Agency-Shop Rule In Chicago Held Illegal by Judge

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In a precedent-setting decision, the U.S. Court of Appeals for the Seventh Circuit has ruled that certain provisions of an "agency-shop" agreement between the Chicago Board of Education and the Chicago Teachers Union violated the constitutional rights of nonunion teachers in the school system.

The court ruled in Annie Lee Hudson v. The Chicago Teachers Union that the school board and the ctu had violated teachers' First and 14th Amendment rights when they failed to establish an appropriate grievance procedure for employees who believed their agency-shop fees were being misused. Under state law, employees who are represented by a bargaining unit but do not wish to join the union are required to pay 95 percent of the regular union dues.

"It is the first time we've gotten a good, strong ruling that clearly places the responsibility on the [school board] to make sure employees' rights are not violated," said Kriss Mussey, a spokesman for the National Right to Work Foundation Inc. in Washington, D.C., which represented the nonunion teachers in the lawsuit.

Lawrence Poltrock, general counsel for the American Federation of Teachers, who referred to the ruling as "17th-century thinking," said the union intends to appeal the decision.

Agency-Fee Restrictions

Under the Illinois collective-bargaining statute for teachers, if school and union officials have entered into a collective-bargaining contract containing a union-security clause, even school employees who do not wish to become union members must pay an "agency fee" for the collective-bargaining services provided by the union to all school employees.

But, as required under the U.S. Supreme Court's 1977 ruling in Abood v. Detroit Board of Education, the Illinois statute places restrictions on how agency fees can be used, strictly prohibiting their use for the advancement of a union's political or ideological views.

Such use of agency fees violates nonunion employees' right to freedom of expression, the Supreme Court ruled, by forcing them to finance the advancement of viewpoints with which they do not agree.

In Hudson, the appeals court took the Abood decision a step further.

First, the court ruled that the nonunion employees in the case have a constitutional right not to be compelled to contribute to any activities unrelated to collective bargaining, regardless of whether the activities are political or ideological.

"The employer's obligation is not limited to establishing a procedure for preventing the diversion of nonunion employees' wages to political or ideological activities; the procedure must make reasonably sure that the agency fee is not used for any unrelated activities," the judges said in their decision.

The court also found that even if the fees are not actually used for activities other than collective bargaining, if the possibility exists that they could be used, the rights of nonunion employees have been violated.

"Just the danger (as distinct from actuality) of depriving people of the freedom of expression guaranteed by the First Amendment has led courts to invalidate procedures that created the danger," the court said.

Inadequate Protection

The school board, as an arm of the state, has an obligation to make certain that the agency-fee procedures it sanctions do not violate the rights of nonunion employees, the appeals court said.

But in Chicago, the school board failed to tell nonunion employees how the agency fees would be used and were remiss in allowing a grievance procedure that "creates the danger" that the employees' rights would be violated, the court ruled.

Under the grievance procedure,el5lnonunion employees who protested the seizure and the use of their funds for union activities unrelated to collective bargaining could only appeal to a union panel and then to an arbitrator picked by the union and paid by the union.

The court found that since the grievance procedure was entirely in the hands of union officials, it was inherently biased against nonunion employees.

The appellate court also questioned the competence of arbitrators to make First Amendment determinations, "but that is what the arbitrator would have to do in any case where the dissenter objected that the agency fee ... was being used for impermissible political or ideological purposes."

"The procedure that the defendants adopted in this case is constitutionally inadequate and they must go back to the drawing board," the court said.

Then, in what union officials have called an "unusual" action, the court proceeded to outline a procedure for the Chicago Board of Education that would conform to the law.

The court recommended, "without wanting to be dogmatic or to foreclose consideration of alternative procedures," that to conform to the requirements of the law, the school board should provide "a prompt administrative hearing before the state board of education or some other state or local agency--the hearing to incorporate the usual safeguards for evidentiary hearings before administrative agencies--and a right of judicial review of the agency's decision."

Rebate Procedure

The court also addressed the issue of a rebate procedure for nonunion members whose agency fees have been misused, although nonunion members in Chicago had never charged that their funds had been misused.

Based on the Supreme Court's decision last spring in Ellis v. Brotherhood of Railway Clerks, a ruling that invalidated union rebate programs to reimburse nonunion employees for the portion of their dues spent on political activities, the appeals court ruled in Hudson that simply refunding misused fees is not enough. (See Education Week, May 16, 1984.)

"During the period between the deduction and the rebate, the union has the use of the dissenter's money, interest free," the court said. "This means that even if the dissenter wins, some of his money--the amount being measured by the value to the union of having this interest-free loan--ends up supporting the union's political activities."

The appeals court panel suggested that the union place the dissenters' money in escrow while the legitimacy of the union's proposed use of it is being determined.

Again, taking a related Supreme Court decision a step further, the judges also suggested that the management of the account be turned over to a bank or a trust company to further protect the dissenters.

"The union might decide, for example, to forgo a high interest rate in order to punish dissenters," the court said.

Mr. Poltrock of the aft, said that the court's ruling is impractical for both unions and school boards.

"No union is going to allow an employer to examine its books and records," Mr. Poltrock said, adding that most school boards would be reluctant to supervise union activity.

Vol. 04, Issue 04

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