Supreme Court Rules on Notice Required for Union Fee Increase

by tylercook on December 1, 2012

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The Supreme Court has ruled that a union must give notice to nonmembers of any anticipated fee increase that all workers are required to pay in closed shop situations.

The Court’s ruling on Thursday, June 21, 2012, was in favor of Dianne Knox and other nonmembers of the Service Employees International Union Local 1000. The nonmembers of the union sought to object to and opt out of a $12 million special assessment of members the union levied upon its California public sector members. Knox argued that the union did not give nonmembers a required notice of the impending increase.

The union argued that the information provided in the annual notice to all due-paying members and nonmembers was sufficient. The case reached the U.S. Ninth Circuit Court of Appeals, which decided in favor of the union. The U.S. Supreme Court took up the case and the high court decided to overturn the Ninth Circuit’s decision in a 7-2 opinion, written by Justice Samuel Alito.

“When a public-sector union imposes a special assessment or dues increase, the union must provide a fresh … notice and may not exact any funds from nonmembers without their affirmative consent,” Alito wrote.

Justices Sonia Sotomayor and Ruth Bader Ginsburg agreed with the judgment by Alito, but wrote their own opinion; “When a public-sector union imposes a special assessment intended to fund solely political lobbying efforts, the First Amendment requires that the union provide non-members an opportunity to opt out of the contribution of funds,” Sotomayor wrote.

However, Sotomayor and Ginsburg said they did not join in the majority opinion that the First Amendment requires an opt-in system for other circumstances like “the levying of a special assessment or dues increase.”

Justices Stephen Breyer and Elena Kagan dissented from the opinion.

“If the union’s basic administrative system does not violate the Constitution, then how could its special assessment have done so?” wrote Breyer. However, the majority opinion favored the notion that the special assessment acquired the characted or an elective assessment upon which the members and nonmembers should have the opportunity to decide separately. The decision could affect future cases over the “opt-out” elections that may be made by nonmembers of a union in a closed shop. Previously, it has been a typical policy of collective bargaining units to assess all members equally, and that both members and nonmembers were subject to any special assessments.

Justice Breyer stated in court that he agreed with Justice Sotomayor on the court’s decision to expand the verdict beyond special political assessments. “No party has asked that we do so,” he said. “The matter has not been fully argued in this court or in the courts below,” said Breyer, who read his dissent aloud.

Alito said there is “no merit” to Breyer’s and Sotomayor’s complaints.


Ty Whitworth writes for Insurance Swami, an outfit very familiar with the tiny notices and nuances of the insurance world.




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