Justices Deal Blow to Public Unions
By JESS BRAVIN
WASHINGTON—The Supreme Court dealt a blow to public-employee unions, ruling that a California local violated dissenting workers' First Amendment rights when it imposed a special fee to fund political operations.While the decision involved relatively narrow circumstances, Justice Samuel Alito's majority opinion contained some ominous implications for organized labor. He cast doubt on the legitimacy of the "agency shop," agreements allowed by certain states that require all employees in a workplace to be union members or pay the union a fee.
Thursday's case arose in a 2005 fight between public-sector unions and California's then-governor, Republican Arnold Schwarzenegger. He backed ballot initiatives that would have diminished the unions' political strength and allowed him to cut employee compensation.
Local 1000 of the Service Employees International Union reacted by establishing a "Political Fight Back Fund," financed by a temporary 25% increase in employee fees. That raised $12 million, and the initiatives failed.
The SEIU's contract with California requires state employees to belong to the union or pay it a fee for collective-bargaining services. Unlike regular fees, the union didn't offer nonmembers a chance to opt out of the assessment or obtain a refund.
The Supreme Court imposed the opt-out opportunity in a 1986 case, Teachers v. Hudson, and since then unions have been required to send annual "Hudson notices" to represented employees alerting them to the right to a refund of fees for political or other nonbargainingwork.
A class-action lawsuit on behalf of 28,000 nonmember California state employees alleged that the SEIU's special assessment, collected without a Hudson notice, violated their First Amendment rights against being compelled to finance political speech they oppose.
Seven members of the Supreme Court agreed on that narrow point. But by a 5-4 vote, the court split along its conservative-liberal line to impose stricter rules on special union assessments and suggest that future cases may further weaken agency-shop rules.
Justice Samuel Alito wrote for the court that a public-sector union must receive fresh approval from nonmembers to impose a new special assessment. He was joined by Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Clarence Thomas.
Going further, he questioned Supreme Court precedents that upheld mandatory union fees. The court has found mandatory fees permissible to prevent free riders—workers who benefit from union agreements without helping pay the cost of obtaining them. He said such arguments "are generally insufficient to overcome First Amendment objections" to the fees.
Justice Stephen Breyer, joined by Justice Elena Kagan, dissented. "Each reason the court offers in support of its 'opt-in' conclusion seems in logic to apply, not just to special assessments, but to ordinary yearly fee charges as well," he wrote. "And that fact virtually guarantees that the opinion will play a central role in an ongoing, intense political debate" over the role of unions.
Write to Jess Bravin at jess.bravin@wsj.com
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