Operations In Fiscal Year 1988 - National Labor Relations Board

136 Fifty-Third Annual Report of the National Labor Relations Boardance adjustment ("collective-bargaining activities"), and thatsuch expenditures thus violated the union's duty of fair representation.In that case, the union had entered into a collective-bargainingagreement that contains a union-security clause under which allrepresented employees who do not become union members mustpay the union "agency fees" in amounts equal to the dues paidby union members. Certain bargaining unit employees who chosenot to become union members filed suit in Federal district courtalleging that the union's expenditure of their agency fees on activitiessuch as organizing the employees of other employers, lobbyingfor labor legislation, and participating in social, charitable,and political events violated'the union's duty of fair representation,Section 8(a)(3), and the first amendment. The district courtheld that the disputed expenditures violated the associational andfree speech rights of objecting nonmembers. A divided Court ofAppeals for the Fourth Circuit, sitting en banc, did not resolvethe constitutional issues, but held that the union's collection offees from nonmembers to finance activities unrelated to collectivebargaining violated its duty of fair representation.Resolving a conflict in the circuits," the Supreme Courtfound controlling its holding in Machinists v. Street, 367 U.S. 740(1961), that Section 2, Eleventh of the Railway Labor Act(RLA) does not permit a union, over the objections of nonmembers,to expend compelled agency fees on political causes""for § 8(a)(3) and § 2, Eleventh are in all material respects identical"(id. at 2648). 29 Thus, the Court noted that, in amending Section8(a)(3) in 1947, Congress intended to correct abuses of compulsoryunionism that had developed under closed-shop agreements,while, at the same time, to permit union-security clausesthat ensured that there would be no employees who were gettingthe benefits of union representation without paying for them."This same concern over the resentment spawned by 'free-riders'in the railroad industry prompted Congress, [in 1951,] to amendthe RLA" (id. at 2651).The fact that in 1947 Congress expressly considered proposalsregulating union fmances but ultimately placed only a few limitationson the collection and use of dues and fees, and otherwiseleft unions free to arrange their financial affairs as they saw fit,was not sufficient, in the Court's view, to compel a broader con-17 The Court of Appeals for the Second Circuit had reached a contrary result in Price v. Auto Workers,795 F.2d 1128 (1986)."I In Elks v. Railway Clerks, 466 U.S. 435, 447-448 (1984), the Court extended Street and held that,under Section 2, Eleventh, objecting nonmembers could only lie charged for those expenditures "necessarilyor reasonably incurred for the purpose of performing the duties of an exclusive [bargaining)representative."19 Initially, the Court concluded (id. at 2646-2647) that the court below had properly exercisedjurisdiction over the judicially created duty of fair representation claim and the first amendment Clain),and that, although the Board had primary jurisdiction over the 8(aX3) claim, the courts were not precludedfrom determining the merits of that claim because the union had sought to defend Itself fromthe duty of far representation claim on the ground that Sec. 8(a)(3) authorized its challenged actions.