The Use of Labor Union Dues for Political Purposes: A Legal Analysis

CRS Report for Congress
The Use of Labor Union Dues
For Political Purposes:
A Legal Analysis
Updated August 2, 2000
L. Paige Whitaker
Legislative Attorney
American Law Division

Congressional Research Service ˜ The Library of Congress

The Use Of Union Dues For Political Purposes:
A Legal Analysis
Summary
Under union shop agreements, labor unions must establish strict safeguards and
procedures for ensuring that non-members’ dues are not used to support certain
political and ideological activities that are outside the scope of normal collective
bargaining activities. The “union shop” or “agency shop” agreement essentially
provides that employees do not have to join the union, but must support the union in
order to retain employment by paying dues to defray the costs of collective
bargaining, contract administration, and grievance matters.
In a line of decisions, the Supreme Court has addressed this issue and has
concluded that compulsory union dues of non-members may not be used for political
and ideological activities that are outside the scope of the unions’ collective
bargaining and labor-management duties when non-members object to such use.
Seven Supreme Court decisions have held that union dues exacted from dissenting
non-members may not to be used for political and ideological purposes and must be
expeditiously refunded to dissenting non-members according to proper procedural
safeguards: (1) International Association of Machinists v. Street, 367 U.S. 740
(1961); (2) Railway Clerks v. Allen, 373 U.S. 113 (1963); (3) Abood v. District
Board of Education, 431 U.S. 209 (1977); (4) Ellis v. Brotherhood of Railway
Clerks, 466 U.S. 435 (1984); (5) Chicago Teachers Union v. Hudson, 475 U.S. 292
(1986); (6) Communications Workers of America v. Beck, 487 U.S. 735 (1988); and
Lehnert v. Ferris Faculty Association, 500 U.S. 507 (1991).

Contents
Introduction ................................................... 1
Labor Union Political Activity Under the Federal Election Campaign Act of 1971, as
Amended .................................................. 2
Background of Union Security Agreements............................5
Supreme Court Decisions Concerning The Use of Compulsory Union Dues for
Political Purposes............................................7

The Use Of Union Dues For Political Purposes:
A Legal Analysis
Introduction
In 1988, the Supreme Court, in Communications Workers of America v. Beck
(hereinafter referred to as Beck), ruled against organized labor and held that non-
union employees could not be required to pay full union dues if some of those funds¹
were to be used for activities unrelated to collective bargaining. Under § 8(a)(3) of
the National Labor Relations Act (NLRA),² a labor union and an employer can enter
into a contractual agreement requiring all employees in the bargaining unit to pay
union dues as a condition of employment no matter whether such employees became
union members or not. The Supreme Court in Beck concluded that § 8(a)(3) of the
NLRA (1) does not permit a labor union to expend funds on non-related union
activities, such as lobbying and political activities, when dues-paying non-member
employees object and (2) authorizes only those dues and fees necessary to the duties³
relating to labor-management relations. In 1991 the Supreme Court in Lehnert v.
Ferris Faculty Association, expanded the scope of the Beck holdings to include public
sector employees so that such employees may not be compelled to subsidize political
or ideological activities of public employee unions.⁴
During the 1992 presidential election year, on April 13, 1992, President George
Bush issued Executive Order 12800 requiring federal contractors to post notices
informing employees of their rights under the Beck decision. It required notification
to federal contractor non-union employees that their union dues may not be used to
support political activities that they oppose. It also required the Secretary of Labor
to issue rules providing for financial disclosure and reporting requirements for labor
unions in order to provide enforcement of the Beck holdings.⁵ However, when
President Bill Clinton took office, he repealed former President Bush’s Executive
Order by issuing Executive Order 12836 on February 1, 1993, which revoked certain
executive orders concerning federal contracting.⁶

¹487 U.S. 735 (1988).
²Codified at 29 U.S.C. § 158(a)(3).
³Beck, supra, at 751-54, 762-63.
⁴500 U.S. 507, 522 (1991).
⁵Exec. Order No. 12800, April 13, 1992, Notification of Employee Rights Concerning
Payment of Union Dues or Fees, 1992 U.S.C.C.A.N. B 22.
⁶Exec. Order No. 12836, Feb. 1, 1993, Revocation of Certain Executive Orders
(continued...)

Prior to the Beck and Lehnert decisions, the Supreme Court regularly revisited
this issue in a line of decisions which held that labor unions cannot use dissenting non-
union employees’ dues for political and ideological activities outside the scope of the
activities related to collective bargaining. Such cases include: (1) International
Association of Machinists v. Street, 367 U.S. 740 (1961); (2) Railway Clerks v.
Allen, 373 U.S. 113 (1963); (3) Abood v. District Board of Education, 431 U.S. 209
(1977); (4) Ellis v. Brotherhood of Railway Clerks, 466 U.S. 435 (1984); and (5)
Chicago Teachers Union v. Hudson, 475 U.S. 292 (1986). These cases will be
discussed in more detail in part four of this report. Although this report will not
discuss the case in more detail since it does not concern labor unions, note that in
Keller v. State Bar of California, 496 U.S. 1 (1990), the Supreme Court held that an
integrated state Bar, which by statute is the regulatory body for the legal profession
in a state and requires the payment of mandatory dues by its members, is analogous
to a union. Therefore, according to the Court, using mandatory dues to fund political
and ideological activities, where such expenditures are not necessarily and reasonably
incurred for the purpose of regulating the legal profession or improving the quality of
the legal services available to the people of the State, the Bar violated the integrated
Bar members’ First Amendment rights.
Labor Union Political Activity Under the Federal
Election Campaign Act of 1971, as Amended
Generally, political activities by labor unions in federal elections are prohibited.⁷
First, the Labor Management Relations Act of 1947 prohibited labor union⁸
contributions to federal election campaigns. Later, the Federal Election Campaign
Act of 1971, as amended, (FECA), generally continued this broad prohibition of labor
union activities and funds in federal elections. However, the FECA provided for three
broad exemptions to this general prohibition of labor union political activities in
federal elections: (1) communications by a labor organization directed at its members
or their families on any subject: (2) non-partisan voter registration and get-out-the-
vote activities by a labor organization which are directed to its members or their
families: and (3) the establishment and administration of a political action committee
or separate segregated fund (commonly known as a PAC) for the purpose of the
solicitation of contributions to such fund for political purposes.⁹ Generally, any other
type of political activity by labor unions in federal elections is prohibited under the
FECA, and labor union contributions and expenditures concerning federal elections
outside these exceptions are prohibited.

⁶ (...continued)
Concerning Federal Contracting, 1993 U.S.C.C.A.N. B 24.
⁷2 U.S.C. § 441b(a) (prohibiting contributions and expenditures by labor organizations).
⁸Ch. 120, Tit. III, § 304, 61 Stat. 136, 159 (1947) (Now codified at 2 U.S.C. §

441b(a)).

⁹2 U.S.C. § 441b(b)(2).

Various advisory opinions of the Federal Election Commission (FEC) have
further clarified the proper roles of labor unions in federal elections. For example,
according to the FEC: a teacher’s union could pay for the expenses of interns
working in a Member of Congress’ mobile office as long as their activities were non-
political and exclusively related to the performance of the Member’s official duties;¹⁰
a labor union could circumvent political contribution requirements if it bought voter
poll results from a candidate’s campaign committee;¹¹ a labor organization could not
pay for travel and living expenses of its members who were serving as delegates to a
national nominating convention;¹² funds received by a labor PAC for the sale of
membership lists would be treated as a contribution to the PAC;¹³ a labor union’s
PAC funds could be used to pay the expenses of lobbying activities conducted by¹⁴
labor union officials; a labor union’s contributions to state and local candidates
should specify that such funds cannot be used for federal candidates;¹⁵ and a labor
union PAC can solicit employees of subsidiary corporations for contributions when
the corporate PAC solicits such employees even though the employees are not union¹⁶
members and the subsidiary corporation is not subject to a union contract.
FEC regulations also address the scope of a labor organization’s participation
in federal elections. Most notably, the regulations restrict those labor union
communications directed to the general public and to union participation in voter
registration and get-out-the vote-drives from containing express advocacy¹⁷ and
prohibit coordination with any candidate or political party. The revised regulations
permit a labor organization to make registration and get-out-the-vote (GOTV)
communications to the general public if such communications: (1) do not expressly
advocate the election or defeat of a clearly identified candidate or candidates of a
clearly identified political party or (2) are not prepared or distributed with the
coordination of a candidate or political party (will subsequently be referred to as¹⁸
“coordinated” or “coordination”). A labor union may also distribute to the general
public, official registration and voting information and forms and absentee ballots (if
permitted by applicable State law) provided that such distributions do not contain

¹⁰FEC Advisory Opinion No. 1979-25, June 19, 1979.
¹¹FEC Advisory Opinion No. 1980-19, March 14, 1980.
¹²FEC Advisory Opinion No. 1980-64, July 9, 1980.
¹³FEC Advisory Opinion No. 1981-7, March 9, 1981.
¹⁴FEC Advisory Opinion No. 1983-4, Feb. 18, 1983.
¹⁵FEC Advisory Opinion No. 1988-18, May 20, 1988.
¹⁶FEC Advisory Opinion No. 1990-25, Dec. 14, 1990.
¹⁷Expressly advocating is defined as any communication: (1) which uses specific
phrases, such as “vote for” or “vote against,” in order to urge the election or defeat of a
clearly identified candidate; or (2) which a reasonable person would interpret as advocating
the election or defeat of a clearly identified candidate. 11 C.F.R. §100.22. Courts are
currently at odds over the second factor of this definition. See FEC v. Furgatch, 807 F.2d^th

857 (9 Cir. 1987), cert. denied, 484 U.S. 850 (1987), Maine Right to Life Committee v.^st

FEC, 914 F.Supp. 8 (D. Maine 1996), aff’d 98 F.3d 1 (1. Cir. 1996).
¹⁸11 C.F.R. § 114.4(c)(2).

express advocacy and are not coordinated.¹⁹ A labor organization may donate funds
to State or local government agencies to help defray the costs of printing and
distributing these materials.²⁰ Moreover, a labor organization may also prepare and
distribute to the general public the voting records of Members of Congress and voter
guides, provided that the these materials do not contain express advocacy and that
there was no coordination involved.²¹
FEC regulations also permit a labor organization to support or conduct voter
registration or GOTV drives aimed both at employees outside its restricted class²² and
the general public, provided that: (1) the labor organization does not expressly
advocate the election or defeat of a clearly identified candidate, or candidates of a
clearly identified political party; (2) the labor organization does not coordinate with
any candidate or political party; (3) the services are not primarily directed at
individuals favored by the labor organization; (4) the services are made without regard
to the voter’s political preference; (5) the workers conducting such services are not
paid only to register or transport voters supporting one or more particular candidates
or political party; and (6) at the time these services are provided, the labor
organization notifies, in writing, those receiving information or assistance regarding
registration or voting of the availability of these services without regard to a potential²³
voter’s political preference. Finally, a labor organization may donate funds to
qualified nonprofit organizations to stage candidate debates.²⁴
Various federal court decisions have determined the legality of certain types of
labor union activities involving federal elections. For example, in the 1957 decision
United States v. United Automobile Workers, the Supreme Court held that labor
union expenditures, in connection with a federal election, would be prohibited to the
extent that such activity amounted to electioneering for a particular candidate or²⁵
political party. The Court asserted that the legislative history of a provision of the
Federal Corrupt Practices Act, prohibiting labor union contributions and expenditures
in federal elections, would disallow the expenditure of union dues to pay for
commercial broadcasts that are designed to urge the public to elect a certain candidate²⁶
or political party.
In United States v. Boyle, in 1973, the United States Court of Appeals for the
District of Columbia Circuit, in affirming the conviction of a labor union president for
consenting to unlawful contributions to federal candidates, held that there are

¹⁹11 C.F.R. § 114.4(c)(3).
²⁰ Id .
²¹11 C.F.R. § 114.4(4), (5).
²²A labor organization’s restricted class is its members and executive or administrative
personnel, and their families. 11 C.F.R. § 114.1(j).
²³11 C.F.R. § 114.4(d).
²⁴11 C.F.R. § 114.4(f)(3).
²⁵352 U.S. 567, 592 (1957).
²⁶352 U.S. at 585-87.

compelling governmental reasons for justifying the federal prohibition against labor
union contributions and expenditures in federal elections despite First Amendment
free speech and association rights of the labor union.²⁷ The Court of Appeals in Boyle
concluded that for a labor union disbursement to be illegal under federal law, it must
be shown that the labor organization: (1) made a contribution or an expenditure, (2)
in connection with a federal election, and (3) for the purpose of active
electioneering.²⁸
In a 1972 Supreme Court decision in Pipefitters v. United States, reversing
certain convictions of labor union officers concerning the use of a political fund, the
Court concluded that a legitimate labor union political fund must be separate from the
labor union in that there must be a strict segregation of the political fund’s monies
from the union’s dues and assessments.²⁹ The Court noted that, while former 18
U.S.C. § 610, which prohibited labor organizations from making contributions or
expenditures connected with a federal election, might be interpreted to prohibit the
use of union funds to establish and maintain a union political fund for the purposes of
soliciting and making political contributions in federal campaigns, the provision of the
Federal Election Campaign Act of 1971 allowing labor unions to establish separate
segregated funds or political action committees may have impliedly repealed Section³⁰

610.

Background of Union Security Agreements
The question frequently arises as to whether compulsory labor union dues may
be used by a union for political purposes and, if so, under what restrictions or
conditions may such dues be used. In order to understand that issue properly, it is
necessary to understand the various types of union security agreements between
employers and labor unions that require employees to provide some form of financial
support to the unions as a condition of employment. One type of security agreement
is the so-called “closed shop” whereby the employer agrees to employ only members
in good standing with the union. This type of agreement was recognized by the
National Labor Relations Act of 1935 (NLRA), popularly known as the Wagner³¹³²

Act, but was later prohibited by the Labor Management Relations Act of 1947.
²⁷482 F.2d 755, 758 (D.C. Cir. 1973), cert. den. 414 U.S. 1076 (1973).
²⁸Id., 760.
²⁹407 U.S. 385, 414 (1972).
³⁰Id., 432.
³¹See ch. 372, § 8(3), 49 Stat. 452 (1935). See Radio Officers Union v. NLRB, 347
U.S. 17, 41 (1954) holding that the legislative history of the NLRA indicated that Congress
intended the utilization of union security agreements to compel the payment of union dues and
fees.
³²The Labor Management Relations Act of 1947 is popularly titled the Taft-Hartley
Amendments of 1947. See ch. 120, § 101, 61 Stat. 140-141 (1947), amending § 8(3) of the
NLRA and renumbering it § 8(a)(3). This section is codified at 29 U.S.C. § 158(a)(3).

Another type of a union security agreement is the agency shop agreement
whereby the employees do not have to join the union or have full union membership
in good standing within thirty days, but must support the union by paying a sum of³³
money equivalent to union dues in order to retain employment. Most agency shop
agreements provide for a service fee, which includes an initiation fee as well as certain
dues that are paid by full union members.
Another form of a union security agreement is the union shop, which does not
condition employment on union membership, but requires that employees join the
union after a certain grace period on the job and remain members during the term of
the labor-management agreement.³⁴
A “maintenance of membership” clause in a union contract is another form of
union security which imposes no obligation to join the union, but requires that one
remain a member once voluntarily becoming one until the expiration of the collective³⁵
bargaining agreement.
Other less formal union security agreements are: (1) a dues-checkoff provision,
(2) a fair-share agreement, or (3) a hiring-hall provision. The dues-checkoff provision
does not require anyone to join a union or retain union membership, but simply
requires that the employer shall deduct from the salary of the union members their
union dues and credit that amount to the union. A fair-share agreement would require
all employees to pay the prorated share of the union’s collective bargaining and
representational expenses, but not irrelevant expenses. The hiring-hall provision is a
device for job security in certain industries such as in the maritime and construction
industries whereby the union and the employer agree that the union-hall is to be the
exclusive mode for job referrals.³⁶
In 1956, the Supreme Court in a unanimous opinion in Railway Employees’
Dept., A.F.L. v. Hanson upheld the union shop provision of § 2, Eleventh of the
Railway Labor Act, as amended,³⁷ which provided that notwithstanding the law of any
state, a carrier and a labor organization may make an agreement requiring all
employees within a stated period of time to become members of the labor
organization provided that there is no discrimination against any employee and
provided further that membership is not denied or terminated for any reason other

³³See generally, Joseph Jenkins, LABOR LAW, v. 2, § 4.9 (Cincinnati: W.H. Anderson
Co., 1969).
³⁴Under the National Labor Relations Act, as amended, union shop agreements are
permitted whereby employees must obtain membership in the union within 30 days of being
employed, or within 30 days after the effective date of the agreement, whichever is later. See
29 U.S.C. § 158(a)(3). However, under the Railway Labor Act (RLA), the union security
requirements are substantially the same as in NLRA except that the period whereby employees
are required to join a union is 60 days rather than 30 days. See 45 U.S.C. §§ 151-158.
³⁵Robert Gorman, Labor Law, Unionization and Collective Bargaining, 641-42 (St.
Paul: West Publishing Co., 1976).
³⁶Id., 642-43.
³⁷64 Stat. 1238, codified at 45 U.S.C. § 152, Eleventh.

than the non-payment of periodic union dues, fees, and assessments.³⁸ The Court
found that the union shop provision of § 2, Eleventh was within the power of the
Congress under the Commerce Clause and did not violate either the First or the³⁹
Fourteenth Amendments.
The Hanson Court noted that it is argued that the union shop agreement forces
employees into ideological and political associations that violate their freedom of
conscience, freedom of association, and freedom of thought. However, the Court
intimated that if the union shop arrangement were used to impose membership
conditions, other than the payment of periodic dues, initiation fees, and assessments,
involving ideological or political associations to which members may be opposed, it⁴⁰
might present First Amendment problems.
Supreme Court Decisions Concerning The Use of
Compulsory Union Dues for Political Purposes
Several years after the Supreme Court upheld the validity of union security
agreements, it was faced with the issue of whether a union may use funds, raised
pursuant to a union-shop agreement,⁴¹ to support candidates for public office against
the wishes of dissenting employees. The Court, in International Association of⁴²
Machinists v. Street, found that such expenditures fall outside of the scope of the
reasons that justified union shop agreements.⁴³ The Court asserted, however, that any
dissent by employees to the use of labor union funds for political causes is not to be
presumed, but must be made known by them to the labor union. Moreover, only
those employees who had identified themselves as being opposed to the political uses
of their funds would be entitled to relief.⁴⁴
The Court was quick to note that this holding would not curtail the traditional
political activities of labor unions, but required only that labor unions must not
support those activities against the expressed wishes of dissenting employees.⁴⁵ The
Court also suggested the following two possible remedies: (1) an injunction against
expenditures for political causes opposed by complaining employees, in the amount
of union dues exacted from them in proportion to the union’s total expenditures for
political purposes to the union’s total budget, or (2) restitution to each dissenting

³⁸351 U.S. 225, 228, 238 (1956).
³⁹Id., 238.
⁴⁰Id., 236.
⁴¹The union shop authorization in the Street case was pursuant to § 2, Eleventh of the
Railway Labor Act (64 Stat. 1238, 45 U.S.C. § 152, Eleventh).
⁴²367 U.S. 740 (1961).
⁴³Id. at 767.
⁴⁴Id., 774.
⁴⁵Id., 770.

employee of the portion of his or her dues which was spent by the union for political
purposes.⁴⁶
In 1963, the Supreme Court in Railway Clerks v. Allen reaffirmed that, under
§ 2, Eleventh of the Railway Labor Act, labor unions cannot, over an employee’s
objection, use exacted funds to support political activities which such employees
oppose.⁴⁷ The Allen Court extended Street, finding that “it would be impractical to
require a dissenting employee to allege and prove each distinct union political
expenditure to which he objects,”⁴⁸ but retained its requirement that such opposition
be made known to the union by each dissenting employee.
The Allen Court reaffirmed the remedies suggested by the Street Court, but
offered suggestions of its own. It suggested a practical decree which would order:
(1) a refund to the dissenting employee of a portion of the exacted dues in the same
proportion that the political expenditures bore to the total union expenditures, and (2)⁴⁹
a future reduction of dues from the dissenting employee by the same proportion.
The Court placed the burden of determining the appropriate proportions on the unions
since they were in possession of the relevant materials.
In 1977, the Supreme Court, in Abood v. Detroit Board of Education, extended
Street and Allen to encompass dissenting non-union public employees,⁵⁰ basing its
decision, however, on constitutional grounds that were not at issue in the prior cases.
While a labor organization can constitutionally expend funds for the expression of
political and ideological views which are not germane to its collective-bargaining
activities, it can only finance such expenditures from the dues of non-dissenting
employees.⁵¹ Dissenting, non-union employees have a constitutional First Amendment
right to prevent a labor union from using a proportionate share of their service fees
for certain political and ideological activities unrelated to the union’s collective-
bargaining activities.⁵²
The Abood Court noted that in determining a remedy, the objective of the Court
would be to devise a method to prevent the compulsory subsidization of political and
ideological activities by dissenting, non-union employees without restricting the
union’s ability to require all employees to pay for the union’s collective-bargaining
activities. As it had previously in Street and Allen, the Abood Court, in remanding the
case for further proceedings, suggested remedies which included: (1) a refund of that
portion of the exacted dues in the proportion that union political expenditures bore

⁴⁶Id., 775.
⁴⁷373 U.S. 113, 118-19 (1963).
⁴⁸Allen, supra, at 118.
⁴⁹Id., 122.
⁵⁰431 U.S. 209 (1977).
⁵¹Id., 235-36.
⁵²Id., 234. Cf., Buckley v. Valeo, 424 U.S. 1, 22-23 (1976) in which the Supreme Court
held that contributions to organizations for the purpose of spreading a political message were
protected by the First Amendment.

to the total union expenditures and (2) a reduction of future union dues to dissenting
non-union employees by the same proportion.
In Ellis v. Brotherhood of Railway Clerks, the Court was asked to determine the
validity of a rebate scheme, in which a labor union collected dues from employees and
used them for certain political and ideological activities, later paying a rebate to
employees who dissented from the political and ideological use of such dues.⁵³ The
Court noted that under the rebate scheme the union obtains an involuntary loan for
those political and ideological activities to which the dissenting employees object.⁵⁴
Since there were readily available acceptable alternatives to such union borrowing,
such as advance reduction of dues and/or interest-bearing accounts, the Court found
that a union cannot be allowed to use the dissenting employees’ funds even
temporarily. Thus, the Court found that although the rebate scheme reduces the
statutory violation, it does not eliminate the violation.⁵⁵
In reaching its decision, the Court developed the following test for determining
whether certain activities must be paid for by dissenting employees subject to a labor-
management agreement: “... the test must be whether the challenged expenditures are
necessarily or reasonably incurred for the purpose of performing the duties of an
exclusive representative of the employees in dealing with the employer on labor-
management issues.” Under such a standard dissenting employees could be required
to pay their fair share of: (1) the direct costs of negotiating a collective bargaining
contract; (2) the direct costs of administering such a contract; (3) the costs of settling
grievances and disputes; and (4) certain costs of activities or undertakings by a labor
union to implement or effectuate the duties of the labor union as the exclusive
representative of the employee.⁵⁶ The Court found that dissenting employees could
be charged for such union activities as: (1) conventions which are essential to the
labor union’s discharge of its duties as a collective-bargaining agent; (2) labor union
social activities which are reasonably related to the union’s collective bargaining
activities; (3) labor union publications which report on labor-management relations
and collective bargaining activities; (4) organizing expenses for the purpose of making
the labor union stronger; and (5) litigation expenses incurred in negotiating and
administering a labor contract or in settling grievances and disputes.⁵⁷
Two years later, in Chicago Teachers Union v. Hudson,⁵⁸ the Court was
presented with an issue involving the procedural safeguards related to the collection
of agency fees by a union. Under the agency shop agreement between the union and
the Chicago Board of Education, “proportionate share payments” which
approximated 95 percent of the regular union dues were deducted from non-members’
paychecks.

⁵³466 U.S. 435 (1984).
⁵⁴Id., 443.
⁵⁵Id., 444.
⁵⁶Id., 448.
⁵⁷Id., 448-53.
⁵⁸475 U.S. 292 (1986).

The union established a three-stage procedure with the union’s administration
to consider non-members’ objections to such deductions. The Court found that the
union’s procedure failed to minimize the risk that the exacted fees of non-union⁵⁹
employees might be used for impermissible ideological and political purposes. The
Court concluded that this procedure was inadequate even though the exacted funds
of the non-members were placed in an escrow account. The procedure contained
three fundamental flaws: (1) failure to minimize the risk that non-union employees’
contributions might be temporarily used for political and ideological purposes; (2)
failure to provide sufficient information to non-members about the basis of their
proportionate shares and the method of determining their “advance reduction of
dues”; (3) failure to provide a reasonably prompt decision by an impartial arbitrator⁶⁰
in determining whether or not a non-member’s dues should be further reduced.
Accordingly, the Supreme Court held that the constitutional requirements for the
union’s collection of agency fees from non-members would include: (1) an adequate
explanation for the basis of the fee; (2) a reasonably prompt opportunity to challenge
the amount of the fee before an impartial arbitrator; and (3) the establishment of an
escrow fund for the amounts reasonably in dispute while any challenges are pending.
The Supreme Court remanded the case to the district court for further proceedings⁶¹
consistent with such holdings.
Like the prior decisions, the 1988 Supreme Court decision in Communications
Workers of America v. Beck held that § 8(a)(3) of the National Labor Relations Act
does not permit a labor union to spend funds exacted from dues-paying non-union
employees on certain activities unrelated to collective bargaining when those
employees object to such expenditures.⁶² The Court found that § 8(a)(3) of the
National Labor Relations Act was like § 2, Eleventh of the Railway Labor Act in that
it authorized the exaction of only those dues which would be necessary to
“performing the duties of an exclusive [bargaining] representative of the employees
in dealing with the employer on labor-management issues.”⁶³
In examining the legislative history of § 8(a)(3), the Court found that Congress
wished to afford non-members adequate protection by allowing the collection of only
those fees which would be necessary to finance collective bargaining activities. Even
though Congress under § 8(a)(3) did not in any way limit the uses for which the
unions could expend such fees exacted from non-members, such silence was not to
be interpreted to mean that there was congressional acquiescence in the use of funds
for activities that were unrelated to collective bargaining activities.⁶⁴ Congress’
purpose in providing for compulsory unionism was to force employees to bear their
fair share of the costs related to negotiations, administration of collective bargaining

⁵⁹Id., 309.
⁶⁰Id., 304-07.
⁶¹Id., 310.
⁶²487 U.S. 735 (1988).
⁶³Id., 752, quoting Ellis v. Railway Clerks, 466 U.S. at 447-48.
⁶⁴Id., 751-54.

agreements, and the settlement of disputes, but not to support union political activities
which they oppose. Under § 8(a)(3), Congress’ justification for the union shop would
limit the union’s expenditures which can be passed on to non-members only to those
relating to labor-management relations.
The Court concluded that it was not the intent of Congress under § 8(a)(3) of
the National Labor Relations Act to allow unions in agency shop agreements to have
free rein to exact dues from non-members in any amounts they please and then to
spend them on activities which are unrelated to collective bargaining activities. Beck,
however, does not extend to union members. The only way that such an employee
may fall under the ruling in Beck is to first resign his union membership and then
object to the use of his exacted dues for political or other purposes unrelated to
collective bargaining.
The last case concerning the use of agency fees decided by the Supreme Court⁶⁵
was Lehnert v. Ferris Faculty Association. In Lehnert, the Court upheld the
constitutionality of the Michigan statute providing for agency-shop agreements in the
public sector, and set forth a three-part test for determining permissible non-political
and non-ideological uses for the service fee that non-members are required to pay the
unions for their services as sole collective bargaining agent for all employees. The
Michigan statute applied to faculty members of Ferris State College, a public
educational institution, who are represented by the Ferris Faculty Association (FFA),
a local bargaining unit affiliated with the Michigan Education Association (MEA) and
the National Education Association (NEA). The non-union faculty brought suit to
challenge certain uses of the service fees which they were compelled to pay the FFA
and which were equivalent to the amount of dues required of a union member. They
claimed that the use of fees for purposes other than the negotiation and administration
of the collective bargaining agreement was in violation of their rights under the First
and Fourteenth Amendments of the Constitution.
The Supreme Court established a test, derived from the preceding line of cases,
for determining whether a particular expenditure of union funds could be charged to
non-member employees. Chargeable uses must: (1) be germane to collective
bargaining activities; (2) be justified by the governmental interest in the maintenance
of labor peace and the prevention of “free riders” who benefit from the union’s
collective bargaining activities without contributing to the costs of such activities; and
(3) not add significantly to the burdening of free speech inherent in the existence of
an agency or union shop.⁶⁶ The Court also rejected the petitioners’ contentions that
they could only be charged for collective bargaining activities undertaken directly for
their local unit and that there must be a direct link between an activity and a tangible
benefit to the local unit.⁶⁷
Four activities were found by the Supreme Court to be chargeable to the non-
members. First, non-members should subsidize NEA program expenditures for

⁶⁵500 U.S. 507 (1991).
⁶⁶500 U.S. at 519.
⁶⁷500 U.S. at 522-24.

collective-bargaining services provided in states other than Michigan and reportage
of such activities in the MEA publication, the Teacher’s Voice. Second, non-
members may be charged for the reportage of general information in the Teacher’s
Voice, such as news about teaching and education generally, professional
development, unemployment, job opportunities, MEA award programs, and other
matters that are neither public nor political, benefit all, and do not additionally burden
First Amendment rights.⁶⁸ Third, non-members may be charged for the cost of
participation by local-unit delegates in the NEA and MEA conventions and the
Coordinating Council meeting. And finally, strike preparations are chargeable to non-
members, even where the contemplated strike would be illegal under state law if it
actually occurred, because the strike preparations constitute part of collective⁶⁹
bargaining strategy and do not additionally burden First Amendment rights.
The Supreme Court also ruled that four other uses may not be charged
constitutionally to the non-members.⁷⁰ First, lobbying other than for ratification and
implementation of the collective bargaining agreement is not chargeable to non-
members.⁷¹ Second, a union program aimed at securing funds for public education
in Michigan and reportage on this program in the Teacher’s Voice were not
chargeable to non-members⁷² because they were public-relations and lobbying-type
activities unrelated to ratification and implementation of the collective-bargaining
agreement. Third, litigation that does not concern the local bargaining unit and
reportage of such litigation in union publications may not be supported by funds from
non-members.⁷³ Finally, public relations activities of the local unit which are designed
to improve the image of the teaching profession may not be charged to non-
members.⁷⁴

⁶⁸500 U.S. at 529.
⁶⁹500 U.S. at 530-32.
⁷⁰Although a majority of the Court agreed on the judgments enumerated in the opinion
with regard to whether a use could be charged to non-members, several opinions used different
analyses to arrive at the same conclusion. The rationale given in the text above is that of
Justice Blackmun, joined by Chief Justice Rehnquist and Justices White and Stevens.
⁷¹500 U.S. 519-22, 559-60.
⁷²500 U.S. at 527, 559-60.
⁷³500 U.S. at 528, 555 & 560.
⁷⁴500 U.S. at 528-9, 559.