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Big Labor Takes a Hit: NLRB Prohibits Unions From Forcing Nonmembers to Pay for Lobbying Activities

In a long-awaited decision, United Nurses & Allied Professionals (Kent Hospital), issued on March 1, 2019, the National Labor Relations Board (NLRB) ruled that a private-sector union may not require nonmember objectors (also known as Beck objectors) to pay for its political lobbying expenses because lobbying falls outside the union’s “representational function.” The Board also held that a union must provide verification to Beck objectors that union dues expenditures are independently audited to assure them the financial information—including how much is spent on lobbying activities—is reliable. With an ever-increasing number of employees re-examining whether to be union members, the Board’s decision empowers individual employees to exercise their right to have their dues money spent only for legitimate representational purposes.

The Board’s decision in United Nurses stems from Communications Workers of America v. Beck, 487 U.S. 735 (1988), where the Supreme Court said workers subject to a union security clause or dues checkoff provision may forego union membership but that the union may still legally charge nonmember objectors for the costs of collective bargaining, contract administration, and grievance adjustment—in other words only activities “reasonably employed to implement or effectuate the duties of the union.” In the context of lobbying costs, NLRB judges have applied the Beck standard on a case-by-case basis. Now, 30 years after Beck, the Board in United Nurses confronted whether unions’ use of nonmember dues and fees to pay for its political work is improper and violates its duty of fair representation.

Background

While working at a hospital in Rhode Island, Jeanette Geary invoked her Beck rights, resigning her membership in the union and objecting to the assessment of dues and fees for activities unrelated to collective bargaining, contract administration, or grievance adjustment. The union provided Geary with a reduced dues calculation and charts setting forth the major categories of expenses for the union, both internationally and locally. The union also asserted that an auditor independently verified the expenses. According to the chart, a portion of the expenses went to lobbying efforts, specifically for various bills before the Rhode Island and Vermont state legislatures. Geary filed an unfair labor practice charge with the Board seeking an auditor’s verification that the union was not using her fees against her wishes for political purposes.

Is Political Lobbying Part of a Union’s Representational Function?

According to the Board, although lobbying activities “may in general relate to terms of employment or may incidentally affect collective bargaining,” lobbying is not part of the union’s collective bargaining duties. As a result, unions may not force nonmember Beckobjectors to fund political lobbying efforts. The Board observed:

We believe that relevant Supreme Court and lower court precedent compels holding lobbying costs are not chargeable as incurred during the union’s performance of statutory duties as the objectors’ exclusive bargaining agent . . . Lobbying activity is not a representational function simply because the proposed legislation involves a matter that may also be the subject of collective bargaining.

In other words, a union violates its duty of fair representation under the National Labor Relations Act (NLRA) if it charges nonmember objectors fees that include lobbying expenses because such fees are not necessary to perform its representative functions.

Independent Verification That Union Expenses Have Been Audited

Additionally, the United Nurses Board held that a union is required to provide Beck objectors with independent verification of an audit of its chargeable and nonchargeable expenses (i.e., categories objectors’ fees can and cannot go toward). It is no longer sufficient for a union to provide assurances to nonmember objectors that an auditor has reviewed the union expenses; instead, “private-sector unions subject to the ‘basic considerations of fairness’ inherent in the statutory duty of fair representation are required to provide Beck objectors verification that the financial information disclosed to them has been independently verified by an auditor.”

Finally, the Board applied both the lobbying expense and the audit verification holding retroactively, requiring as part of the remedy that the union reimburse all similarly situated employees the amount of dues collected for lobbying activities, with interest, and to provide appropriate verification of its expenses.

Key Takeaway for Employers

The Board’s decision puts the issue of nonmember Beck objectors’ rights to have a say in how their dues money is spent front and center and follows a trend of recent cases expanding similar individual employee rights in the public sector.

Nonmember employees now have greater access to, and verification of, union financial information and how their dues money is spent. Unions not only have to disclose detailed financial information when workers subject to a union security clause or dues checkoff provision exercise their Beck rights, but they must also provide individual employees with verification that the union’s financial information has been independently audited.

Unions are not shy about using employee dues to attempt to influence political actors and public policy. As a result of United Nurses, it is likely that Beck objectors and employees everywhere will reevaluate whether they want their hard-earned dues money spent on organized labor’s political lobbying activates. Employees may not agree with their union leaders in Washington D.C. on everything and now have the right to carefully determine for themselves whether such activities are an appropriate use of their money. The Board’s decision in United Nurses could significantly impact the continued financial viability of private-sector unions and their ability to engage in lobbying and political activities.

© 2019, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

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About this Author

Associate

Valerie L. Weiss represents and advises management from a wide-range of industries, including hospitality, manufacturing, pharmaceutical and non-profit agencies, among others, in connection with employment disputes before federal and state courts and agencies. She also counsels employers on all aspects of the employment relationship, such as avoidance of litigation, leaves of absence, disability accommodations, and employment contracts and separation agreements. As part of her counseling, she regularly updates and revises Employee Handbooks and employment policies for compliance with...

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