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Legality of Union's Agency-Shop Fees Weighed by Court

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Washington--Members of the U.S. Supreme Court last week questioned whether a Chicago teachers' union would be unjustly harmed if it were required to modify its procedures for collecting fees in lieu of dues from nonunion teachers.

A majority of the Justices repeatedly asked the two lawyers arguing Chicago Teachers Union v. Hudson (Case No. 84-1503) whether they thought the union's rights would be violated if it had to submit evidence supporting the way it calculated the fee to a judge or some other independent ruling authority before it demanded payment from nonmembers.

See related story, page 9.

The Court's ruling in the case, which is expected to be handed down by late spring, could affect union finances by forcing changes in similar "agency-fee" contract provisions in the 17 states with laws that either permit or require such arrangements. Under such contracts, all teachers must help pay for benefits won for them by the union. Previous rulings by the Court, however, exempt nonmembers from having to support union organizing efforts, lawsuits unrelated to contract enforcement and negotiation, and political causes that they find objectionable.

Critics of teachers' unions contend that agency-fee arrangements represent a "coerced unionism" that violates nonmembers' rights to free speech and freedom of association. The unions argue that such arrangements promote labor peace by keeping nonmembers from getting a "free ride" on the backs of dues-paying members.

At issue in Hudson is the method used by the Chicago affiliate of the American Federation of Teachers to calculate the nonmembers' "fair share" fees, as they are known in Illinois. Under the procedure, outlined in a 1982 labor contract with the city's school board, union officials calculate the amount of the nonmembers' fair-share fee and require them to make payments as a condition of continued employment.

Right to Appeal

The procedure permits a nonmember who wants to challenge the amount to appeal first to an internal union review panel, then to an arbitrator selected by the union president, and finally to the state courts. The nonmember's fee is placed in an interest-bearing escrow account until all appeals are exhausted.

Last year, the U.S. Court of Appeals for the Seventh Circuit ruled that the procedure violated the nonmembers' First Amendment rights to freedom of speech and their 14th Amendment rights to due process of law. (See Education Week, Sept. 26, 1984.)

The court held that the process lacked reasonable protections for nonunion employees and therefore "made it likely that some of the money collected from them will be used to support political objectives not germane to the union's function in the collective-bargaining process."

In addition, the court held that requiring a nonunion teacher to support a union deprives him of freedom of association within the meaning of the 14th Amendment. Therefore, it said, the teacher must be afforded due process of law before that right can be taken away.

System Revisions

The court suggested that, at a minimum, the union and the Chicago board would have to devise a new collection system that provided dissenting teachers "with fair notice, a prompt administrative hearing before the board of education or some other state or local agency, and a right of judicial review of the agency's decision."

The appeals panel noted that the most conspicuous feature of the process is that the union controls it from start to finish. It said the problem "would not be so serious if there were an independent arbitrator at the end--if not the beginning--of the process."

That particular finding appeared to capture the attention of a majority of the Justices, as indicated by their line of questioning during last week's hearing.

"Normally, we'd approach a problem like this by saying, 'Yes, there can be a burden on [both the union and the objecting teachers], but let's choose the least burdensome method,"' said Associate Justice Sandra Day O'Connor. "Why can't there be an independent determination at the outset of the process rather than the method we have here?"

"It all comes back to the same question," added Associate Justice John Paul Stevens. "Maybe it's not only in the best interest of the objectors, but in the best interest of the union, too, to have an independent audit up front."

Labor Peace

Laurence Gold, the lawyer representing the teachers' union, responded that such action would "violate the government interest in maintaining labor peace."

"And the unions? It also would violate their interests, too, right?'' Associate Justice Byron R. White quickly added, noting that the union could potentially lose revenue if an auditor disallowed certain costs included by the union in the fair-share fee.

Edwin Vieira Jr., a lawyer from the National Right to Work Legal Defense Foundation, which is representing the nonunion teachers in the case, told the Justices he supported the appeals courts' finding that the 14th Amendment required some sort of audit before fees could be collected from objecting teachers.

"The union should be required to take their figures to some state agency," he said. "They have to have some rational basis for their demand. It does not have to be a full-blown judicial or administrative hearing, but it does have to be a bit more than a naked demand for money."

In other action last week, the Court agreed to hear a lawsuit questioning whether employment-discrimination charges decided by a state administrative agency could be reargued in federal court.

The case, University of Tennessee v. Elliott (No. 85-588), stems from the firing of a black employee of the university's Agricultural Extension Service, allegedly for disciplinary reasons.

The university fired the employee after a hearing before a quasi-judicial panel of staff members. Last year, a federal appeals court ruled that the judicial doctrine of res judicata did not prevent the employee from contesting his dismissal in federal court.

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