The Future of Unions

Raymond J. LaJeunesse, Jr. *

Despite popular belief, and contrary to some figures that may indicate otherwise, the decline of organized labor in the United States is a myth.

Organized labor's political and economic influence has not declined over the last few decades, despite its decline in membership. Looking at some of the numbers, private sector unions' total receipts in real dollars increased from $4.8 billion in 1960 to $10.4 billion in 1997. In other words, receipts more than doubled, despite the decline in union membership from 14.6 million to 10.9 million members during the same period.

There has also been an increased emphasis by labor unions in the political arena, the strategy being that they can accomplish their goals through means other than collective bargaining. Indeed, the number of paid union lobbyists has increased substantially since 1978. Further, union Political Action Committees ("PACs") received an increase in total receipts from $34.5 million in 1975-76 to $66.9 million in 1987-88, again doubling. Further, the reported union PAC expenditures on federal campaigns in 1992 totaled $95 million. That list does not include the unreported "in kind" contributions and expenditures that labor organizations routinely make. This would include phone banks staffed by union employees and members, publicity, printing, and mailing services for campaign material that is sent out to union members and their families, registration for "get out the vote" drives which allegedly are "non-partisan," but are targeted to union supporters who will get out and vote for the candidates supported by their union, and union employees working as political organizers among union members and their families.

In 1996, economics professor Leo Troy of Rutgers University, in testimony before a House committee, estimated that organized labor's "in kind" political contributions and expenses amounted to $300-$500 million in the 1992 presidential election year. In 1996, the AFL-CIO alone, not including its constituent national and international unions, spent $35 million on an issue advocacy campaign that is not among the expenditures that get reported to the Federal Election Commission.

According to AFL-CIO president John Sweeney, in 1998 unions registered half a million voters in union households, mailed 9.5 million pieces of campaign mail, made 5.5 million phone calls, purchased 511 different campaign pieces that were distributed at thousands of work sites, and had 392 paid field organizers working full time for more than a month in congressional districts around the country.

In the more direct area of labor relations, there has been a substantially increased emphasis on organizing, including the use of the new "corporate campaign" technique, since President Sweeney took over the AFL-CIO.

On the public sector side of the labor movement, the membership in public sector labor unions has increased significantly over the last few decades and, of course, this membership has increased in direct relationship to the increase in size and power of government. The more programs government has, the more public employees there are, and the more public employee union members and non-members represented by public sector unions there will be.

There is anecdotal evidence that shows that these efforts by organized labor have had an effect in terms of power and influence both in politics and in the economic sphere. On the political side, there are several examples. One would be the defeat of California Proposition 226, which would have placed some minimal restrictions on the use of union dues for political activities. Other examples include the passage of an increased minimum wage in a Republican Congress, the failure of a Republican Congress, for the last few years, to pass any legislation limiting organized labor's special privileges, and of course, the results of the 1998 Congressional elections.

On the economic side, the continued power of organized labor is seen in the results of recent labor disputes, including the United Parcel Service strike by the Teamsters, and the UAW strike against General Motors.

Therefore, the question would appear to be this: why has organized labor's political and economic influence continued to thrive, despite a decline in union membership on the private sector side? The answer is that organized labor has many extraordinary privileges and immunities that were created by legislatures and the courts.

There are numerous examples of this. The Clayton Act of 1914 exempts unions from anti-monopoly laws. The Norris-Laguardia Act of 1932 and state injunction acts give labor organizations immunity from injunctions against trespass on an employer's property. The principle of exclusive representation, which is embedded in all of our labor relations statutes, enables unions to deprive employees of the right to make their own employment contracts. Unlike other parties in the economic marketplace, unions can compel employers to bargain in good faith with them. Unlike other employees, union-represented employees have the right to strike; that is, to refuse to work while keeping their job. And, unlike any other private organization, except for some state bar associations, unions can compel individuals to support them financially in 29 states under the National Labor Relations Act, all states under the Railway Labor Act, and many states under public sector labor relations acts.

This is not a minor issue; there are many employees who oppose organized labor's political and, for that matter, bargaining goals. For example, while 95% or more of organized labor's political contributions and expenditures has supported Democrats since 1980, between 32%-40% of the voters from union households have voted Republican, depending on the particular election year, according to polling data that was published in the New York Times on November 9, 1998.

Another privilege that the unions have is in the Federal Election Campaign Act, which exempts unions from its limits on campaign contributions and expenditures as well as some of its reporting requirements. Unions are free to spend unlimited amounts on communications to members and their families in support of or opposition to candidates for federal office, and they need not report these expenditures if the communications are in union publications that are primarily devoted to other subjects.

Finally, and perhaps the most egregious example of these special privileges and immunities, is the Enmons decision [United States v. Enmons, 410 U.S. 396 (1973)] in 1973, in which the United States Supreme Court held that union violence is exempted from the Hobbs Act, which makes it a federal crime to obstruct interstate commerce by robbery or extortion.

There are, however, some statutory and judicial prohibitions on organized labor's collection of compulsory dues for politics and ideological purposes. The first is that unions may not require employees to become actual full members of the union, subject to the union constitution. The United States Supreme Court so held under the National Labor Relations Act in 1963 in the General Motors case [NLRB v. General Motors Corp., 373 U.S. 734 (1963)], and reiterated that holding in the Pattern Makers decision [Pattern Makers v. NLRB, 473 U.S. 95 (1985)] in 1985, in which the Court concluded that even employees who join unions have a right, under the National Labor Relations Act, to resign their membership at any time. All these employees are required to do to comply with the compulsory union agreement is pay the dues equivalent. Moreover, after the Court's Hanson decision [Railway Employees' Dep't v. Hanson, 351 U.S. 225 (1956)] in 1956, these rules have also been applied under the Railway Labor Act.

The other limitation is that unions may not require objecting non-members to subsidize activities other than collective bargaining and contract administration. That principle was established under the Railway Labor Act in the Street case [Machinists v. Street, 376 U.S. 740 (1961)] in 1961, in which the Court held that railway and airline unions cannot use compulsory dues and agency fees for political and ideological activities. This ruling was extended in the Ellis decision [Ellis v. Railway Clerks, 466 U.S. 435 (1984)] in 1984 where the Court held that unions also could not charge objecting employees for organizing, extra-unit litigation, and publications that are devoted to otherwise non-chargeable activities under the Railway Labor Act.

In Aboud v. Detroit Board of Education [931 U.S. 209 (1977)], decided in 1977, the Court extended this reasoning to public sector employees, when it held that it is a violation of the First Amendment of the United States Constitution to use objecting non-members' agency fees for purposes other than collective bargaining: specifically, political and ideological activities. This decision was extended and clarified in 1991 in the Lehnert case [Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507 (1991)], which I argued, and where the Court held that unions cannot use public employees' monies against their will for lobbying and public relations activities, with a few minor exceptions.

And, of course, there is Communications Workers v. Beck [487 U.S. 735 (1988)], where the Court held that the National Labor Relations Act also limits the use of compulsory dues and agency fees to purposes related to collective bargaining and contract administration.

Even so, organized labor has several ways in which it can avoid these limitations. For instance, as I pointed out earlier, the limits on dues apply only to non-union members, and the lower courts interpreting the Court's decisions have held that members have no right to object to the use of their dues for any purpose authorized by the union constitution and the union leadership. Therefore, in order to get people who would otherwise object to the use of their money to support the union's political activities, the unions deceive employees into joining unions. They accomplish this in several ways. There is active misrepresentation, some of it intentional, some of it unintentional; for example, telling employees, either verbally or in writing, that they have to join a union. By unintentional, I mean that a lot of union officials at the shop level, the union stewards and local union officials, do not even know what the law is. To them, the contract says membership, which means everyone has to join the union.

This leads me to the Marquez decision [Marquez v. Screen Actors Guild, 119 S.Ct. 292 (1998)] heard by the Court just this month, a case which I argued. As the law currently stands, 80% of the collective bargaining contracts in the private sector state that an employee has to be a member of the union, or has to be a member in good standing, in order to work for the company in question. In Marquez, we argued that this should not be permitted. We argued that the collective bargaining agreements should say what the limits are on what can be required of an employee, in accordance with Supreme Court jurisprudence from General Motors through Beck.

Unfortunately, the Court in Marquez held that a union does not breach its duty of fair representation merely by negotiating a union security clause that uses the statutory language, that is, says that membership is required without expressly explaining in the agreement the refinements dictated by General Motors and Beck. The Wall Street Journal, in an editorial about the Marquez decision on November 10, 1998, said that the Court had taken the improbable position that while "workers don't have to become union members, unions may continue to lie about that fact in contracts." What is even more inexplicable to me is that this was a unanimous decision, despite that fact that three circuits and Justices Kennedy and Thomas in their concurring opinion have recognized that the only realistic explanation for the retention of the statutory language in contracts is to mislead employees about their rights. But the Supreme Court does declare the law of the land.

Fortunately, the Court's decision was a very narrow one. The Court made it very clear that unions have an affirmative duty of fair representation to inform employees about their rights under General Motors and Beck, that is, that employees do not have to be full members and only have to pay the court-defined costs of collective bargaining and contract administration. Justices Kennedy and Thomas, in their concurring opinion, emphasized this point by stating, "the opinion does not address circumstances in which there is evidence that a security clause such as this one was used or intended to deceive or injure employees."

The problem with the Court's rationale is that the notices that unions give of employee rights under General Motors and Beck are typically given in ways so that they are unlikely to be seen or heard by many employees. For example, the unions use fine print buried in union publications, which somebody who does not support the union in all likelihood is not going to want to read in the first place, and in fleeting postings on union bulletin boards buried in the corner of the shop, which are only up for a month or so. Therefore, a lot of people are not made aware of their rights under General Motors and Beck. We at the National Right to Work Foundation get calls from employees all the time who have to deal with this problem.

Moreover, even when employees do learn what their rights are, many of them are afraid to refrain from membership in the union for two reasons. First, non-members have no say concerning their employment terms and conditions. They cannot vote for union officers who select the negotiators. They cannot serve as negotiators or participate in the process of selecting negotiators, and they cannot vote on the ratification of the contract that is to determine their wages and other benefits. Therefore, many employees are coerced into joining the unions simply in order to have a say in the collective bargaining process.

The second reason why many workers join unions who would not otherwise do so is that there is subtle and not so subtle discrimination against and pressure upon non-members in the shop, ranging from hints such as, "well, if you're a non-member, we're not really going to pursue your grievance very vigorously if you have a grievance against the employer," to outright verbal abuse, threats, and actual violence. Again, at the National Right to Work Foundation, we have received requests for assistance from many employees who have suffered all of these subtle and not so subtle forms of harassment and pressure from organized labor. Finally, assuming a non-member finds out what his rights are and has the courage to exercise them by objecting to the use of his compulsory agency fees for non-bargaining purposes, that worker still faces several procedural hurdles.

Nevertheless, there are procedural safeguards that are supposed to be in place for objecting employees. These safeguards were set forth by the Supreme Court in 1986 in the Hudson decision [Teachers Local No. 1 v. Hudson, 475 U.S. 292 (1986)]. These safeguards include advance reduction; that is, if an employee objects to the use of his money for purposes other than collective bargaining, the union is supposed to collect from him only the amount that the union concedes goes towards collective bargaining costs, and not collect full dues and then later give the employee a rebate. The second safeguard Hudson put in place is a notice requirement for the basis of the calculation of the reduced amount, including verification by an independent auditor. There also is supposed to be an opportunity for prompt review, if anyone wants to challenge the calculation, before an impartial decision-maker, and the money is supposed to be held in escrow while such challenges are pending.

However, these procedural safeguards are really not sufficient to protect the objecting employees' rights. As I have already stated, notice of the right to object is buried in union publications so that many workers do not even know they have the right to object. Moreover, the unions impose annual objection and window period requirements; that is, an employee can only object during a relatively short period of time, typically fifteen days to a month, which they have to do every year. In the Shea case [Shea v. Machinists, 154 F.3d 508 (5th Cir. 1998)], the Fifth Circuit found that this requirement of annual objection violates the First Amendment and violates the duty of fair representation.

Another problem with these procedural "safeguards" is that a union can unilaterally determine the amount collected from objecting employees. There is no opportunity for a pre-taking hearing found in most due process cases. Additionally, the pre-taking audit authorized in the Hudson decision has been interpreted by the lower courts as not verifying a union's categorization of activities as lawfully chargeable or not. The auditors only check the math.

The unions have also gotten around the requirement of review by an impartial decision maker by establishing a scheme, in concert with the American Arbitration Association, under which the objecting non-member employee has no say in who the arbitrator is. The arbitrator is selected by the AAA from a special panel. To get on that special panel, the arbitrator needs to have recommendations from four unions, hardly a good example of fairness. In these procedures, there is no right to discovery, and of course, an employee needs discovery in these cases because unions have all the books and records. There is no compulsory process at the hearings: the objecting employee has no right to compel the union to produce witnesses and documents that the employee wants produced. Further, the rules of evidence do not apply, so the union can support its case with self-serving hearsay.

There is another case that I argued, Miller v. Air Line Pilots Association [118 S.Ct. 1761 (1998)], that I would like to discuss. In that case, the Supreme Court, in its last term, held that a non-member employee is not required to exhaust the union-created arbitration procedure before he can proceed to court on his claims. The Sixth Circuit has held that if an employee does get through such a procedure, that employee is entitled to normal discovery once he gets to court. [See Bromley v. Michigan Educ. Ass'n, 82 F.3d 686 (6th Cir. 1996).]

Another major hurdle for employees who want to challenge the use of their dues for political purposes is the National Labor Relations Board's failure to enforce the Beck decision vigorously. The NLRB General Counsel has unreviewable discretion to issue complaints on charges. Since 1994, the General Counsel has instructed Regional Directors who normally make these decisions to immediately dismiss Beck charges they find unworthy and to not issue complaints on Beck charges they do find worthy: they are to send these cases to Washington for the Division of Advice to make the decision. Moreover, Regional Directors have refused to issue complaints on many Beck charges at the direction of the General Counsel. In addition, the General Counsel has settled many Beck charges with no real relief for the charging employees, requiring only the posting of a notice but no return of the monies that were collected in violation of the law.

Perhaps the most egregious problem with the Board is its delay of decisions in Beck enforcement cases for protracted periods. For example, the Board took eight years to issue its first post-Beck decision in California Saw and Knife Works [320 NLRB 224 (1995), enf'd sub nom., Machinists v. NLRB, 133 F.3d 1012 (7th Cir. 1998)]. In fact, I am now handling a case that has been pending before the Board for ten years. I have filed a petition for mandamus with the D.C. Circuit Court of Appeals to force the Board to move on it, but who knows what they will eventually do.(1)

In an October 15, 1997 letter, then Board Chairman William Gould admitted to a Congressman that nearly half of the sixty-five cases then pending for two or more years were Beck cases, and implied that Board member Sarah Fox was holding up those decisions for political reasons. This leads me to my next point about the Board: the current Board majority has had a pro-union bias. Chairman Gould who, in some ways, was one of the better Board members before he retired, publicly criticized the Supreme Court's decisions upholding employees' rights not to join unions, and stated that unions should be permitted to use compulsory dues for lobbying. Member Fox, who is rumored to be the next nominee for Chairman, is a former labor counsel with Senator Ted Kennedy and for the Bricklayers union. Member Liebman is a former attorney for the Bricklayers and the Teamsters.

Finally, as far as the hurdles that employees face when they want to challenge the use of their dues for politics, the highest are the costs, difficulties, and protracted nature of this type of litigation. Justice Black predicted this in the Street case in 1961 in his dissent from the Court's failure to declare compulsory unionism arrangements unconstitutional. Justice Black said:

"It may be that courts and lawyers with sufficient skill in accounting, algebra, geometry, trigonometry and calculus will be able to extract the proper microscopic answer from the voluminous and complex accounting records of the local, national, and international unions involved. It seems to me, however, that this formula with its attendant trial burdens promises little hope for financial recompense to the individual workers whose First Amendment freedoms have been flagrantly violated."

The "paycheck protection" and Beck enforcement bills, which have been proposed in a number of cases, would still require employees to go through all of the various procedural hurdles which would arise, including protracted litigation. These so-called "remedies" would still leave it to the union to determine the amount of the fee in the first place; therefore, the employee must either rely on the honesty of the union officials to do the calculations or bring a lawsuit. Many of these proposals do not even extend the prohibition on the use of compulsory dues as far as the Supreme Court's Beck decision would indicate. Worst of all, one of the Beck enforcement proposals, the so-called McCain-Feingold Bill, would have left enforcement exclusively in the hands of the National Labor Relations Board. I have already indicated the problems with such an arrangement.

The real solutions to the misuse of compulsory union dues for politics are two-fold. One was pointed out by Justice Black in the Street case. This was that the Court should simply hold that the collection is unconstitutional; therefore, the employees would not have to pay for the politics in the first place and would not have to go through the objection process. This solution, of course, requires the overruling of Supreme Court decisions or the passage of a National Right to Work law by Congress, and state right to work laws with regard to public employees by state legislatures.

The ultimate fundamental solution would be for the United States Supreme Court to declare exclusive representation unconstitutional, or for Congress and state legislatures to repeal the statutory authorization of exclusive representation. This would eliminate the Hobson's Choice that employees face of either having to stay non-members in order to exercise their rights to not pay for politics, thus having no say in what their terms and conditions of employment are, or giving up the right to object and joining the union so that they have some say in how their wages and benefits are set.

In conclusion, organized labor will continue to have political and economic influence far out of proportion to its voluntary membership so long as the extraordinary statutory privileges of exclusive representation and compulsory unionism enable it to compel membership and financial support of political activities from unwilling employees.

* Ray LaJeunesse's remarks were made at the Federalist Society's annual Lawyers Convention in Washington, D.C. on November 12, 1998 at the Labor and Employment Practice Group's panel on the Future of Unions. The panel was moderated by practice group subcommittee chairman John Irving, with the law firm of Kirkland & Ellis. Mr. Irving was formerly General Counsel of the National Labor Relations Board. The other panelists included: Daniel Yager of the law firm of McGuiness & Williams and General Counsel of the Labor Policy Association, and James Coppess, Associate General Counsel of the AFL-CIO.

  1. Since this speech, the Court ordered the Board to set a date by which it would issue a decision. The Board subsequently decided the case on January 28, 1999. American Fed'n of Television and Radio Artisis, Portland Local, 327 NLRB No. 97 (1/28/99).

2001 The Federalist Society