Case No UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant-Appellee.
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1 Case: Document: Page: 1 Date Filed: 06/17/2015 Case No UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT JOSE SERNA,MARY RICHARDSON,ROBERTO CRUZ,SANTOS CORDERO,SARI MADERA,RALPH ANDERSON,WARREN LAMBERT,GREG HOFER, AND KENT HAND, FOR THEMSELVES AND THE CLASS THEY REPRESENT, Plaintiff-Appellants, V. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant-Appellee. On Appeal from the United States District Court for the Northern District of Texas, Dallas Division Civil Action No. 3:13-CV-2469-N, David C. Godbey, Judge Presiding APPELLANTS BRIEF David E. Watkins Bruce N. Cameron Texas Bar No bnc@nrtw.org dwatkins@jenkinswatkins.com Milton L. Chappell Jason E. Winford mlc@nrtw.org Texas Bar No Glenn M. Taubman jwinford@jenkinswatkins.com gmt@nrtw.org JENKINS & WATKINS Nathan J. McGrath A Professional Corporation njm@nrtw.org 2626 Cole Avenue, Suite 200 c/o National Right to Work Dallas, Texas Legal Defense Foundation Tel: Braddock Road, Suite 600 Fax: Springfield, Virginia Tel: Fax: Counsel for Plaintiff-Appellants and the class they represent
2 Case: Document: Page: 2 Date Filed: 06/17/2015 CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons and entities as described in the fourth sentence of Fifth Circuit Rule have an interest in the outcome of this case. These representations are made in order that the judges of this Court may evaluate possible disqualification or recusal. 1. Appellants: Jose Serna, Mary Richardson, Roberto Cruz, Santos Cordero, Sari Madera, Ralph Anderson, Warren Lambert, Greg Hofer, and Kent Hand; 2. Class of nonunion employees Appellants represent; 3. Counsel for the Appellants: Bruce N. Cameron, *Milton L. Chappell, Glenn M. Taubman, *Nathan J. McGrath, *Jason E. Winford, *David E. Watkins, and Jenkins & Watkins (*class counsel); 4. Appellee: Transport Workers Union of America, AFL-CIO; 5. Counsel for the Appellees: Peter D. DeChiara, Michael L. Winston, Cohen, Weiss and Simon LLP, Sanford R. Denison, and Baab & Denison, LLP; 6. Counsel for the United States: Katherine Twomey Allen. s/ Bruce N. Cameron Bruce N. Cameron Attorney of record for Plaintiff-Appellants i
3 Case: Document: Page: 3 Date Filed: 06/17/2015 STATEMENT REGARDING ORAL ARGUMENT Pursuant to Rule 34 of the Federal Rules of Appellate Procedure and Fifth Circuit Rule , Plaintiff-Appellants respectfully request oral argument. This appeal concerns First Amendment issues that are in flux as a result of two recent U.S. Supreme Court decisions dealing with compulsory labor union fees: Harris v. Quinn, 134 S. Ct (2014); and Knox v. Service Employees International Union, Local 1000, 132 S. Ct (2012). In those cases, the Supreme Court elevated the level of constitutional scrutiny for compulsory fees from intermediate scrutiny, important governmental interests, to the highest level of scrutiny, exacting First Amendment scrutiny. Harris, 134 S. Ct. at Using this highest level of scrutiny, the Supreme Court questioned whether the U.S. Constitution continues to permit the imposition of compulsory union fees on nonunion employees. Id. at It also questioned the current procedures for collecting compulsory union fees, specifically the validity of defaulting nonunion employees into supporting union politics unless they register a timely, written objection. Knox, 132 S. Ct. at This case presents this Court with its first opportunity to apply the new, heightened level of scrutiny to these issues. Plaintiff-Appellants submit that oral argument will be beneficial to the resolution of the First Amendment principles at issue in this case. ii
4 Case: Document: Page: 4 Date Filed: 06/17/2015 TABLE OF CONTENTS Page CERTIFICATE OF INTERESTED PERSONS...i STATEMENT REGARDING ORAL ARGUMENT... ii TABLE OF AUTHORITIES...v STATEMENT OF JURISDICTION...1 STATEMENT OF THE ISSUES PRESENTED...2 STATEMENT OF THE CASE...2 SUMMARY OF ARGUMENT...15 ARGUMENT...20 I. STANDARD OF REVIEW...20 II. THE COMPULSORY UNION FEE EXPERIMENT IS INCOMPATIBLE WITH THE FIRST AMENDMENT...20 A. Compulsory Union Fees Are an Experiment That Failed...20 B. Workplace Compulsion Defies Legislative and Judicial Precedent...22 C. Compulsory Union Fees Are an Undue Burden on Speech...26 III. ALTERNATIVELY, THE FIRST AMENDMENT DOES NOT PERMIT THE UNION TO ASSUME NONMEMBERS CONSENT TO ITS POLITICAL ACTIVITIES...31 A. Introduction Knox supports clarification and reconsideration Harris supports clarification and reconsideration...34 iii
5 Case: Document: Page: 5 Date Filed: 06/17/2015 TABLE OF CONTENTS (cont.) Page B. Assuming Consent to Supporting Union Politics Is Appropriate Only for Union Members...35 C. The Supreme Court Has Never Required Nonmembers to Object Affirmatively to Paying Political Fees Nonmember only cases Mixed member and nonmember cases...42 D. The First Amendment Requires That Nonmembers Opt In to Support Politics...44 E. The Law of Prior Restraint Requires Opt In...46 F. Privacy Rights Require Opt In...48 G. Fundamental Fairness Requires Opt In...50 CONCLUSION...52 CERTIFICATE OF SERVICE...54 CERTIFICATE OF COMPLIANCE...55 iv
6 Case: Document: Page: 6 Date Filed: 06/17/2015 TABLE OF AUTHORITIES Page CASES Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977)...16, 28, 42 Air Line Pilots Ass'n v. O Neill, 499 U.S. 65, 74 (1991)...51 Albertson s/max Food Warehouse, 329 N.L.R.B. 410 (1999)...25, 51 Andrews v. Louisville & Nashville R.R., 441 F.2d 1222 (5th Cir. 1971), aff d, 406 U.S. 320 (1972)...17 Beck v. Commc ns Workers of Am., 776 F.2d 1187 (4th Cir. 1985), aff d en banc, 800 F.2d 1280 (4th Cir. 1986), aff d, 487 U.S. 735 (1988)...29 Belhumeur v. Labor Relations Comm n, 735 N.E.2d 860 (Mass. 2000)...29, 30 Board of Regents v. Southworth, 529 U.S. 217 (2000)...27, 28 Boy Scouts of Am. v. Dale, 530 U.S. 640 (2000)...32 Brotherhood of Railway Clerks v. Allen, 373 U.S. 113 (1963)...37, 38 41, 42 Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292 (1986)...passim Citizens United v. FEC, 558 U.S. 310 (2010)...19, 26, 28, 30 College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999)...36, 45 Covenant Aviation Sec., LLC, 349 N.L.R.B. 699 (2007)...25 Communications Workers of Am. v. Beck, 487 U.S. 735 (1988)...29, 32 Davenport v. Washington Educ. Ass n, 551 U.S. 177 (2007)...36, 42, 45 Dixon v. Int l Bhd. of Police Officers, 504 F.3d 73 (1st Cir. 2007)...49 v
7 Case: Document: Page: 7 Date Filed: 06/17/2015 TABLE OF AUTHORITIES (cont.) Page Ellis v. Bhd. of Ry. Clerks, 466 U.S. 435 (1984)...passim Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985)...46, 47 Harris v. Quinn, 134 S. Ct (2014)...passim Hickinbotham Bros. Ltd., 254 N.L.R.B. 96 (1981)...24 International Ass n of Machinists v. Street, 108 S.E.2d 796 (Ga. 1959), rev d, 367 U.S. 740 (1961)...passim Johnston & Johnston v. Conseco Life Ins. Co., 732 F.3d 555 (5th Cir. 2013)...20 Knox v. Serv. Emps. Int l Union, Local 1000, 132 S. Ct (2012)...passim Lathrop v. Donohue, 367 U.S. 820 (1961)...34 Lehnert v. Ferris Faculty Ass n, 500 U.S. 507 (1991)...27 Locke v. Karass, 555 U.S. 207 (2009)...27 McIntyre v. Ohio Elections Comm n, 514 U.S. 334 (1995)...48 National Ass n of Letter Carriers v. Austin, 418 U.S. 264 (1974)...49 National Fed n of Indep. Bus. v. Sebelius, 132 S. Ct (2012)...22 National Steel & Shipbldg. Co., 324 N.L.R.B (1997)...24 NLRB v. Granite State Joint Bd., 409 U.S. 213 (1972)...36 Phelps Dodge Specialty Copper Prod. Co., 337 N.L.R.B. 455 (2002)...24 vi
8 Case: Document: Page: 8 Date Filed: 06/17/2015 TABLE OF AUTHORITIES (cont.) Page Prater v. United States Parole Comm n, 575 F. Supp. 284 (S.D. Ind. 1983)...49 Railway Emps. Dep t v. Hanson, 351 U.S. 225 (1956)...20, 21, 26, 34 Retail Clerks Int l Ass n, Local 1625 v. Schermerhorn, 373 U.S. 746 (1963)...31 Roberts v. United States Jaycees, 468 U.S. 609 (1984)...16, 30 Shea v. Int l Ass n of Machinists, 154 F.3d 508 (5th Cir. 1998)...passim Thomas v. Collins, 323 U.S. 516 (1945)...47 United States v. Enmons, 410 U.S. 396 (1973)...49 United States v. Playboy Entm t Grp., Inc., 529 U.S. 803 (2000)...26, 30 United States v. United Foods, Inc., 533 U.S. 405 (2001)...16, 25 Watchtower Bible & Tract Soc y of New York, Inc. v. Vill. of Stratton, 536 U.S. 150 (2002)...48 West Va. State Bd. of Educ. v. Barnette, 319 U.S. 624 (1943)...47 vii
9 Case: Document: Page: 9 Date Filed: 06/17/2015 TABLE OF AUTHORITIES (cont.) Page UNITED STATES CONSTITUTION U.S. Const. amend. I...passim U.S. Const. amend. V...1 STATUTES 28 U.S.C U.S.C U.S.C U.S.C U.S.C National Labor Relations Act 29 U.S.C. 159(e) U.S.C. 164(b)...24 Railway Labor Act 45 U.S.C. 151, et. seq U.S.C. 152, Eleventh...2 FEDERAL RULES OF APPELLATE PROCEDURE Fed. R. App. P ii viii
10 Case: Document: Page: 10 Date Filed: 06/17/2015 TABLE OF AUTHORITIES (cont.) Page FIFTH CIRCUIT LOCAL RULES Cir. R i Cir. R ii OTHER AUTHORITIES Andrew J. Hull, Prior Restraint and the Union Political Speech Opt-Out Requirement, 42 N. Ky. L. Rev. 27 (2015)...48 Cass R. Sunstein & Richard H. Thaler, Libertarian Paternalism Is Not an Oxymoron, 70 U. Chi. L. Rev (2003)...44 Clyde W. Summers, Freedom of Association: A Study in Labor Law and Political Theory, 16 Comp. Lab. L.J. 262 (1995)...23 Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (rev. & expanded ed. 2009)...10, 44 Right to Work States, ix
11 Case: Document: Page: 11 Date Filed: 06/17/2015 STATEMENT OF JURISDICTION This case arises under the First and Fifth Amendments to the United States Constitution, which guarantee the right of autonomy of speech and association and due process of law in the context of the Railway Labor Act ( RLA ), 45 U.S.C. 151 et seq. Subject matter jurisdiction arose in the court below under 28 U.S.C and 1337, and pursuant to 28 U.S.C and 2202, to declare the Plaintiff-Appellants constitutional rights. On December 3, 2014, the lower court certified this case as a national class action of nonunion employees required to pay compulsory union fees to Defendant-Appellee Transport Workers Union of America, AFL-CIO ( Union ). (ROA.1546). The United States intervened on December 12, 2014, to defend the constitutionality of the RLA. (ROA.1570). The lower court, on March 30, 2015, granted the Union s August 11, 2014 motion for summary judgment and denied Plaintiff-Appellants September 19, 2014 cross motion for summary judgment. (ROA.1611). Plaintiff-Appellants timely filed their Notice of Appeal on April 14, (ROA.1625). Accordingly, this Court has appellate jurisdiction, pursuant to 28 U.S.C. 1291, over the lower court s final Order and Judgment of March 30, (ROA.1611); (ROA.1622). 1
12 Case: Document: Page: 12 Date Filed: 06/17/2015 STATEMENT OF THE ISSUES PRESENTED 1. Can nonmembers of the Union be forced, despite constitutional limits, to fund union activities? 2. If the answer is, yes, nonmembers can be required to fund union bargaining, but not union politics, then the question is whether the Union may structure nonmembers choice regarding the funding of union politics in such a way as to automatically default nonmembers into supporting union politics unless they timely object in writing? STATEMENT OF THE CASE Course of Proceedings and Disposition Below Under the RLA, 45 U.S.C. 152, Eleventh, Congress allows employers and labor unions to compel represented employees to join or financially support a union as a condition of employment. In this case, Plaintiff-Appellants Jose Serna, Mary Richardson, Roberto Cruz, Santos Cordero, Sari Madera, Ralph Anderson, Warren Lambert, Greg Hofer, and Kent Hand ( Workers ) decline to join the Union and object to two aspects of compelled union fees. As nonmembers of the Union, they object to being forced to give any financial support to the Union and to the fact that the Union automatically defaults them into supporting its politics. To establish and enforce their First Amendment rights with regard to the compulsory union fees, the Workers filed a class action complaint with three 2
13 Case: Document: Page: 13 Date Filed: 06/17/2015 counts on June 27, (ROA.21). The first count challenges the constitutionality of the requirement that nonmembers pay any compulsory union fees. (ROA.31-32). A second count states an alternative claim: if some compulsory union fees (e.g., for bargaining costs) are constitutional, and others are not (e.g., for political costs), it is unconstitutional for the Union to structure the nonmembers choice in such a way as to default them into supporting union political expenses. (ROA.32-34). The third count states another alternative claim: the Union cannot constitutionally require nonmembers to object repeatedly, on an annual basis, to supporting its political and ideological expenses; and it cannot extract from nonmembers any fees it admits cannot be charged to them. (ROA.34-35). On July 29, 2013, the Workers asked the district court to certify a nationwide class of nonmembers who are represented by the Union and forced to pay compulsory fees to it. (ROA.75). On October 9, 2013, the Workers amended their complaint to add additional plaintiffs. (ROA.724). The Union filed an answer to both the original, (ROA.190), and amended, (ROA.768), complaints and opposed class certification. (ROA.199). On August 11, 2014, the Union moved for summary judgment and informed the lower court that part of the Workers third count was moot because the Union had, subsequent to the lawsuit being filed, repealed its requirement that nonmembers annually renew their objections to supporting its political and ideological 3
14 Case: Document: Page: 14 Date Filed: 06/17/2015 expenses. (ROA.1097); (ROA.1099). On September 19, 2014, the Workers filed their response and a cross motion for summary judgment. (ROA.1203); (ROA.1209). On December 3, 2014, the lower court certified this case as a national class action of nonunion employees required to pay the Union compulsory fees. (ROA.1546). The United States gave notice on December 12, 2014, that it was intervening in Count I to defend the constitutionality of the provisions of the RLA authorizing compulsory union fees. (ROA.1570). On March 30, 2015, the district court granted the Union s motion for summary judgment and denied the Workers cross motion for summary judgment. (ROA.1611) (Order); (ROA.1622) (Final Judgment). The Workers timely filed their Notice of Appeal on April 14, (ROA.1625). The Workers appeal the lower court s summary judgment as to their Count I claim, which challenges the constitutionality of all compelled union fees, and their Count II claim, which challenges the Union s choice structure that defaults the Workers into supporting its politics. The Workers do not appeal their Count III claims. 4
15 Case: Document: Page: 15 Date Filed: 06/17/2015 Statement of Facts The Workers are or were employed by Envoy Air, Inc., formerly American Eagle Airlines, Inc., as Fleet Service Clerks (Serna, 1 Richardson, Cordero, and Madera) and as a former Fleet Service Crew Chief (Cruz), and by Southwest Airlines Co., as Flight Attendants (Anderson, Lambert, Hofer, and Hand). (ROA ). The Workers all resigned membership in the Union, but are or were covered by Union contracts that require the discharge of any employee who fails to join or financially support the Union. (ROA.1612); (ROA.1615); (ROA.1430); (ROA ). Composition of the Mandatory Financial Support Regular Union dues include money spent for collective bargaining and for political, ideological, and other non-bargaining expenses. (ROA ); (ROA.1615). Nonmembers cannot be compelled to pay for political, ideological, and other non-bargaining expenses. Ellis v. Bhd. of Ry. Clerks, 466 U.S. 435, 457 (1984); Int l Ass n of Machinists v. Street, 367 U.S. 740, (1961). For clarity and brevity here, these two broad and mutually exclusive categories of union expenses will be labeled bargaining and political. The initial division between bargaining and political expenses is made unilaterally by the Union, without prior notice to the Workers or an opportunity for hearing. (ROA ). 1 Jose Serna is no longer employed by Envoy Air, Inc. 5
16 Case: Document: Page: 16 Date Filed: 06/17/2015 The Procedure for Collecting Mandatory Financial Support The Union unilaterally created its Transport Workers Union of America Policy on Agency Fee Objection 2 ( Policy ) for the collection and disposition of compulsory union fees. (ROA ); Record Excerpts Tab 3. The Policy is structured to create two default decision points for nonmembers, (ROA.1296); (ROA.1298), both of which strongly slant the playing field to the Union s pecuniary and political advantage. First Default Decision Point The Union s Policy requires every nonmember to pay an amount equal to full Union membership dues, including the political portion, or lose his or her job. (ROA.1296); (ROA ); (ROA.1374). Thus, under that Policy, the first decision point is that, by default, every nonmember employee automatically pays both the bargaining and political portions of the Union dues. (ROA.1296); (ROA.1374). Thus, the Union guarantees that the political portion of its dues flows automatically from an employee s pocket into the Union s coffers unless the nonmember takes timely affirmative action to stop the outflow. (ROA.1296). This opt- 2 The Policy the Union gives to the Workers and class members is published in TWU Express, found at ROA The Union prints the Policy in a tiny font that is barely legible. (ROA.1321); (ROA.1363). For the convenience of the Court, and when not trying to highlight the illegibility of the Policy, the Workers direct the Court to an enlarged, artificially legible copy of the Policy, which is at ROA ; Record Excerpts Tab 3. One Worker wrote to the Union telling it he needed a magnifying glass to read the Policy. (ROA.1375); (ROA.1377). 6
17 Case: Document: Page: 17 Date Filed: 06/17/2015 out, instead of opt-in, default is the focus of the second issue presented in this appeal. The Union requires that a nonmember affirmatively object in writing during a narrow thirty-one day window period in January. (ROA.1296). A nonmember who disagrees with the default position supporting the Union s politics must navigate this objection window, which is closed most of the year. (ROA.1296); (ROA ). If a nonmember objects during that narrow, annual thirty-one day window, still more is required of him or her to perfect the objection. To stop the outflow of money for politics, the nonmember must plan, draft, and mail or deliver individual written objection notices. (ROA.1296); (ROA.1353); (ROA.1358); (ROA.1360). Objection notices must provide the Union with the nonmember s home address, and they must be signed by the nonmember before mailing. (ROA.1296). Mailing the objection notice to the Union brings its own set of requirements. The objection notice must be mailed to two separate entities: the Union and its local. (ROA.1296). The nonmember must purchase at least two envelopes, research the names and addresses of the Union and its local, make a copy of the notice, pay for sufficient postage to send the notice and copy to two separate addresses, and mail the notice and the copy. (ROA.1296). If a nonmember does not own a copier, making the additional copy requires additional time, travel, and 7
18 Case: Document: Page: 18 Date Filed: 06/17/2015 expense. The objection must be postmarked to the Union s International Secretary Treasurer and the local union by the January deadline. (ROA.1296). Each of the foregoing steps is required to stop the outflow of political money, and recover the nonmember employee s money. (ROA ). Thus, the Union s first default decision point allows it automatically to collect political money, to which it has no legal claim, from employees salaries without their actual consent, or even their knowledge. Second Default Decision Point The second default decision point is relevant to the first issue raised in this appeal: are compulsory union fees constitutional? Toward the end of each year, the Union publishes in the closing pages of its magazine, TWU Express, an Independent Auditor s Report that includes a schedule containing the Union s division of its expenses between bargaining (what the Union calls chargeable ) and political ( nonchargeable ) categories. (ROA ). Following that schedule, in a font so small it challenges the reader s vision, (ROA.1321); (ROA.1363); (ROA.1375); (ROA.1377), the Union explains that nonmembers may initiate a challenge to contest its unilateral division of bargaining and political expenses. (ROA.1347). Unlike other information contained in the magazine, the TWU Express table of contents contains no reference to the Independent Auditor s Report or the 8
19 Case: Document: Page: 19 Date Filed: 06/17/2015 challenge Policy. (ROA.1328). Nonmembers who might want to invoke the Policy apparently are expected to stumble upon this information on their own, if at all. See (ROA.1352) (one Worker noted he had never noticed the agency fee policy in TWU Express and had only found out about the option to object because of a coworker s research efforts); (ROA ); (ROA.1363). 3 Unless a nonmember affirmatively mails an additional letter to initiate a challenge to the Union s unilateral calculation, the Union automatically assumes that the nonmember agrees with its determination of how the money is to be divided. (ROA ). Thus, the second default decision point is that nonmembers who do not take a second step automatically accept the Union s unilateral, self-interested, and ex parte calculation of the amounts it spent on bargaining versus political expenses. (ROA ). This additional objection to challenge the Union s calculation has to be timely perfected under the Union s Policy. (ROA ). Perfecting the challenge also requires overcoming procedural hurdles the Union unilaterally establishes. It takes nine paragraphs of instructions in the Policy to describe those hurdles. (ROA ). By setting the default for nonmembers to I automatically agree with the Union s calculation, the Union defaults nonmembers into 3 If a nonmember had previously objected during that calendar year, the Union would send its Policy to the nonmember and the nonmember would not have to search for it. (ROA.1297). 9
20 Case: Document: Page: 20 Date Filed: 06/17/2015 waiving any legal interest in the money to which both the Union and the employees have an arguable legal claim and that is subject to reasonable dispute. What the Science of Behavioral Economics Reveals About the Union s Objection Policy Dr. John Balz served as the lead researcher for the authors of the New York Times best-selling book Nudge, 4 and wrote initial drafts of some sections of the book for the authors, Richard H. Thaler and Cass R. Sunstein. (ROA.1378). (Dr. Balz s Declaration is at Record Excerpts Tab 2.) Nudge addresses behavioral economics, a science that examines how people make financial and other decisions. Specifically, Nudge looks at how structuring a choice (the book uses the terminology choice architecture ) strongly influences a person s ultimate decisions. (ROA ). Choices can be framed in a manner designed to influence a person s decision in a preferred direction, while not completely foreclosing less preferred choices. Thus, the framer of a choice can influence and determine the outcome to its favor. (ROA.1378); (ROA ). A simple example of choice architecture is a school cafeteria s decision to put certain food items at eye level and other food at ankle level. Through the placement of food options, the cafeteria structures the students choice to favor food placed at eye level. 4 Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (rev. & expanded ed. 2009). 10
21 Case: Document: Page: 21 Date Filed: 06/17/2015 Dr. Balz s expert opinion is that the Union s two default settings structure nonmember choice in a way that greatly favors its own political and financial agenda, while disfavoring and disadvantaging the Workers and other nonmembers property rights, free speech, and political autonomy. (ROA ). Dr. Balz identifies various ways the Union structures its Policy to transfer political money from employees pockets into the Union s coffers. First is the Union s use of defaults. (ROA ). If the initial default were set so that nonmembers would keep their own money unless they decided otherwise and took action (i.e., opted in to support union politics), then the default would be aligned with the status quo: each party would keep its own money and nothing would change hands without an affirmative response. However, by structuring its Policy to transfer money automatically from nonmembers to the Union at the first default decision point, the Union causes the nonmembers money to change hands, even though they have done nothing to relinquish their money or authorize such a transaction. (ROA ). The Union structures the second default such that employees relinquish their legal claim to money reasonably in dispute. Again, if the employee does nothing, the Union keeps for itself all of the fees to which both the Union and the employee may have a legal claim. (ROA ); (ROA ). 11
22 Case: Document: Page: 22 Date Filed: 06/17/2015 As Dr. Balz explains, there exists a Status Quo Bias, which reflects the human tendency toward inertia or non-action. (ROA.1381). Once individuals choose to enroll in a program, they normally stick with that choice for long periods of time. (ROA.1381). That is true even if individuals have been defaulted into that choice. (ROA.1381). A 2001 study Dr. Balz cited found that when individuals were allowed to opt into a 401(k) retirement program, only 37.4% enrolled. In sharp contrast, when the program was structured to enroll individuals automatically, and individuals were required to opt out to avoid that choice, enrollment soared to 85.9%. (ROA.1381). Those vastly different outcomes are not, according to Dr. Balz, indicative of employees actual preferences, but are due to the manner in which the choices are structured. (ROA.1381). Dr. Balz cites multiple studies that demonstrate the power of structuring a decision through the use of a default. (ROA ). Dr. Balz s expert opinion concludes that the Union s use of the first default discussed above results in nonmembers money flowing to the Union for political purposes not by voluntary and knowing acts, but by operation of the Union s choice architecture alone. In contrast, under an opt-in structure, no money for political purposes changes hands without a nonmember s clear decision and authorization. (ROA.1382). 12
23 Case: Document: Page: 23 Date Filed: 06/17/2015 A channel factor a barrier created or removed by those structuring the choice is the second way the Union s choice architecture affects the rights of employees. (ROA.1382). For example, Dr. Balz cites a Yale University study in which the school wanted to encourage its students to get a tetanus shot. Students were given identical information about the risks and benefits of the shot and were told where they could receive the shot. One group of students, however, was also given a map directing them to the building where the shot was being administered. Providing that small, additional piece of information increased the inoculation rate from 3% to 28%. (ROA.1382). As Dr. Balz points out, the additional value of a map seems minimal to an outsider because finding out where a building is located does not require a huge investment of time or resources. But, this small factor proved significant, and not providing it inhibited students chances of getting the shot. (ROA.1383). The Union s Policy contains many channel factors that deter nonmembers from retaining both their own political money and their interest in the reasonably disputed fees. Dr. Balz notes that in the case of letters and forms, lengthy text and confusing terms are common channel factors. When channel factors are combined with default options, the default becomes even more powerful and difficult to overcome. (ROA.1383). 13
24 Case: Document: Page: 24 Date Filed: 06/17/2015 One confusing term in the Union s Policy, according to Dr. Balz, is the reference to the Union s political activities as nonchargeable, an unintuitive term that does not help employees assess how those funds would be used. (ROA.1383). Instead, employees who might object must gather information from the Union to try to determine what it considers nonchargeable and whether its unilateral calculations are correct. (ROA.1383). For nonmembers to keep their own political money, they must act on the Union s information published in very small type that requires them to draft a letter, make copies of the letter, and send the letter to two different locations within a thirty-one day deadline. (ROA.1383). If a nonmember thinks the Union s calculation of the collective bargaining amount is incorrect, he must take a series of additional steps that act like channel factors. (ROA ). The failure to provide a map, discussed above, pales in comparison to the channel factors the Union has created to separate employees from the political funds to which they have sole title, and the disputed fees to which both the Union and the employees may have a legal claim. As Dr. Balz found, the combined power of the Union s default options and channel factors tilts against nonmember employees who have personal preferences not to pay fees for political purposes. (ROA.1384). The Union uses the Policy it imposes upon nonmembers as a tool to nudge (push) employees toward Union 14
25 Case: Document: Page: 25 Date Filed: 06/17/2015 membership and payment of fees equal to full union dues. (ROA.1384). As a result, an unknown number of employees are giving political money [to the Union] that they would not otherwise give... for activities they would not agree to and would prefer not to support financially. (ROA.1384). The Workers do not want to be compelled to support the Union at all. (ROA.1306); (ROA.1311); (ROA.1317); (ROA ); (ROA ); (ROA.1359); (ROA ); (ROA.1374). Therefore, they do not want their money or their legal interests defaulted to the Union, or to be forced to chase after their own money to reclaim it. SUMMARY OF ARGUMENT The Workers filed this suit to change the law. The district court was reluctant to forge new law, saying it is not the role of this Court to deviate from established, binding jurisprudence. (ROA.1616). The Workers understand that this Court, too, may feel itself bound by the Supreme Court s past decisions permitting compulsory union fees, even though the rationale for those decisions has now been abrogated. The Workers believe, however, that a different result is mandated by the stringent level of constitutional scrutiny the Supreme Court has applied in its more recent decisions concerning forced union fees. Harris v. Quinn requires that exacting First Amendment scrutiny be used when evaluating compulsory 15
26 Case: Document: Page: 26 Date Filed: 06/17/2015 unionism schemes. 134 S. Ct. 2618, 2639 (2014) (quoting Knox v. Serv. Emps. Int l Union, Local 1000, 132 S. Ct. 2277, 2289 (2012)). Knox defined the exacting scrutiny applicable here as follows: [M]andatory associations are permissible only when they serve a compelling state interest[t]... that cannot be achieved through means significantly less restrictive of associational freedoms. Second, even in the rare case where a mandatory association can be justified, compulsory fees can be levied only insofar as they are a necessary incident of the larger regulatory purpose which justified the required association. 132 S. Ct. at 2289 (citation omitted) (quoting Roberts v. United States Jaycees, 468 U.S. 609, 623 (1984), and United States v. United Foods, Inc., 533 U.S. 405, 414 (2001)). The Supreme Court has not yet applied such exacting scrutiny to abrogate the long-standing and questionable rule that union fees for bargaining purposes can be compulsory under the RLA. However, the Court has held that its prior decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977), upholding such fees for public employees, has questionable foundations. Harris, 134 S. Ct. at 2638; see id. at And, significant here, the Court suggested that its earlier decisions allowing forced fees under the RLA failed to consider sufficiently First Amendment principles. See id. at The original justification for compulsory fees sat on a very narrow perch, i.e., the legislative judgment that the elimination of free riders is necessary for 16
27 Case: Document: Page: 27 Date Filed: 06/17/2015 labor peace. Knox, 132 S. Ct. at The validity of that justification no longer exists because free-rider arguments... are generally insufficient to overcome First Amendment objections. Id. at The mere fact that nonunion members benefit from union speech is not enough to justify an agency fee. Harris, 134 S. Ct. at Thus, this Court should apply exacting First Amendment scrutiny and find that all compulsory union fees imposed under the RLA violate the Workers rights of autonomy of speech and association and due process of law. We understand, however, that the Court may be reluctant to hold that prior Supreme Court decisions are no longer binding as a result of Knox and Harris, although we believe it can do so. Cf. Andrews v. Louisville & Nashville R.R., 441 F.2d 1222, 1224 (5th Cir. 1971), aff d, 406 U.S. 320 (1972) (this Court declined to follow earlier on point Supreme Court precedents where subsequent Supreme Court decisions suggested the Supreme Court would later overrule those precedents). Therefore, we here present for the Court s consideration, or to preserve for Supreme Court review, the arguments that forced fees are unconstitutional. If this Court upholds the constitutionality of some compulsory fees, it must then address the second issue raised. This Court has already determined that union procedures for collecting and using compelled fees must minimize the burden on speech. [W]e are called upon to protect the free speech rights of objecting 17
28 Case: Document: Page: 28 Date Filed: 06/17/2015 employees from intrusive union procedures. The free speech rights whose protection is at issue here lie at or near the core of the First Amendment. Shea v. Int l Ass n of Machinists, 154 F.3d 508, 517 (5th Cir. 1998) (citations omitted). Thus, Union collection policies must be carefully tailored to minimize the infringement. Id. at 514. Burdensome restrictions, such as slanted defaults and adverse channel factors, which enrich the Union s political coffers at the expense of the Workers First Amendment rights, cannot be allowed. They serve[] only to further the illegitimate interest of the [Union] in collecting full dues from nonmembers who would not willingly pay more than the portion allocable to activities germane to collective bargaining. Id. at 515. Since Shea, the Supreme Court in Knox explained that the historic dissent is not to be presumed language originally used in International Ass n of Machinists v. Street, 367 U.S. 740, 774 (1961), was only dicta, an offhand remark that did not consider the broader constitutional implications of an affirmative opt-out requirement. Knox, 132 S. Ct. at The Court also explained that its earlier cases did not analyze that dicta under constitutional standards, and noted that prior decisions permitting the use of an opt-out system... approach, if they do not cross, the limit of what the First Amendment can tolerate. Id. at The Court then held that when a union imposes a special assessment it may not exact any funds from nonmembers without their affirmative consent. Id. at The Court 18
29 Case: Document: Page: 29 Date Filed: 06/17/2015 had no reason to go further, because only a special assessment was at issue in Knox. Using the constitutional measuring stick Knox requires, and recognizing that the original presumption of consent to funding union politics applied only to voluntary union members, this Court should hold that the nonmembers choice cannot constitutionally be structured so that they automatically lose their money and their political autonomy unless they affirmatively fight to reclaim them. Permitting the Union to create a choice structure that benefits its political program at the expense of the nonmembers constitutional free speech and associational rights opens the door to all sorts of mischief. If the default choice were that nonmembers keep their own money, the Union, like every other candidate or group seeking political support, would be required to muster its most persuasive appeal for funds. But, when the choice is structured to default the nonmembers political money into the Union s political machine, the Union understandably (not legally) takes money to which it has no legal claim, and erects as many barriers as possible to nonmembers who want to reclaim their own money. Prolix laws chill speech for the same reason that vague laws chill speech. Citizens United v. FEC, 558 U.S. 310, 324 (2010). If protecting speech required substantial litigation over an 19
30 Case: Document: Page: 30 Date Filed: 06/17/2015 extended time... [t]he interpretive process itself would create an inevitable, pervasive, and serious risk of chilling protected speech. Id. at This Court has already determined that annual objections cannot be required because they serve[] only to further the illegitimate interest of the [Union] in collecting full dues from nonmembers who would not willingly pay more than the portion allocable to activities germane to collective bargaining. Shea, 154 F.3d at 515. The same is true ab initio: an opt-out system creates a risk that the fees paid by nonmembers will be used to further political and ideological ends with which they do not agree. Knox, 132 S. Ct. at It follows from Knox that the Court should hold that the Union s objection requirement violates the First Amendment. ARGUMENT I. STANDARD OF REVIEW This Court reviews de novo a grant of summary judgment and applies the same standard as the trial court. Johnston & Johnston v. Conseco Life Ins. Co., 732 F.3d 555, 561 (5th Cir. 2013). II. THE COMPULSORY UNION FEE EXPERIMENT IS INCOMPATIBLE WITH THE FIRST AMENDMENT A. Compulsory Union Fees Are an Experiment That Failed More than sixty years ago, the Supreme Court embarked on an experiment with compulsory union fees. In Railway Employes Department v. Hanson, the 20
31 Case: Document: Page: 31 Date Filed: 06/17/2015 Court acknowledged the controversial nature of this compulsion: The ingredients of industrial peace are not only numerous and complex, but also may well vary from age to age, with the result being that what would be needful one decade might be anathema the next. 351 U.S. 225, 234 (1956). Hanson was hardly a ringing endorsement of compulsory unionism. It even noted that the elimination of compulsory unionism was easily within the police power of a State. Id. at 233. The decision rests with the policy makers, not with the judiciary. Id. at 234. Decades later, the Court in Harris described Hanson s analysis of the constitutionality of compulsory union fees for bargaining purposes as a single, unsupported sentence that its author essentially abandoned a few years later. 134 S. Ct. at Hanson applied only the rational basis test to uphold compulsory union fees. See 351 U.S. at 234 ( The task of the judiciary ends once it appears that the legislative measure adopted is relevant or appropriate to the constitutional power which Congress exercises. ). Only five years after Hanson, Justice Black, dissenting in International Ass n of Machinists v. Street, correctly foresaw that the Court s remedy of making some union expenses chargeable and some not would fail workers and be a very lucrative boon for special masters, accountants and lawyers who, with sufficient skill in accounting, algebra, geometry, trigonometry and calculus would 21
32 Case: Document: Page: 32 Date Filed: 06/17/2015 extract the proper microscopic answer from the [union s] voluminous and complex accounting records. 367 U.S. 740, (1961); see Harris, 134 S. Ct. at Justice Black predicted that this accounting and legal morass would promise[] little hope for financial recompense to the individual workers whose First Amendment freedoms have been flagrantly violated. 367 U.S. at 796. Permitting compulsory union fees, thus requiring nonmembers to chase after their money to avoid supporting union politics, was, in Justice Black s opinion, prohibited by the First Amendment and should be stopped dead in its tracks. Id. at 797. Experience shows that the First Amendment violation is so compelling that compulsory unionism can no longer be written off as a controversial but allowable legislative policy. As shown below, Justice Black was clairvoyant regarding this experiment with employees constitutional rights. As the Supreme Court recently wrote, deference in matters of [legislative] policy cannot... become abdication in matters of law. Nat l Fed n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2579 (2012). After sixty years of the controversial experiment with compulsory unionism, deference has become abdication, and a course correction is necessary. B. Workplace Compulsion Defies Legislative and Judicial Precedent The original justification for compulsory fees was the legislative judgment that elimination of free riders is necessary for labor peace. Knox,132 S. Ct.at 22
33 Case: Document: Page: 33 Date Filed: 06/17/ Free riders is a derisive term referring to nonunion employees who are forcibly included within a bargaining unit covered by a union-negotiated contract, and who, therefore, choose not to support the union financially. Employees, however, often have different interests. Professor Clyde W. Summers noted that the minority is often actually made worse by a union s collective bargaining agreement. Clyde W. Summers, Freedom of Association: A Study in Labor Law and Political Theory, 16 Comp. Lab. L.J. 262, 267 (1995). Summers, reviewing Sheldon Leader s book, noted that such an unwilling beneficiary is not caught by any plausible charge of free riding. Id. Knox cites to Summers article for several examples of groups benefitting others without anyone thinking the benefit created free riders who should be forced to pay for the benefits. 132 S. Ct. at Summers article concludes: tolerance of free riders is one of the hallmarks of a free market system and an inescapable condition in any complex democratic social system. Summers, Freedom, supra, at 268. Free markets do not impose compulsion on free riders, and neither does the First Amendment. Time and experience have swept the free rider/labor peace justification into the dustbin of history. For one thing, its original legal justification is invalid because free-rider arguments are generally insufficient to overcome First Amendment objections. Knox, 132 S. Ct. at The mere fact that nonunion 23
34 Case: Document: Page: 34 Date Filed: 06/17/2015 members benefit from union speech is not enough to justify an agency fee. Harris,134 S. Ct.at Time has also shown that the factual basis for the free rider/labor peace claim cannot be sustained. Pursuant to the power given them by Congress under 29 U.S.C. 164(b), half of the states (twenty-five) have chosen to pass Right to Work laws prohibiting compulsory union fees under the National Labor Relations Act. Right to Work States, (last visited June 16, 2015). Is there a marked difference in labor peace between neighboring states that have Right to Work laws and those that do not? There is not, and never has been, any greater workplace violence or strife in states that permit so-called free riders than in those that do not. The argument for compulsion as a necessary component of labor peace is even weaker given the fact that even in states permitting compulsion, Congress has decreed that compulsory union fees are not mandatory or automatic, but rather are a matter of voluntary agreement between the employer and union, which the employer may lawfully reject. Phelps Dodge Specialty Copper Prod. Co., 337 N.L.R.B. 455 (2002); Nat l Steel & Shipbuilding Co., 324 N.L.R.B (1997); Hickinbotham Bros., 254 N.L.R.B. 96 (1981). This destroys the claim of a compelling interest in solving the free-rider problem. The existence of Right to Work states, and open shop workplaces, creates unlimited opportunities to show 24
35 Case: Document: Page: 35 Date Filed: 06/17/2015 that directly comparable workplaces experience labor war whenever employees are free to decline to support a union. Yet, the Union and Intervenor United States produced not one shred of record evidence in support of the idea that freedom of choice creates labor war. Even when an employer and union agree to compulsion, Congress allows National Labor Relations Act employees to vote to deauthorize that compulsion. 29 U.S.C. 159(e); Covenant Aviation Sec., LLC, 349 N.L.R.B. 699 (2007); Albertson s/max Food Warehouse, 329 N.L.R.B. 410 (1999). If compulsory fees were necessary for labor peace, then how can compulsion, and the interests it supposedly protects, be left to the vagaries of collective bargaining or the whims of employers, employees, or the states? In short, whatever the justification for exclusive representation, its successful operation in Right to Work states and open shops in non-right to Work states demonstrates that compulsory union fees cannot constitutionally be levied, because they fail the Knox exacting-scrutiny standard that compulsory fees can be levied only insofar as they are a necessary incident of the larger regulatory purpose which justified the required association. 132 S. Ct. at 2289 (quoting United States v. United Foods, Inc., 533 U.S. 405, 414 (2001)). 25
36 Case: Document: Page: 36 Date Filed: 06/17/2015 C. Compulsory Union Fees Are an Undue Burden on Speech The distinction between laws burdening and laws banning speech is but a matter of degree. The Government s content-based burdens must satisfy the same rigorous scrutiny as its content-based bans. United States v. Playboy Entm t Grp., Inc., 529 U.S. 803, 812 (2000). In Citizens United v. FEC, the Court rejected the idea that a statute limiting speech could be saved through an interpretation that force[s] speakers to retain a campaign finance attorney to interpret an amorphous regulatory interpretation. 558 U.S. 310, 324 (2010). Prolix laws chill speech for the same reason that vague laws chill speech. Id. If protecting speech against a statute requires substantial litigation over an extended time,... [t]he interpretive process itself would create an inevitable, pervasive, and serious risk of chilling protected speech. Id. at As Justice Black predicted in Street, supra pages 21-22, the Hanson and Street decisions have inflicted precisely that upon employees who object to a union s agency fee calculation and must litigate to protect their rights. The process the Union uses here is especially worthy of censure, but an undue burden necessarily exists in all of the line-drawing cases that Justice Black described in Street, 367 U.S. at The major problem is vague standards and the difficulty dividing chargeable from nonchargeable expenses, which then compels ever more litigation by 26
37 Case: Document: Page: 37 Date Filed: 06/17/2015 employees seeking to protect their free speech rights. In Lehnert v. Ferris Faculty Ass n, 500 U.S. 507 (1991), the Justices had trouble deciding what was protected speech and what was not. A map is needed to determine at what point Justice Blackmun wrote for the Court or only for a plurality. Id. at 511. For example, in 1984, the Court in Ellis v. Brotherhood of Railway Clerks held that [t]he expenses of litigation not having... a connection with the bargaining unit are not to be charged to objecting employees. 466 U.S. 435, 453 (1984). Yet, seven years later, the Court in Lehnert was split into three irreconcilable factions as to the chargeability of litigation. Locke v. Karass, 555 U.S. 207, 208 (2009). And, eighteen years after Lehnert, despite Ellis,the Court decided some litigation expenses incurred outside the bargaining unit were chargeable. Id. at In Board of Regents v. Southworth, 529 U.S. 217 (2000), the Supreme Court considered applying its procedures for resolving union fee disputes to university student fee disputes. The Court agreed that compulsory union fee precedents were applicable. Id. at 231. However, the Court concluded that the remedy applied in the union fee cases was too complex for student fee cases! Id. at Showing great candor, the Southworth Court noted that even in dealing with unions, whose functions are, or so we might have thought, well known and understood, and even after a long history of judicial involvement, we have 27
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