Supreme Court to Decide Constitutionality of Public Sector Union's Assessment of Fees on Non-Members to Fund Political Activity

The U.S. Supreme Court has agreed to resolve (pdf) two constitutional challenges stemming from a public sector union’s temporary imposition of increased dues and fees to fund political activity. In Knox v. Service Employees International Union Local 1000, the SEIU imposed a union fee increase after it issued its annual notice – known as a Hudson notice – informing non-members as to what percentage of their dues and fees is allocated to functions associated with union representation and how much is unrelated to the union’s representational function. After receiving the information set forth in the Hudson notice, non-members may opt out of paying amounts associated with the latter category. In Knox, the SEIU imposed the increased fee without issuing a second Hudson notice and charged non-members who objected to the increase in fee 56.35% of the total increase, the percentage set forth in the initial Hudson notice as the amount associated with union representation. In a class action lawsuit brought by nonunion state employees challenging this practice, the Ninth Circuit ultimately decided (pdf) that a second notice was not required. The class appealed, and the Supreme Court agreed to examine the following questions:

May a State, consistent with the First and Fourteenth Amendments, condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a Hudson notice that includes information about that assessment and provides an opportunity to object to its exaction? And

May a State, consistent with the First and Fourteenth Amendments, condition continued public employment on the payment of union agency fees for purposes of financing political expenditures for ballot measures?

In the petition for Supreme Court review, (pdf) the plaintiffs explained that the Supreme Court case Chicago Teachers Union v. Hudson established that “[b]asic considerations of fairness, as well as concern for the First-Amendment rights at stake, . . . dictate that the potential objectors be given sufficient information to gauge the propriety of the union’s [agency] fee” extracted from nonunion public employees. To that end, the Court stated that a union must provide to non-union members “an adequate explanation of the basis for the fee, a reasonably prompt opportunity to challenge the amount of the fee before an impartial decision maker, and an escrow for the amounts reasonably in dispute while such challenges are pending.” The plaintiffs contend that the union’s failure to issue a second Hudson notice before imposing the increased fee designated “for a broad range of political expenses, including television and radio advertising, direct mail, voter registration, voter education, and get out the vote activities” was therefore unlawful. Specifically, they contend that the Ninth Circuit decision “clearly conflicts with [the Supreme Court’s] compelled-speech jurisprudence generally, and with its decision in Hudson as to the standard to be applied when considering the obligation to provide notice and disclosure when extracting compelled fees.”

In addition, the plaintiffs point out that in Lehnert v. Ferris Faculty Ass’n, the Supreme Court held that “the State constitutionally may not compel its employees to subsidize legislative lobbying or other political union activities outside the limited context of contract ratification or implementation.” Therefore, the plaintiffs argue, the Ninth Circuit’s decision “is directly contrary to this Court’s holding in Lehnert that the lobbying and electoral politics at issue there are constitutionally nonchargeable.”

Ultimately, the decision in this case will have a real impact on public sector unions’ ability to require non-members to subsidize non-representational activities by timing the announcement of new, required fees to occur after the issuance of the annual Hudson notice.