Supreme Court Opens Door to 'Open Shop'
by Mark Brenner
July 23, 2012
In an ominous late June ruling, the Supreme Court paved
the way for rewriting the rules on how public sector
unions collect dues. The result could curtail those
unions' spending on political action.
On a 7-2 vote, the court said non-members in a
unionized workplace must opt in rather than opt out of
any special dues assessments. If this opt-in principle
is extended more generally, which the court seems
prepared to do, it could lead to a public sector
version of so-called "right to work."
"That would be a sea change," said Joseph Slater, law
professor at the University of Toledo and expert on
public sector collective bargaining. "It would make it
much more difficult for unions to raise money for
Since the 1947 Taft-Hartley Act, 23 states have passed
right-to-work laws allowing private sector workers to
reap the rewards of union contracts without paying any
of the cost of their upkeep, a deal commonly known as
the "open shop."
Many union leaders think the issue is bigger than
curtailing unions' political action.
"The public sector is the last bastion of organized
labor," said Henry Garrido, associate director of the
120,000-member AFSCME District Council 37 in New York
City. "They're coming after us because we're fighting
for fair taxation, for an economy that works for more
than just the 1 percent."
POLITICAL SPENDING AT ISSUE
The case, Knox v. SEIU, stemmed from a 2005 special
dues assessment imposed by Service Employees Local
1000, part of the California State Employees
Association. The assessment was levied to fight
anti-union ballot initiatives proposed by then-governor
By federal law all non-members in unionized workplaces
covered by a union security clause are notified every
year what portion of union dues is used for political
activity. They are given the choice to opt out of these
political expenses and pay a reduced "fair share" or
"agency fee" covering only the union's expenses related
to representation and bargaining.
For many public sector unions the difference between
full dues and agency fee is small. But in large,
politically active locals like SEIU Local 1000 the
difference can be substantial: non-members paid 44
percent less in 2005.
Because SEIU's special assessment--which raised dues
from 1 percent of gross salary to 1.25
percent--occurred after the annual notification,
non-members who had not previously opted out of paying
for political work were automatically subject to the
assessment. Only after several non-members sued the
union were they allowed to receive a refund.
The Supreme Court said that was not enough: all
non-members should have been notified to see if they
wanted to opt in for the assessment.
The ruling casts a shadow on the whole opt-out approach
to using union dues for politics. Although the issue
was not debated before the court, the justices took it
up anyway, claiming in the majority opinion that
opt-out had been established "as a historical
More than 50 years ago the Supreme Court established
that non-members in unionized private sector workplaces
could not be required to fund partisan political or
so-called ideological activities. The court ruled that
non-members could opt out, and in 1977 affirmed the
same rights for public-sector workers.
ECHOES OF WISCONSIN
The court's ruling is sure to energize the various
state-level initiatives designed to curb union dues
collection and political spending, most notably
deceptively titled "paycheck protection" laws--already
on the ballot or proposed in the legislatures of 11
These rules, which have been pushed for years by
corporate-backed groups like the American Legislative
Exchange Council, would force public sector unions to
seek opt-ins from their own members for political
spending. ALEC was thrust into the national spotlight
last year after state legislatures in Wisconsin and
Ohio pushed through anti-union measures it championed.
Wisconsin Governor Scott Walker's successful
legislative attack on public sector unions revealed the
heavy toll opt-in provisions can take on labor's
membership and financial clout. In Wisconsin's case,
public employees now have to opt in to union
membership, not just the union's political spending.
After Walker terminated collective bargaining and ended
dues check-off, Wisconsin membership in the public
sector union AFSCME dropped to 28,745, falling by half
between March 2011 and February 2012, according to a
recent Wall Street Journal report. Locals were left
strapped for money and forced to cut back on
representation and education.
Although the percentage of non-members in public sector
workplaces varies by area and occupation, moving to
opt-in could come with a heavy cost.
For example, New York's AFSCME District Council 37 now
collects agency fees from close to 20,000 workers, out
of 117,000 in the union's bargaining units. Losing
those fees could cost the union close to 15 percent of
the $38 million it receives in dues and fees annually.
Other unions could be even harder hit: 100,000 of the
171,000 in the SEIU California homecare Local 6434 are
Experience shows that unions long accustomed to relying
on employers for dues collection are ill-equipped to do
it themselves in open shop conditions.
In 2011 Wisconsin, public employees came out to
fiercely defend their unions in a way not seen for
decades. But once Walker succeeded in stripping unions'
right to bargain, many members fell away. Fear of
retaliation from newly aggressive managers has
undoubtedly kept some from signing up.
To survive, unions are being forced to put more of the
work of the union in members' hands.
"Lots of folks are learning a lesson a hard way," said
Marv Vike, a snowplow driver from Janesville,
Wisconsin, and president of AFSCME Local 1077. "Now you
have to fight to keep everything you got."
Despite the new limits on collective bargaining, Vike's
small local boasts a 96 percent membership rate, and
even won modest wage gains from the county this year.
But the climate of fear and nonstop demonization of
public workers and their unions can cause paralysis.
"Too many people are waiting for the other shoe to
drop," said Keith Kelleher, president of the
90,000-member SEIU health care local covering Illinois,
Indiana, Kansas, and Missouri.
Kelleher noted that unions started years ago as
voluntary associations, and that some current
unions--like NEA, which represents tens of thousands of
teachers in right-to-work states--have been able to
thrive under the difficult provisions of "opt-in"
"I'm for dues check-off wherever we can get it," he
said, "but we've got to have a Plan B."
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