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Otto v. Pennsylvania State Education Association

April 03, 2003

MARSHA OTTO; F. NAYLOR EMORY; DENNIS A. ERB; ROBERT K. GILBERT; JAMES W. LOSSELL; BARBARA J. MCALLEY; WESLEY S. SEMPLE, ON BEHALF OF THEMSELVES AND ALL OTHER NON-MEMBERS SIMILARLY SITUATED
v.
PENNSYLVANIA STATE EDUCATION ASSOCIATION; NATIONAL EDUCATION ASSOCIATION; SHALER AREA EDUCATION ASSOCIATION, ON BEHALF OF THEMSELVES AND ALL OTHER LOCAL ASSOCIATIONS SIMILARLY SITUATED APPELLANTS



Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civil Action No. 96-cv-01233) District Judge: Honorable Yvette Kane

Before: Ambro and Stapleton, Circuit Judges, and O'NEILL,*fn1 District Judge

The opinion of the court was delivered by: Ambro, Circuit Judge

Opinion vacated May 8, 2003. As amended April 8, 2003.

MARSHA OTTO; F. NAYLOR EMORY; DENNIS A. ERB; ROBERT K. GILBERT; JAMES W. LOSSELL; BARBARA J. MCALLEY; WESLEY S. SEMPLE, ON BEHALF OF THEMSELVES AND ALL OTHER NON-MEMBERS SIMILARLY SITUATED
v.
PENNSYLVANIA STATE EDUCATION ASSOCIATION; NATIONAL EDUCATION ASSOCIATION; SHALER AREA EDUCATION ASSOCIATION, ON BEHALF OF THEMSELVES AND ALL OTHER LOCAL ASSOCIATIONS SIMILARLY SITUATED APPELLANTS

Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civil Action No. 96-cv-01233) District Judge: Honorable Yvette Kane

Milton L. Chappell, Esquire (Argued) W. James Young National Right to Work Legal Defense Foundation 8001 Braddock Road, Suite 600 Springfield, VA 22160 Attorneys for Appellants/Cross-Appellees

John M. West, Esquire (Argued) Laurence Gold Bredhoff & Kaiser 805 Fifteenth Street, N.W., Suite 1000 Washington, D.C. 20005

Mark P. Widoff, Esquire Pennsylvania State Education Association 400 North Third Street P.O. Box 1724 Harrisburg, PA 17105 Attorneys for Appellees/Cross-Appellants

Before: Ambro and Stapleton, Circuit Judges, and O'NEILL,*fn1 District Judge

The opinion of the court was delivered by: Ambro, Circuit Judge

PRECEDENTIAL

Argued June 27, 2002

OPINION OF THE COURT

We consider whether, under the First Amendment, certain expenses incurred by unions may be charged to non-members and whether a local union must obtain independent auditor verification of its charges (and, if so, what kind of verification we require).

The First Amendment affords public-sector employees the freedom not to associate with a labor organization. See Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292, 301 (1986) (quoting Abood v. Detroit Bd. of Educ., 431 U.S. 209, 222 (1977)). There are limits to this constitutional freedom, however, in light of organized labor's important role in advancing employment conditions. Abood, 431 U.S. at 225-26. Thus, as a means of curing the so-called "free-rider" problem posed by its representation of non-members, a union may charge each non-member employee a fair-share, or agency, fee equal to his or her per capita share of the union's expenses arising from its duties as a collective-bargaining representative. See id. at 235-36. But a union may not, consistent with the First Amendment, collect fair-share dues to support ideological causes or other expenses insufficiently related to collective bargaining. Id.

To ensure that non-members are assessed only for fair-share fees properly chargeable to them, the Supreme Court has ruled that unions must adopt procedural safeguards "carefully tailored to minimize the [First Amendment] infringement." Hudson, 475 U.S. at 303. First, the union must provide a non-member with "sufficient information to gauge the propriety of the union's fee." Id. at 306. This explanation of the basis for the fee is often referred to as a "Hudson notice." Second, a non-member must have an adequate opportunity to object to the fair-share fee allocation. See id. at 307. The two safeguards are linked; without the Hudson notice, a non-member would lack a basis for deciding whether to object to a fair-share fee calculation. Penrod v. NLRB, 203 F.3d 41, 46 (D.C. Cir. 2000).

When theory meets practice, questions abound. Do the financial information requirements apply to small local unions? How much verification of that information must there be? When a union represents more than one bargaining unit, can that union include, in the fair-share fee assessed to non-members of one bargaining unit, costs associated with another bargaining unit's litigation? What if those bargaining units are in different industries?

I. BACKGROUND AND PROCEDURAL HISTORY

Shaler Area Education Association ("SAEA") is the exclusive bargaining representative for education professionals employed by the Shaler Area School District. SAEA is the local affiliate of the Pennsylvania State Education Association ("PSEA") -- which represents, inter alia, both education and healthcare professionals in the Commonwealth -- and the National Education Association ("NEA," and collectively with SAEA and PSEA, the "Unions"). During the 1994-1995 school year, the Shaler Area School District employed 355 education professionals, 344 of whom were members of the SAEA (and, thereby, the PSEA and NEA). Because all three Unions provide collective-bargaining ...


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