Opinion ID: 774940
Heading Depth: 3
Heading Rank: 2

Heading: Arbitrator's Ability to Increase Agency Fee

Text: 33 Appellants also object to the Union's requirement that Class II objectors must agree that the arbitrator may either approve the United Academics, AAUP/AFT calculations or increase or decrease the amount attributable to`non-chargeable' activities. Appellants argue that a system which allows the Union to seek a higher chargeable percentage violates Hudson's requirements. 34 The district court rejected Appellants' argument and found that the system satisfied the Hudson requirements. We agree with the district court's determination. 35 Appellants fail to articulate precisely how the provision violates Hudson. Under United Academics' procedures, an impartial arbitrator is responsible for approving the Union's calculations and determining whether the amounts attributable to nonchargeable activities should be adjusted upward or downward. Appellants contend that by allowing an arbitrator to increase the agency fee, United Academics seeks to chill an agency fee payer's decision to challenge the fee determination. However, the arbitrator is appointed by the American Arbitration Association. Thus, the selection does not represent the Union's unrestricted choice. See Hudson, 475 U.S. at 308 n.21; Grunwald, 994 F.2d at 1376. Further, both parties may offer such evidence as they desire and shall produce such evidence as the arbitrator may deem necessary to an understanding and determination of the dispute. American Arbitration Association, Rules for Impartial Determination of Union Fees (Jan. 1, 1988). We do not believe the Union could successfully influence a neutral arbitrator so as to prejudice the objectors. Instead, adjustments in the chargeable amount would likely occur only if the arbitrator finds an error in previous calculations. The adjustments can either increase or decrease the amount attributable to nonchargeable activities. Based on these factors, we conclude that the provision does not violate the Hudson requirements.