High Court Declines Appeals On Union Agency Fees

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The U.S. Supreme Court let stand last week a federal appeals court ruling holding that even the smallest local teachers' unions must undergo formal audits of how they calculate the fees collected from teachers who are not union members.

The case involved an appeal by the National Education Association affiliate in the Shaler Area School District near Pittsburgh of a lower-court ruling that all unions, regardless of size, must be audited as part of the process of ensuring that nonmembers' so-called agency or "fair share" fees are not spent on political activities.

The U.S. Court of Appeals for the 3rd Circuit, in Philadelphia, had also determined in its ruling last May that unions could use agency fees from one bargaining unit to help pay the legal expenses of others, even if those units represent workers from different professions. In their appeal, the nonunion teachers had challenged the Pennsylvania State Education Association's use of agency fees to help pay litigation costs for health-care workers it also represented.

Concluding that the unions were operating what amounted to a risk pool to cover their legal bills, a three-judge panel of the 3rd Circuit court concluded unanimously that the nonunion teachers were benefiting from that arrangement and thus the use of the agency fees for that purpose was proper. The panel reversed a federal district judge's ruling in favor of the teachers on that issue.

With the high court declining without comment to take Shaler Area Education Association v. Emory (Case No. 03-182) on Nov. 3, neither side came away with a clean victory. Both the nonunion teachers and the unions had asked the justices to take up the case in separate appeals, but for different reasons. The case is one of a long string of lawsuits across the country over the issue of how to make sure that agency fees are used not on politics but for collective bargaining purposes.

A spokesman for the PSEA, the parent of the Shaler local, said the 167,000- member state-level organization was satisfied with the resolution of the case.

"The issue we lost on, the audit issue, we're less concerned about because it has less organizational impact," said Wythe Keever.

A lawyer for the nonunion teachers said he had mixed emotions about the court's refusal to hear the case. Even though he had prevailed on the auditing question, Milton L. Chappell of the National Right to Work Legal Defense Foundation, based in Springfield, Va., said conflicting appeals court rulings on the issue have sown confusion.

"I'm a little bit disappointed that the confusion continues," Mr. Chappell said.

Lawyers for the unions had argued that hundreds of small local unions within the 3rd Circuit, which also includes Delaware and New Jersey, have had to stop collecting their share of agency fees because they couldn't afford audits.

Flow Continues

Still, that halt has not stanched the flow of money to the locals' state and national parent organizations, which receive the bulk of the union fees collected from nonmembers. About 3,500 workers statewide pay agency fees to the PSEA.

"We'll continue to collect the state and the national share, because the PSEA and the NEA have always had our books audited," Mr. Keever said.

In the decision in May, the 3rd Circuit appeals judges said they "recognized that our decision might place high costs on some local unions." The court said small locals could either band together or state or national unions could choose to subsidize the cost of local unions' audits.

Mr. Keever said last week that the union was operating a grant program to help small locals foot the bill for audits.

In concluding that audits are required of all unions, regardless of their size, the 3rd Circuit court specifically rejected the reasoning of a panel of the U.S. Court of Appeals for the 9th Circuit, in San Francisco, which held earlier this year that small unions did not have to undertake full-blown audits to comply with Supreme Court precedents. That decision was appealed, but the high court declined last month to take it up.

Vol. 23, Issue 11, Page 19

Published in Print: November 12, 2003, as High Court Declines Appeals On Union Agency Fees
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