August 6, 1984
PAUL H. ROBINSON, CLIFFORD OWENS, PAUL B. KELLY, ALLAN ROTH, CALVIN W. CORMAN, EARL MALTZ, ELIHU ABRAHAMS, ARNOLD GLASS, CHARLES W. UPTOM, ALEX W. WYPYSZINSKI, MICHAEL CREW, HAROLD ZAPOLSKY AND JACKSON TOBY
STATE OF NEW JERSEY, THOMAS H. KEAN, GOVERNOR, JAMES W. MASTRIANI, CHAIRMAN PUBLIC EMPLOYMENT RELATIONS COMMISSION, EDWARD J. BLOUSTEIN, PRESIDENT AND INDIV. RUTGERS STATE UNIVERSITY, RUTGERS UNIVERSITY, BOARD OF GOVERNORS, RUTGERS UNIVERSITY, STATE DEPT. OF HIGHER EDUCATION, MR. JAMES A. GORMLEY, DIRECTOR OF PERSONNEL AND INDIV., RUTGERS UNIVERSITY (CAMDEN), CHRISTINE MOWRY, DIRECTOR OF OFFICE OF EMPLOYEE LABOR RELATIONS AND INDIV., RUTGERS COUNCIL, AAUP AND MS. SANDRA WALTHER, EXECUTIVE DIRECTOR RUTGERS COUNCIL, AMERICAN ASSOCIATION, RICHARD LAITY, CHAIRMAN AND INDIV., AAUP LEGISLATIVE RELATIONS COMMITTEE, AAUP AND IRVIN J. SPITZBERG, JR., GENERAL SECRETARY AAUP, RICHARD PESKIN, PRESIDENT AND INDIV., RUTGERS COUNCIL OF AAUP; JOSEPH W. ANTONACCI, MEVERIL JONES, THOMAS GAY, JOHN RUSSELL, RICHARD H. TREXLER, A. WILLIAM ONDER, LEON MATELSKI, EDWARD JAKUBCO, MRS. DOROTHY GRAY AND WILLIAM F. GRAY V. STATE OF NEW JERSEY, THOMAS H. KEAN, GOVERNOR, JAMES W. MASTRIANI, CHAIRMAN, PUBLIC EMPLOYMENT RELATIONS COMMISSION, WESTFIELD EDUCATION ASSOCIATION, SALLY VEJNOSKA, PRESIDENT AND INDIV., UNION COUNTY EDUCATION ASSOCIATION, WESTFIELD BOARD OF EDUCATION, DR. L. J. GREENE, SUPERINTENDENT AND INDIV., ROBERT WESTKERNA, PASCACK VALLEY REGIONAL EDUCATION ASSOCIATION, DAVID T. DIERKER, PRESIDENT AND INDIV., BERGEN COUNTY EDUCATION ASSOCIATION, PASCACK VALLEY REGIONAL BOARD OF EDUCATION, LAURIE THORTON, PRESIDENT AND INDIV., EDISON TOWNSHIP BOARD OF EDUCATION, AURORA BERNARD-SALIT, PRESIDENT AND INDIV., MIDDLE SEX COUNTY EDUCATION ASSOCIATION, MARIA VERSOCKI, PRESIDENT AND INDIV., EDISON TOWNSHIP BOARD OF EDUCATION, CHARLES A. BOYLE, SUPERINTENDENT, RIDGEWOOD EDUCATION ASSOCIATION, FRANK SIDOTI, PRESIDENT AND INDIV., RIDGEWOOD BOARD OF EDUCATION, ROSEMARIE SCHUTT, PRESIDENT AND INDIV., TOWNSHIP OF OCEAN BOARD OF EDUCATION, JAMES F. JEFFRIES, PRESIDENT AND INDIV., NEW JERSEY EDUCATION ASSOCIATION, EDITH FULTON, PRESIDENT AND INDIV., NATIONAL EDUCATION ASSOCIATION, WILLARD H. MCGUIRE, PRESIDENT; ALLEN OLSEN, WILLIAM ANDERSON, PETER YULL, LARRY LAND, FRED S. SMARTT, AND WILLIAM J. HARRINGTON V. COMMUNICATIONS WORKERS OF AMERICA (CWA), GLENN E. WATTS, CWA DISTRICT ONE CWA LOCALS, 1031, 1032, 1033, 1034, 1037, 1038, 1040 AND STATE OF NEW JERSEY, THOMAS H. KEAN, GOVERNOR; WESTFIELD EDUCATION ASSOCIATION, SALLY VEJNOSKA, UNION COUNTY EDUCATION ASSOCIATION, PASCACK VALLEY REGIONAL EDUCATION ASSOCIATION, ROBERT WESTKERNA, DAVID T. DIERKER, BERGEN COUNTY EDUCATION ASSOCIATION, EDISON TOWNSHIP BOARD OF EDUCATION, AURORA BERNARD-SALIT, MIDDLESEX COUNTY EDUCATION ASSOCIATION, MARIA VERSOCKI, RIDGEWOOD EDUCATION ASSOCIATION, FRANK SIDOTI, TOWNSHIP OF OCEAN BOARD OF EDUCATION, ELIZABETH CAMPANILE, NEW JERSEY EDUCATION ASSOCIATION, EDITH FULTON, NATIONAL EDUCATION ASSOCIATION, AND WILLARD H. MCGUIRE, APPELLANTS IN NOS. 82-5698 AND 83-5533, JOSEPH W. ANTONACCI, ET AL., APPELLANTS IN NO. 82-5750, RUTGERS COUNCIL OF AAUP CHAPTERS, SANDRA WALTHER, RICHARD PESKIN AND RICHARD LAITY, APPELLANTS IN NO. 83-5569, NATIONAL AMERICAN ASSOCIATION OF UNIVERSITY PROFESSORS AND IRVING J. SPITZBERG, JR., APPELLANTS IN NO. 83-5563, ALLEN OLSEN, WILLIAM ANDERSON, PETER YULL, LARRY LAND, FRED S. SMARTT, AND WILLIAM J. HARRINGTON APPELLANTS IN NO. 83-5459, COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, APPELLANT IN NOS. 83-5403 AND 83-5532
On Appeal from the United States District Court for the District of New Jersey.
Adams, Sloviter, Circuit Judges, and Teitelbaum, District Judge.*fn*
These consolidated appeals present two important questions posed by the representation fee arrangements created under the New Jersey public employee statute:*fn1 first, the constitutional permissibility under the First Amendment of the use of mandatory representation fees for lobbying activities by public employee unions; and, second, the extent of due process protections afforded to employees who object to the use of any portion of their fees to further the political and ideological stands of their bargaining representative.
The district court determined that the use of mandatory representation fees for lobbying activities by public employee unions was in conflict with the First Amendment of the United States Constitution and that the various escrow account procedures advanced by the defendant-unions were insufficient to protect the constitutional rights of non-consenting employees. Consequently, the district court enjoined the operation of the representation fee provision of the New Jersey Act and ordered that no fees be deducted from the payrolls of non-consenting employees. For the reasons developed below, we reverse the judgment of the district court, direct that the injunctions be withdrawn, and order that the matter be remanded for further proceedings.
In 1968, the New Jersey Employer-Employee Relations Act granted state public employees the rights to bargain collectively with the state employer. N.J.S.A. 34:13-5.1 et seq.*fn2 A prime purpose of the Act was to promote the state's interest in the settlement of labor disputes and the prevention of work stoppages through negotiations between the state employer and a collective bargaining representative selected by the majority of employees.*fn3 See Caldwell-West Caldwell Ed. Assn v. Caldwell-West Bd. of Ed., 180 N.J. Super. 440, 440, 435 A.2d 562, 567 (App. Div. 1981). Under the terms of the Act, a public employee union can collect dues from those employees who choose to join the union; all other members of a bargaining unit are free not to contribute to the union's expenses in any form. Nevertheless, the Act
require[s] that a majority representative of public employees which has negotiated a labor agreement covering such employees to represent the interests of all employees in the bargaining unit, regardless of organizational membership, without discrimination. Non-members of the majority organization, therefore, enjoy virtually equal benefits and protections without sharing in the costs, incurred by collective negotiations, grievance representation, and other services.
Sponsor's Statement to Assembly Bill No. 688, February 9, 1978, quoted in Robinson v. State of New Jersey, 547 F. Supp. 1297, 1301 (D.N.J. 1982); see N.J.S.A. 34:13A-5.3 ("majority representative . . . shall be responsible for representing the interest of all such employees").
This "free rider" problem was remedied by legislation in 1980.*fn4 The New Jersey statute was amended to allow a majority bargaining representative to collect a representation fee from all employees within an appropriate bargaining unit who had not joined the union. N.J.S.A. 34:13A05.5(b) directed that the representation fee
shall be in an amount equivalent to the regular membership dues, initiation fees and assessments charged by the majority representative to its own members less the cost of benefits financed through the dues, fees and assessments and available only to its members, but in no event shall such fee exceed 85% of the regular membership dues, fees and assessments.
Under N.J.S.A. 34:13A-5.5(c), unions were empowered to use representation fee funds for
the costs of support of lobbying activities designed to foster policy goals in collective negotiations and contract administration or to secure for the employees represented advantages in wages, hours, and other conditions of employment in addition to those secured through collective negotiations with the employer.
Section 5.5(c) also requires that any public employee paying a representation fee
shall have the right to demand and receive from the majority representative . . . a return of any part of that fee paid by him which represents the employee's additional pro rata share of expenditures by the majority representative that is either in aid of activities or causes of a partisan political or ideological nature only incidentally related to the terms and conditions of employment or applied to the cost of any other benefits available only to members of the majority representative.
Public employer unions are not allowed to avail themselves of a dues checkoff (the automatic deduction of representation fees from an employee's paycheck by the employer), until they have established the demand and return system required by statute. N.J.S.A. 34:13A-5.5(c). Such a demand and return system must allow for review of the amount returned "through full and fair proceedings placing the burden of proof on the majority representative." N.J.S.A. 34:13A-5.6. Employees dissatisfied with the review proceeding have a right of appeal to a three-member board consisting of a representative of public employers, a representative of public employee organizations, and a neutral member. Further appeals from this board lie to the state courts.
The consolidated appeals before the Court today involve three separate challenges to the constitutionality of the 1980 amendments brought by individual faculty members at the state-owned and operated Rutgers University, individual teachers employed by five different school boards in New Jersey, and individual employees of the state.*fn5 The defendants are the State of New Jersey, its governor, the state public employment relations commission (PERC), and various national and regional affiliates of public employee unions.
In Robinson v. New Jersey, plaintiffs attack the representative fee paid by all faculty members at Rutgers University to the American Association of University Professors (AAUP). In Antonacci v. Westfield Education Association the challenged majority representative is the National Education Association (NEA) and its New Jersey affiliates. In Olson v. Communications Workers of America, the disputed representation fees are paid to the Communications Workers of America (CWA) as bargaining representative for four units of state employees.
Although the original actions filed in the district court challenged a broad swath of the New Jersey statute, including the authority of the state legislature to require non-consenting employees to pay representation fees, the consolidated appeals focus primarily on the authorization of lobbying by public employee unions and the demand and return systems established by the unions involved in the present appeal. In a joint opinion covering the Robinson and Antonacci cases, the district court held that "it is permissible to require non-members to contribute to the cost of collective bargaining activities." 547 F. Supp. at 1316. The court, however, found that the New Jersey statute went beyond what was constitutionally permissible in allowing the use of representation fees for lobbying activities "designed to foster policy goals in collective negotiations and contract administration." N.J.S.A. 34:13A-5.5. Pointing to the possibility of "very deep political and ideological differences of opinion" regarding the aims of such lobbying, the court concluded:
Although plaintiffs are teachers and defendants can argue that they might benefit personally from changes in these laws, plaintiffs and other non-members of the employee organizations may nevertheless oppose such legislative changes. They may oppose for political or ideological reasons; they may believe, as do many other citizens, that the legislative changes sought by the employee organizations are bad public policy even though they, as teachers, might receive certain benefits.
547 F. Supp. at 1317. The district judge entered an injunction prohibiting the unions from using any agency fees in lobbying efforts. The judge also directed that all representation fees be placed in escrow under the supervision of the court until such time as the unions devised a procedure under which the unions, rather than a challenging employee, would have the entire burden of proving that representation fees were not directed toward constitutionally impermissible ends. *fn6
In March 1983, the district court extended the injunction against the use of representation fees to the CWA locals involved in the Olsen suit. Because the CWA had already established a practice of escrowing 40 per cent of the fees during the pendency of the litigation, the district judge did not grant preliminary injunctive relief against the union's collection mechanism. Rather, he consolidated the three proceedings for final determination of the constitutionality of the various demand and return systems.
On June 15, 1983, the district court entered its injunction against the employment of any of the demand and return systems designed by the three defendant unions. The court acknowledged that the CWA system in particular "constituted genuine attempts to create as effective demand and return systems as human ingenuity could devise." 565 F. Supp. at 945. The judge, however, concluded:
[E]ach system is complex and overwhelmingly burdensome. Each requires an objecting member to expend such major efforts to pursue his remedy that no individual could be expected to avail himself of the remedy. Thus under the very best demand and return system no objecting non-member can devote the time and money required to ascertain and, if warranted, regain the portion of his representation fee which the union may use for political and ideological purposes. The statutory requirement of a demand and return system is an illusory remedy. As a practical matter, therefore, the statute permits a union to take the funds of objecting nonmembers and use them for the union's own political and ideological purposes. The good faith efforts of the union defendants in these cases to create workable systems demonstrate that no demand and return system can protect an objecting non-member's First Amendment rights.
Id. at 945-46. The court then issued final injunctive relief to the plaintiffs prohibiting the collection of any representation fees from objecting employees:
If plaintiffs' important constitutional rights are to be protected, injunctive relief must be granted at this time. . . . The injunction as to any plaintiff shall remain in effect until the plaintiff withdraws his objection or until the statute is amended (i) so as to exclude from the representation fee expenses for political, ideological and lobbying activities (other than lobbying to secure approval or implementation of a collective bargaining agreement) and (ii) so as to include a provision for a hearing before a state tribunal on the validity of any representation fee prior to payment of the fee to the union.
We begin our analysis by addressing the first of the constitutional challenges to the New Jersey representation fee system, the claim that the lobbying provision infringes the First Amendment rights of non-consenting employees.
Before we turn to the issues posed by the lobbying activities of public employee unions, it bears emphasis that the constitutional dimension of compelled employee support for these activities does not arise in a vacuum. All compulsory contributions to unions, whether in the form of the closed or union shop or in the form of representation or agency fees, to some extent implicate the rights of association and free expression protected by the First Amendment. As the Supreme Court has recognized,
To compel employees financially to support their collective-bargaining representative has an impact upon their First Amendment interests. An employee may very well have ideological objections to a wide variety of activities undertaken by the union in its role as exclusive representative. His moral or religious views about the desirability of abortion may not square with the union's policy in negotiating a medical benefits plan. One individual might disagree with a union policy of negotiating limits on the right to strike, believing that to be the road to serfdom for the working class, while another might have economic or political objections to unionism itself. An employee might object to the union's wage policy because it violates guidelines designed to limit inflation, or might object to the union's seeking a clause in the collective-bargaining agreement proscribing racial discrimination. The examples could be multiplied. To be required to help finance the union as a collective-bargaining agent might well be thought, therefore, to interfere in some way with an employee's freedom to associate for the advancement of idea, or to refrain from doing so, as he sees fit.
Abood v. Detroit Board of Education, 431 U.S. 209, 222, 52 L. Ed. 2d 261, 97 S. Ct. 1782 (1977).
To recognize the constitutional ramifications of compulsory contributions to unions, however, does no more than set the stage for the judicial inquiry. A constitutional analysis under the First Amendment must also consider the rights of the majority employees to association for the purposes of advancing their interests, International Association of Machinists v. Street, 367 U.S. 740, 773, 6 L. Ed. 2d 1141, 81 S. Ct. 1784 (1960), and of the congressional determination that collective bargaining best promotes industrial peace. Thus, in Abood, the Court reiterated that "such interference [with individual First Amendment rights] as exists is constitutionally justified by the legislative assessment of the important contribution of the union shop to the system of labor relations established by Congress." 431 U.S. at 222. As one commentator has observed:
The most effective technique to produce acceptable terms to resolve disputes is voluntary agreement of the parties, and the best system we have for producing agreement between groups is collective bargaining. . . .
Kheel, Strikes and Public Employment, 67 Mich. L. Rev. 931, 942 (1969).
The Supreme Court first confronted the First Amendment issues in the union shop context in a series of cases brought under the Railway Labor Act. In Railway Employes' Dept v. Hanson, 351 U.S. 225, 231, 100 L. Ed. 1112, 76 S. Ct. 714 (1956), the Court took note of Congress' intent that those "who enjoy the fruits and benefits of unions" should contribute to the cost of collective bargaining, and that "the requirement for financial support of the collective-bargaining agency by all who receive the benefits of its ...
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