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[House Report 106-968]
[From the U.S. Government Publishing Office]

106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-968

======================================================================

 
                  WORKER PAYCHECK FAIRNESS ACT OF 1999

                                _______
                                

October 11, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Goodling, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                     MINORITY AND DISSENTING VIEWS

                        [To accompany H.R. 2434]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 2434) to require labor organizations to 
secure prior, voluntary, written authorization as a condition 
of using any portion of dues or fees for activities not 
necessary to performing duties relating to the representation 
of employees in dealing with the employer on labor-management 
issues, and for other purposes, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                                Purpose

    The purpose of H.R. 2434, the Worker Paycheck Fairness Act, 
is to ensure that all workers have sufficient information about 
their rights regarding the payment of dues or fees to labor 
organizations and the uses of their dues and fees by labor 
organizations, and to ensure that the right of all workers to 
make individual and informed choices about the political, 
social or charitable causes they support is protected to the 
greatest extent possible.
    The legislation creates a new, federal right implementing 
the spirit of the Supreme Court's 1988 Beck decision. In Beck, 
the high court held that workers could not be required to pay 
for activities beyond those related to legitimate union 
functions. H.R. 2434 applies only in circumstances in which 
employees work under a ``union security agreement,'' that is, 
when unions require workers to pay dues as a condition of 
keeping their jobs.

                            Committee Action

    H.R. 2434, the Worker Paycheck Fairness Act, was introduced 
by Representative Bill Goodling (R-PA) on July 1, 1999. H.R. 
2434 was marked up in Full Committee on November 3, 1999, and 
ordered favorably reported by roll call vote (yeas 25, nays 22, 
not voting 2). H.R. 2434 currently has 24 cosponsors.
    The Worker Paycheck Fairness Act is similar to H.R. 1625, 
introduced during the 105th Congress by Representative Harris 
W. Fawell on May 15, 1997. H.R. 1625 had more than one hundred 
cosponsors, including the entire Republican House leadership. 
By unanimous consent, the Subcommittee on Employer-Employee 
Relations was discharged from further consideration of H.R. 
1625 on October 8, 1997. On that same date, the Committee on 
Education and the Workforce approved H.R. 1625, as amended, by 
a voice vote, and, also by a voice vote, ordered the bill 
favorably reported.
    The Committee on Education and the Workforce has held six 
hearings during the past three Congresses on the issue of 
compulsory union dues. The hearings established that rank-and-
file union members need more control over the portion of their 
dues money that is spent on activities having nothing to do 
with the functions of the union. Worker after worker testified 
about the incredible burdens they have faced trying to exercise 
their rights under current law and recover money that is 
theirs.
    Throughout the Committee's hearings, union members 
testified about the intimidation, stonewalling and deception 
they have experienced in their attempts to exercise their 
rights, under Communications Workers of America v. Beck,\1\ to 
object to the use of their union dues or fees for purposes that 
were not necessary to collective bargaining. The Committee also 
heard from individuals from several organizations that had 
represented workers who had attempted to object to the non-
collective bargaining use of their union dues or fees. These 
witnesses highlighted both the significant challenges under the 
current law and the depth of the frustration workers feel with 
regard to mandatory assessment of union dues and fees. Workers, 
as well as individuals experienced in the legal aspects of 
asserting Beck rights, testified in support of the Worker 
Paycheck Fairness Act, and indicated it would inject more 
fairness into the mandatory dues collection process.
---------------------------------------------------------------------------
    \1\ 487 U.S. 735 (1988).
---------------------------------------------------------------------------
    The Subcommittee on Employer-Employee Relations held a 
hearing on the abuse of worker rights and the Worker Paycheck 
Fairness Act on January 21, 1998. Testimony was heard from 
Robert P. Hunter, Director of Labor Policy for the Mackinac 
Center for Public Policy, Midland, Michigan; John Masiello, 
Member, International Association of Machinists and Aerospace 
Workers, Mooresville, North Carolina; Frank Ury, Co-Author, 
California Campaign Reform Initiative, Mission Viejo, 
California; John Hiatt, General Counsel, AFL-CIO, Washington, 
DC; Morgan O. Reynolds, Professor, Department of Economics, 
Texas A&M University, College Station, Texas; John C. McCrae, 
Member, Carpenters for Democracy in Unions, Ridley Park, 
Pennsylvania; Cheri W. James, President, Virginia Education 
Association, Richmond, Virginia; and Mark Wilson, Policy 
Analyst, Heritage Foundation, Washington, DC.
    On December 11, 1997, the Subcommittee on Employer-Employee 
Relations held a field hearing in San Diego, California. During 
the hearing, which addressed mandatory union dues and the abuse 
of worker rights, testimony was heard from James Righeimer, co-
author, California Campaign Reform Initiative, Tustin, 
California; John Moses, Employee, National Steel and 
Shipbuilding Company, San Diego, California; Karan Koog, 
Member, International Association of Machinists and Aerospace 
Workers, Woodworkers Local Lodge W98, AFL-CIO, McKinleyville, 
California; Jane McGill, President, Sweetwater Education 
Association, San Diego, California; Nadia Q. Davies, Former 
Teacher, San Diego, California; Jackie Giles, Member, Service 
Employees Local 2028, San Diego, California; Brenda Reneau, 
Commissioner of Labor, State of Oklahoma, Oklahoma City, 
Oklahoma; and Bob Williams, President, Evergreen Freedom 
Foundation, Olympia, Washington.
    The Committee on Education and the Workforce held a hearing 
on H.R. 1625 on July 9, 1997. Testimony was heard from Kevin 
Spence, Phoenix, Arizona; Charles E. Barth, Cornelius, North 
Carolina; Daniel A. Klosowski, Milwaukee, Wisconsin; Steven J. 
Nemirow, Attorney, Portland, Oregon; Roger Pilon, Director, 
Center for Constitutional Studies, CATO Institute, Washington, 
DC; Marshall J. Breger, Visiting Professor of Law, Columbus 
School of Law, the Catholic University of America, Washington, 
DC; Mitchell Kraus, General Counsel, Transportation 
Communications Union, Rockville, Maryland; and James B. 
Coppess, Associate General Counsel, Communications Workers of 
America.
    The Subcommittee on Employer-Employee Relations held a 
hearing on mandatory union dues on March 18, 1997. Testimony 
was heard from the Honorable Esteban Edward Torres, Member of 
Congress; Jane Gansmann, West Chicago, Illinois; Kerry W. Gipe, 
Matthews, North Carolina; E. Grady Thurston, Suisun City, 
California; Robert A. St. George, St. Paul, Minnesota; Bob 
Williams, President, Evergreen Freedom Foundation, Olympia, 
Washington; Patrick J. Manshardt, Attorney, Individual Rights 
Foundation, Los Angeles, California; Morgan O. Reynolds, 
Professor, Department of Economics, Texas A&M University, 
College Station, Texas; Allison Beck, General Counsel, 
International Association of Machinists and Aerospace Workers, 
AFL-CIO; and James B. Coppess, Associate General Counsel, 
Communications Workers of America.
    Hearings on mandatory union dues were also held by the 
Subcommittee on Employer-Employee Relations during the 104th 
Congress. On April 18, 1996, the subcommittee heard testimony 
from Gary Bloom, Southhaven, Minnesota; James Cecil, Clarkston, 
Michigan; Len Cipressi, Los Angeles, California; Gary Dunham, 
Buffalo, New York; Charles R. Serio, Linthicum, Maryland; John 
Wilson, Neosho, Missouri; Marshall J. Breger, Visiting 
Professor of Law, Columbus School of Law, the Catholic 
University of America, Washington, DC; W. James Young, Staff 
Attorney, National Right to Work Legal Defense Foundation, 
Springfield, Virginia; Victoria Bor, Attorney, Sherman, Dunn, 
Cohen Leifer & Yellig, Washington DC (testifying on behalf of 
the International Brotherhood of Electrical Workers); and Mark 
Schneider, Associate General Counsel, International Association 
of Machinists and Aerospace Workers, AFL-CIO, Washington, DC. 
On June 19, 1996, the subcommittee held a hearing on the Worker 
Right to Know Act, legislation similar to H.R. 2434, and to 
H.R. 1625 that was introduced in the 104th Congress. At this 
hearing, the subcommittee heard from Mary S. Burkholder, 
Chambersburg, Pennsylvania; William H. Hitchings, Chicago, 
Illinois; Charles W. Baird, Professor of Economics and 
Director, Smith Center for Private Enterprise Studies, 
California State University, Hayward, California; Raymond J. 
LaJeunesse, Staff Attorney, National Right to Work Legal 
Defense Foundation, Springfield, Virginia; Michael A. Taylor, 
Attorney, Powell, Goldstein, Frazer & Murphy, Washington, DC; 
Marshall J. Breger, Visiting Professor of Law, Columbus School 
of Law, the Catholic University of America, Washington, DC; 
James B. Coppess, Associate General Counsel, Communications 
Workers of America; and Helen Gibson, Agency Fee Administrator, 
Communications Workers of America.

                            Committee Views

                        Introduction and Summary

    Despite the U.S. Supreme Court establishing more than a 
decade ago that workers who are forced to pay union dues as a 
condition of employment may not be required to pay dues beyond 
those necessary for collective bargaining, Beck\2\ rights have 
remained illusory. Employees must first be aware that they have 
a right to object to non-collective bargaining dues. The fact 
of the matter is that the actual text of the National Labor 
Relations Act, as currently written, still appears to permit 
unions and employers to agree to make union membership and 
payment of full union dues a condition of employment. The law 
also puts the burden on the employee to object to non-
collective bargaining dues and, if no objection is made, the 
employee may be liable for full dues. Further, if an employee 
wants to object to the payment of non-collective bargaining 
dues, the union may require the employee to resign from the 
union and, in the process, the employee loses critical 
workplace rights such as the right to ratify a contract or vote 
to go on strike.
---------------------------------------------------------------------------
    \2\ Id.
---------------------------------------------------------------------------
    If an employee gets this far and decides to affirmatively 
object, the employee must often withstand threats and 
intimidation from co-workers and union officials, only to have 
to renew the objection each year. In sum, the right of an 
employee to object to the payment of any dues beyond those 
necessary for collective bargaining has remained more of a 
legal right than a practical one. The hurdles an employee must 
overcome are many, requiring extreme persistence, knowledge of 
the law, and a willingness to buck the system and give up 
participation in decisions affecting his or her work 
environment.
    The Worker Paycheck Fairness Act addresses each of these 
shortcomings of current law. The legislation creates a new 
requirement in federal law directing any labor organization 
accepting payment of any dues or fees from an employee as a 
condition of employment pursuant to an agreement authorized by 
federal law to simply secure from each employee prior, 
voluntary, written authorization for any portion of such dues 
or fees which will be used for non-collective bargaining 
activities. The Worker Paycheck Fairness Act includes effective 
remedial provisions modeled on the Family and Medical Leave Act 
providing that any labor organization which failed to secure 
the required authorization would be liable to the affected 
employee for damages equal to two times the amount of the dues 
or fees accepted in violation of the Act together with 
interest. The employee could also recover attorneys' fees and 
costs.
    Unionized employers would be required to post a notice 
informing employees of their rights under the legislation. The 
Worker Paycheck Fairness Act also requires more detailed 
financial reporting by labor organizations, gives workers 
paying union dues or fees the same access to financial 
information as union members, and allows any interested party 
to make a written request for financial reports filed with the 
Department of Labor. Consistent with other workplace laws, the 
legislation would also protect workers against coercion or 
retaliation in the exercise of their rights under this Act. The 
Worker Paycheck Fairness Act injects needed fairness into the 
mandatory dues collection process and builds upon the reasoning 
of the Supreme Court in Beck to finally transform the promise 
of that decision into a reality.

              Current Law Fails to Protect Workers' Rights

    In 1988, the Supreme Court established in Communications 
Workers of America v. Beck\3\ that workers cannot be forced 
under a union security clause to pay dues or fees to a union 
beyond those ``necessary to performing the duties of an 
exclusive representative of the employees in dealing with the 
employer on labor-management issues.'' Unfortunately, Beck 
rights as currently constituted have proven elusive to the 
average working American. After receiving testimony from 
numerous workers from all across this nation and from a host of 
organizations that advocate on behalf of employees related to 
their union dues obligations, the Committee has concluded that 
the rights enunciated by the Supreme Court in Beck do not offer 
employees a meaningful right to object to union dues or fees 
not necessary to collective bargaining. The problems with Beck 
rights as currently available are manifold.
---------------------------------------------------------------------------
    \3\ 487 U.S. 735, at 762 (1988).
---------------------------------------------------------------------------

Lack of notice

    The problems begin with the notice, or lack thereof, that 
employees have of their right under Beck to object to the use 
of compulsory dues for purposes not necessary to collective 
bargaining. As Marshall Breger, former Solicitor for the 
Department of Labor during the Bush administration and a law 
professor at Catholic University's Columbus School of Law, 
testified: ``There has been considerable controversy as regards 
how non-union agency fee payers are expected to learn of their 
Beck rights. Unions have no specific interest in appraising 
workers of their `refund rights' because the use of the refund 
option reduces their discretionary funds. Indeed even some 
employers believe that it is in their interest to reduce the 
transaction costs under union security agreements. Perhaps it 
is the case that Beck rights have passed into the common 
consciousness of industrial relations--I have seen no evidence 
to sustain that proposition, however.'' \4\
---------------------------------------------------------------------------
    \4\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
12 (April 18, 1996) (Serial No. 104-66).
---------------------------------------------------------------------------
    Oklahoma's Commissioner of Labor, Brenda Reneau, who 
introduced Beck rights language into that state's minimum wage 
poster, testified that ``the rank and file are kept in the 
dark, with little to no explanation of their rights.'' \5\ 
Reneau cited a poll of 1,000 union members, which found that 
only 1 in 4 with at least 20 years of membership actually knew 
of their rights, or the right to request a refund of dues spent 
on political activities, and that of those with fewer than 5 
years of membership, only 1 in 10 had knowledge of the rights 
granted under the Beck decision.\6\
---------------------------------------------------------------------------
    \5\ Field Hearing on Mandatory Union Dues and the Abuse of Worker 
Rights, Before the Subcommittee on Employer-Employee Relations, 105th 
Cong., 2nd Sess., at 36 (December 11, 1997) (Serial No. 105-24).
    \6\ Id.
---------------------------------------------------------------------------
    The experiences of the workers who testified before the 
Committee reinforce the conclusions that Mr. Breger and Ms. 
Reneau articulated about the lack of notice. Bill Hitchings, a 
longtime member of the Carpenters' Union, stated: ``[T]he union 
makes no attempt whatsoever to make the membership aware that 
they have options under the Beck ruling * * * I've been 
deprived of information. I don't know whether it's on purpose 
or just an oversight, but when I made objection to [political 
spending] with my union, they certainly never mentioned Beck to 
me.'' \7\ Similarly, Robert St. George, an airline industry 
worker from St. Paul, Minnesota, told the Committee: ``When 
[the union representative] was asked at this meeting if there 
wasn't some way we could just pay for representation, as I 
remember it, [he] made the incredible claim that we could not 
because Minnesota was not a Right to Work State and that can 
only be done in a Right to Work State. [He] would not even tell 
us about our Beck rights when asked.'' \8\
---------------------------------------------------------------------------
    \7\ Hearing on H.R. 3580, the Worker Right to Know Act, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
197, 363 (June 19, 1996) (Serial No. 104-66).
    \8\ Hearing on Mandatory Union Dues, Before the Subcommittee on 
Employer-Employee Relations, 105th Cong., 1st Sess., at 24 (March 18, 
1997) (Serial No. 105-9).
---------------------------------------------------------------------------
    Daniel Klosowski, a broadcast engineer from Milwaukee, 
Wisconsin, testified: ``No one explained what my obligations 
for union dues were, nor was I given a copy of the contract to 
read. That should have been the time when my obligations were 
discussed regarding union dues, and whether I had the choice of 
even joining the union. This is still the current practice used 
by the stewards today; they do not tell new hires what their 
rights are * * *'' \9\ John Moses, a foreman at a California 
shipbuilding company, testified before the Committee: ``Over 
the years since I've gotten out of the union, through talking 
to people, I've learned of rights I never knew I had. I never 
knew about the Beck decision and the rights it gave me. When I 
was a member of the union I never knew about any of these 
options.'' \10\ A poll conducted during the 105th Congress at 
the request of Americans for a Balanced Budget backs up the 
experiences of these workers. The survey found that only 19% of 
union members know that they could object to the use of union 
dues for non-collective bargaining purposes.
---------------------------------------------------------------------------
    \9\ Hearing on H.R. 1625, the Worker Paycheck Fairness Act, Before 
the Committee on Education and the Workforce, 105th Cong., 1st Sess., 
at 77 (July 9, 1997) (Serial No. 105-51).
    \10\ Field Hearing on Mandatory Union Dues and the Abuse of Worker 
Rights, Before the Subcommittee on Employer-Employee Relations, 105th 
Cong., 2nd Sess., at 120 (December 11, 1997) (Serial No. 105-24).
---------------------------------------------------------------------------
    Neither the National Labor Relations Board (NLRB) nor the 
Department of Labor has taken any substantial steps to address 
this widespread lack of notice. In its first comprehensive 
ruling interpreting Beck, the NLRB concluded that it was 
sufficient for the union to print a notice of Beck rights only 
once a year in the inside of its monthly magazine.\11\ 
Although, why non-union fee payers are expected to pick up and 
read the union magazine is less than clear. Further, both the 
Board and the current administration have steadfastly failed to 
require that Beck notices be posted in the workplace. One of 
President Clinton's initial acts upon taking office was to 
rescind an executive order issued by President Bush requiring 
federal contractors to post Beck notices.\12\
---------------------------------------------------------------------------
    \11\ California Saw & Knife Works, 320 NLRB 224 (Dec. 20, 1995).
    \12\ Executive Order 12836 (February 1, 1993) rescinding Executive 
Order 12800 (April 13, 1992).
---------------------------------------------------------------------------

Union resignation required

    Employees who are fortunate enough to clear the initial 
hurdle of not knowing their rights under Beck and want to 
object to the use of their union dues for political or social 
causes are often required to resign their membership in the 
union.\13\ This is not an easy thing for many employees to do 
for a number of reasons. First and foremost, as stated in 
testimony the Committee heard from James Young, an attorney 
with the National Right to Work Legal Foundation, unions often 
either wittingly or unwittingly (Mr. Young argues the former) 
mislead their employees on the effect resignation from the 
union will have on their employment, implying that resignation 
will lead to discharge.\14\ The text of the collective 
bargaining agreement itself exacerbates this deception, as 
union security clauses often require full membership in the 
union as a condition of employment even though the courts have 
made it clear that this cannot be demanded of employees.\15\
---------------------------------------------------------------------------
    \13\ The Beck decision did not address whether or not an employee 
can be required to resign from the union in order to exercise Beck 
rights. In a later decision, the Fourth Circuit Court of Appeals did 
find that employees do not have a right to remain a member of a union 
yet only pay for the costs of union activities necessary to collective 
bargaining. Kidwell v. Transportation Communications International 
Union, 946 F.2d 283 (4th Cir. 1991). See also, United Steelworkers, 329 
NLRB No. 18, at fn. 3 (Sept. 17, 1999)(noting NLRB general counsel's 
position, pursuant to General Counsel's Guidelines, that in order to 
qualify for Beck rights, employee must be non-member of union).
    \14\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
112 (April 18, 1996) (Serial No. 104-66).
    \15\ National Labor Relations Board v. General Motors Corp., 373 
U.S. 734 (1963). The Supreme Court, however, has contributed to 
workers' confusion by holding that union contracts can require 
compulsory membership without spelling out that workers do not have to 
become full union members. Marquez v. Screen Actors Guild, Inc., 525 
U.S. 33 (1998) (holding as reasonable union contract's security clause 
tracking language of NLRA Section 8(a)(3)).
---------------------------------------------------------------------------
    The experiences of several of the workers who testified 
before the Committee buttress the observations made by Mr. 
Young. Gary Bloom, a medical records clerk from Southhaven, 
Minnesota, related his experience as follows: ``[The union 
official] mentioned that as part of the union contract, I must 
become a member of Local 12, 31 days after being hired and if I 
chose not to become a member, she * * * would have no 
alternative but to request that Group Health terminate my 
employment there.'' \16\ Similarly, Kerry Gipe, an airline 
mechanic from Matthews, North Carolina, testified, ``I was told 
that joining the union was a mandatory part of working for the 
company.'' \17\ Nadia Davies, a retired schoolteacher from San 
Diego, testified that when she asked her union to allow her to 
pay only those dues related to collective bargaining, she ``* * 
* was told in no uncertain terms that [she] could not do that 
and that [she] was locked in for the duration of the 
contract.'' \18\
---------------------------------------------------------------------------
    \16\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
26 (April 18, 1996) (Serial No. 104-66).
    \17\ Hearing on Mandatory Union Dues, Before the Subcommittee on 
Employer-Employee Relations, 105th Cong., 1st Sess., at 17 (March 18, 
1997) (Serial No. 105-9).
    \18\ Field Hearing on Mandatory Union Dues and the Abuse of Worker 
Rights, Before the Subcommittee on Employer-Employee Relations, 105th 
Cong., 2nd Sess., at 30 (December 11, 1997) (Serial No. 105-24).
---------------------------------------------------------------------------

Workers experience intimidation and coercion

    Even for employees who find out the truth, many who object 
to the union's ``extracurricular'' activities may believe that 
union representation brings them benefits in the workplace and 
thus may be reluctant to resign. Some employees may also fear 
the reaction that union resignation may bring from fellow 
employees. Robert Hunter, who heads the Mackinac Center for 
Public Policy, in Midland, Michigan, testified before the 
Committee: ``We see peer pressure and bullying tactics from 
within union ranks, often discouraging members from exercising 
their Beck rights * * * [T]hey are pressured to avoid rocking 
the boat.'' \19\ Several workers appearing before the Committee 
testified regarding the coercion and intimidation they 
experienced once they began to question the orthodoxy of full 
union membership and dues payment.
---------------------------------------------------------------------------
    \19\ Hearing on Abuse of Worker Rights and H.R. 1625, the Worker 
Paycheck Fairness Act, Before the Subcommittee on Employer-Employee 
Relations, 105th Cong., 2nd Sess., at 7 (January 21, 1998) (Serial No. 
105-71).
---------------------------------------------------------------------------
    John Masiello, a mechanic at U.S. Airways and IAM member, 
testified that once he began asking about his Beck rights, 
``the local lodge president * * * immediately started a 
campaign to discredit me * * * He did this with slanderous 
lies, and character assassination. Letters were hung all over 
the workplace claiming [I] objected to paying any dues * * * 
Months had gone by and the harassment had not let up one bit, 
and to make matters worse, I was still paying what they had 
considered full dues. Not one penny of the overpayment was 
refunded to me * * * I was forced to take the local lodge 
president to small claims court.'' \20\
---------------------------------------------------------------------------
    \20\ Hearing on Abuse of Worker Rights and H.R. 1625, the Worker 
Paycheck Fairness Act, Before the Subcommittee on Employer-Employee 
Relations, 105th Cong., 2nd Sess., at 101-102, (January 21, 1998) 
(Serial No. 105-71).
---------------------------------------------------------------------------
    Kerry Gipe told the Committee: ``* * * the union began an 
almost immediate smear campaign against us, led by our local 
president * * * portraying us as scabs, and freeloaders * * * 
We had our names posted immediately on both union property and 
company property accusing us of being scabs. We were thrown out 
of our local union hall, and threatened with physical violence 
* * * We were accosted at work, we were accosted on the street. 
We were harassed, intimidated, and threatened. We were told 
that our names were being circulated among all union officials 
in order to prevent us from ever being hired into any other 
union shop at any other location. The union membership was told 
that we were refusing to pay any dues whatsoever, which created 
a very hostile environment among our fellow workers.'' \21\
---------------------------------------------------------------------------
    \21\ Hearing on Mandatory Union Dues, Before the Subcommittee on 
Employer-Employee Relations, 105th Cong., 1st Sess., at 15 (March 18, 
1997) (Serial No. 105-9).
---------------------------------------------------------------------------
    James Cecil of Clarkston, Michigan, testified that ``the 
union agent wanted to know why I would not sign the check-off 
and join * * * [H]e became angry and asked me who the hell I 
thought I was? Did I think I was some kind of intellectual? Did 
I think I was better than the other workers out there? I told 
him no, but I know what my rights are and I intend to defend 
them * * * He promised me in no uncertain terms that he would 
bring the full force of his and the other unions down on me if 
I dared to do that * * * I was greatly concerned about 
retaining my job and for my physical well-being.'' \22\
---------------------------------------------------------------------------
    \22\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
29 (April 18, 1996) (Serial No. 104-66).
---------------------------------------------------------------------------

Loss of workplace rights

    Even if one withstands the intimidation and coercion, once 
an employee resigns from the union he or she loses the right to 
have a voice in the myriad decisions made between the exclusive 
bargaining representative and the employer about the terms and 
conditions affecting his or her employment. In most workplaces, 
employees who are part of a bargaining unit that is represented 
by a union, but who are not union members, have no right to 
participate in the internal affairs of the union (e.g. cannot 
vote in union elections), have no right to vote in decisions to 
strike an employer, and have no right to vote to ratify a 
contract offer of an employer. Under a union security 
agreement, a nonmember can be forced--as a condition of 
employment--to pay for the costs of union representation but 
can be denied participation in all decisionmaking with regard 
to what that representation entails.\23\
---------------------------------------------------------------------------
    \23\ See Testimony of W. James Young, Hearing on Mandatory 
Assessment of Union Dues, Before the Subcommittee on Employer-Employee 
Relations, 104th Cong., 2nd Sess., at 110-111 (April 18, 1996)(Serial 
No. 104-66).
---------------------------------------------------------------------------
    Several workers appearing before the Committee expressed 
frustration at the Hobson's choice they were facing. Leonard 
Cipressi from Los Angeles, California told the Committee: 
``When you exercise your Beck rights you don't get to vote on 
contracts that affect you, your family, your peers. Not only 
that, you don't get to exercise free speech because you're not 
allowed to go to union meetings.'' \24\ Gary Dunham described 
the situation under current law as forcing him to ``choose 
between First Amendment rights and workplace rights'' and to 
forego his rights to participate in the union and to vote on 
his contract.\25\
---------------------------------------------------------------------------
    \24\Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
92 (April 18, 1996)(Serial No. 104-66).
    \25\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
54 (April 18, 1996)(Serial No. 104-66).
---------------------------------------------------------------------------
    The words of the unions themselves speak volumes as to the 
detriment experienced by workers forced to resign from the 
union in order to assert Beck rights. The International 
Association of Machinists and Aerospace Workers (IAM) posted a 
notice in Kerry Gipe's workplace making very clear that ``these 
employees have lost their say in all union activities except 
the right to be represented in accordance with their grievance 
procedures and strike benefits if they choose not to become a 
scab and cross our picket line.'' \26\
---------------------------------------------------------------------------
    \26\ Hearing on Mandatory Union Dues, Before the Subcommittee on 
Employer-Employee Relations, 105th Cong., 1st Sess., at 22 (March 18, 
1997)(Serial No. 105-9).
---------------------------------------------------------------------------

Procedural hurdles

    If the employee is willing to accept these very real 
limitations on his or her role in the workplace, the 
meaningfulness of the employee's right to object to dues being 
used for non-collective bargaining purposes is further diluted 
by the practical obstacles to the exercise of that right. The 
workers who testified before the Committee highlighted some of 
the procedural hurdles, pointing out, for example, limited 
window periods for making objections, annual renewal 
requirements for objectors, very specific requirements 
regarding mailing objections, and the requirement that 
objections must be made to multiple parties. Kerry Gipe 
indicated that ``the current system of resigning from the union 
and then re-applying annually * * * is a further heavy burden 
that the workers of this country should not be required to 
bear. This practice is clearly intended to make your objection 
to supporting these causes as difficult as possible.'' \27\ 
Charles Serio of Linthicum, Maryland told the Committee: ``No 
matter how scrupulously I followed the policy prescribed by 
CWA, my demands for an agency fee reduction were ignored * * * 
I subsequently received my first agency fee reduction * * * 
more than two years after my initial effort.'' \28\
---------------------------------------------------------------------------
    \27\ Hearing on Mandatory Union Dues, Before the Subcommittee on 
Employer-Employee Relations, 105th Cong., 1st Sess., at 18 (March 18, 
1997)(Serial No. 105-9).
    \28\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
36 (April 18, 1996) (Serial No. 104-66).
---------------------------------------------------------------------------
    Karan Koog, a former IAM member from McKinleyville, 
California, told the Committee that when she asked a ``normally 
helpful'' shop steward how she would go about exercising her 
Beck rights, ``* * * [the union officer] admitted he had heard 
something like that once, however, he really didn't know what 
is was about or how one would go about finding out how to 
prohibit dues from being used for political purposes. The 
barriers to information that I faced was enough to stop me from 
pursuing the matter further.'' \29\
---------------------------------------------------------------------------
    \29\ Field Hearing on Mandatory Union Dues and the Abuse of Worker 
Rights, Before the Subcommittee on Employer-Employee Relations, 105th 
Cong., 2nd Sess., at 25 (December 11, 1997)(Serial No. 105-24).
---------------------------------------------------------------------------
    The Committee's hearings made clear that there are no any 
easy answers for employees, whether they are union members or 
not, who want to take issue with the activities of the union 
that go beyond what may be a yeoman's effort by that union in 
representing employees in the workplace. The Committee views 
these issues as ones of basic fairness. So long as unions and 
employers have the unique power under federal law to divert a 
portion of a worker's salary for collective bargaining expenses 
under the pain of the loss of the worker's job, the Committee 
has an obligation to ensure that workers are treated with 
respect and fairness. Workers have a right to know why money is 
taken out of their paycheck, how money legitimately taken is 
used, and a realistic and available right to stop money from 
being taken out of their paychecks that is not used for 
legitimate collective bargaining purposes. This is exactly what 
the Worker Paycheck Fairness Act is designed to provide.

                    The Worker Paycheck Fairness Act

    The Worker Paycheck Fairness Act merely says to unions who 
want to require workers to pay union dues as a condition of 
keeping their jobs, if you want to spend dues for reasons not 
germane to collective bargaining, (1) Get written consent of 
the workers first; and (2) provide better information 
concerning how the dues were spent. The legislation is designed 
to answer the lament of workers like Gary Dunham who told the 
Committee, ``This four-year ordeal has opened my eyes to the 
abuse that is possible under current labor law. If I don't pay 
dues or fees to my union, I will be fired. In practical terms, 
my money is being used for causes and ideas I oppose and my 
four-year effort shows me there is nothing I can do to change 
this. So I am turning to you, hoping that you will help me and 
the thousands of other workers who find themselves in a similar 
situation.'' \30\
---------------------------------------------------------------------------
    \30\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
54-55 (April 18, 1996) (Serial No. 104-66).
---------------------------------------------------------------------------
    The Worker Paycheck Fairness Act is about common sense and 
basic worker rights. It is not about trying to silence unions 
or interfere with the role they can and should play in the 
political process. The legislation allows unions to spend their 
money exactly as they currently do. The only difference is that 
individual workers, who provide the lion's share of their 
union's financial resources, must first give their written 
consent before being obligated to pay for those expenses that 
have nothing to do with collective bargaining.

Up-front consent

    The most dramatic improvement contained in the Worker 
Paycheck Fairness Act is its requirement that workers be 
granted an opt-in, up-front consent procedure. This stands in 
contrast to the process under current law, which requires 
workers to affirmatively object, that is, to opt-out of paying 
non-collective bargaining dues, and to renew their objection 
each year. Under the bill, labor organizations that accept 
payment of any dues or fees from employees as a condition of 
employment pursuant to an agreement authorized by federal law 
must secure from each employee a prior, voluntary written 
authorization for any portion of dues or fees used for non-
collective bargaining activities. Under current law, an 
agreement requiring the payment of dues or fees to a labor 
organization as a condition of employment--a so-called union 
security clause--is permissible both under the National Labor 
Relations Act \31\ and the Railway Labor Act.\32\
---------------------------------------------------------------------------
    \31\ 29 U.S.C. Section 158(a)(3).
    \32\ 45 U.S.C. Section 152, Eleventh.
---------------------------------------------------------------------------
    H.R. 2434 sets forth several specific requirements for the 
terms of the written authorization--each designed to ensure 
that workers are well-apprised of their rights and obligations 
regarding the payment of dues or fees to a labor organization. 
The authorization must clearly state that the employee is not 
required to provide the authorization--and thus is not required 
to pay those dues or fees used for non-collective bargaining 
activities. It must also state that if the authorization is 
provided--and thus the employee agrees to pay non-collective 
bargaining dues or fees--the labor organization may use those 
dues or fees for activities that may be political, social or 
charitable in nature.
    The Worker Paycheck Fairness Act also provides that the 
authorization remains effective until revoked and may be 
revoked at any time upon giving 30 days written notice.
    Much has been made of the fact that H.R. 2434 does not have 
any application to corporations or other membership 
organizations. The Committee believes that there are sound 
policy reasons for drawing a distinction between labor 
organizations utilizing a union security clause and other 
organizations. First of all, the Worker Paycheck Fairness Act 
does not apply to every union. It only applies to those unions 
that have voluntarily chosen to enter into a union security 
clause with an employer requiring employees to pay union dues 
or fees as a condition of employment. Herein lies the critical 
difference between unions and corporations or other membership 
organizations. Unions, by a grant of power from the federal 
government, can force employees to pay dues to the union as a 
condition of keeping their jobs; corporations cannot force 
individuals to invest in them, nor can other membership 
organizations force individuals to join and pay dues.
    The Committee believes that it is entirely fair to balance 
this special ``taxing'' power given to unions with special 
obligations to ensure that employees paying mandatory dues are 
well-informed as to their rights and obligations regarding 
those payments. Here is how a long-time member of the 
Carpenters' Union, Bill Hitchings, drew the distinction between 
unions and corporations:

          [A]s a stockholder of AT&T, wouldn't I have the 
        option of divesting myself of that stock without 
        endangering my ability to feed my family, clothe 
        myself, house myself, provide medical care for myself? 
        I mean, we're talking apples and oranges here. I'm 
        talking about my job. I can take money from an 
        investment in AT&T and turn it into another stock if I 
        disagreed terribly with what AT&T is doing with my 
        money. I have no option of joining another carpenters' 
        union. There ain't one.'' \33\
---------------------------------------------------------------------------
    \33\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
362 (April 18, 1996) (Serial No. 104-66).
---------------------------------------------------------------------------

Collective bargaining dues/non-collective bargaining dues

    H.R. 2434 requires that a written authorization be secured 
for any dues or fees that will be used for activities which are 
``not necessary to performing the duties of the exclusive 
representative of the employees in dealing with the employer on 
labor-management issues.'' This language is taken directly from 
the holding in the Beck decision where the Supreme Court 
stated: ``We conclude that Section 8(a)(3) [of the National 
Labor Relations Act], like its statutory equivalent, Section 2, 
Eleventh of the Railway Labor Act, authorizes the exaction of 
only those dues and fees necessary to 'performing the duties of 
an exclusive representative of the employees in dealing with 
the employer on labor-management issues.' '' \34\
---------------------------------------------------------------------------
    \34\ 487 U.S. 735, 762 (1988).
---------------------------------------------------------------------------
    The Committee relied on this language from Beck in drafting 
H.R. 2434 because the language most accurately reflects the 
services that a worker is required to pay for when he or she 
must pay dues or fees to a labor organization under a union 
security clause. In short, under the terms of the legislation, 
a line is drawn--reinforcing the line that already exists under 
current law--between collective bargaining dues and non-
collective bargaining dues. A worker subject to a union 
security clause may be required to pay only those dues or fees 
necessary for collective bargaining. A worker may be asked to 
pay additional dues or fees for non-collective bargaining 
activities, and such dues or fees may be accepted only if the 
union has secured a voluntary written authorization from the 
worker.
    Under the formulation set forth in H.R. 2434, the types of 
activities that a worker could be forced to finance through 
dues or fees paid under a union security clause are only those 
necessary to support the union's activities in representing the 
employees before their employer on labor-management issues. 
Thus, preparations for collective bargaining, negotiating with 
an employer, representing employees in grievances, and dealing 
with contract issues (e.g. determining who would be affected by 
a lay-off under a seniority system, resolving a dispute about 
the parameters of an employer-provided healthcare plan) would 
fall within the duties of the exclusive representative of the 
employees and could be financed with mandatory dues or fees 
without triggering a consent requirement.
    The Committee finds that virtually all political or 
lobbying activity would fall outside the scope of collective 
bargaining expenses and thus would trigger the up-front consent 
requirement. This would include political activity related to 
elections for public office, as well as lobbying on matters of 
public policy. There is significant Supreme Court precedent 
that the former is not chargeable to objecting employees under 
the current Beck rubric.\35\ And, with respect to the latter, 
both the Supreme Court \36\ and lower courts have begun to 
review unions' lobbying expenses for purposes of determining 
whether such expenses fall within the category of collective 
bargaining activities. The Court of Appeals for the District of 
Columbia has held that the Air Line Pilots Association could 
not charge objecting employees for lobbying on airline safety 
issues. The court concluded: ``That the subject of safety is 
taken up in collective bargaining hardly renders the union's 
government relations expenditures germane. Under that 
reasoning, union lobbying for increased minimum wage laws or 
heightened government regulation of pensions would also be 
germane. Indeed if the union's argument were played out, 
virtually all of its political activities could be connected to 
collective bargaining; but the federal courts, including the 
Supreme Court, have been particularly chary of treating as 
germane union expenditures that touch the political world.'' 
\37\
---------------------------------------------------------------------------
    \35\ See e.g. International Association of Machinists v. Street, 
367 U.S. 740 (1960); Communications Workers of America v. Beck, 487 
U.S. 735 (1988); Lehnert v. Ferris Faculty Association, 500 U.S. 507 
(1991).
    \36\ The Supreme Court in Lehnert indicated that lobbying generally 
was not chargeable to objecting employees; it did intimate that there 
might be a narrow exception where lobbying expenses may be chargeable 
if the lobbying was related to legislative ratification or fiscal 
appropriation for a collective bargaining agreement. While finding that 
the labor legislation lobbying expenses at issue were not chargeable, 
the Special Master suggested in determinations reviewed by the Fourth 
Circuit in the Beck case that some types of lobbying may be chargeable. 
776 F.2d 1187 (4th Cir. 1985), en banc, 800 F.2d 1280. Although the 
Appeals Court agreed with the Special Master's disallowance of the 
lobbying expenses at issue, neither the Fourth Circuit nor the Supreme 
Court addressed the issue of legislative lobbying on workplace issues. 
Most other decisions speak in general terms about political or 
ideological activities being not chargeable. See e.g. International 
Association of Machinists v. Street, 367 U.S. 740 (1960); Chicago 
Teachers Union v. Hudson, 475 U.S. 292 (1986).
    \37\ Miller v. Air Line Pilots Association, 108 F.3d 1415, at 1422 
(D.C.Cir. 1997).
---------------------------------------------------------------------------
    Consistent with this decision, it is the Committee's view 
that, while lobbying on matters of public policy (particularly 
with regard to workplace issues) may have some relevance to 
collective bargaining, it is clearly not necessary to 
performing the duties of the exclusive representative of the 
employees in dealing with the employer on labor-management 
issues. Thus, a labor organization would not be able to use any 
portion of an employee's mandatory dues or fees for lobbying 
activities without securing prior consent.
    Similarly, the Committee finds that organizing activity is 
not necessary to collective bargaining and thus triggers the 
requirement for a written authorization. This is consistent 
with the reasoning of the Supreme Court in Ellis v. Brotherhood 
of Railway Clerks,\38\ which found that organizing is not 
chargeable to objecting employees because it has only the most 
attenuated benefit to collective bargaining on behalf of the 
fee payer. The Committee would note that it views with disfavor 
last year's National Labor Relations Board ruling on this point 
that runs counter to the Ellis holding. See United Food and 
Commercial Workers Locals 951, 7, and 1036 (Meijer, Inc.), 329 
NLRB No. 69 (Sept. 30, 1999).\39\
---------------------------------------------------------------------------
    \38\ 466 U.S. 435 (1984)
    \39\ The Committee does not believe that organizing activities are 
a necessary incident of collective bargaining and contract 
administration. Rather, the Committee strongly agrees with Board Member 
Brame, who noted in his Meijer dissent that the reasoning of Ellis 
applies with equal force to union security and the NLRA. Brame further 
noted that the Supreme Court has found no basis in the legislative 
history for the notion that, in authorizing the union shop, Congress 
intended to enhance organizational efforts; that the Court recognized 
that organizing efforts are necessarily spent on employees outside the 
bargaining unit and therefore afford ``only the most attenuated 
benefits to collective bargaining on behalf of the dues payer;'' and 
that organizing was not the sort of benefit that Congress had in mind 
in authorizing union security agreements to prevent ``free riders'' 
from enjoying benefits obtained by the union for which they had not 
paid. 1999 WL 818607 at 21.
---------------------------------------------------------------------------
    Other types of activities that fall outside the formulation 
of collective bargaining activities and thus trigger the up-
front consent requirement include contributions to charitable 
organizations\40\ or social causes and union-sponsored social 
or cultural events.\41\
---------------------------------------------------------------------------
    \40\ This is consistent with Lehnert v. Ferris Faculty Association, 
500 U.S. 507 (1991), where the Supreme Court found that a contribution 
from a local union to its parent that was not part of the local's 
responsibilities was more in the nature of a charitable contribution 
and thus was not chargeable to objecting employees.
    \41\ In this regard, the Committee would disagree with the Supreme 
Court's conclusion in Ellis v. Brotherhood of Railway Clerks, 466 U.S. 
435 (1984), that the expenses for various social activities were 
chargeable. Although the Court emphasized the de minimus nature of the 
expenses, the Committee believes that social events are not necessary 
to performing the duties of the exclusive representative of the 
employees in dealing with the employer on labor-management issues.
---------------------------------------------------------------------------

Remedies

    The Worker Paycheck Fairness Act includes a comprehensive 
remedial scheme modeled on that of the Family and Medical Leave 
Act. Where a labor organization fails to get the necessary 
authorization and spends dues or fees paid under a union 
security clause on non-collective bargaining activities, the 
legislation allows a worker to sue individually or as part of a 
class in any federal or state court. The labor organization 
would be liable for damages equal to double the amount of the 
dues or fees accepted in violation of the legislation plus 
interest calculated at the prevailing rate. In addition, a 
court could award attorneys' fees and costs as well as such 
equitable relief as may be appropriate.
    The remedial provisions of H.R. 2434 are central to its 
effectiveness. One of the problems with current law under Beck 
is that employees are either unable to pursue their claims in 
court because of a lack of resources or because they are 
enmeshed in the morass of the National Labor Relations Board. 
As Roger Pilon of the CATO Institute testified before the 
Committee: ``The enforcement provisions of [the Worker Paycheck 
Fairness Act], especially the provisions for fees and costs, 
are a welcome improvement. Were the `fees and costs' subsection 
to be stripped subsequently from the bill, however, I cannot 
imagine how the average worker, absent pro bono assistance, 
could vindicate his rights. It is imperative, therefore, that 
this provision be kept in the bill--not least because the bill 
arises in the first place from the practical problems that 
surround the enforcement of Beck rights.'' \42\
---------------------------------------------------------------------------
    \42\ Hearing on H.R. 1625, the Worker Paycheck Fairness Act, Before 
the Committee on Education and the Workforce, 105th Cong., 1st Sess., 
at 158 (July 9, 1997) (Serial No. 105-51).
---------------------------------------------------------------------------
    If a union's determination as to which expenses were 
related to collective bargaining and which are not is 
challenged in court, the labor organization would bear the 
burden of persuasion in demonstrating that it properly spent 
the mandatory dues or fees solely on activities necessary for 
performing its duty as the employee's representative before the 
employer.\43\ In other words, the union would have to 
demonstrate that it secured consent for any dues spent for non-
collective bargaining activities. And, where consent was not 
secured, the union would have to show that its expenses were 
limited to collective bargaining activities. The D.C. Circuit 
has concluded that Beck challenges under the National Labor 
Relations Act require an independent audit of the union's 
calculations of reductions in agency fee payments, finding that 
such an audit was the ``minimal guarantee of trustworthiness.'' 
\44\ The Committee feels that a similar requirement would be 
appropriate under the Worker Paycheck Fairness Act.
---------------------------------------------------------------------------
    \43\ This is consistent with the case law that led to the Beck 
decision. See Railway Clerks v. Allen, 373 U.S. 113, 122 (1963) 
(holding that union, not individual employees, had burden of proving 
proportion of political to total union expenditures).
    \44\ Ferriso v. National Labor Relations Board, 125 F.3d 865 (D.C. 
Cir. 1997). See also Prescott v. County of El Dorado, 177 F.3d 1102, 
1107 (9th Cir. 1999) (mandating a ``real'' independent verification of 
financial data in question to make sure expenditures are being made the 
way union says they are).
---------------------------------------------------------------------------

Notice

    H.R. 2434 requires all unionized employers to post a notice 
in their workplaces informing employees that any labor 
organization accepting payment of any dues or fees from an 
employee as a condition of employment, pursuant to an agreement 
authorized by federal law, must secure from each employee 
prior, written authorization if any portion of such dues or 
fees will be used for activities not necessary to performing 
the duties of the exclusive representative of the employees in 
dealing with the employer on labor-management issues. Although 
labor organizations would be notifying employees of these 
rights as they attempt to secure consent from individual 
workers for non-collective bargaining dues, this posting 
requirement will serve the purpose of reiterating to employees 
what the respective obligations are of workers and unions under 
the Worker Paycheck Fairness Act. It is similar to the posting 
requirement demanded of federal contractors under an Executive 
Order issued by President Bush in 1992 \45\ and later rescinded 
by President Clinton.\46\
---------------------------------------------------------------------------
    \45\ Executive Order 12800 (April 13, 1992).
    \46\ Executive Order 12836 (February 1, 1993).
---------------------------------------------------------------------------

Disclosure

    The Committee's numerous hearings found the reporting and 
disclosure of union financial information under current law to 
be entirely inadequate. As stated by Marshall J. Breger, 
professor of law at Catholic University's Columbus School of 
Law, in testimony before the Committee, the information unions 
must currently provide to the Department of Labor is ``not 
particularly useful in giving union members or anybody a full 
understanding of the purposes for which the union is spending 
its money.'' \47\ Furthermore, Breger testified, ``Individual 
union members have had great difficulty in getting information 
and in testing the accuracy of the information given them.'' 
\48\ H.R. 2434 amends the Labor-Management Reporting and 
Disclosure Act (LMRDA) of 1959 \49\ to require more detailed 
financial reporting by labor organizations, to provide workers 
paying union dues or fees the same access to financial 
information as union members, and to give any interested party 
the right to make a written request for financial reports filed 
under the LMRDA.
---------------------------------------------------------------------------
    \47\ Hearing on Mandatory Assessment of Union Dues, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
7 (April 18, 1996) (Serial No. 104-66).
    \48\ Hearing on H.R. 3580, the Worker Right to Know Act, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
348 (June 19, 1996) (Serial No. 104-66).
    \49\ 29 U.S.C. 401, et seq.
---------------------------------------------------------------------------
    Section 6(a) amends Section 201(b) of the Labor-Management 
Reporting and Disclosure Act by adding at the end the following 
new sentence: ``Every labor organization shall be required to 
attribute and report expenses in such detail as necessary to 
allow members to determine whether such expenses were necessary 
to performing the duties of the exclusive representative of the 
employees in dealing with the employer on labor-management 
issues.''
    Title II of the LMRDA requires that unions file annual 
financial reports, known as LM reports, with the Department of 
Labor. The goal for the reporting of expenditures under the 
LMRDA should be complete transparency and full disclosure. 
Unfortunately, the current LM-2 form \50\ only requires unions 
to file yearly their income and expenses according to what 
accountants call an ``object classification''--which identifies 
expense categories, such as salary, rent, transportation, etc., 
and requires unions to indicate simply the amount of money 
spent in those categories. While this provides a flat dollar 
amount spent on certain items, it does not allow anyone looking 
at the form to determine the purpose for which the money was 
being used. Section 6 of H.R. 2434 recognizes that the more a 
dues payer knows about the purposes for which a union spends 
its money the better able he or she is to decide whether to 
elect to allow his or her money to be spent on non-collective 
bargaining activities.
---------------------------------------------------------------------------
    \50\ Unions having $200,000 or more in gross annual receipts must 
file with the Department of Labor an ``LM-2'' form. Unions which have 
gross annual receipts totaling less than $200,000 for its fiscal year 
may elect to file an ``LM-3'' form. If a union has gross annual 
receipts totaling less than $10,000 for its fiscal year, it may elect 
to file an ``LM-4'' form. 29 CFR Part 403.4 The Department of Labor 
receives more than 35,000 forms each year.
---------------------------------------------------------------------------
    The intent of this provision is to mandate that unions file 
such information by ``functional classification'' \51\--setting 
forth the purposes for which the money was being used--in a 
manner similar to rules proposed by the Bush administration. In 
April 1992, the Department of Labor issued a Notice of Proposed 
Rulemaking \52\ proposing to revise the various financial 
report forms unions must file with the DOL yearly to reflect 
various functional categories. These rules, after which the 
Committee intends the rules promulgated under Section 6 of H.R. 
2434 to be modeled, designated the following eight functions: 
contract negotiation and administration; organizing; safety and 
health; strike activities; political activities; lobbying; 
promotional activities; and other.\53\ In addition, the 
Committee would urge that a ninth category be created for 
charitable contributions to cover all contributions by the 
labor organization to tax-exempt and other charitable/social 
organizations. The testimony the Committee received from 
workers indicated that they often differed with their union's 
choices regarding which charitable/social groups to support as 
much as they differed with the union's political choices.
---------------------------------------------------------------------------
    \51\ A need for functional reporting was recognized as far back as 
1978, when the American Institute of Certified Public Accountants 
(AICPA) encouraged labor organizations to report on a functional basis. 
See 57 FR 14244 at 14245 (April 17, 1992).
    \52\ Id. at 14244-14246.
    \53\ In issuing its proposed rules, the Department of Labor found 
that a rule requiring ``functional'' reporting did not constitute a 
``major rule'' in that it would not have an annual effect on the 
economy of $100 million or more--thus, no regulatory impact analysis 
was prepared or was necessary. 57 FR at 14246.
---------------------------------------------------------------------------
    The Committee envisions that each expense item contained on 
the LM-2 would be further broken down into these nine 
functions. It is more helpful for dues payers to know not 
simply the amount of money being spent for travel, for example, 
but whether that travel was undertaken for organizing, contract 
administration, collective bargaining, strike activities, 
political activities or lobbying and promotional activities. 
This is the sort of detailed information workers require in 
order to determine how the money they pay to the union is 
actually being spent. For activities that clearly fall outside 
the ``core'' union activities of collective bargaining, 
contract administration and grievance adjustment--such as for 
politics, charitable contributions, social causes, think tanks, 
etc.--the more detailed disclosure requirements would serve not 
only to educate all dues payers, but would also readily alert 
dues payers laboring under a union security agreement that 
their prior consent is required for any such expenditures.
    Following the Department of Labor's issuance of final rules 
in October 1992,\54\ the Clinton administration in December 
1993 issued final rules rejecting the Bush administration's 
proposed changes pertaining to filing--rescinding the 
functional reporting requirement and causing the current LM-
forms to remain basically the same as when the program began in 
1960.\55\ As pointed out by Breger, in testimony before the 
Committee, the reporting rules promulgated after the LMRDA was 
passed nearly 40 years ago were ``cut to the trim of 
technological feasibility.'' \56\ In contrast, today's computer 
software, Breger testified, allows labor organizations to more 
easily provide extensive and useful information to dues 
payers.\57\
---------------------------------------------------------------------------
    \54\ 57 FR 49282-49290 (October 30, 1992).
    \55\ 58 FR 67594-67604 (December 21, 1993).
    \56\ Hearing on H.R. 3580, the Worker Right to Know Act, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
225 (June 19, 1996) (Serial No. 104-66).
    \57\ Id.
---------------------------------------------------------------------------
    Section 6(b) amends LMRDA Section 201(c) to ensure that a 
labor organization's obligation to make available to all of its 
members the information contained in reports it must file with 
the Department of Labor pursuant to the LMRDA extends to 
``employees required to pay any dues or fees to such 
organization'' as well as to ``members.'' All dues payers, not 
just union members, are entitled to the LMRDA's guarantee of 
access to the information unions use to meet their reporting 
obligations. Section 6(b) ensures this entitlement. Section 
6(b) also extends to ``employees required to pay any dues or 
fees to such organization'' the right granted to ``members'' 
under the LMRDA to sue any labor organization in any state 
court of competent jurisdiction or in the district court of the 
United States for the district in which such labor organization 
maintains its principal office, to permit such employee for 
just cause to examine any books, records, and accounts 
necessary to verify any report the labor organization must file 
pursuant to the LMRDA.
    Section 6(c) amends LMRDA section 205(b) to make clear that 
any person may write the Department of Labor to receive a 
complete copy of any report or other document the labor 
organization must file pursuant to LMRDA section 201, which 
includes, among other information required by section 
201(a)(1)-(a)(5), the labor organization's constitution and 
bylaws and annual financial report. As pointed out to the 
Committee in July 9, 1997 testimony from Marshall J. Breger, 
the tens of thousands of LM-2 disclosure statements are 
currently kept on file in Washington, DC at the Department of 
Labor's Office of Labor-Management Standards (OLMS). These 
reports, Breger testified, ``are not retrievable by computer 
and are available only on the OLMS's receipt of a five-digit 
file number corresponding to the file.'' \58\ The public, 
Breger noted, must attempt to find files numbers in a reference 
book last published in 1990. ``Many of the file numbers are not 
updated,'' Breger said, ``which makes finding some files 
practically impossible. In addition, there are significant 
restrictions on the number of files that can be examined or 
photocopied per day. Thus, the Department's existing disclosure 
leaves much to be desired.'' \59\ The Committee notes that 
efforts have begun at the OLMS to make LM-forms accessible over 
the internet. It is the Committee's hope that these forthcoming 
technological advances, along with the important amendments 
included in this legislation, will greatly enhance the public's 
access to this critical information, and further strengthen 
union democracy.
---------------------------------------------------------------------------
    \58\ Hearing on H.R. 1625, the Worker Paycheck Fairness Act, Before 
the Committee on Education and the Workforce, 105th Cong., 1st Sess., 
at 193 (July 9, 1997) (Serial No. 105-51).
    \59\ Id. at 193-94.
---------------------------------------------------------------------------

Anti-retaliation/coercion

    The Worker Paycheck Fairness Act makes it unlawful for any 
labor organization to coerce, intimidate, threaten, interfere 
with, or retaliate against any employee in the exercise of, or 
on account of having exercised, any right granted or protected 
by the legislation. This prohibition on retaliation would 
prevent a union from intimidating or taking any adverse action 
against an employee because he or she exercised rights of 
consent under the Act. It would also prevent unions from 
forcing workers to resign their union membership--and in the 
process, to give up critical workplace rights such as the right 
to vote on ratifying contracts or approving strikes--in order 
to exercise their rights under the bill.
    The anti-retaliation provision responds to the earlier-
cited testimony of many workers who spoke of the harassment and 
intimidation some unions use to pressure employees to not 
exercise their rights regarding the payment of union dues. Such 
a provision, which would send a signal that this type of 
conduct will no longer be tolerated, is a common feature in 
employment rights laws. The language of the anti-retaliation 
provision is modeled after that found in section 503 of the 
Americans with Disabilities Act and in section 704 of Title VII 
of the Civil Rights Act of 1964, and is consistent with the 
provisions of section 7 of the National Labor Relations Act and 
the protections of section 105 of the Family and Medical Leave 
Act. Any union guilty of coercing an employee in deciding 
whether to give consent to the use of dues for political, 
social, civic or other non-collective bargaining purposes, or 
of retaliating against an employee for declining to give 
consent, would be liable to the employee in accordance with the 
previously outlined remedial provisions.
    In addition to the more typical types of harassment and 
coercion, the prohibition on retaliation would prevent a union 
from expelling a member who refused to give consent to the use 
of his dues for non-collective bargaining purposes. Thus, this 
provision is intended to overrule not only the decision of the 
Fourth Circuit in Kidwell v. Transportation Communications 
International Union,\60\ but also any and all NLRB and court 
determinations relying upon Kidwell or other precedent in 
requiring a union member to resign as a prerequisite to 
exercising Beck rights. In Kidwell, the court confronted the 
issue of whether the union had to permit union members to 
exercise their Beck rights and thus allow them to pay reduced 
fees. While the court was sympathetic to Kidwell's argument 
that she should not have to resign from the union because in 
doing so she would have to give up participation in certain 
union activities that have an impact on the conditions of her 
employment (for example, ratification of the collective 
bargaining agreement), the court held, interpreting Beck and 
other cases, that the union could require a union member to 
resign from the union if he or she wished to exercise Beck 
rights.
---------------------------------------------------------------------------
    \60\ 946 F. 2d 283 (4th Cir. 1991).
---------------------------------------------------------------------------
    The Committee believes that the reasoning of the district 
court in the Kidwell case--the lower court decision was 
reversed by the Fourth Circuit--more fairly balances the rights 
of dissenting workers and the needs of the union as the 
exclusive bargaining representative. In finding that even a 
union member was entitled to a reduction in her union dues for 
all union expenses unrelated to collective bargaining, the 
district court concluded that ``when the union strays from that 
charter given by the Railway Labor Act * * * and uses dues to 
support candidates, religious beliefs, or any other ideological 
cause, it is not an answer to say to one who is opposed to 
those views, `leave the union'.'' \61\ Like the Committee, the 
district court was persuaded that it was not fair to ask union 
members to choose between their workplace rights and their free 
speech rights. The Worker Paycheck Fairness Act protects the 
basic rights of both members and nonmembers of the union by 
giving both an equal ability to exercise their rights under the 
legislation without fear of retribution.
---------------------------------------------------------------------------
    \61\ 731 F.Supp 192, at 199 (D. Md. 1989).
---------------------------------------------------------------------------

                               Conclusion

    So long as labor organizations and employers have the 
unique power under federal law to force workers to pay dues or 
fees to a union under the pain of the loss of the worker's job, 
the Committee believes that the law must ensure that workers 
have the fullest information possible as to their rights and 
responsibilities regarding those payments. Workers have a right 
to know why money is taken out of their paycheck, how money 
legitimately taken is used, and a realistic and available right 
to stop money from being taken out of their paychecks that is 
not used for legitimate collective bargaining purposes. These 
are exactly the rights the Worker Paycheck Fairness Act 
provides.
    The Act merely says to unions who want to require workers 
to pay union dues as a condition of keeping their jobs, if you 
want to spend dues for reasons not germane to collective 
bargaining, (1) get written consent of the workers first; and 
(2) provide better information concerning how the dues were 
spent. This is not too much to ask.

                                Summary

    H.R. 2434, the Worker Paycheck Fairness Act, creates a 
free-standing statute which would require labor organizations 
that accept payment of any dues or fees from an employee as a 
condition of employment pursuant to federal law to secure from 
each employee prior, voluntary, written authorization for any 
portion of such dues or fees which will be used for activities 
not necessary to performing the duties of the exclusive 
representative of the employees in dealing with the employer on 
labor-management issues. The legislation provides that such an 
authorization is effective until revoked and may be revoked 
upon giving 30 days written notice. H.R. 2434 gives workers 
enforcement rights modeled on those granted by the Family and 
Medical Leave Act. Under the legislation, if a labor 
organization fails to get the employee's authorization but 
violates the law by using dues or fees for non-collective 
bargaining purposes, the employee may file an individual or 
class action lawsuit in federal or state court to recover 
double the amount of dues or fees illegally accepted, as well 
as attorneys' fees, costs of litigation, and any appropriate 
equitable relief.
    The bill also requires unionized employers to post a notice 
telling employees of their right to be asked permission should 
the union want to spend any portion of their dues or fees on 
non-collective bargaining activities. Finally, H.R. 2434 amends 
the Labor-Management Reporting and Disclosure Act (LMRDA) to 
make it easier for workers to give their informed consent by 
requiring more detailed financial reporting by labor 
organizations, providing workers paying union dues or fees the 
same access to financial information as union members, and 
giving any interested party the right to make a written request 
for financial reports filed under the LMRDA.

                      Section-by-Section Analysis

Section one

    Provides that the short title of the bill is the ``Worker 
Paycheck Fairness Act.''

Section two

    Establishes the findings of the Committee related to the 
rights of workers paying dues or fees to a labor organization, 
the uses of dues or fees by labor organizations, and the rights 
of individuals regarding the political, social and charitable 
causes they support.

Section three

    Provides that the purpose of the Act is to ensure that all 
workers have sufficient information about their rights 
regarding the payment of dues or fees to labor organizations 
and the uses of their dues and fees by labor organizations and 
to ensure that the right of all workers to make individual and 
informed choices about the political, social or charitable 
causes they support is protected to the greatest extent 
possible.

Section four

    Provides that any labor organization accepting any payment 
of dues or fees from an employee as a condition of employment 
pursuant to federal law must secure from each employee prior, 
voluntary, written authorization for any portion of such dues 
or fees which will be used for activities not necessary to 
performing the duties of the exclusive representative of the 
employees in dealing with the employer on labor-management 
issues. Also provides that such an authorization shall remain 
in effect until revoked and may be revoked upon giving 30 days 
written notice. Also provides for a civil action by employees 
and specifies the liability of labor organizations that violate 
the terms of the Act.

Section five

    Requires employers whose employees are represented by a 
collective bargaining representative to post a notice informing 
employees that any labor organization accepting any payment of 
dues or fees from an employee as a condition of employment 
pursuant to federal law must secure from each employee prior, 
voluntary, written authorization for any portion of such dues 
or fees which will be used for activities not necessary to 
performing the duties of the exclusive representative of the 
employees in dealing with the employer on labor-management 
issues.

Section six

    Amends the Labor-Management Reporting and Disclosure Act 
(LMRDA) to require more detailed financial reporting by labor 
organizations, to provide workers paying union dues or fees the 
same access to financial information as union members, and to 
give any interested party the right to make a written request 
for financial reports filed under the LMRDA.

Section seven

    Provides that it is unlawful for a labor organization to 
coerce, intimidate, threaten, interfere with, or retaliate 
against any employee in the exercise of, or on account of 
having exercised, any right granted or protected by this Act.

Section eight

    Authorizes the Secretary of Labor to prescribe regulations 
to implement sections five and six.

Section nine

    Provides that the Act shall be effective immediately upon 
enactment, except that sections 4 and 5 shall take effect 90 
days after enactment and section 6 shall take effect 150 days 
after enactment.

                       Explanation of Amendments

    H.R. 2434 was ordered favorably reported without amendment.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA), requires a description of the 
application of this bill to the legislative branch. H.R. 2434 
creates a right on behalf of all workers who pay dues or fees 
to a labor organization as a condition of employment pursuant 
to an agreement authorized by federal law. Thus, the bill would 
apply to legislative branch employees to the extent that they 
are subject to union security agreements authorized by federal 
law requiring the payment of union dues or fees. However, the 
labor relations of legislative branch employees are governed by 
the Federal Labor Relations Act, which currently does not 
permit the negotiation of a union security clause. While the 
rights created by H.R. 2434 do not inure to legislative branch 
employees at this time, they would be available should the 
Federal Labor Relations Act be amended, or a separate law 
enacted, allowing the negotiation of a union security clause.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget & Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. The Committee received a letter regarding unfunded 
mandates from the Director of the Congressional Budget Office. 
See infra.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendment offered to the measure or matter the total 
number of votes cast for and against and the names of the 
Members voting for and against.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

   New Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 2434 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, December 3, 1999.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2434, the Worker 
Paycheck Fairness Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Sadoti.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 2434--Worker Paycheck Fairness Act

    Summary: H.R. 2434 would place new requirements on unions 
and employers relating to the payment of union dues and fees by 
workers. The bill would require labor organizations with union 
security agreements to obtain prior written authorization from 
workers for any portion of their dues or fees that are used for 
nonrepresentational activities. (A union security agreement 
between an employer and a labor organization requires union and 
nonunion members to pay dues or fees to the union as a 
condition of employment.) In addition, the legislation would 
require labor organizations to report separately their expenses 
for representational and nonrepresentational activities on 
financial disclosure forms filed with the Department of Labor 
(DoL). The bill would also require all employers with workers 
who are represented by unions to post notices regarding their 
union's duty to obtain authorization before accepting required 
dues or fees that are partially used to fund 
nonrepresentational activities.
    CBO estimates that implementing H.R. 2434 would cost the 
Department of Labor about $2 million per year beginning in 
fiscal year 2000 and about $9 million over the 2000-2004 
period, assuming appropriation of the necessary funds. Because 
the bill would not affect direct spending or receipts, pay-as-
you-go procedures would not apply.
    H.R. 2434 contains both intergovernmental and private-
sector mandates, as defined in the Unfunded Mandates Reform Act 
(UMRA). CBO estimates that the cost to state, local, or tribal 
governments to comply with the mandates would not exceed the 
threshold established in that act ($50 million in 1996, 
adjusted annually for inflation). CBO is uncertain whether the 
direct costs of complying with the private-sector mandates 
would exceed the threshold specified in UMRA ($100 million in 
1996, adjusted annually for inflation) in the first year the 
bill would be effective. We estimate that the direct cost of 
those mandates would not exceed the threshold in subsequent 
years.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2434 is shown in the following table. 
The costs of this legislation fall without budget function 500 
(education, training, employment, and social services).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2000    2001    2002    2003    2004
------------------------------------------------------------------------
                     WITH ADJUSTMENTS FOR INFLATION

Authorizations of Appropriations
 Under Current Law \1\:
    Estimated Authorization.....     337     351     363     375     387
    Estimated Outlays...........     339     350     362     374     386
Proposed Changes:
    Estimated Authorization.....       2       2       2       2       2
    Estimated Outlays...........       1       2       2       2       2
Authorizations of Appropriations
 Under H.R. 2434:
    Estimated Authorization.....     339     353     365     377     389
    Estimated Outlays...........     340     352     364     376     388

                    WITHOUT ADJUSTMENTS FOR INFLATION

Authorizations of Appropriations
 Under Current Law:
    Estimated Authorization.....     337     337     337     337     337
    Estimated Outlays...........     339     337     337     337     337
Proposed Changes:
    Estimated Authorization.....       2       2       2       2       2
    Estimated Outlays...........       1       2       2       2       2
Authorizations of Appropriations
 Under H.R. 2434:
    Estimated Authorization.....     339     339     339     339     339
    Estimated Outlays...........     340     339     339     339     339
------------------------------------------------------------------------
\1\ Salaries and expenses of the Employment Standards Administration.
  The figures for fiscal year 2000 reflect the appropriation for that
  year.

    H.R. 2434 would require labor organizations to provide more 
information in financial disclosure forms that they file with 
DoL. In 1999, about 31,500 labor organizations filed such 
forms. H.R. 2434 would require DoL to develop new forms for 
these organizations to use. In addition, DoL would need to 
provide compliance assistance and training on these new forms 
and would incur additional costs for processing them. In 1992, 
the Administration sought to make changes similar to those 
provided for in H.R. 2434 through administrative action. At 
that time, DoL estimated the additional costs of developing new 
forms, providing necessary compliance assistance, and 
processing cases at $1.35 million per year. Adjusted for 
inflation these costs would be about $1.7 million in fiscal 
year 2000 and slightly larger amounts each year thereafter.
    H.R. 2434 also would require employers of workers who are 
covered by collective bargaining agreements to post notices 
regarding their union's responsibility to obtain authorization 
in order to spend a portion of their dues or fees on 
nonrepresentational activities. Currently, employers are 
required to post notices regarding minimum wage and maximum 
hour requirements, equal opportunity and anti-discrimination 
provisions, and other information regarding workplace safety. 
The federal costs of enforcing the requirement to post 
additional information would not be significant.
    Pay-as-you-go considerations: None
    Estimated impact on state, local and tribal governments: 
H.R. 2434 contains two intergovernmental mandates as defined in 
UMRA. The bill would require employers (including state, local, 
and tribal governments) that allow collective bargaining to 
post notices informing employees of their new rights under the 
bill. The bill also would require state courts to impose 
certain remedies for violations of employees' rights under the 
bill. CBO estimates that even if all state, local, and tribal 
governments in states that allow collective bargaining were 
required to post notices, compliance costs would not be 
significant. The new requirements for state courts would not 
result in any additional costs because they just specify 
certain elements of judgments to be awarded by the courts.
    Estimated impact on the private sector: H.R. 2434 would 
impose two new private-sector mandates--one on labor 
organizations and one on employers--and expand an existing one 
on labor organizations. CBO cannot determine whether the 
aggregate direct cost of the three mandates in H.R. 2434 would 
exceed the statutory threshold specified in UMRA ($100 million 
in 1996, adjusted annually for inflation) during the first year 
the mandates would be effective. The cost of each mandate would 
decline substantially after the first year, however. CBO 
estimates that the aggregate direct cost of the mandates in the 
second through fifth years would not exceed the statutory 
threshold.
    First, the bill would require labor organizations with 
union security agreements to obtain prior written authorization 
from workers for any portion of their dues or fees that are 
used for activities other than employee representation. In 
1988, the Supreme Court decided in Communication Workers of 
America v. Beck that nonunion workers who are required to pay 
dues or fees to a union need only pay for the share of union 
expenses used for representational activities. To exercise this 
right, however, the workers must formally object to the payment 
of the higher fee.
    The cost of this mandate would be greatest in the first 
year because affected labor organizations would have to request 
authorizations from all of their current workers. Subsequently, 
unions could add an authorization form to the normal hiring 
process, thereby covering any new employees. The cost to unions 
in the first year would depend on the number of workers from 
whom authorizations would be requested and the average cost of 
making such a request. Little information is available on 
either of these quantities. Currently, 29 states allow union 
security agreements. A total of 13.2 million union members, and 
an additional 1.1 million workers represented by unions, were 
employed in these states in 1998. The proportion of these 
workers employed under union security agreements is unknown. 
Furthermore, only unions that spend a significant portion of 
their funds on nonrepresentational activities would have a real 
incentive to obtain authorizations. Because the prevalence and 
magnitude of spending on nonrepresentational activities is not 
known, CBO cannot estimate how many labor organizations with 
union security agreements would actually request 
authorizations.
    Second, the bill would increase financial reporting 
requirements for labor organizations. Unions would have to 
report separately their expenses for representational and 
nonrepresentational activities. Under current law, labor 
organizations must file financial disclosure forms with the 
Department of Labor. The financial disclosure forms, however, 
do not report the purposes of these expenditures.
    All labor organizations that currently file financial 
disclosure forms with the Department of Labor would have to 
comply with the bill's reporting requirements. In 1999, there 
were about 31,500 such labor organizations, and the cost of 
reporting requirements would vary significantly. CBO cannot 
estimate an average cost per organization because comprehensive 
data on the type, size, and activities of labor organizations 
do not exist. The cost would be greatest in the first year the 
requirement would be in effect because many labor organizations 
would have to set up new reporting and accounting systems. In 
the following years, the cost would decline significantly. For 
some organizations with union security agreements, even the 
initial cost might be small because, under current law, they 
must disclose their nonrepresentational expenses and calculate 
reduced fees for nonmembers who formally object to paying for 
such expenses.
    Finally, H.R. 2434 would require all employers with workers 
who are represented by a union to post notices informing their 
workers of the union's duty to obtain their authorization if 
some of their required dues or fees are used for 
nonrepresentational purposes. These requirements would impose a 
largely one-time cost on employers with union workers. To 
comply with these requirements, employers would have to post 
notices in at least one area in each of their establishments. 
Currently, all employers are required to post notices regarding 
fair labor standards and workplace safety requirements. This 
new posting mandate, however, would apply only to employers of 
workers covered by collective bargaining agreements. Of the 
approximately 3 million establishments with paid employees, the 
share with union workers is not known. In any case, the cost 
per notice could be quite small. Therefore, CBO estimates that 
the overall cost of this mandate to employers would be less 
than $10 million in the first year the mandate is effective and 
negligible in later years.
    Estimate prepared by: Federal Cost: Christina Hawley 
Sadoti. Impact on State, Local, and Tribal Governments: Susan 
Sieg. Impact on the Private Sector: Karuna Patel.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

 Statement of Oversight Findings of the Committee on Government Reform

    With respect to the requirement of clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform on the 
subject of H.R. 2434.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by H.R. 2434. H.R. 2434, 
the Worker Paycheck Fairness Act, provides rights to workers 
subject to union security agreements negotiated under the 
National Labor Relations Act (NLRA) and the Railway Labor Act 
(RLA). Both the RLA \62\ and the NLRA \63\ have been 
determined, by the Supreme Court, to be within Congress' 
Constitutional authority. Because the Worker Paycheck Fairness 
Act places additional restrictions on the use of dues or fees 
paid to labor organizations pursuant to union security clauses 
under the NLRA and RLA, the legislation is similarly within the 
scope of Congressional powers under Article 1, Section 8, 
Clause 3 of the Constitution of the United States.
---------------------------------------------------------------------------
    \62\ Texas & New Orleans Railroad v. Brotherhood of Railway & 
Steamship Clerks, 281 U.S. 548 (1930).
    \63\ National Labor Relations Board v. Jones & Laughlin Steel 
Corp., 301 U.S. 1 (1937).
---------------------------------------------------------------------------

                           Committee Estimate

    Clauses 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 2434. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

         LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT OF 1959

           *       *       *       *       *       *       *

 TITLE II--REPORTING BY LABOR ORGANIZATIONS, OFFICERS AND EMPLOYEES OF 
                   LABOR ORGANIZATIONS, AND EMPLOYERS

                     report of labor organizations

  Sec. 201. (a)  * * *
  (b) Every labor organization shall file annually with the 
Secretary a financial report signed by its president and 
treasurer or corresponding principal officers containing the 
following information in such detail as may be necessary 
accurately to disclose its financial condition and operations 
for its preceding fiscal year--
          (1) * * *

           *       *       *       *       *       *       *

Every labor organization shall be required to attribute and 
report expenses in such detail as necessary to allow members to 
determine whether such expenses were necessary to performing 
the duties of the exclusive representative of the employees in 
dealing with the employer on labor-management issues.
  (c) Every labor organization required to submit a report 
under this title shall make available the information required 
to be contained in such report to all its members and employees 
required to pay any dues or fees to such organization, and 
every such labor organization and its officers shall be under a 
duty enforceable at the suit of any member or employee required 
to pay any dues or fees to such organization of such 
organization in any State court of competent jurisdiction or in 
the district court of the United States for the district in 
which such labor organization maintains its principal office, 
to permit such member or employee required to pay any dues or 
fees to such organization for just cause to examine any books, 
records, and accounts necessary to verify such report. The 
court in such action may, in its discretion, in addition to any 
judgment awarded to the plaintiff or plaintiffs, allow a 
reasonable attorney's fee to be paid by the defendant, and cost 
of the action.

           *       *       *       *       *       *       *

                    reports made public information

  Sec. 205. (a) * * *
  (b) The Secretary shall by regulation make reasonable 
provision for the inspection and examination, on the request of 
any person, of the information and data contained in any report 
or other document filed with him pursuant to sections 201, 202, 
203, or 211. Upon written request, the Secretary shall make 
available complete copies of any report or other document filed 
pursuant to section 201.

           *       *       *       *       *       *       *

                      DISSENTING VIEW OF RON PAUL

                            i. introduction

    The use of union dues, which, in the 29 non-Right to Work 
states workers must pay as a condition of employment, for 
political causes opposed by the worker is, in the words of 
Thomas Jefferson ``both sinful and tyrannical.'' However, this 
congressionally-created wrong does not justify the expansion of 
federal power over the relationship between unions, workers, 
and employees contained in the Worker Paycheck Fairness Act 
(H.R. 2434). The Worker Paycheck Fairness Act not only 
continues congressional unconstitutional interference in 
America's labor markets, it also fails to deal with the root 
cause of the problem. Furthermore, it is doubtful that the new 
regulations and mandates in this bill will achieve the goal of 
stopping union officials from using force dues for politics.
    The problem of using of compulsory union dues for politics 
is rooted in those federal laws that equally sanction 
compulsory unionism. Federal laws authorizing compulsory dues 
for any reason violate the principle of individual liberty upon 
which this country was founded. Therefore, the constitutional 
solution to the problem of the use of forced dues for politics 
(or any other reason) is to repeal those sections of federal 
law giving union officials the power to force workers to pay 
union dues as a condition of employment.

  ii. h.r. 2434 creates new burdens on employers, unions and employees

    The Worker Paycheck Fairness Act sets up a new federal 
regulatory system, complete with mandates on union officials, 
employers and workers, to control union political spending. 
Under this bill unions wishing to spend dues receipts on 
politics must obtain a signed statement from every dues-paying 
worker authorizing the use of their dues for political 
purposes. The bill also requires unions to produce more 
detailed expense reports so workers can determine how much of 
their expenses were spent on items other than collective 
bargaining.
    These requirements will impose tremendous costs on labor 
unions, costs which Congress has no authority to impose. 
Supporters of this bill may attempt to justify imposing this 
burden on labor union as necessary to ensure union officials do 
not abuse their federally-granted privilege of collecting 
compulsory dues. However, Congress' original abuse of its 
authority to empower union officials in no way justifies 
federal interference in a union's internal operations. Unions 
are constitutionally entitled to the same freedom from federal 
mandates as every other private institution in America. The 
power to force employees to pay dues that are used for 
political purposes, which unions have as a result of federal 
protections, is a justification for repealing those laws, not 
for placing new mandates on unions, employees, and employers.
    This bill also places a new, unfunded mandate on businesses 
by requiring every employer to post a notice in their workplace 
informing workers of their rights under this statute. Mandating 
that employers place a notice on their property constitutes a 
taking of private property, however minor, without just 
compensation.
    The Worker Paycheck Fairness Act will also place new 
burdens on the very people who the act is designed to aid: the 
American worker. For example, millions of American workers will 
likely be faced with an increase in union dues in order to 
cover the additional costs incurred in complying with this 
mandate.
    Furthermore, requiring workers to sign a card stating 
whether or not they wish to contribute to union politics 
burdens the free speech rights of both those workers who would 
wish to support union political activity and those who do not 
wish to underwrite union politics. Workers should not be 
required to fill out paperwork, that may later become part of a 
public record if the union's expenditures are challenged in 
court, in order to exercise their first amendment rights to 
participate (or not participate) in politics. Rather than 
having to comply with government mandates to ensure their 
forced union dues are spent properly, workers should simply be 
returned the freedom to choose whether or not they will pay 
union dues for any purpose.
    A further infringement on the rights of union members is 
the provision providing that a worker who objects to having 
part of his dues used for union officials is still entitled to 
all the rights and privileges of union membership. This is an 
infringement on the freedom of association rights of those who 
chose to pay for union politics freedom of association. A union 
should have the ability to determine its own rules for 
membership, Congress should not force those who pay for union 
politics to associate with those who choose not to pay for 
political activities.
    Ironically, this infringement of the union members' freedom 
of association is rooted in the special privileges granted 
union officials by federal law. Under the National Labor 
Relations Act, union officials have the power to represent all 
employees at a worksite, whether or not they are members of the 
union or even whether or not they desire union representation. 
Furthermore, employers at a unionized workplace are forbidden 
by federal law from bargaining over working conditions with any 
individual employee, a violation of the employee and the 
employers' right to freely contract. Therefore, a union dues 
payer who objects to the use of union dues and gives up his 
membership in the union, is, in essence, giving up his right to 
have a say in his wages, hours, and benefits. The fate of the 
unions under this bill is yet another example of how those who 
seek to enrich themselves by seeking special privileges from 
the federal government eventually lose their own liberties to 
the leviathan state they helped construct.

  iii. h.r. 2434 will not curtail the use of forced dues for politics

    It is highly questionable as to whether placing these 
mandates on unions and employees will effectively curtail the 
use of forced-union dues for politics. Several times since the 
passage of the National Labor Relations Act, Congress has 
amended the law to provide for greater federal control of labor 
unions, yet union corruption remains a serious problem, as 
evidenced by the voiding of recent government supervised and 
financed Teamster elections. Given this history it appears 
likely that when dishonest union officials battle federal 
regulators over political spending, the union officials will 
successfully disguise their spending on politics as funds spend 
of purposes related to ``exclusive representation.''
    One of the goals of the act is to end the harassment of 
workers who assert their right not to pay for politics. This is 
certainly a laudable goal. One of the most shameful aspects of 
the modern labor movement is the all-too-frequent use of 
threats and even actual violence against workers who object to 
the policies of union officials. However, it is unlikely that 
this bill will stop corrupt unions from harassing independent-
minded workers. If this bill becomes law, corrupt unions will 
harass workers who refuse to authorize the use of their dues 
for politics, or who challenge union officials in occur for a 
refund of those dues allegedly spend for politics.
    The persecution of workers by unscrupulous union officials 
will continue until Congress repeals the federal laws that give 
unions the power to coerce workers to pay union dues and accept 
union representation, since corrupt union officials' ability to 
tyrannize workers flows from the unconstitutional powers grated 
them by Congress.

        iv. h.r. 2434 implicity legitimizes compulsory unionism

    The primary reason Congress should reject this bill is its 
faulty premise. By stating, in the very first finding, that 
``Workers who pay [union] dues may not * * * be required to pay 
to that organization any dues or fees supporting activities 
that are not necessary to performing the duties of the 
exclusive representation of the employee * * *'' the drafters 
of this bill implicitly accept the legitimacy of compulsory 
unionism, as long as the dues collected by compulsion are not 
spent for political purposes. However, union political spending 
per se should not be the concern of Congress. Even if union 
political spending as 10 times as much as it is now it would 
not be a proper subject of Congressional regulation--as long as 
it was from voluntary dues. Conversely, even if union officials 
never spend another dime on politics. Congress would still be 
morally obligated to repeal those laws empowering union 
officials to force workers to pay dues for any purposes. It is 
the collection of forced dues that damages our system--not any 
particular use to which those dues are put!
    The problems with H.R. 2434 were eloquently stated by Harry 
Beck, the lead plaintiff in the Supreme Court case which 
established the right of forced-dues payers to a refund of that 
portion of their dues spend on politics, ``you don't solve the 
forced dues in politics problems by letting the union bosses 
keep the force while trying to micro-managed their `politics.' 
The government lawyers, accountants and bureaucrats love that 
approach [i.e. the approach contained in H.R. 2434] because it 
would give them job security. The legislative solution to 
coercion isn't to keep it under a GOP-approved system of 
regulation--but to end it!''

                             v. conclusion

    The Workers Paycheck Fairness Act (H.R. 2434) attempts to 
address the very serious problem of the use of forced union 
dues for political purposes through the establishment of a new 
system of coercion. This bill places new mandates on workers, 
employers, as well as on unions. The system established in H.R. 
2434 not only compounds the constitutional violations of the 
federal laws that give unions the power to force workers to pay 
union dues, it also will fail to address the problem it is 
designed to solve. If this bill becomes law, corrupt union 
officials will simply use ``creative accounting'' to 
distinguish their political spending and/or use force and 
intimidation to ensure workers ``consent'' to having their 
forced dues spent on politics.
    In its attempt to solve a congressional-created problem 
with new restrictions on American liberties, H.R. 2434 
parallels proposals to ``reform'' campaign finance by limiting 
freedom of speech as both expand government power rather than 
attack the root cause of the problem--too much ``congressional 
activism'' in which constitutionally are non-government 
affairs!
    Instead of passing an unconstitutional, ineffective law, 
Congress should follow the advice of Harry Beck--stop trying to 
regulate union officials' use of the fruits of their coercion 
and repeal the unconstitutional laws that authorize the 
collection of forced dues. Only by revoking union officials' 
legislatively-ordained coercive privileges can Congress end the 
scourge of forced dues for politics and restore true freedom to 
America's labor markets.

                                   Ron Paul.

                             MINORITY VIEWS

    H.R. 2434 is coldly calculated to cripple the ability 
unions and the workers they represent to effectively 
participate in the political affairs of the nation. In effect, 
this legislation seeks to effectively disenfranchise American 
workers.
    In the name of enforcing the right of a minority to dissent 
from engaging in political activity, this legislation 
deliberately and intentionally tramples on the right of the 
majority to do so. The legislation infringes on the right of 
workers to establish their own rules regarding union 
membership. The legislation infringes on the right of workers 
to determine for themselves the activities of their own 
organizations. The legislation imposes costly, crippling 
paperwork requirements upon unions, thereby effectively 
imposing a punitive tax on all those represented by unions. 
While imposing unreasonable and unfair infringements on the 
rights of workers to engage in political activity through their 
unions, the legislation places no restrictions at all on the 
political activities of employers or employer associations. To 
justify this blatant, one-sided attempt to distort the 
democratic process, the majority has dismissed, ignored, or 
distorted the substantial protections afforded by existing law 
to all those represented by unions.
    H.R. 2434 is a deliberate, calculated effort to place 
unions and the workers they represent at a unique and 
substantial disadvantage with regard to their ability to 
participate in politics as compared to any other group. This 
legislation is not about protecting free and open political 
debate, it is about the ability of one group of Americans--
workers--to participate in that debate. What this legislation 
ultimately seeks to accomplish is to distort the democratic 
processes of this country. At the least, it was the hope of the 
Republican leadership to use this legislation, or similar 
legislation, to blame Democrats for their failure to enact 
campaign finance reform legislation. At the most, Republicans 
hope to silence their perceived political enemies, those who 
advocate for and on behalf of workers. To state that either 
goal is ignoble is to understate the fact.
    In fact, the legislation is too obviously unfair to 
accomplish any goal. In the 105th Congress, a similar proposal 
to attempt to gag workers, H.R. 2608, was considered on the 
floor and defeated by vote of 166 to 246. Fifty-two Republicans 
joined with Democrats to defeat that effort. In addition, 
during consideration of H.R. 2183, the bipartisan Campaign 
Reform Act of 1988, the House rejected an amendment by Mr. 
Paxon, House Amendment 744, that would have imposed reporting 
requirements on union political activities by a vote of 150-
248, and adopted an amendment by Mr. Shays, House Amendment 
690, that, among other provisions, codified the Beck decision 
by a vote of 237-186. In this Congress, Mr. Goodling again 
offered an amendment that was the substance of H.R. 2434 to 
H.R. 417, the Bipartisan Campaign Reform Act of 1999. That 
amendment was withdrawn without a vote because it was clear 
that the amendment would not pass.
Current law protects the rights of union objectors
    Republican assertions that current labor laws run roughshod 
over dissenting union members are not simply false, but gross 
distortions. Republicans contend falsely, that unions may force 
workers to pay for union political activity. In fact, no 
employee may be required to join a union as a condition of 
employment. Membership in a union is purely voluntary. Nor is 
any employee required, as a condition of employment to 
underwrite union political activity.
    Unions, by law, are democratic organizations whose officers 
and policies are required to be determined by the majority will 
of their members. In fact, the democratic principles embodied 
in our labor laws are borrowed from the democratic procedures 
we use and honor all across the country when we choose our city 
councils, our mayors, our school boards, and Members of 
Congress.
    Unions are required by law to inform all employees who are 
subject to a collective bargaining agreement, including an 
agency fee or union security provision, that they are not 
required to pay any part of the union dues that are used for 
purposes that are not germane to collective bargaining, 
contract administration, or grievance adjustment. Unions must 
inform such employees of the percentages of their union dues 
that are used for purposes that are not germane to collective 
bargaining, contract administration, or grievance adjustment. 
Moreover, unions must establish procedures to ensure that those 
employees who choose not to support the union's political 
activity, do not pay any part of the union dues that are used 
for purposes that are not germane to collective bargaining, 
contract administration, or grievance adjustment.
    Those who believe their right to refrain from paying for 
any union activity unrelated to collective bargaining, contract 
administration, or grievance adjustment have not just one, but 
two different forums by which they may seek remedy. They may 
file a complaint with the National Labor Relations Board, in 
which case the Government, rather than the employee, will 
undertake the cost of investigation and, if merited, the 
prosecution of the allegation. Alternatively, the employee may 
sue the union directly for violating its duty of fair 
representation.
    In fact, those who are represented by unions have extensive 
rights under current law. By law, unions are democratic 
organizations whose officers and policies are required to be 
determined by the majority will of their members. By law, as 
discussed in more detail below, unions are already under more 
extensive reporting and disclosure requirements than virtually 
all other institutions in the country, and are required to 
report all of their income and expenditures to members, to the 
Government, and to the public. Under the National Labor 
Relations Act, bargaining unit members have a statutory right 
to either nullify the agency fee provision of a contract or 
decertify the union if the majority feels that either the 
agency fee provision or the union is no longer in their best 
interest. Union members have a statutory right to inspect their 
union's books and to vote on the amount of dues the union will 
charge its members. The National Labor Relations Act prohibits 
unions from charging those who are subject to an agency fee 
provision excessive or discriminatory fees. In short, the 
alleged evil this legislation seeks to correct is one that has 
already been rendered nonexistent by law.
    If the polls cited by the majority for the proposition that 
union members support ``up-front'' consent are accurate, it is 
fully within the ability of those union members to implement 
such a requirement. In fact, however, public opinion polls show 
that members like their unions speaking out on their behalf. A 
poll by Peter Hart Associates taken after the 1996 election 
found that 85 percent of members supported their union's fight 
to increase the minimum wage and protect Medicare. They also 
strongly supported voter guides, voter encouragement efforts, 
and efforts to lobby Members of Congress on issues affecting 
working families. These are the very kinds of activities 
Republicans want to squelch with its shut down of union 
democracy.
    Beyond providing that union dues and initiation fees, as 
well as union constitutions and bylaws, must be established 
pursuant to majority will, section 8(b)(5) of the NLRA \1\ 
makes it an unfair labor practice subject to regulation by the 
National Labor Relations Board (NLRB) for a union to impose 
excessive or discriminatory fees on employees who are subject 
to a union security or agency fee provision.
---------------------------------------------------------------------------
    \1\ 29 U.S.C 158(b)(5).
---------------------------------------------------------------------------

Unions are already under more extensive reporting and disclosure 
        requirements than virtually all other institutions in the 
        country

    H.R. 2434 imposes onerous reporting burdens on unions, yet 
unions are already subject to extensive reporting and 
disclosure requirements. Subchapter III of the LMRDA requires 
unions to file full reports regarding the procedures by which 
the union operates \2\ and annual reports detailing the 
financial condition of the union including all receipts and 
expenditures by the union.\3\ In addition, the LMRDA 
specifically provides:
---------------------------------------------------------------------------
    \2\ 29 U.S.C 431(a).
    \3\ 29 U.S.C 431(b).

          Every labor organization required to submit a report 
        under this subchapter shall make available the 
        information required to be contained in such report to 
        all of its members, and every such labor organization 
        and its officers shall be under a duty enforceable at 
        the suit of any member of such organization in any 
        State court or competent jurisdiction or in the 
        district court of the United States for the district in 
        which such labor organization maintains its principal 
        office, to permit such member for just cause to examine 
        any books, records, and accounts necessary to verify 
        such report.\4\
---------------------------------------------------------------------------
    \4\ 29 U.S.C 431(c).

    As James B. Coppess stated in testimony before the 
---------------------------------------------------------------------------
Subcommittee on Employer-Employee Relations on March 18, 1997:

          Given this legal structure, there is no room to doubt 
        that the decisions unions make to support or oppose 
        particular pieces of legislation or particular 
        candidates for public office, and the decisions unions 
        make to expend money in support of such views, reflect 
        the views of the majority of union members. Indeed, one 
        reason workers form unions in the first instance is 
        precisely to be able to band together to participate in 
        legislative and political affairs.

Unions have a long and proud tradition of participating in the 
        political process, and union members are well aware of and 
        supportive of this tradition

    The fact that unions engage in political activity is, of 
course, neither new nor news. As Justice Felix Frankfurter has 
pointed out, ``It is not true in life that political protection 
is irrelevant to, and insulated from, economic interests. It is 
not true for industry or finance. Neither is it true for 
labor.'' \5\ Labor unions have recognized this since their 
inception. As Justice Frankfurter stated:
---------------------------------------------------------------------------
    \5\ Machinists v. Street, 367 U.S. 740, 814-815 (1916) (dissenting 
opinion).

          To write the history of the [Railroad] Brotherhoods, 
        the United Mine Workers, the Steel Workers, the 
        Amalgamated Clothing Workers, the International Ladies 
        Garment Workers, the United Auto Workers, and leave out 
        their so-called political activities would be sheer 
        mutilation. Suffice it to recall a few illustrative 
        manifestations. The AFL, surely the conservative labor 
        group, sponsored as early as 1893 an extensive program 
        of political demands calling for compulsory education, 
        an eight-hour day, employer tort liability, and other 
        social reforms. The fiercely contested Adamson Act of 
        1916 was a direct result of railway union pressure 
        exerted upon both the Congress and the President. More 
        specifically, the weekly publication ``Labor''--an 
        expenditure under attack in this case--has since 1919 
        been the organ of the railroad brotherhoods which 
        finance it. Its files through the years show its 
        preoccupation with legislative measures that touch the 
        vitals of labor's interests and with men and parties 
        who effectuate them. This aspect--call it the political 
        side--is as organic, as inured a part of the philosophy 
        and practice of railway unions as their immediate 
        bread-and-butter concerns.\6\
---------------------------------------------------------------------------
    \6\ Id. at 800.

    Nor, contrary to the impression the majority has sought to 
foster, have unions ever made a secret of their political 
activity. Indeed, to do so in a democratic society such as ours 
is obviously and inherently counterproductive. As Mr. Coppess 
---------------------------------------------------------------------------
has testified:

          Over the years, the labor movement has led the 
        crusade for enactment of the minimum wage and the 
        forty-hour workweek, for laws protecting occupational 
        safety and health, assuring the security of pensions, 
        and prohibiting invidious discrimination in employment. 
        We have done so because union members, acting through 
        the democratic processes of the unions, decided that it 
        was right and proper to do so--for the sake not just of 
        union members but of all working Americans. And, today 
        we continue to advance the interests of working 
        families by leading the effort to preserve and 
        strengthen the employee-protective laws, and to protect 
        the system of social insurance on which workers and 
        older Americans depend.\7\
---------------------------------------------------------------------------
    \7\ Prepared statement of James B. Coppess, Hearing on Mandatory 
Union Dues, Before the Subcommittee on Employer-Employee Relations, 
105th Cong., 1st Sess. (March 18, 1997).
---------------------------------------------------------------------------
          [W]orkers know that unions attempt to advance the 
        interests of those they represent through political 
        action. Workers know that when they vote for union 
        representation. Workers know that when they vote to 
        approve collective bargaining agreements containing 
        union security clauses requiring everyone to pay their 
        fair share for representation. And workers know that 
        when they vote on the level of dues they are willing to 
        pay and on the leaders who will set their union's 
        agenda.
          Workers make these decisions with their eyes wide 
        open about union political activity--as to both the 
        fact of such activity and its cost. Indeed, unions are 
        required to disclose more about their finances than any 
        other organization of which I am aware. And if the 
        membership want more information, it is free to elect 
        leaders promising such or to amend their organization's 
        constitution and bylaws to so provide.
          Anyone who claims that unions could pursue the 
        political course they have consistently followed 
        without substantial majority support is willfully 
        misunderstanding the relationship between elected 
        leaders and representatives and their constituency. \8\
---------------------------------------------------------------------------
    \8\ Hearing on H.R. 3580, the Worker Right to Know Act, Before the 
Subcommittee on Employer-Employee Relations, 104th Cong., 2nd Sess., at 
320 (June 19, 1996)(Serial No. 104-66).

    Claims by anyone that they did not know that unions engaged 
in political activity are, at best, disingenuous.
    The resolution of whether employees may be required to 
underwrite activities of a union that are not germane to 
collective bargaining, contract administration, or grievance 
adjustment has been more recently decided. Since 1947, the NLRA 
has provided that in States that have not enacted so called 
``right-to-work'' laws, a union may seek to negotiate a 
provision in its collective bargaining agreement providing that 
all workers represented by the union may be required to share 
equally in the cost of that representation as a condition of 
employment. These provisions are generally known as agency fee 
or union security provisions. In the 21 States that have 
enacted ``right-to-work laws,'' though a union remains liable 
for providing fair representation to all workers it represents, 
no worker may be required under the NLRA to pay anything to a 
union for the costs of providing that representation.
    As originally enacted in 1935, the NLRA permitted unions 
and employers to negotiate so called ``closed shop'' 
agreements, agreements whereby an employer refused to hire 
anyone who was not already a member of the union. Section 
8(a)(3) of the NLRA makes it unlawful for an employer to 
``discriminate in regard to hire or tenure of employment or any 
term or condition of employment to encourage or discourage 
membership in any labor organization.'' This provision, 
standing alone, would preclude the payment of any dues or fees 
to a union as a condition of employment. However, as originally 
enacted, the language was qualified by a proviso stating that 
``nothing in [the NLRA] or in any other statute of the United 
States, shall preclude an employer from making an agreement 
with a labor organization * * * to require as a condition of 
employment membership therein * * * if such labor organization 
is the representative of the employees. * * *''
    A Republican Congress, as part of the Taft-Hartley 
Amendments of 1947, specifically amended section 8(a)(3) of the 
NLRA, until then section 8(3), to limit the provisions of the 
first proviso by adding the following:

          [N]o employer shall justify any discrimination 
        against an employee for nonmembership in a labor 
        organization (A) if he has reasonable grounds for 
        believing that such membership was not available to the 
        employee on the same terms and conditions generally 
        applicable to other members, or (B) if he has 
        reasonable grounds for believing that membership was 
        denied or terminated for reasons other than the failure 
        of the employee to tender the periodic dues and the 
        initiation fees uniformly required as a condition of 
        acquiring or retaining membership.

    In addition, the Taft-Hartley amendments added section 
8(b)(2), which makes it unlawful for a union ``to cause or 
attempt to cause an employer to discriminate against an 
employee in violation of subsection 8(a)(3) of this section or 
to discriminate against an employee with respect to whom 
membership in such organization has been denied or terminated 
on some ground other than this failure to tender the periodic 
dues and the initiation fees required as a condition of 
acquiring or retaining membership.''
    The effect of the 1947 amendment was to preclude 
contractual provisions requiring an employee to join a union as 
a condition of employment. ``If an employee in a union shop 
unit refuses to respect any union-imposed obligations other 
than the duty to pay dues and fees, and membership in the union 
is therefore denied or terminated, the condition of 
`membership' for 8(a)(3) purposes is nevertheless satisfied and 
the employee may not be discharged for nonmembership even 
though he is not a formal member.'' \9\
---------------------------------------------------------------------------
    \9\ Labor Board v. General Motors, 373 U.S. 734, 743 (1963).
---------------------------------------------------------------------------
    The fact that an employee cannot be required to join a 
union as a condition of employment has clearly and 
unambiguously been a matter of settled law for decades. 
Sections 8(a)(3) and 8(b)(2), when read in conjunction, provide 
that an employee who pays full union dues and fees has a 
statutory right to be a member of a union, but also has a 
statutory right to refrain from formally doing so.

In 1988, the Supreme Court made it clear in Communication Workers v. 
        Beck, that no worker can be compelled to support union 
        political activity

    Until Communication Workers v. Beck was decided 1988, the 
Supreme Court had ``never before delineated the precise limits 
8(a)(3) places on the negotiation of and enforcement of union-
security agreements. * * *'' \10\ However:
---------------------------------------------------------------------------
    \10\ Communication Workers v. Beck, 487 U.S. 735, 745 (1988).
---------------------------------------------------------------------------
          Over a quarter century ago we held that 2, Eleventh 
        of the RLA does not permit a union, over the objections 
        of nonmembers, to expend compelled agency fees on 
        political causes. Because the NLRA and RLA differ in 
        certain crucial respects, we have frequently warned 
        that decisions construing the latter often provide on 
        the roughest of guidance when interpreting the former. 
        Our decision in [Machinists v. Street, 367 U.S. 740 
        (1961)], however, is far more than merely instructive 
        here: we believe it is controlling, for 8(a)(3) and 2, 
        Eleventh are in all material respects identical. * * * 
        Thus, in amending the RLA in 1951, Congress expressly 
        modeled 2, Eleventh on 8(a)(3), which it had added to 
        the NLRA only four years earlier, and repeatedly 
        emphasized that it was extending ``to railroad labor 
        the same rights and privileges of the union shop that 
        are contained in the Taft-Hartley Act.'' In these 
        circumstances, we think it clear that Congress intended 
        the same language to have the same meaning in both 
        statutes.\11\
---------------------------------------------------------------------------
    \11\ Id., at 745-747 (citations omitted).

    The clearness with which the Court majority saw the issue 
was not as apparent to all observers as the dissent of Justice 
Blackmun, in which Justices O'Connor and Scalia joined,\12\ 
illustrates.
---------------------------------------------------------------------------
    \12\ Justice Brennan delivered the opinion of the Court, in which 
Chief Justice Rehnquist, and Justices White, Marshall, and Stevens 
joined. Justices Blackmun, O'Connor, and Scalia concurred in part and 
dissented in part. Justice Kennedy took no part in the consideration or 
decision of the case.

          The Court's conclusion that 8(a)(3) prohibits 
        petitioners from requiring respondents to pay fees for 
        purposes other than those ``germane'' to collective 
        bargaining, contract administration, and grievance 
        adjustment simply cannot be derived from the plain 
        language of the statute. In effect, the Court accepts 
        respondents' contention that the words ``dues'' and 
        ``fees,'' as used in 8(a)(3), refer not to the periodic 
        amount a union charges its members but to the portion 
        of that amount that the union expends on statutory 
        collective bargaining. Not only is this reading 
        implausible as a matter of simple English usage, but it 
        is also contradicted by the decisions of this Court and 
        of the NLRB interpreting the section. Section 8(a)(3) 
        does not speak of ``dues'' and ``fees'' that employees 
        covered by a union-security agreement may be required 
        to tender to their union representative; rather, the 
        section speaks only of ``the periodic dues and 
        initiation fees uniformly required as a condition of 
        acquiring and retaining membership.'' Thus, the 
        section, by its terms, defines ``periodic dues'' and 
        ``initiation fees'' as those dues and fees ``uniformly 
        required'' of all members, not a portion of full dues. 
        As recognized by this Court, ``dues collected from 
        members may be used of a variety of purposes, in 
        addition to meeting the union's costs of collective 
        bargaining. Unions rather typically use their 
        membership dues to do those things which the members 
        authorize the union to do in their interest and on 
        their behalf.'' By virtue of 8(a)(3), such dues may be 
        required from any employee under a union-security 
        agreement. Nothing in 8(a)(3) limits, or even 
        addresses, the purposes to which a union may devote the 
        moneys collected pursuant to such an agreement.
          The Court's attempt to squeeze support from the 
        legislative history for its reading of congressional 
        intent contrary to the plain language of 8(a)(3) is 
        unavailing. As its own discussion of the relevant 
        legislative materials reveals, ante, at 747-750, there 
        is no indication that the 1947 Congress intended to 
        limit the union's authority to collect from nonmembers 
        the same periodic dues and initiation fees it collects 
        from members. Indeed, on balance, the legislative 
        history reinforces what the statutory language 
        suggests: the provisos neither limit the uses to which 
        agency fees may be put not require nonmembers to be 
        charged less than the ``uniform'' dues and initiation 
        fees.\13\
---------------------------------------------------------------------------
    \13\ Id., at 768-770 (citations omitted).

    Notwithstanding the dissent, however, the Beck decision has 
settled the issue of whether 8(a)(3) ``includes the obligation 
to support union activities beyond those germane to collective 
bargaining, contract administration, and grievance 
adjustment.'' \14\ In the words of the Court, ``We think it 
does not.'' \15\ Since 1988, it has been unlawful to require 
any employee, as a condition of employment, to financially 
support through the payment of dues or fees union activities 
that are not germane to collective bargaining, contract 
administration, or grievance adjustment.
---------------------------------------------------------------------------
    \14\ Id., at 745.
    \15\ Id.
---------------------------------------------------------------------------

Beck Rights are aggressively enforced

    The majority contends that, despite the Beck decision, 
``Beck rights remain illusory.'' The contention does not stand 
up when compared to the facts. Proponents of H.R. 2434 assert 
that the National Labor Relations Board has not protected Beck 
rights. As Mr. Coppess has testified:

          In California Saw & Knife Works,\16\ the NLRB--
        largely following rules announced by the NLRB General 
        Counsel at the time Beck was decided in 1988--imposed 
        an exacting set of requirements on labor unions which 
        seek to collect agency fees. The Board first held that 
        before a union may require a nonmember to pay such a 
        fee, the union must inform the nonmember of his right 
        to object to paying for activities ``not germane to the 
        union's duties as bargaining agent'' and his right to 
        ``obtain a reduction in fees for such activities.'' The 
        NLRB further held that a nonmember who exercises such 
        right by submitting an objection, must be charged a 
        reduced fee, reflecting the union's calculation of the 
        percentage of its overall expenditures devoted to 
        activities germane to collective bargaining. Finally, 
        the Board held that the objecting nonmember must be 
        ``apprised of the * * * basis for the calculation,'' 
        and must be notified of his right to challenge the 
        union's calculations.
---------------------------------------------------------------------------
    \16\ 320 NLRB No. 11 (1995).
---------------------------------------------------------------------------
          California Saw thus provided dissident workers, who 
        do not agree with the majority's decisions to pursue 
        certain legislative or political ends, with a fully-
        developed set of rules to protect the dissident's 
        rights. Those rules are far more elaborate than 
        anything that exists to protect, for example, dissident 
        stockholders. And over the past six months, the Board 
        has made clear that it stands ready to vigorously 
        enforce those rules through a series of decisions 
        holding unions guilty of violating the law where unions 
        had either failed to give a Beck notice to all 
        nonmembers, to establish procedures through which 
        nonmembers could object to paying for activities 
        unrelated to collective bargaining, or to provide 
        nonmembers who submitted objections with the required 
        breakdown of union expenditures.\17\
---------------------------------------------------------------------------
    \17\ Board cases enforcing California Saw cited by Mr. Coppess 
include IUE Local 444 (Paramax Systems), 322 NLRB No. 1 (Aug. 27, 
1996); Production Workers Local 707 (Mayo Leasing), 322 NLRB No. 9, 
(Aug. 27, 1996); Laborers Local 265 (Fred A. Newman Co.), 322 NLRB No. 
47 (Sept. 30, 1996); Carpenters Local 943 (Oklahoma Fixture Co.), 322 
NLRB No. 142 (Jan. 10, 1997); Theatrical Stage Employees Local 219 
(Hughes-Avicom International, Inc.), 322 NLRB No. 195 (Feb. 14, 1997); 
and UFCW Locals 951, 1036, and 7, 16-CB-3850 (Jan. 31, 1997) (ALJ 
opinion).
---------------------------------------------------------------------------
    Nor was the Board inactive during the period between the 
Beck decision and California Saw. Within months of the Beck 
decision, the General Counsel issued a comprehensive statement 
of what she believed necessary for a union to comply with 
Beck.\18\ NLRB regional offices actively prosecuted unfair 
labor practice charges alleging Beck violations on the basis of 
noncompliance with the General Counsel's interpretive 
guidelines. Those prosecutions were continued by General 
Counsels appointed under both the Bush and Clinton 
administrations.
---------------------------------------------------------------------------
    \18\ NLRB General Counsel Memorandum, GC-88-14 (Nov. 15, 1988).
---------------------------------------------------------------------------
    As has been previously stated, an employee alleging a 
violation of Beck rights may bring a charge before the NLRB, 
whose decisions may be appealed to the Federal circuit courts, 
or may sue a union directly in Federal district court. The 
contention that a judiciary made up of large numbers of 
Republican appointees has been hesitant to enforce or has 
somehow diminished Beck rights is neither plausible nor 
accurate. The majority, themselves, cite evidence to the 
contrary, pointing out that the D.C. Circuit, in Ferriso v. 
National Labor Relations Board.\19\ has concluded that a 
union's calculations of the percentage of dues and fees that 
are used for collective bargaining, contract administration, 
and grievance adjustment must be confirmed by an independent 
audit.
---------------------------------------------------------------------------
    \19\ CA DC, No. 96-1321 (September 23, 1997).
---------------------------------------------------------------------------
    The efforts to enforce Beck rights in a meaningful manner 
is not simply reflected in the law and the efforts of the Board 
and the courts to enforce the law, but is regularly reflected 
in the actions of unions. During hearings, several unions 
explained the practices and procedures they have undertaken to 
comply with Beck. While different unions have adopted different 
procedures, the practices of the International Association of 
Machinists are illustrative of union efforts. According to Mark 
Schneider, Association General Counsel of the Machinists:

          Each year we notify all of our represented employees 
        through a notice in our newspaper at the end of each 
        year that if they wished to become dues objectors the 
        following year, they should make that request in 
        writing to our General Secretary Treasurer in 
        Washington, D.C. Because we require that objection 
        requests be submitted to a particular union officer 
        during a particular one-month ``window period,'' we 
        felt that fairness required that we provide notice to 
        all of our represented employees on an annual basis 
        describing these requirements.
          We also advise our represented employees of the size 
        of the reduction they should expect, and of the kinds 
        of expenditures in sufficient detail for them to 
        understand what activities they are funding, and what 
        activities they are no longer funding, pursuant to the 
        union's calculation. Finally, we advise them that if, 
        after reviewing this material, they wish to challenge 
        the union's allocation, the union will provide them 
        with the complete audit that supports its calculation, 
        and so armed give them the opportunity to make that 
        challenge before a neutral arbitrator selected by the 
        American Arbitration Association. At that arbitration 
        the union bears the burden of justifying its expense 
        allocation, and agrees in advance to be bound by the 
        arbitrator's decision.
          In order to fairly allocate union expenditures, every 
        union staff member keeps contemporaneous records of his 
        or her time, on forms specially prepared for Beck 
        purposes. On these records, employee time is broken 
        down into various categories, such as, for example, 
        ``attending union meetings,'' ``legislative 
        activities,'' ``grievances and arbitration'' and so on. 
        From these time sheets, accountants determine how much 
        of the time of each of the union's departments is 
        properly chargeable to objectors, and how much is not. 
        Accountants then take the C.P.A. audited expenditure 
        figures from the union's general ledger, and allocate 
        expenditures in accordance with the percentages derived 
        from the time records. A summary of this material then 
        is provided to every dues objector, and the complete 
        audit is provided to any objector who requests a copy 
        and wishes to challenge the union's conclusion in the 
        neutral arbitration.
          Each year, during the objector cycle, the union 
        escrows a sufficient sum of money to assure that, 
        should it be determined by an arbitrator that it has 
        not provided a sufficient reduction, any difference 
        will be covered by the escrow account. In that way, 
        objectors are assured that not a penny of their money 
        will even inadvertently be spent on matters not germane 
        to the collective bargaining process.
          In sum, under the regime established by the Board, 
        and in place at our union, employees are fully aware of 
        their Beck rights and have every opportunity to 
        exercise them in a meaningful manner. The union's Beck 
        compliance program--for the most part required by law--
        has imposed substantial burdens on the union. And we 
        most emphatically believe that if any modification of 
        the existing rules is in order, it would be in the 
        direction of less regulation, and not more.\20\
---------------------------------------------------------------------------
    \20\ Prepared statement of Mark Schneider, Hearing on the 
Assessment of Union Dues, Before the Subcommittee on Employe-Employee 
Relations, 104th Cong., 2nd Sess. (April 18, 1996).
---------------------------------------------------------------------------

H.R. 2434 ignores substantive flaws in labor law and proposes 
        fundamental changes to the law based on dubious anecdotes

    To buttress a nonexistent case for the need to protect Beck 
rights, the majority has produced anecdotal evidence of the 
hardships faced by workers. However, the Republicans have 
produced no systemic evidence beyond partisan polling 
information for the contention that Beck rights are routinely 
violated or difficult to enforce. In fact, there is no evidence 
for those kinds of systemic abuses. There is substantial 
evidence, however, for the systemic abuse of other provisions 
of the National Labor Relations Act. The major thrust of 
section 8(a)(3) has nothing to do with agency fees, but 
provides that it is ``an unfair labor practice for an employer 
by discrimination in regard to hire or tenure of employment or 
any term or condition of employment to encourage or discourage 
membership in any labor organization. * * *'' Notwithstanding 
8(a)(3), it is estimated that 10,000 workers are unlawfully 
fired every year for seeking to exercise their right to 
organize. In one out of every four organizing campaigns, 
workers are unlawfully fired for seeking to exercise 
statutorily protected rights. According to a recent survey, 44% 
of all workers who are not represented by a union would vote to 
join a union tomorrow, but for the fact that doing so may cost 
them their jobs.
    But the Majority is not just indifferent, they are hostile 
to addressing these kinds of systemic abuses of the law. H.R. 
2434, was intentionally crafted in a manner that precludes our 
ability to even attempt to redress the systemic problems in the 
law. Rather than seeking to amend the National Labor Relations 
Act and the Railway Labor Act, the statutes that authorize 
agency fees in the first instance, H.R. 2434 was deliberately 
crafted as a free standing statute in part in order to preclude 
amendments that may deal with more substantive problems in the 
law.
    The Majority's animosity for the rights of workers is also 
reflected in the absurd remedies provided under H.R. 2434. 
Workers have a right to form and join unions. Where workers 
exercise that right, they also are protected from being 
required as a condition of employment from having to finance 
union activities that are not germane to collective bargaining, 
contract administration, or grievance adjustment. The right to 
pay less than full union dues, however, is meaningless unless 
workers exercise the right to organize. There is no general 
obligation under the NLRA requiring employers to inform 
employees of their right to form and join unions. Nor does H.R. 
2434 provide such a requirement. However, where employees do 
act to form or join unions, H.R. 2434 requires employers to 
post notices informing employees of their rights to pay less 
than full union dues. It is not simply inconsistent to require 
that employers post notices informing workers of their right 
not to pay less than full union dues, while refusing to require 
employers to inform workers of their right to join a union in 
the first instance. It is illustrative of a general hostility 
toward the right of workers to form and join their own 
organizations.
    The hostility is even more obvious with respect to another 
aspect of the remedies provided under H.R. 2434. Damages are 
not available to employees under section 8(a)(3) where an 
employer unlawfully fires a worker for seeking to form or join 
a union. However, H.R. 2434 provides double damages in 
circumstances where a union effects a violation of 8(a)(3) by 
requiring an objector to pay full union dues. As has been 
previously pointed out, under the LMRDA union members have the 
right to determine how much their union dues will be, and under 
the NLRA union dues may not be excessive or discriminatory. As 
Mark Schneider pointed out in testimony before the 
subcommittee:

          The discussion over the appropriate procedural rules 
        to implement Beck is a discussion that in practical 
        terms is a discussion over extremely small amounts of 
        money. Union dues in the Machinists Union is something 
        like $25-$30 each month. The reduction owed a dues 
        objector is routinely something in the nature of 20% of 
        that amount--only a small portion of which, I hasten to 
        add--relates to expenditures for political activity. A 
        disagreement over the appropriate safeguards that 
        should be in place to assure the accuracy of the 
        union's reduction calculation--whether it is properly 
        19% or 20%, or how to structure an arbitration system 
        that fairly gives an objector opportunity to claim that 
        the reduction is properly a higher percentage than 
        claimed--is literally a dispute over pennies. Without 
        disparaging in any way the importance of the ongoing 
        discussion about the implementation of Beck or the 
        merits of one or the other holdings of the NLRB in 
        California Saw, I would respectfully suggest that there 
        are matters within the jurisdiction of the NLRB of far 
        more critical importance to the workers we represent, 
        and, for that matter, to the employer community, that 
        are not getting the attention that Beck compliance has 
        achieved, and I look forward to the day when these 
        other critical issues are given the attention they 
        deserve.\21\
---------------------------------------------------------------------------
    \21\ Prepared statement of Mark Schneider, Hearing on the 
Assessment of Union Dues, Before the Subcommittee on Employer-Employee 
Relations, 104th Cong., 2nd Sess. (April 18, 1996).

    H.R. 2434 provides damages for financially meaningless, 
though philosophically important, improper act of union of 
claiming more dues money from an employee than it is entitled 
to, or of spending such funds in a manner unrelated to 
collective bargaining and inconsistent with the employee's 
views. Being unlawfully fired, however, is a financial, as well 
as a philosophical, catastrophe for a worker.
    The NLRA generally provides ``make whole'' remedies for 
employer unfair labor practices. Where an employee has been 
unlawfully discharged, an employee is generally entitled to 
reinstatement and back wages for the period the employee was 
unemployed, minus any wages the employee could have earned 
during that period. As evidenced by the number of workers who 
are annually discharged in violation of 8(a)(3), existing 
remedies do little to deter employer violations. Employers 
often contest the unfair labor practice and thereby prolong the 
period for which the employee is unlawfully without a job or an 
income. The employee is entitled to neither punitive nor 
compensatory damages as a result of the harm he or she suffers 
as a result of the employer's unlawful action. If an employee 
defaults on a car loan or a mortgage payment as a result of the 
employer's unlawful discharge, the employee does not receive 
additional compensation for that loss. Typically, employees end 
up settling such charges without being reinstated and without 
even receiving the full compensation to which they are 
entitled. Even where employees are reinstated, they are 
commonly gone within one year of reinstatement. To content that 
a worker should be entitled to damages where a union has 
misused minimal amounts of a worker's money, but should not be 
entitled to damages where an employer has unlawfully abridged 
the ability of that worker to earn a livelihood demonstrates a 
staggering animosity for the rights and welfare of working 
Americans. Yet, the is exactly the circumstance the majority 
would seek to create by enacting H.R. 2434.
    The blatant unfairness of H.R. 2434 is evident in other 
ways as well. While 8(b)(2) provides it is an unfair labor 
practice for a union to cause an employer to violate 8(a)(3), 
8(a)(3), itself, provides that it is an unfair labor practice 
for an employer to discriminate against an employee for 
nonmembership in a labor organization where that employee has 
otherwise tendered the dues and fees required pursuant the dues 
and fees required pursuant to an agency fee agreement. By 
contrast, H.R. 2434 provides that it unlawful for a labor 
organization to accept dues and fees pursuant to an agency fee 
agreement without prior approval of the employee. Putting aside 
the significant issue of prior approval, under current law an 
employer who unlawfully administers an agency fee provision is 
as equally liable as a union that unlawfully administers an 
agency fee provision. Under H.R. 2434, however, where an 
employer unlawfully administers an agency fee provision and the 
union does no more than unwittingly accept the money the 
employer has unlawfully deducted from the worker, it is the 
union and only the union that is liable for damages, while the 
employer is only liable for the ``make whole'' remedies of 
current law.

H.R. 2434 imposes prohibitively high costs of compliance on unions

    If the Worker Paycheck Fairness act is enacted, unions 
would be required to collect 16.3 million signatures from 
workers. In order to obtain the 16.3 million individual 
authorizations, the cost will be approximately $1 per person, 
for a response and retrieval rate of significantly less than 
100 percent. Add to that 2.7 million hours of effort, and the 
value of that time calculated at $15.05, the average wage of a 
union employee, then the cost of collecting signatures is $40.6 
million plus the estimated $16.3 million, to prepare 
authorization forms and explanatory materials, distribute them, 
and follow-up on signatures.
    This bill does not define reporting requirements, but 
presumably unions would have to delineate for their members 
what activities and expenses were involved in political 
expenditures. This bookkeeping would impose new administrative 
burdens to most of the 33,800 or more labor bodies. Keep in 
mind that many locals are very small and the majority have no 
paid staff and no computerized records or accounts, developing 
new and sophisticated reporting systems is neither easy nor 
inexpensive. A leading accountant with significant experience 
working with trade unions estimates that setting up such a 
system would cost a minimum of $2,000 in professional 
accounting time, not to speak of the time necessary for union 
officials to work with the systems. Many locals do not have the 
funds to pay these accounting costs. Estimated start-up costs 
to comply with this provision of the proposed legislation would 
be approximately $3.4 million, conservatively. If the 33,800 
labor bodies needed to develop new accounting systems, then 
start-up costs could run as high as $6.8 million, meaning that 
between $13.2 million and $26.5 million would be spent each 
year maintaining the systems and generating reports.
    An undertaking of this magnitude is mammoth, especially 
where a local has members in multiple locations. Monumental 
effort is required at each stage of the process--notice, 
distribution, solicitation, response, and follow-up. The new 
administrative burdens and requirements would cost nearly as 
much as $90 million initially and $27 million every year 
thereafter.
    The requirement for national banks and corporations to gain 
similar authorizing signatures is not significant, given that 
``stockholders or employees'' rarely pay dues, initiation fees, 
or other payment as a condition of employment.'' The 
requirement for labor unions clearly is significant, since dues 
are the way in which these organizations fund their existence.

H.R. 2434 is an invitation for further litigation

    As interpreted by the Supreme Court, the federal labor law 
``does not permit a union, over the objections of nonmembers, 
to expend compelled agency fees on political causes.'' 
Communication Workers v. Beck, 487 U.S. 735, 745 (1988), citing 
Machinist v. Street, 367 U.S. 740 (1961). Recognizing that the 
``the majority * * * has an interest in stating its views 
without being silenced by the dissenter,'' the Court has taken 
care to articulate a rule that attain[s] the appropriate 
reconciliation between majority and dissenting interests in the 
area of political expression'' and ``protect[s] both interests 
to the maximum extent possible without undue impingement of one 
on the other.'' \22\
---------------------------------------------------------------------------
    \22\ Machinists v. Street, 367 U.S. at 773.
---------------------------------------------------------------------------
    The proponents of H.R. 2434 have expressed their 
dissatisfaction with the ``reconciliation between majority and 
dissenting interests'' struck by the Supreme Court. Consistent 
with this position, the bill would overturn each component of 
the rule articulated by the Court to the obvious end of 
inflicting ``undue impingement'' upon the majority's right of 
free association and expression.
    Where the Supreme Court has stated that ``dissent is not to 
be presumed--it must be affirmatively made known to the union 
by the dissenting employee,'' Street, 367 U.S. at 774, the 
union they have chosen to represent them before that union can 
accept normal dues. There the Supreme Court expressly limits 
the right of dissent to ``nonmembers'', Beck, 487 U.S. at 745, 
H.R. 2434 bars unions from accepting normal dues payments from 
even voluntary members without having first received from them 
statements of agreement with the union's political positions. 
And where the Supreme Court states that the dissenters' 
``grievance stems from the spending of their funds for purposes 
not authorized by the Act in the face of their objection not 
from * * * the mere collection of funds,'' Street, 367 U.S. at 
771, H.R. 2434 bars unions from collecting normal membership 
dues from employees who have not signed special forms stating 
their agreement with the union's political positions.
    The rights of employees with respect to the use of their 
contractually required payments to unions have been forged over 
years of litigation. In one stroke, H.R. 2434 would completely 
unsettle this area of the law, leaving unions, employers, and 
most especially employees completely unsure of where they 
stand. As a general rule, caution should be exercised in making 
a drastic change in settled legal principles, if for no other 
reason, than to avoid the flood of litigation that inevitably 
follows such changes. But in the labor relations context, where 
uncertainty not only leads to litigation but it undermines 
industrial stability and employment security, legislative 
action upsetting established rights and arrangements is seldom 
in order.
    The problems that H.R. 2434 claims to address are 
fictitious. The remedies imposed by H.R. 2434 are as 
unreasonable, unwarranted, and unfair. The protections afforded 
those represented by unions with regard to the political 
activities of the union far exceed those afforded to the 
members of any other organization. The assertion that employees 
may be required to underwrite union political activity or that 
current law condones or in any way coddles union efforts to 
coerce employees into underwriting union political activity is 
a gross canard. Neither 8(a)(3) nor 2, Eleventh serves as any 
justification for imposing different rules upon the political 
participation of unions than those generally applicable to all 
other organizations.\23\
---------------------------------------------------------------------------
    \23\ The rights and protections afforded under section 2, Eleventh 
of the Railway Labor Act are not administered by an agency but are 
directly enforced by the courts. It has been unlawful since 1961 for a 
union subject to the RLA to require an employee as a condition of 
employment to underwrite any union costs that are not associated with 
the costs of negotiating and administering collective agreements and 
adjusting and settling disputes. (see Machinists v. Street, 376 U.S. 
740 (1961). Further, until controversy concerning 8(a)(3) arose in the 
last Congress, no serious need has ever been felt to codify the Street 
decision.
---------------------------------------------------------------------------
    The Majority states that ``Unions, by a grant of power from 
the federal government, can force employees to pay dues to the 
union as a condition of keeping their jobs; corporations cannot 
force individuals to invest in the nor can other membership 
organizations force individuals to join and pay dues.'' To the 
extent that the majority is implying that a union may force any 
employee to underwrite any activity that is not related to 
collective bargaining, contract administration, or grievance 
adjustment, they are being disingenuous. However, the 
contention that other organizations cannot or do not 
effectively coerce members to underwrite their political 
activities is equally inaccurate. Both union and nonunion 
employees own substantial amounts of corporate stock through 
employee pension plans, profit sharing plans, 401(k) plans, and 
other forms of retirement savings plans. Most employees have no 
voice in how their money is invested and no knowledge of what 
stocks are owned by their retirement plans. Nevertheless, 
corporations regularly and routinely expend millions of dollars 
more than unions on political activities every year, at the 
expense of the return workers might otherwise receive for the 
pension investments, frequently for purposes that are 
antithetical to the interests of workers, without seeking the 
prior approval of anyone.
    The money that employers and employer organizations are 
spending, for example, to dissuade the Congress from regulating 
health maintenance organizations, to diminish protections under 
the Occupational Safety and Health Act, or to prevent the 
minimum wage from being increased is money that was directly 
earned by the efforts of workers. It is money that otherwise 
may have been used to increase the wages and benefits of 
workers. It is money that is instead being spent for the 
explicit purpose of preventing wages and benefits from being 
increased. It is money that does not belong to corporate 
managers. And it is money that is spent without any input from 
the workers. To contend that such workers have right to find 
another job is not a realistic alternative for most workers, 
does not ensure that the worker will not run into the same 
problem at the next job, and is an alternative, unrealistic as 
it may be, that is equally applicable to an employee who is 
subject to an agency fee provision.

H.R. 2434 imposes onerous obligations on the political participation of 
        unions that are required of no other institution

    The truth of the matter is that union members have far more 
voice in determining the political activities of their union, 
both legally and practically, than shareholders have of 
determining how their money is spent for political purposes by 
corporate managers. Workers have voluntarily joined the union, 
in part, for the express purpose of engaging collectively in 
political activity. A shareholder typically buys stock solely 
for the purpose of the return the investment will produce. Yet, 
virtually every corporation regularly and routinely spends 
shareholder money to finance the expression of political views 
with which the shareholder may or may not agree. A small 
businessman may join the Chamber of Commerce for a variety of 
benefits, none of which has anything to do with the Chamber's 
political activities. However, that does not prevent the 
Chamber from spending a portion of the dues collected from that 
small business person for political purposes with which the 
business person does not agree.
    Further, the money spent by corporations on political 
activity vastly exceeds anything spent by unions. According to 
information compiled by the Federal Election Commission and the 
Independent Center for Responsive Politics, in 1998, 
corporations made $166.5 million in hard money contributions to 
federal candidates and political parties, compared to $50.2 
million from labor organizations. Business outspent labor by a 
ratio of 3.1 to 1. The ratio for soft money contributions was 
even more one-sided, 16.3 to 1, corporations having contributed 
$167.2 million compared to $10.3 million from labor. Businesses 
accounted for 87% of all soft money contributions to Democrats 
and 96% of all soft money contributions to Republicans over the 
period of 1995 and 1996. Over the same period, labor accounted 
for 11% of Democratic soft money contributions and 1% of 
Republican soft money contributions. In total money, businesses 
spent $203.5 million in soft money contributions in 1996, 
compared to the slightly less than $9.5 million spent by labor, 
a ratio of 21.4 to 1. And this is but the tip of the iceburg. 
Including trade association fees, so called public interest 
advertising, independent expenditures, and direct lobbying 
expenses, corporations spend hundreds of millions, perhaps 
billions, of other people's dollars for the purpose of engaging 
in political activity. So much for the Republican concern that 
``all men and women should have a right to make individual and 
informed choices about the political, social, or charitable 
causes they support.'' \24\
---------------------------------------------------------------------------
    \24\ H.R. 2434, Section 2, paragraph (3).
---------------------------------------------------------------------------
    Notwithstanding the limited financial interests that 
individual workers have in H.R. 2434, the harm that H.R. 2434 
would visit upon unions and upon the rights of workers, as 
compared to any other segment of society, are substantial.
    Unions operate on the principal that it is the right of the 
majority to decide the duties of membership, and that those who 
want the privileges of membership must accept the 
responsibilities that come with it. Political parties, 
churches, business associations, girlscout troops and all other 
voluntary associations operate on the same principle. For 
example, it is typical for those who wish to select a 
Republican candidate for political office to be required to be 
members of the Republican Party.
    The Supreme Court has long recognized that an organization 
has the right to ``determin[e] * * * the boundaries of its own 
association, and of the structure which best allows it to 
pursue it political goals, is protected by the Constitution.'' 
\25\ And ``any interference with the freedom of [the 
organization] is simultaneously an interference with the 
freedom of its adherents.'' \26\
---------------------------------------------------------------------------
    \25\ Tashijan v. Republican Party of Connecticut, 479 U.S. 208, 224 
(1986).
    \26\ Democratic Party of the United States v. Wisconsin 450 U.S. 
107, 122 (1981).
---------------------------------------------------------------------------
    Beck incorporates these fundamental principles of freedom 
of association while safeguarding the right of dissidents to 
withdraw from the group without suffering adverse employment 
consequences and without any obligation to pay for a union's 
political or ideological activities. However, to force a union 
to allow dissidents who withdraw from membership to retain the 
right participate in membership decisions would turn Beck--and 
the First Amendment--on their heads.
    If freedom of association is to have any meaning, the 
members of the association must have the right to decide how 
best to pursue their common interest and common mission. To 
prevent union members from deciding that their union will 
engage in political activity, and that those who choose to join 
the union will support that activity through a portion of their 
dues, is to strike at the heart of union members' rights of 
association. What the Supreme Court has said in the political 
party context is equally apt here: ``these proposal would 
`limit [unions'] associational opportunities at the critical 
juncture at which the appeal to common principles may be 
translated into concerted action and hence to political power 
in the community.'' \27\
---------------------------------------------------------------------------
    \27\ Tashjian, supra, 479 U.S. at 216.
---------------------------------------------------------------------------
    Indeed, that is precisely the point. To prohibit unions 
from using dues money to press for the enactment of legislation 
or the election of candidates sympathetic to working families--
or to require each member every year to sign a written 
agreement authorizing such activities would effectively silence 
the only voice working families have in our society.
    For all the talk bout union expenditures in the last 
election, the fact of the matter is that corporate interests 
significantly outspent union interests. We need a more level 
playing field for working people in politics, not one that is 
more skewed in favor of corporate interests. And, we will do 
everything we can to resist these blatant attempts to punish 
the labor movement for having had the temerity to stand up for 
the men and women they represent, and to protect the right of 
their members to participate on a full and equal basis in the 
political decision making process in this country.

                                   William L. Clay.
                                   Dale E. Kildee.
                                   Donald M. Payne.
                                   Robert E. Andrews.
                                   Robert C. Scott.
                                   Carlos Romero-Barcelo
                                   John F. Tierney.
                                   Loretta Sanchez.
                                   Dennis J. Kucinich.
                                   Rush Holt.
                                   George Miller.
                                   Major R. Owens.
                                   Tim Roemer.
                                   Lynn Woolsey.
                                   Chaka Fattah.
                                   Carolyn McCarthy.
                                   Ron Kind.
                                   Harold E. Ford, Jr.
                                   David Wu.

                                  

```