Earl Warren: No. 368 Retail Clerks International Association Local 1625, AFL-CIO, et al., petitioners versus Alberta Schermerhorn et al. Mr. Lippman.
S. G. Lippman: Thank you sir. Mr. Chief Justice and may it please the Court. We have a related problem to the one that was just argued before this Court. In our situation, the local union and Food Fair negotiated a collective bargaining contract which contained a panoply of many benefits to the employees and Florida being one of the Like to Work states which prohibits the entry into a contract requiring membership in a union pursuant to 14(b).
Potter Stewart: How many such states are there, about a dozen?
S. G. Lippman: There are 20 at the moment sir.
Potter Stewart: Twenty.
S. G. Lippman: We negotiated what I think could be correctly characterized as a service fee arrangement. In that service fee, and it is set forth on page 9 of the record, although it's called agency shop, I think the Court will recognize that it has substantial differences from the agency shop in the GM case just argued. In that service fee arrangement, we provide that under the law of the State of Florida the employees have a right to join and not to join the union. However, the union is the exclusive bargaining agent. It's been certified, chosen by the employees, and the union has the obligation under the law to represent all the employees equally and impartially. The union incurs many expenses in connection with this representation and therefore we say in so many words to defray the cost of the union as a collective the bargaining agency, the employees who determine that they do not wish to join the union would be required to pay a service fee. In a subsequent notice which we posted, after reiterating the language, we said that the service fee would be the equivalent of the monthly dues and the initiation fee. I might point out that the issue before this Court and the issue before the Florida Supreme Court was not the amount of the service fee or the reasonableness of the service fee, but was whether or not one penny could be charged as a service fee arrangement. The rationale if it may please the Court is this. A union has the obligation under the law, and the Court has spelled out that obligation, to represent all employees, union and nonunion alike, and to represent them impartially. All employees receive these benefits and the record of contract is in the record indicates the substantial benefits involved. Being a collective bargaining agency requires a great deal of expenditures. I think that is clear and it's spelled out in the brief, one has to hire attorneys and negotiators and fulltime representatives. Committees have to be paid, records have to be kept, contracts have to be administered, cases have to be taken to arbitration. And so we say that if you want the benefits and you have chosen us to obtain benefits for you, we believe that you should pay a prorated cost of carrying on as the collective bargaining agent not as a member of the union, but as a member or an employee within the bargaining unit. Now, how do we differ from the agency shop? The sums which are paid can only be used to defray the cost of collective bargaining. None of the money could in any way be used for institutional or labor union objectives unrelated to the collective bargaining function of the particular union involved.
Byron R. White: Which I suppose leads to objective employee pay a greater proportion of the collective bargaining costs?
S. G. Lippman: No sir.
Byron R. White: Why is that?
S. G. Lippman: Because the costs of collective bargaining are ascertainable just as in the hiring-hall arrangement --
Byron R. White: But he's going to be paying monthly the same dues, the same amount? I mean, as a matter of fact that's one of his -- that was true in this case.
S. G. Lippman: In this case, but there is no demonstration --
Byron R. White: And we are talking about this case.
S. G. Lippman: Right sir, in this case, but there is no demonstration in the record that this particular union did not use all of its funds for collective bargaining purposes. This is actually one of the other small unions, it's rather unusual, but this case does not present the question of the reasonableness of the sum. Now, it could very well be that in a subsequent action, in a subsequent proceeding, the reasonableness of the sum could be questioned.
William J. Brennan, Jr.: Well, are you saying now Mr. Lippman that as far as this record is concerned, we have to treat the case as if all union revenues were expended for purposes in carrying on collective bargaining.
S. G. Lippman: That is correct sir.
William J. Brennan, Jr.: Was there a finding to that effect?
S. G. Lippman: There was never any trial. The case was decided on the pleadings. For the purpose of this case, it must be so treated because this is a sole issue and this is the sole issue which the court, which lower courts addressed themselves to.
Potter Stewart: Were the pleadings alleged this, you said it was decided on the pleadings?
S. G. Lippman: Yes, the pleadings point out that the employees that do not want to be members of the union. They do not want to pay any fees, they do not want to pay any service fees, and this constitutes a violation of the Florida Right to Work Law and of course, constitutes a violation of Section 14(b). Now, I was about to point out and I think I did point out that in no sense can any of the moneys be used for any institutional purposes, that it can only be used for collective bargaining functions, and that the relationship is the relationship between a union and the employees in the bargaining unit and not between a union and its membership. Involved here is the question of Section 14(b).
Earl Warren: We'll recess now Mr. Lippman. [Recess]
S. G. Lippman: Yes, may it please the Court. I sought to develop forenoon the argument that the contract that we have before us, the particular clauses, we call a service fee arrangement. It's drafted in the since, requires specifically that employees in a bargaining unit who choose not to be members of the union must pay a service fee to defray the union's ordinary costs in connection with collective bargaining. We also tried to make it clear that in issue, is not the amount of the fee, but the principle as to whether or not such a clause in a contract can be nullified by the State of Florida operating under Section 14(b). I would like now to discuss the requirements and the limitations of 14(b) as it impinges on the – and raises the Federal preemption problem. 14(b) is quite clear, in that it is an exception to the general pattern of the Labor Act and provides in substance that the states are permitted to pass laws specifically prohibiting membership in a labor organization. Now Congress knew quite well what is meant by membership in a labor organization. It is not a difficult ambiguous word and if there is any uncertainty about the matter, I believe a reference to the legislative history would demonstrate what Congress was concerned with in 8 (a) (3) when they abolished the closed shop and in 14(b), Congress was concerned with the evils of compulsory membership in a union. They were concerned with the Cecil De Mille where an employee or a person had to pay assessments for political purposes. They were concerned with a situation where an employee was expelled from the union for doing unionism or an employee was -- and lost his job, or an employee who testified against another employee in a Court proceeding was expelled from the union, they were concerned with the abuses of internal unionism. In no sense do I find anything in the legislative history, which indicates that Congress was concerned with the payments to the extent that Congress did have such a concern. It did have an amendment, it does have an amendment in the law prohibiting excessive initiation fees. Beyond that, there was no concern with that problem. On the other hand, Congress did throughout manifest a concern about a fee right. Now, since we have this exception, since the language of 14(b) is so clear, is a State justified in taking the position that 14(b) goes beyond what it says, that is a validation of its Right-to-work laws. What the states do is they interrupt their own laws and then they say this stems from 14(b) we have the authority to do so under 14(b). Now what abuses have we seen? We have cases coming from the Supreme Court of South Carolina and Arkansas outlawing the hiring-hall based upon the presumed authority under 14(b). We have a case in the Supreme Court of Georgia where they took the position, where the Court took the position that an exclusive bargaining contract could not stand in face of its Right-to-work law again stemming from the authority of 14(b). And we have the opinion of the Attorney General in South Dakota to the same extent. The states do not look to the language of 14(b) to its intent, but they look to their own Right-to-work laws and under the guidance of that, they believe 14(b) is a license for them to regulate all aspects or many aspects of labor relations. In this respect, I raise the question of preemption, clearly where a State were to go outside the authority of 14(b) and say that you cannot negotiate on a particular subject, that you cannot negotiate a hiring-hall or that you cannot negotiate a contract benefiting employees and seeking a service fee in return, where it is not clearly covered by the language and where quite arguably it is covered by the provisions of the Federal Act and actually protect it and where it is not clear at all that the states have such authority, it seems to me, if we are going to obtain any kind of uniformity in the first instance, it should be the Labor Board, which would have primary jurisdiction to determine whether or not the particular subject matter folds within the scope of 14(b) and is subject to regulation by the states. Otherwise, we will have at the moment 20 different states each interpreting 14(b) and carrying rights under the Labor Act.
Byron R. White: [Inaudible]
S. G. Lippman: Mr. Justice White, in my judgment it would be an unfair labor practice.
Byron R. White: [Inaudible]
S. G. Lippman: Well, there may be an element of concurrent jurisdiction.
Byron R. White: [Inaudible]
S. G. Lippman: I don't concede it, but I raise the problem. One Court, the Supreme Court of Colorado took the position, the case which we cite in our brief and discuss, took the position that the State merely have the authority to declare the law and by declaring the law, it could very well nullify to provisos of Section 8 (a) (3). But --
Byron R. White: [Inaudible]
S. G. Lippman: Yes. We raise that question because we said number one, a service fee arrangement or even an agency shop is not within the scope of 14(b) and is covered by the general provisions of the Labor Act and therefore of course, the entire area would be controlled by the Labor Act, and under this should we take the position that where there was an arguable question, the State should not be in a position to sit and determine its own jurisdiction. In this respect, the situation is not entirely dissimilar from the case which this Court decided last June, the MEBA case on the Great Lakes, which opinion written by Justice Potter Stewart. There a state sought to determine its own jurisdiction by seeking to interpret what is meant by a labor organization within the meaning of the act, by seeking to interpret what is meant by supervise the employees within the meaning of the act. But this Court held that in the first instance even there it is for the Labor Board to determine and I contend for the proposition that under a situation where a clear question is raised as to whether or not the states have this authority and where it's also clear and the question raised and this comes within the purview of the Labor Board that in the interest of uniformity and the interest of the preemption principles which have be so thoroughly explored and articulated by this court, it is only the Labor Board which has primary jurisdictions. Otherwise, we will have the most terrible kind of hodgepodge, we will have the most terrible kind of impairment of rights, states interrupting their laws and saying the authority comes from Section 14(b). Now we could have a situation of this sought, the State -- the State of Florida could adjoin the operation of this clause. We could turn around and seek to negotiate a similar clause with the employer. The employer might take the position as it did in the GM case that it's -- I can't do that, it's outside of the law. The Labor Board might issue a complain saying that this is outside of the scope of 14(b) and the employer is under an obligation to negotiate on this matter. 14(b) is as much a part of the Labor Act as any other provision. It is a limitation on the Board where the states act properly, but the Board cannot carry out its functions unless it carries out its functions in light of an interpretation of 14(b) and it is also important that 14(b) be given a uniform interpretation so that all states will interpret an act on the 14(b) in the same way.
Potter Stewart: But don't you think that we have a progress to that end, it might not be possible in this very case? Why should the Board have to do it in every case, this is one of those reasons that this Court is here?
S. G. Lippman: Well, because the Court --
Potter Stewart: What we are dealing with is a meaning of a Federal Statute?
S. G. Lippman: But it's a Federal Statute over which the Board is given exclusive jurisdiction, if the Federal and the Board is given the primary responsibility of protecting rights under the law and caring of the policies. If the State interprets or passes a law in the 14(b) which impairs any rights under the statute, the Board is surely concerned with that.
Potter Stewart: But right here in this case we have now before us, the question of what does Section 14(b) mean and it's -- certainly there is an opportunity is there not, to contribute to uniformity by deciding this case.
S. G. Lippman: I would say that it would be of great aid to the Labor Board to interpret 14(b) and give it some definitive meaning, but I would also say that in the final analysis the determination of whether a service fee arrangement comes within 14(b) or the outside of scope of 14(b) and therefore, a protective kind of activity should be made by the Labor Board which is expert not only in the conduct presumably but also in the interpretation of a statute; 14(b) has to be accommodated to the rest of the act.
Potter Stewart: Well, let's assume a State has a law prohibiting the union shop in the purer sense to that word, I choose whatever the language you want for the statute, and that the highest court of the state says this is all it means. It means this and nothing more and nothing less. Do you think it's up to the -- do you think the Labor Board then have the power of saying, well, --
S. G. Lippman: I would say and certainly --
Potter Stewart: Do you think that means something else and you have to --
S. G. Lippman: I would say sir if I understand your question correctly, in a situation where it is absolutely clear beyond any arguable reason.
Potter Stewart: That's my assumed case, yes?
S. G. Lippman: That there I believe a State could outlaw or could prohibit the enforcement of that particular clause, but by an injunction, but where there is -- but where there is a great deal of doubt as to whether or not, I mean taking the reasoning of the Colorado Supreme Court, but where there is substantial doubt of substantial uncertainty where the law has been undeclared, then I think only the Labor Board can make that determination. I don't believe that the principle differs markedly from the principle in any other preemption case. If it is the preemption doctrine that even where the law is well established where the Labor Board has set it down as well established that the federal government does not have jurisdiction, then the State has jurisdiction. It would not be necessary to go to the labor board. I'm endeavoring to apply the same principles which this Court would apply in any other kind of a preemption case. Now it seems to me that this Court has in a number of cases indicated that 14(b) does not stand in the way of the application of the preemption doctrine. It's done so recently in the Curry case, which came before this Court where the state of Georgia sought to enjoin activities seeking to obtain a closed shop. This Court held the application of the preemption doctrine and cited Garmon. This Court in --
William J. Brennan, Jr.: Mr. Lippman, I really don't understand that in light of your reliance on Curry, while you conceded with Justice White with even in the crystal clear case, State Court granted an injunction against the enforcement of the act.
S. G. Lippman: Well --
Byron R. White: Does the conduct certainly have been unfair labor practice in that attempt?
S. G. Lippman: Well, the conduct is an unfair labor practice with – I frankly -- I don't think anything anyone knows except as we have learned from this Court as to whether or not there is any kind of jurisdiction --
William J. Brennan, Jr.: Do you find anything in Curry which suggests that we should have made that confession?
S. G. Lippman: No sir I find nothing in Curry which indicates that. As a matter of fact, based on all the indications that I know of, it appears that the State has no authority at all to act in that field except to declare the law.
William J. Brennan, Jr.: Well, I didn't mean to put words in your mouth.
S. G. Lippman: Yes, but I was -- I just wondered whether or not if there was to be any area -- if there was to be any area, it is in that area in which there would be no doubt at all, but even there I speak with uncertainty as to just what the authority of the State Court is, but surely I don't have to go that far and I only contend to this proposition surely in a situation of this kind where there is substantial doubt.
Byron R. White: About what?
S. G. Lippman: As to whether or not a service fee arrangement comes under 14(b).
Byron R. White: Or under the State Law. Do you think there is any doubt in this case that this kind of arrangement is barred by the Florida Law.
S. G. Lippman: By the Florida Law itself; well, the Supreme Court of Florida said it was barred by [Inaudible]
Byron R. White: And you conceded it in moving to dismiss.
S. G. Lippman: No, we didn't concede that moving to the --
Byron R. White: Well, I think for the purpose of your motion to dismiss it. But --
S. G. Lippman: Well, we filed a -- we filed a motion. Our motion to dismiss was also that our conduct did not come -- would not prohibited by the State Law. It was a matter of interpreting the State statute too, but the question is not so whether or not our conduct to be condemned by the State Law but the question is whether our conduct would be condemned by Section 14 (b) because whatever validity that State Law may have in the field of interstate commerce is dependent on Section 14 (b).
Hugo L. Black: Suppose 14 (b) had never been adopted what would you say then?
S. G. Lippman: If 14 (b) had never been adopted again I would say in my judgment there would not been any doubt that appeal was completely preempted.
Hugo L. Black: Why?
S. G. Lippman: Because –-
Hugo L. Black: Preempted –-
S. G. Lippman: Yes the appeal would be --
Hugo L. Black: What would you say about the legality of the agreement as far as federal law is concerned -- [Inaudible] had not been adopted –-
S. G. Lippman: It would appropriately lawful agreement.
Hugo L. Black: [Inaudible]
S. G. Lippman: Yes, if I understand your question whether or not an agreement for a service fee arrangement whether or not that that would have been --
Hugo L. Black: If you are making service free arrangement with the employer that might be one thing, making a service fee employment for employee who do not belong your union might be another.
S. G. Lippman: Well in case sir, we have a service fee arranged with the employer I --
Hugo L. Black: Which is to be paid by the employee who does not want to pay it?
S. G. Lippman: -- which should be paid employee sir in order to defray the cost of collective bargaining. There isn't any doubt about its validity under the Federal law. The only question which is raised there, was a question of 14 (b) because quite clearly if one could justify under it Section 8(a)(5) because the union is a bargaining agent has the power and the authority to provide for its own operations as exclusive bargaining agent and in any event it would undoubtedly be saved by Section 8 (a) (3), which is a much lesser kind of an arrangement, which 8 (a) (3) contemplates. So I would have no doubt that the service fee would be lawful as a matter of Federal Law. I might say however that the only question under the Federal Law would be as to whether or not in fact the service fee was a sincere effort to defray the cost of collective bargaining or whether or not it was an effort of coerce employees into union, but this is a question of fact which the labor board would have to make a determination.
William J. Brennan, Jr.: Well, suppose you had a record here that told us [Inaudible]
S. G. Lippman: Sorry sir.
William J. Brennan, Jr.: Suppose we had a record here and you told us we don't, showing that union revenues was spent for other purposes beside those that [Inaudible] to collective bargaining.
S. G. Lippman: In that case sir there would be a surcharge, there would be a violation of a fiduciary relationship, violation of trust, the money could be recovered. This money can only be used for collective bargaining purposes and not for any institutional purpose.
Potter Stewart: You call this a, very carefully a service fee provision or a service fee arrangement all the way through. Let's assume that it was not that, but that it was an agency shop clause as it would be is titled of the jurists in most obvious kinds similar to the General Motors post provision. What do you think, do you think that would, a State could prohibit that under 14 (b)?
S. G. Lippman: At this point I part to company with the Solicitor. I do not believe the State would the authority to bar that under Section 14 (b) and the reasons are these. I believe that Section 8 (a) (3) meant what it said that the -- it is perfectly lawful and permissible for the union to enter into a contract requiring membership in a union and that 8 (a) (3) is a lot more than agency shop. We have thousands of contracts throughout the country requiring a union shop arrangement, requiring employees to join union after 30 days of employment. Now, the only problem we have there is that the union shop cannot be enforced in such a way as to jeopardize the employee's job rights, so long as he continues to pay his union dues, but that does not mean that he does not have the obligation that the employer does not have the obligation to see to it that the employee joins the union otherwise Congress just did not say what it meant. One cannot read 8 (a) (3) except by being impressed as if that he permeated with the idea of membership in the union as a condition of employment, or the base indicate that this is a compromise between a closed shop and a union shop. Now the argument that 14(b) therefore is also an agency shop prohibition, stems from that kind of a fallacy, that 8 (a) (3) is nothing but an agency shop, but if 8 (a) (3) were in fact as I believe it to be a union shop, but with qualifications as to how you can administer it, then the entire argument would fall because then you could read 14(b) in it's exact language namely giving the state's authority only to prohibit membership in the union and not to prohibit any kind of a fee payment. I believe the mistake has been made as result of the misinterpretation of the Union Starch case and Radio Officer decided by this Court, because in all of those cases you had no problem at all about the employee being a member of the union. In my judgment, in my judgment an employee who says I refuse to join the union, but I would pay you dues, that employee can be discharged under 8 (a) (3) because he does not have a willingness to join.
Potter Stewart: He can be.
S. G. Lippman: Yes sir. Otherwise 8 (a) (3) is going to be completely emasculative, but you cannot impose conditions beyond that. There are two conditions you can impose. One, he must show willingness to join the union, which is basic, and thereafter he must pay his union dues and initiation fees. To read an agency shop out of 8 (a) (3) means that Congress just did not know how to state its simple principle and I believe this is the error which people are falling into.
Byron R. White: Mr. Lippman you said that there was nothing in the record indicating what the amount of these payments were to be?
S. G. Lippman: No I said there was nothing in the record sir, I ought to say which in anyway raised the question of the reasonableness of the fee, that the only question which was raised is whether or not one penny could be obtained.
Byron R. White: But we are I suppose free to consider the allegations of the complaint which you didn't controvert in this respect as to -- that these payments would be equivalent to initiation fees and monthly dues.
S. G. Lippman: That's correct sir.
Byron R. White: And so we can accept those facts anyway.
S. G. Lippman: Yes sir you can accept those facts, but whether or not the initiation fees or the equivalent would be used for any other purpose, there you have -- there you must also be faced with the proposition --
Byron R. White: Well there's nothing in the record either way on that, whether the union spent -- they did or did not spend any money for other than collective bargaining.
S. G. Lippman: Yes you do have a record if my may say so sir, because the contract itself says it can only be used for the purpose of defraying costs in connection with collective bargaining. And there is no allegation that the money could be or was used in any other respect, and this is the only way in which the union can use the money.
William J. Brennan, Jr.: That is the only way it can use to sue. That's the question I put to you is whether there is anything in this record regarding the expenditure of union revenues and growth, is there anything which indicates that all of the union revenues and growth whether service fee or otherwise are all expended for collective bargaining purpose?
S. G. Lippman: There is nothing in the record in that respect sir.
William J. Brennan, Jr.: Well you've asked us I understand it, to consider this record as if all union revenues, inclusive of the service fee revenues, are all used for collective proper bargaining purpose and nothing else.
S. G. Lippman: That's right and surely.
Potter Stewart: But there is nothing in the record to show that, is there?
S. G. Lippman: Well there is nothing in the record to show the contract.
Potter Stewart: Well, we know the facts of life though.
S. G. Lippman: Well but we say though -- but we say so sir with respect to the particular sums collected as service fees; there, there is -- there if I that only leave one thought it is this; that, that money can only be used for collective bargaining purposes.
Potter Stewart: Well this means then that these people are paying a larger than their proportionate share of their collective bargaining expenses.
S. G. Lippman: No sir, it does not mean that, because if they were in that position, they would be in the same position that the Board was in the Holman case. They could then come in and object and enjoin the collection of the fund and make sure that all employees were paying the same sums of money for collective bargaining purposes. This is another question entirely, this is a question of the administration to think, but the sole question we have and we must assume that the sums are reasonable and that the sums are only to be used for service fee arrangements and nothing else.
Byron R. White: [Inaudible] do establish that the member and the non-members in equivalent position insofar as his – the financial charge to him is concerned.
S. G. Lippman: Insofar as the charges concerned to him, but not as to the purpose for which the money could be used. The non -- the member paying money sir, is money to be used for institutional purposes. There would be no restriction, but the nominee member, his money could only be used for collective bargaining purposes.
Byron R. White: Well this may mean that this is even more burdensome than the union shop, I think?
S. G. Lippman: I don't think so, because he is getting, he is paying -- he is paying only what he should pay as a member of the bargaining unit.
Byron R. White: In any event, the same money comes out of the pocket of the member and the non-member.
S. G. Lippman: Well the same sum, but the purpose --
Byron R. White: All right, that's all. That was my only question.
S. G. Lippman: Yes, sir.
Earl Warren: Mr. Weksler.
Bernard B. Weksler: Mr. Chief Justice and if the Court please, in the course of this case which I have handled from the inception down in Miami, I have heard two startling propositions advanced by the union. One was advanced just before this Court a moment ago, the effect that Congress did not know how to state a simple principle. The second startling comment was in the brief that was filed before this Court seeking the writ of certiorari when the union boldly stated in labor relations as in all other aspects of political life, the power of the purse strings is the power to control. That was stated in the petition for writ of certiorari, where the question that was presented to this Court and the Court considered in granting the writ of certiorari, was not a question pertaining to a service fee arrangement, as the union is now seeking to name this particular device or stratagem or gimmick to try circumvent Section 14(b) and the right-to-work laws of the State of Florida. The question presented to this Court in the petition for the writ of certiorari was whether the Florida Supreme Court misconstrued Section 14(b) of the Taft-Hartley Act in holding that it authorizes the states both to prohibit and to regulate an agency shop clause in an interstate labor contract. After this Court granted certiorari, and as I understand the rules of this Court, the certiorari is to be limited to the questions presented in the petition for writ of certiorari, then the union switched its attack and now refers to a service fee arrangement, which is supposed to be something separate and distinct from an agency shop. And I will quote the eminent Solicitor General when he before referred to a question from Mr. Justice Brennan that there is no difference between an agency shop and an union shop and I believe he labeled it in Latin as “Tweedledum, Tweedledee.” I will say that a service fee arrangement is the same thing as an agency shop for arrangement on the basis of the record that was presented to the Florida Court and the record that is before this United States Supreme Court. The record clearly shows, as Mr. Justice White observed the complaint. All we have before this Court and all we had before the Florida Supreme Court was a complaint, wherein the complaint referred to an agency shop provision, wherein the complaint had affixed to it as exhibits, a so-called important notice to employees which is on page 7 of the record, and also had affixed to it as an exhibit on page 8 of the record, the particular provision in the union contract referring to an agency shop clause. Nowhere in the contract is there a reference to a service fee clause, but only a reference to an agency shop clause and the petition for writ of certiorari to this Court in 19 places in the petition for writ of certiorari and the brief they referred to an agency shop. Now, what has the union asked for non-union employees of Food Fair to do? They have told these employees that you do not have to belong to union if you want to work here for Food Fair. We very graciously say you don't have to belong to union, but if you want to keep on working here as a condition of employment, you must pay to the union the same amount of money that the union member will pay. And because some of the employees of Food Fair may not be too literate, the union very graciously posted an important notice to the employees to explain the agency shop to these employees and stated, because many of you, which notice is page 7 of the record, because many of you may not be too familiar with the meaning and purpose of an agency shop, a few words of explanation may be in order. And they explained that under an agency shop that even though the Union and the Company have agreed that you may not have joined the union, you are obligated under the provisions of the agency shop to pay an initial service fee, which is the equal of the initiation fee for union members and a monthly service fee, which is equal of the monthly dues for those who voluntarily become union members. This is the same provision that is in the General Motors case. They are asked to pay the same amount of money as union members, which is more onerous than the situation that you have with a person who voluntarily becomes a union member. Now many people, the majority of the people in the State of Florida and in 19 other right-to-work states, have by election determined that they do not wish to be members of the union. That unionism is a matter of voluntary choice, is a voluntary freedom. I believe if a person wants to join the union, they have all the right in the world to join the union and they should be able to join the union if they so desire, but if at the same time, if a person wishes to refrain from being a member of the union, that person should also have that right. However, what is being proposed actually by the union in this particular case is that after the Supreme Court in three cases has upheld the constitutionality of the right-to-work laws of states, has now said that your efforts, you work has all been in vain, because even though states may have right-to-work laws and even though it was the intent of Congress in Section 14 (b) to permit states to continue to have right-to-work laws, the union has now said you can forget those right-to-work laws, you can forget the congressional intent, because now we have come up with a new arrangement, a service fee arrangement whereby, we might say to the union member or to the employee, you don't have to pay the same amount of money as a union member, you just have to pay a service fee. Maybe the service fee might be ten cents less than what a union member would have to pay. Maybe we can setup an elaborate bookkeeping or accounting system, whereby we will say the money that came from employee X, who is a non-union member, will be used to pay the cost of collective bargaining. The money that comes from employee Y, who is a union member that money we will use for political contributions, we will use it to pay nice big salaries, we'll use it to buy a building, we'll use it, we will use it for contribution to some worthwhile charity. How is the average union employee or the average non-union employee able to determine what portion of this so-called service fee which is being exacted from him or her without her concern, how can they determine whether or not that is being used for collective bargaining purposes.
Hugo L. Black: May I ask you a question?
Bernard B. Weksler: Yes Mr. Justice.
Hugo L. Black: Let us assume as I understand your challenges, the challenges on the basis of this statement and everything else, let us assume they had provided in the contract that they must pay the cost of collective bargaining when they are representing it and they had figured out from last year [Inaudible] was so much that they would be required to pay that as a fee only for collective bargaining, what would you say to that?
Bernard B. Weksler: I would say sir that they cannot do that. I --
Hugo L. Black: What would be the argument on that?
Bernard B. Weksler: The argument on that is the fact that the State has enacted a right-to-work law, which says if a person does not have to be a member of the union, and which would also mean that the person does not have to financially assist the union if that person does not wish to. I say that the unions have been entrusted by Congress with being the exclusive bargaining agent of all the persons in the bargaining unit that that is something that the unions themselves have sought and asked by Congress that the unions in becoming the exclusive bargaining agent for every employee who is in the bargaining end and has actually now deprived the non-union employee of the right to be able to contract and bargain for himself, for herself, and in this particular instance, even in the contract which is affixed to the complaint, we have a situation, one of my clients is a woman who has been working for Food Fair for over eight years who would have a certain amount of substantial seniority. This contract, which they allege gives people many benefits, this contract specifically provides in Section 3, page six of the contract which is on page 13 of the record, specifically provides that on layoffs and transfers, stewards, union stewards shall enjoy super seniority. The chief steward in each store shall be the last employee to be transferred or laid off. I don't know how many stewards, if a Food Fair store has 30 employees and 20 of them are union employees and ten are non-union, maybe the 20 will be designated as stewards, the other --
Hugo L. Black: Does that have any relevance to the [Inaudible]
Bernard B. Weksler: No, it has a relevancy in this sense sir, only in the sense, and they talk about benefits that are being given by a contract and as a result that anybody who benefits by it should pay for it. I would dispute the fact that it necessarily means that there is a benefit to the non-union employee by virtue of a collective bargaining agreement having been entered into.
Hugo L. Black: It is your position that get the issues a little more confused than they have been, what was the -- you have a situation where its agreed that Congress has selected for its own purpose one reason, the majority of unions, if they are majority that represent all the employees as bargaining agents. I suppose there was a -- figured out exactly what the cost of that bargaining union would be and that would you say that the National Labor Relations Board did not approve such a provision on the contract?
Bernard B. Weksler: Yes sir, under the National Labor Relations Act, because now is the only obligation that can be made upon an employee, is the obligation to pay periodic dues and initiation fees. This would not -- that is provided for in Section 8 (a) (3). Now this would not come within that particular provision, and I can refer the Court to a case decided by the National Labor Relations Board called the Hughes II Company case, wherein you had several locals within a union, one was a white local, one was a colored local. The white local was paying regular dues and fees into the union. The colored local was not paying any dues and fees, and the union said that it costs us so much money to take care of grievances and arbitration, we are now going to setup a $15 fee for grievance and we are going to setup an arbitration expense of $400 and those of you who are non-union members will have to pay that money into the union. The National Labor Relations Board almost revoked the certification of the union and did not do it only because of the fact that they revoked the certification of the union for seeking to get this type of an assessment; that, that would have the effect of putting the colored local, deprive the colored local of the certification, so they gave them a warning and told him that they could not have that.
Hugo L. Black: [Inaudible]
Bernard B. Weksler: Yes sir. This case fits -- there is a case that came out of the Third Circuit involving oddly enough the National Labor Relations Board and Food Fair wherein the union went to the Food Fair employees and asked all Food Fair employees to come up with a $15 strike assessment, this was not a period due, it was not an initiation fee. Some of the employees at Food Fair refused to come up with a $15 strike assessment and the union sought to have them discharged. The National Labor Relations Board held that this was an unfair labor practice, that the union has no right to obtain any sort of an assessment or charge any assessment, because under 8 (a) (3) they are only able to seek to collect periodic dues which are periodic membership dues and an initiation fee which applies to initiation as a member.
Hugo L. Black: I'm pursuing this inquiry for this reason, there is a question of preemption.
Bernard B. Weksler: Yes Mr. Justice.
Hugo L. Black: If you are wrong with reference to the fact that your argument, that such an agreement could be held valid under the National Labor Relations Act by the National Labor Relations Board, that would be a serious, more serious question here of preemption that you have assumed, would there not?
Bernard B. Weksler: Yes sir, if the National Labor Relations Board would feel that this came within their jurisdiction that certainly would be a credit.
Hugo L. Black: That is one of the questions raised.
Bernard B. Weksler: As far as we are concerned Your Honor, it has not been raised by the record. It has been raised in the brief after this Court granted the petition for writ of certiorari. And the Solicitor General of the National Labor Relations Board have already stated not only before this Court orally today, but also in their brief filed in the General Motors case, that the board is of -- and I quote from page 13 of their brief that in preferring to an agency shop that the board is of the view that such an arrangement meeting an agency shop could be regulated by the states under Section 14(b) of the Act. Now I do not see any type of a difference, frankly between the so called service fee and the agency shop because Congress.
Potter Stewart: [Inaudible] exhibits next to them show that the payments here were exactly the same as initiation fees and dues.
Bernard B. Weksler: Yes sir, I very gladly not even have to discuss anything relative to a service fee.
Potter Stewart: And a service fee might or might not be an entirely different case.
Bernard B. Weksler: That's right it is not -- and well, I certainly hope that it would not be necessary --
Potter Stewart: I mean the service fee where it was shown, where it was shown or whether it was not shown that this was for collective bargaining purposes only and it wasn't tantamount to membership. Your point is that, your case is that I gather that the payments here were the same thing as initiation fees and dues.
Bernard B. Weksler: Yes I would say this was an agency shop.
Potter Stewart: Therefore they come under the meaning of the word membership in 14(b).
Hugo L. Black: My question is mainly this. It's doesn't make it what they call this or what you call it, if it's within the ambit of what the board will have jurisdiction to determine is a valid arrangement, I would assume that its pretty well settled by some of our cases that they would be ones that pass on the bona fide of the claim and as to the service fee.
Bernard B. Weksler: Mr. Justice Black that raises a question in my mind because as you will recall the 1946, this Court in the case of AFL versus Watson pertaining to the same constitutional provision that we have here in the State of Florida, stated that it is up to the state, that the state Court must first interpret and construe its own constitutional provision, so I would humbly submit to this --
Hugo L. Black: Well, I agree to that. We are bound by what the State of Florida says this does insofar as Florida is concerned, but not insofar as the powers of the National Labor Relations are concerned in connection with the scope that Florida gives this Act.
Bernard B. Weksler: Well it might come up Mr. Justice Black, but the question as to whether or not a service fee arrangement is embraced within the Florida, right to work provision and I believe that possibly under the construct --
Hugo L. Black: Suppose it were, suppose it were.
Bernard B. Weksler: Yes, sir.
Hugo L. Black: Suppose Florida had attempted to forbid a service fee arrangement and suppose it would be held that under the National Labor Relations Act that power, the [Inaudible] of the kind is in the board, what would go with your Florida Act in that respect?
Bernard B. Weksler: I would say that the board would still have to ask the Florida Court or hold off until such time as the Florida Court has determined whether or not the service fee arrangement came within the proscription of the --
Hugo L. Black: Suppose It does, suppose it comes within the prescription of that -- proscription of that constitutional provision, but comes within the allowable limits of the jurisdiction of the board to approve it is right, what would you say there?
Bernard B. Weksler: I would say then that the board would go ahead and act and I would say also like Mr. Justice Stewart commented on the Indiana thing, that maybe the Indiana Court was wrong. I think that the NLRB would be wrong. And then it would just be a situation of going up to the appropriate circuit and determining whether the National Labor Relations Board was right. I don't believe that the Act permits or authorizes a service fee arrangement, but as pointed out by Mr. Justice Brennan, it actually is not -- Mr. Justice Stewart, it actually is not in this appeal, although it has been argued. I say to conclude very, very briefly that what has happened over here is that the unions now are seeking to usurp the powers of government by taxing people who don't wish to belong to a union or finance or assist a union by taxing them with the cost of the union. And this was never the intent of Congress, this is not to be permitted by the unions, and that a person has a voluntary choice to be member of the union and that the slogan, “The land of the free” is not to be substituted by the unions to be called the “Land of the fee.”