Court Opinion

ID: 9440352
Source: CourtListenerOpinion
Date Created: 2023-08-03 16:40:11.486529+00
Date Added: 2024-06-11T17:27:32.373475
License: Public Domain

LYNCH, Circuit Judge,
joining and concurring.
The National Right to Work Legal Defense Foundation, representing non-unionized Maine state employees, brought this case in the hopes of persuading the Supreme Court to resolve an issue that the Court left unanswered in Lehnert v. Ferris Faculty Ass’n, 500 U.S. 507, 111 S.Ct. 1950, 114 L.Ed.2d 572 (1991), and on which the circuit courts differ.
Unions that take on the role of exclusive bargaining representative according to the terms of a collective bargaining agreement owe a duty to bargain on behalf of all employees. Indeed, once the union has been certified as the exclusive bargaining representative, the employees may not negotiate independently with management. Unions secure collective goods for those employees, such as higher wages, benefits, and job security. See generally D. Leslie, Labor Bargaining Units, 70 Va. L.Rev. 353, 354-60 (1984). All employees enjoy at least some of the fruits of a union’s efforts, but only union members pay union dues.
Union security mechanisms such as agency shop agreements combat this free rider problem by ensuring that nonmembers who benefit from the union’s collective bargaining activities pay their fair share to support the union. Id. at 379; see also Commc’ns Workers v. Beck, 487 U.S. 735, 747-54, 108 S.Ct. 2641, 101 L.Ed.2d 634 (1988) (discussing role of free rider problem in legislative history of the National Labor Relations Act and the Railway Labor Act). An agency shop agreement requires “that employees, as a condition of continued employment, must either become members of the union, with the attendant dues obligation, or pay the union a service fee.” 2J. Higgins, The Developing Labor Law 2143-44 (5th ed.2006). That fee, as is true in this case, is typically less than the fee union members pay and *67covers the cost of those common benefits that non-union employees have derived.
Compelling government employees to pay union fees raises constitutional issues. The First Amendment forbids a public employees’ union from requiring payment by nonmembers of fees used to support ideological activities not “germane to its duties as collective bargaining representative.” Abood v. Detroit Bd. of Educ., 431 U.S. 209, 235, 97 S.Ct. 1782, 52 L.Ed.2d 261 (1977). The limits of “germaneness,” which lie between the poles of union expenditures for purely ideological activities and expenditures for core collective bargaining activities, lead to much litigation between unions and nonmember employees. See, e.g., R. Gorman & M. Finkin, Basic Text on Labor Law 921-27 (2d ed.2004).
Maine law allows agency shop agreements, as the National Labor Relations Act permits the state to choose to do. Opinion of the Justices, 401 A.2d 135,147-48 (Me.1979); see also 29 U.S.C. § 152(2) (exempting government employers from the NLRA); Davenport v. Wash. Educ. Ass’n, — U.S. -, 127 S.Ct. 2372, 2376, 168 L.Ed.2d 71 (2007). The Maine State Employees Association, Local 1989, Service Employees International Union, AFL-CIO-CLC (“Local 1989”), includes in its calculation of expenses chargeable to nonmembers some portion of the affiliation fees the local pays to SEIU, its national parent union. The agency fees may include only that portion of these so-called “extra-unit expenses” for activities “germane” to the local bargaining unit.
The actual sums involved here help set the context of this dispute. As of July 2005, members of Local 1989 paid biweekly union fees of $18.20. Nonmember employees subject to the “full fair share” agency fee were charged $8.94 each biweekly pay period. Plaintiffs themselves were “grandfathered” nonmembers assessed only 50% of the usual agency fees, or $4.47 biweekly, until June 2006.
A portion equal to 13.86% of the Local’s agency fees was attributable to extra-unit expenditures (i.e. affiliation fees paid to SEIU). The national union accounted for 12.08% of that sum as “professional fees and expenses.” That line item represents 1.67% of the agency fees charged to employees that did not join Local 1989. For nonmember employees charged their “full fair share,” that amounts to a charge of $.15 biweekly — or $.30 per month — for all professional services charged by the national union to Local 1989. An undefined proportion of the extra-unit professional expenses are attributable to litigation. Thus, the maximum monetary amount at issue in this case is less than fifteen cents each month to each of the plaintiffs when they were grandfathered, and less than thirty cents to other nonmembers paying agency fees.
The very narrow issue raised by this case is whether Local 1989’s agency shop fees must exclude SEIU’s extra-unit litigation expenses from the usual rule for calculating chargeable extra-unit expenses. Lehnert ruled that chargeability of extra-unit expenses is subject to “a case-by-case analysis.” 500 U.S. at 519, 111 S.Ct. 1950. Chargeable activities must “(1) be ‘germane’ to collective bargaining activity; (2) be justified by the government’s vital policy interest in labor peace and avoiding ‘free riders’; and (3) not significantly add to the burdening of free speech that is inherent in the allowance of an [agency shop].” Id. There is no dispute that the extra-unit litigation by SEIU was “germane” in that pertinent sense. The question plaintiffs present is a categorical one — are extra unit litigation expenses so different from other extra-unit expenses that they should per se be treated differ*68ently for agency fee purposes? As described well in Judge Lipez’s opinion, Leh-nert did not directly answer the question. I think the answer is, clearly, “No.”
The First Amendment is not violated by allowing extra-unit litigation expenses to be charged according to the same criteria of germaneness as other extra-unit expenses. Extra-unit litigation expenses are not analytically different from other pooled extra-unit expenses. See Int'l, Ass’n of Machinists & Aerospace Workers v. NLRB, 133 F.3d 1012, 1016 (7th Cir.1998) (Posner, C.J.) (noting that in challenge to extra-unit fees, litigation expenses were “treated separately by the parties but [are] analytically identical, as far as we can see”). The National Labor Relations Board, an administrative body with particularized expertise in administering labor disputes under the NLRA, has so held for over a decade. California Saw & Knife Works, 320 N.L.R.B. 224, 239 (1995).
The free rider problem, which justifies both local and extra-unit agency fees, exists equally for litigation costs as for other extra-unit costs. Extra-unit litigation can create common benefits or avoid common detriments. Litigation conducted by national unions frequently establishes precedent that redounds to the benefit of a union local and the employees it represents, even when the local is not a named party. For example, terms within a collective bargaining agreement may not yet have been established as having a particular meaning, and extra-unit litigation could establish a union-friendly definition. Or a local may believe that a particular practice common to its segment of an industry is an actionable unfair labor practice and contractual violation, but the national may decide for strategic reasons that a lawsuit is better brought with an extra-unit plaintiff.18 In return for these considerable benefits, a local union need pay an affiliation fee to the national. There is no reason to think, and no evidence presented by the plaintiffs to prove, that the free rider problem is eliminated simply because the common extra-unit benefit is obtained through litigation. In fact, such a position “overlooks the economic interdependence of bargaining units.” Int’l Ass’n of Machinists, 133 F.3d at 1016.
Further, if a particular extra-unit lawsuit is too remote and indirect in benefit to a local bargaining unit, or if a national union brings a suit for purposes totally unrelated to its collective bargaining duties, that problem may be addressed by a particularized germaneness inquiry. The existence of this mechanism to determine germaneness itself argues against any per se exclusion of extra-unit litigation expenses. If a case is brought to advance a political position, then the Lehnert rule itself will exclude that litigation from the agency fee.
A contrary rule would result in significant practical detriment for both local and national unions. Adopting plaintiffs’ proposed rule would lead to reducing unions’ ability to draw on funds for litigation related to collective bargaining. There would be a concomitant reduced capacity to bargain effectively on behalf of all employees. Ultimately, chipping away at the scope of properly chargeable expenses could jeopardize the income stream of unions. Cf. R. Posner, Some Economics of Labor Law, 51 U. Chi. L.Rev. 988, 1004 (1984).
Under Lehnert, the marginal burden on the First Amendment rights of non-union employees imposed by adding germane ex*69tra-unit litigation fees to the agency fee is minimal. On the facts here,19 the financial burden for extra-unit litigation costs is very small. The added burden on the plaintiffs’ expressive and associative rights could not amount to any significant diminution — let alone infringement — of First Amendment rights.
The proposed categorical rule could be viewed in another dimension. All of the affected parties need a clear set of rules by which to operate. It could be argued that a flat rule prohibiting all extra-unit litigation from being chargeable to non-union employees would be easily administrable and therefore economically efficient. But given that some of SEIU’s extra-unit expenses can be charged to nonmembers, it is unclear why the deletion of one component of that charge-back would make the system materially easier to administer. Indeed, there is no evidence in this record that any additional administrative costs are imposed by charging back germane extra-unit litigation expenses. This tracking and allocation of litigation expenses is a routine accounting matter.
A great many resources have been spent thus far on the issue here and elsewhere. Decision of this issue by the Supreme Court would provide needed clarity.

. Another benefit to a local of contributing fees to the national's litigation fund is that one day that fund may be mobilized to help resolve the local's own bargaining disputes. See Otto v. Penn. State Educ. Ass’n, 330 F.3d 125, 138-39 (3d Cir.2003).

. Hypothetically, those costs on the facts in a given case could be so burdensome, and the benefits so attenuated, that there could be a First Amendment violation. Our concern here is not with an extreme case but with whether to adopt a categorical rule.