Court Opinion

ID: 9011476
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:56:35.891366+00
Date Added: 2024-06-11T17:11:23.429268
License: Public Domain

BRUNETTI, Circuit Judge,
dissenting.
The only issue before us in this case is the constitutionality of the “deduction-escrow-refund” procedure used by the District and the Union to collect agency fees from the nonunion teachers, the agency fee payers. The precise question is whether the District can deduct the full union dues from agency fee payers’ paychecks in September and not pay a rebate to the objecting fee payers until December 7 at the earliest. To state it another way, can the District deduct nonchargeable amounts from fee payers’ paychecks and hold them in escrow for four months?
As the majority notes, a union may satisfy the requirements of the First Amendment by adopting procedures “such as advance reduction of dues and/or interest-bearing escrow accounts.” Ellis v. Brotherhood of Ry. Clerks, 466 U.S. 435, 444, 104 S.Ct. 1883, 1890, 80 L.Ed.2d 428 (1984). However, Ellis did not set forth the standards that reviewing courts should apply to decide when the use of such procedures is justified.
In Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986), the Supreme Court addressed the first of these options, advance reduction of dues, and identified three conditions that an advance reduction procedure must satisfy. First, it must provide nonmembers with an “adequate explanation” of the basis for calculating the agency fee so that potential objectors have the means to determine whether that fee is in fact fairly calculated. Id. at 310,106 S.Ct. at 1077. Second, if a nonmem*1378ber objects to the calculation, the procedure must provide “a reasonably prompt opportunity to challenge the amount of the fee before an impartial decisionmaker.”- Id. Finally, the procedure must provide “an escrow for the amounts reasonably in dispute while such challenges are pending.” Id.
The procedure at issue here, however, is not “an advance reduction of dues” (the first Ellis option), but rather 'an “interest-bearing escrow account” (the second Ellis option). The District deducts from the fee payers’ paychecks the full amount of union dues; it does not provide for an “advance reduction” as did the teachers’ union in Hudson. For this reason, the majority’s statement that “this is the type of ‘appropriately justified advance reduction’ approved by the Court in Hudson ” is erroneous. We therefore cannot directly apply the Hudson criteria to this procedure. Because the Supreme Court has not set forth the standards that reviewing courts should use to judge the validity of Ellis interest-bearing escrow accounts, we must do so ourselves.
The majority opinion sets forth a two-pronged test. First, the Union must provide an “adequate explanation” for using the deduction-escrow-refund procedure: “The union must show that the preferred method of doing things is impossible or, at any rate, far most costly or cumbersome.” The majority notes in n. 5 that this “preferred method” is the “advance reduction” procedure itself, because this procedure is less of an infringement on nonmembers’ First Amendment rights. If the Union satisfies the “adequate explanation” requirement, it must then make its procedure as fair and rapid as possible by satisfying the conditions that Hudson imposes on advance reduction plans. I agree with the second prong, but I disagree with the majority’s statement and application of the first prong.
The issue involved has been defined by the court in Abood, that nonunion employees do have a constitutional right to prevent the Union’s spending a part of their required service fees to contribute to political candidates and to express political views unrelated to its duties as exclusive bargaining representative. Hudson, 475 U.S. at 302, 106 S.Ct. at 1073. The objective in devising a procedure for collecting the appropriate amount from nonunion employees must be to devise a way of preventing compulsory subsidization of ideological activity by employees who object, without restricting the Union’s ability to require every employee to contribute the cost of collective-bargaining activities. Id. at 302, 106 S.Ct. at 1073.
The “agency shop” is already a “significant impingement” on employees’ constitutional rights. Ellis, 466 U.S. at 455, 104 S.Ct. at 1896. The First Amendment requires that the fee collection procedure be carefully tailored to minimize further infringement on agency fee payers’ rights, and the nonunion employee whose First Amendment rights are affected must have a fair opportunity to identify the impact of government action on his interests and to assert a meritorious First Amendment claim. Hudson, 475 U.S. at 303, 106 S.Ct. at 1074. The District and the Union accordingly have a responsibility to provide procedures that minimize the impingement and that facilitate a nonunion employee’s ability to protect his rights. Id. at 307, n. 20, 106 S.Ct. at 1076, n. 20. Advance reduction of dues and/or interest-bearing escrow accounts are acceptable procedures. Id. at 304, 106 S.Ct. at 1074.
As to the second prong, the procedure adopted by the District and the Union meets the Hudson tests because the notice given on October 15 gives the fee payers an adequate explanation of the basis for the Union calculation of the fee and the arbitration procedure provides a prompt and fair opportunity to challenge the calculation -before an independent decisionmaker. Where the procedure fails is that it is not “carefully tailored to minimize the infringement” on nonmembers’ First Amendment rights, because for four months it deprives the fee payer of amounts that are to be refunded. The District and the Union fail to justify their failure to use procedures which they have already tried or considered which impinge less on the fee payers’ rights.1 In fact, the procedure as *1379adopted is obviously for the convenience of the District and the Union with no consideration of the infringement on the fee payers’ rights.
The majority asserts that “the end of September is the earliest point at which the [Union] can identify agency fee payers and notify them of their right to a refund,” and that therefore it would be impossible or at least highly impractical to reduce nonmembers’ dues in advance. The majority also notes in n. 7 that the Union could further minimize the burden on agency fee payers by assuming that “those teachers who opted to be agency fee payers in one year would want to continue to be agency fee payers in the next,” but that the Constitution does not require the Union to take on the burden of doing so.
However, the evidence indicates that the Union already operates under this assumption, and that therefore it cannot provide an “adequate explanation” for failing to use an advance reduction procedure. The Union knows at the beginning of each school year who the existing agency fee payers are; it just doesn’t know which of the new teachers will decide to join their ranks. See Stipulation of the Parties at 16 (“new teachers are typically given 30 days to decide whether to join the Union or become a fee payer.”) (emphasis added). The Union assumes that existing fee payers will continue to desire that status. See Exhibit 9 to Stipulation at 166 (“[a]t the beginning of the fiscal year, CTA shall place into an independently-managed interest-bearing account all CTA and NEA agency fees received from fee payers.”) (emphasis added); Exhibit 10 to Stipulation at 168 (“[f/rom the start of this school year, CTA has been placing all CTA and NEA agency fees received into an interest-bearing escrow account.”) (emphasis added). Clearly, then, the Union could use an “advance reduction” procedure for existing fee payers and a deduction-escrow-refund type procedure for new teachers who later choose to become agency fee payers.
The Union proffers several reasons for its refusal to use such a system. First, it states that it doesn’t know teachers’ new addresses until the end of September. This would not hamper the operation of the two-tier procedure, because the Union doesn’t need to know addresses to reduce the deduction from the agency fee payers’ paychecks.
Second, the Union states that such a procedure would be problematic because several school districts have in the past refused to deduct a different amount for agency fees than for agency dues. However, this refusal alone cannot satisfy the “adequate explanation” test. This is like the District refusing to follow Brown v. Board of Education, 349 U.S. 294, 75 S.Ct. 753, 99 L.Ed. 1083 (1955), because integration imposes too much of an administrative burden.
Third, the Union claims that the use of a two-tier system would require that Hudson notices be sent at least thirty days prior to the first deduction so that the identities of the objecting fee payers could be determined. Not so. While the Hudson notices would be required to determine which fee payers objected to the Union’s calculation of the advance reduction, they would not be required to calculate the advance reduction and apply it to existing fee payers’ paychecks. Operating the two-tier procedure would require only that Hudson notices be sent out at the same time they are now.
*1380Fourth, the Union states that the “only other option” would be to send out the notices on October 15 and delay collection of the fee until December. Again, not so. Collection of the appropriately reduced fee could begin immediately as the parties have stipulated to what the October 15 notice is to contain including the estimated chargeable and estimated nonchargeable expenditures of the Union. See Stipulation of the PaHies at 3. Furthermore, the Union is already “deprived” of the agency fees for four months of each year (because the fees go straight into escrow and do not come out until rebates are paid), so the argument that a two-tier system would cause such an effect does not hold water.
In sum, the Union has not justified its failure to use such a procedure. The majority baldly asserts that “the Constitution [does not] require[] the school district and the Union to bear the additional administrative burden of operating a two-tier system” without citing any evidence that such a system would impose any extra burden. There are other procedures recognized and rejected by the District and the Union which would minimize the infringement on the fee payers, and no adequate reasons other than convenience to the District and the Union have been advanced for failing to use those less impinging systems.
The District’s deduct-escrow-refund procedure fails to protect the fee payers’ constitutional rights as identified in Hudson, and the district court’s decision finding the plan constitutional should be reversed.

. The District and Union developed this deduct-escrow-refund procedure after trying and reject*1379ing an advance reduction of dues system, and considering and rejecting a system using an October 15 notice and delay in collection of the fee until the end of December. See Stipulation of the Parties at 16-17.
The advance reduction system was dropped as unworkable because several school districts refused to deduct a different amount for agency fees than for member dues, and, further, the reduced fee would require Hudson notices at least thirty days prior to the first deduction so that the identity of the objecting fee payers could be identified. Id. at 17.
The delayed collection option was not adopted because it would deprive the unions and affiliated locals of any agency fees for four months each year and, in addition, fee payers would have to pay a much larger amount each month for the rest of the school year to recoup amounts owed for the four months when deduction did not take place. The Union was concerned that this unequal deduction (compared with union members fees deducted over ten months) might raise equal protection claims. Id. at 17-18.