursue his grievance to arbitration. The court stated that a union breaches its duty of good faith when its conduct toward a member of the bargaining unit is arbitrary discriminatory, or in bad faith. The court found that merely settling a grievance short of arbitration, without more, fails to establish a breach of DFR. The court held that the complainant could not establish a DFR breach and confirmed the HLRB determinations. B. Agency Fee Decisions Under Lehnert v Ferris Faculty Association, 500 US 507, 114 L Ed 2d 572, 111 S Ct 1950 (1991), public employees who are not members of the union representing them may constitutionally be required to pay agency or fair share fees based on chargeable expenses incurred by the union which (1) are germane to collective bargaining activity, (2) are justified by governmental interests in fostering labor peace and avoiding free riders, and (3) do not significantly increase the burden on First Amendment rights inherent in agency or union shops. Before collecting such fees, unions are constitutionally required to provide non-members with procedural safeguards which include (1) an explanation of the basis for the fee (supported by audited financial information identifying the major categories of expenses and a breakdown of those expenses into chargeable and nonchargeable components); (2) the opportunity to challenge the amount of the fee and obtain a reasonable prompt decision by an impartial decision maker; and (3) an escrow to hold the amounts reasonably in dispute pending resolution of any challenges. Chicago Teachers Union, Local No. 1 v Hudson, 475 US 292, 89 L Ed 2d 232, 106 S Ct 1066 (1986). United States Courts of Appeal Wagner v. Professional Engineers in California Government, 354 F3d 1036, 174 L.R.R.M. (BNA) 2015 (9 th Cir. 2004) In Wagner, plaintiff fee-payers alleged (1) that the union failed to provide proper Hudson notice and (2) that the union improperly characterized certain activities as representational. The Ninth Circuit Court of Appeals (1) held that the proper remedy for a defective Hudson notice is issuance of a proper notice with a renewed opportunity to object because dissent on the part of properly notified nonmembers is not to be presumed and the burden to object is on the nonmember; and, (2) held that the plaintiff fee-payers were judicially estopped from pursuing their claim that the union improperly characterized certain activities as nonchargeable because they stated to the District court that they were not challenging the amount of the fee. In the course of its opinion, the Court very clearly explained that Hudson governs the procedure to be used for allowing fee payers to object to being charged a fee, whereas Lehnert governed the substance of determining the proper amount of the fee to charge. 4

5 United Stated District Courts Professional Helicopter Pilots Ass n v. Lear Siegler Services, Inc., 326 F.Supp.2d 1305, 175 L.R.R.M. (BNA) 2603 (M.D.Alabama 2004). In Professional Helicopter Pilots Association, the employer involved provided services to the United States Army and to NATO. The union involved sought to collect agency fees from two nonmember employees. The Middle District of Alabama found that pursuant to 29 U.S.C. 164(b), the State of Alabama s so-called right-to-work law extended to any area where the State of Alabama had the power to legislate, including where its jurisdiction is concurrent with the federal government. That finding was the key to the case because the specific employee helicopter pilots worked at two different air fields and the issue became whether the State of Alabama had concurrent jurisdiction over those air fields. After reviewing various land patents, the Court found that the State of Alabama had concurrent jurisdiction over the air fields and, thus, its law extended to those fields. The Court rejected the union s argument that a job situs test should be used given that its headquarters and the majority of its members worked on land that was within the exclusive jurisdiction of the federal government. The Court distinguished Oil, Chemical and Atomic Workers v. Mobil Oil, 426 U.S. 407 (1976) on the basis that the job situs where all of the bargaining unit members worked in that case was a ship sailing on the high seas, whereas, in Helicopter Pilots, not all of the bargaining unit members were in one boat, so to speak. Madsen v. Associated Chino Teachers, 317 F.Supp.2d 1175, 174 L.R.R.M. (BNA) 2997 (C.D.CA. 2004). In Madson, a public school teacher in California sought to avoid the payment of the equivalent of agency fees based on religious grounds, alleging inter alia a violation of Title VII. The teachers union agreement provided for dues for members and agency fees for objecting nonmembers and it created an exception from the membership requirement for religious objectors. Religious objectors did not need to pay any dues, rather they were required to pay an equivalent amount to a charity A religious objector was distinguished from an agency fee payer in that the former objected on religious grounds to supporting the union in any way while the latter objected on religious or other ideological grounds for contributing money for certain items. The Court found that the union s policy conformed to the California Education Employment Relations Act and counteracted the friction that would have resulted within the school district if religious objectors were perceived by other employees as free riders. Also, the court found that she was not subject to discrimination, in that she was not treated more or less favorable than either dues paying members or agency fee payers. 5

6 Harrinton v. City of Albuquerque, 329 F.Supp.2d 1237, 175 L.R.R (NNA) 2739 D.N.M. 2004). In Harrington, the court held, based on its earlier findings in Wessel v. City of Albequerque, CIV , remanded, 299 F.3d 1186 (10 th Cir. 2002), that the plaintiffs Constitutional rights were violated when the union s Hudson notice (1) did not indicate which portion of dues and fees was allocated to each of the three levels of the union (AFSCME) and (2) did not include the verification of an independent auditor. The court ordered that the fair share fees that plaintiffs paid be refunded to them in their entirety because the union did not address the proportion of the fees that it believed was chargeable. Finally, the court ordered a jury trial to determine any punitive damages. Mitchell v. City of Philadelphia, 2004 WL (E.D.Pa. 2004). In Mitchell, the court held that the union failed to comply with the constitutional requirements of Hudson when it failed to provide advance notice to nonmembers before deducting agency fees from the nonmembers wages, although the notice itself was substantively adequate. An audit for the expenses for each local union within the AFSCME district council was not required. Hunterdon County v. CWA, 369 N.J.Super. 572, 850 A.2d 494, 175 L.R.R.M. (BNA) 2046 (2004). In Hunterdon County, the court upheld as Constitutional the agency fee payroll deduction provisions of the amended New Jersey Employer-Employee Relations Act that required public employers in New Jersey to make payroll deductions of agency fees on behalf of unions holding majority representational status as determined by New Jersey s Public Employment Relations Commission, holding, inter alia, that the provisions achieved important public policy goals such as reducing the ranks of so-called free riders. Robinson v. Pennsylvania State Corrections Officers Ass n, 299 F.Supp.2d 425, 174 L.R.R.M. (BNA) 2261 (M.D.PA. 2004). In Robinson, the court rejected an argument that a new union should be excused from the advance notice requirement of Hudson. The court held that Hudson required advance notice of the fair share fee even from unions that are newly formed and which have no history of expenditures upon which to base a fair share fee calculation. According to the court, the burden lies on the union to justify the collection of a fair share fee and its claim that it is unable to do so does not vitiate the necessity for the procedural protection set forth in Hudson. 6

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