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Backgrounder #1156 on Jobs and Jobs and Labor Policy

February 12, 1998

The Worker Paycheck Fairness Act: Ending the Involuntary Use of Union Dues

By and

In 1988, the U.S. Supreme Court ruled in Communications Workers v. Beck1 that workers who are forced to pay union dues as a condition of employment may not be required to pay dues beyond those necessary for collective bargaining purposes. They also are entitled (if they so choose) to a refund of any portion of these dues that is used by their union for political purposes. Over 200 years ago, Thomas Jefferson enunciated the fundamental axiom that "To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical."2 In effect, Beck applied that principle to the collection of union dues established in the 1935 National Labor Relations Act (NLRA), as amended.

Today, however, most workers in unions are no better off than they were before Beck. They still receive little or no information from their unions, for example, on how their dues are being used. A recent poll for the National Voter Survey showed that most union members are not even aware of their rights under Beck.3 Even worse, many workers who have tried to exercise their rights have been threatened and stonewalled. One worker testified before Congress in 1997 that "Almost immediately the lies started: anti-union, scab, free loader, and religious fanatic were labels ascribed to me. They did anything to create hate and mistrust between myself and the other union members.… [M]y union dues were not reduced at all.… I had to take the union to small claims court to achieve a reduction of union dues."4

To correct this abuse of compulsory union dues, and to enable union workers to exercise their full rights under the Beck decision, Representative Harris Fawell (R-IL) has introduced the Worker Paycheck Fairness Act (H.R. 1625).5 This legislation would require (1) that employers provide workers with information about their legal rights regarding the payment of union dues, (2) that unions provide information on how those dues are spent, and (3) that unions obtain written permission from members before spending their dues for non-collective bargaining purposes. Given the National Labor Relations Act's restrictions on the freedom of voluntary private contracts,6 Congress ought to ensure that the NLRA also does not infringe on a worker's freedom to exercise his or her political rights.

PROBLEMS WITH CURRENT LAW UNDER THE BECK DECISION

As the law now stands, union members have no single independent source for information on their rights under decisions handed down by the courts and the National Labor Relations Board (NLRB). Furthermore, the U.S. Department of Labor has acted to discourage the dissemination of workers' rights information to union members.7 Because of this lack of information, most workers are not aware of their rights, and those who are and who have spoken out have been threatened and intimidated by their unions.

The most significant problems with current law that need to be addressed are:

  • Many workers are forced to pay union dues as a condition of employment. The exclusive representation provision of the National Labor Relations Act, as implemented by unions, forces many workers to pay union dues as a condition of employment.8 Unions justify compulsory dues on the grounds that the NLRA requires them to represent all workers in their respective bargaining units. Hence, it is only fair that every worker be forced to pay for the representation services they provide; otherwise, some workers might become free riders receiving union-generated benefits without helping to pay for the costs of the union. Historically, however, union security agreements are how unions have forced workers to pay for their share of representation-forced riders are better than free riders.9 Union security agreements are not voluntary exchange agreements or private contracts;10 they are based on privileges granted to unions by federal law. Given the restrictions on voluntary private contracts embedded in the NLRA, Congress should ensure that this labor law also does not infringe on workers' freedom to exercise their political rights.

  • Workers have no single independent source of information on their rights. When it comes to issues related to the payment of union dues, workers have no single independent source upon which they can rely for accurate information concerning their rights. It is difficult even for labor lawyers to keep up with the many different court and NLRB decisions that have come down since 1978. As noted in a September 1997 decision of the U.S. Court of Appeals for the Sixth Circuit, the "line of U.S. Supreme Court cases has so widened the gap between what the NLRA authorizes and what the high court has held that failure to incorporate those high court teachings in real-life union-security clauses can mislead workers."11

  • The U.S. Department of Labor refuses to provide union members with the information they need to make informed decisions. The lack of available information on union activities means that members do not know how much their union spends on non-collective bargaining activities. Some unions have claimed that they spend as much as 20 percent of their dues on non-collective bargaining functions.12 However, the current financial reports that unions are required to file with the U.S. Department of Labor do not request that unions separate out what was spent on various political activities.13 In 1993, the Department of Labor rescinded a proposed rule, issued in 1992, that would have enabled workers to obtain this information. In rescinding the proposed rule, the Labor Department found that the benefits to workers do not appear to be as great as originally believed, while the costs to unions appear to be substantially greater than originally considered. In 1997, the U.S. Department of Labor refused a request by the Department of Labor in Oklahoma to print the rights of workers regarding union dues on the posters employers are required to post in the workplace.14 It is no wonder that most workers are not yet aware of their right under the Supreme Court's Beck decision to a refund of any dues used by their unions for political purposes.

  • Workers who try to exercise their Beck rights are intimidated. Recent congressional testimony at six separate hearings over the past year reveals a pattern of threats, intimidation, and obstruction by various unions against members who try to exercise their Beck rights. For example, Kerry Gipe, an aircraft mechanic and member of the International Association of Machinists and Aerospace Workers, testified that

the union began an almost immediate smear campaign against us…portraying us as scabs, and freeloaders.… We had our names posted repeatedly on both union property and company property accusing us of being scabs. We were thrown out of our local union hall, and threatened with physical violence.… We were accosted at work, we were accosted on the street. We were harassed, intimidated, and threatened. We were told that our names were being circulated among all union officials in order to prevent us from ever being hired into any other union shop at any other location.15

Under current law, workers subjected to this type of abuse have little or no recourse against their union, and any legal action they might take would be both long and costly.

WHY MERELY CODIFYING BECK
IS INADEQUATE

Though it has been ten years since Beck became the law of the land, the U.S. Department of Labor has not changed its union reporting requirements so that workers could be better informed. The information unions provide to the Department of Labor under the Labor-Management Reporting and Disclosure Act of 1959 does little to help members understand the functions or activities on which unions spend their dues money.16 Codifying the U.S. Supreme Court's Beck decision will neither rectify this situation nor ensure that workers receive the information they need to make informed decisions about the use of their union dues.

Since the Beck decision, the NLRB and the courts have debated a number of issues surrounding the payment of union dues, including how workers should be informed of their rights under Beck, how they can exercise these rights, and what union functions are considered part of collective bargaining. As recently as December 1997, the Supreme Court agreed to hear a case regarding whether employees who object to the calculation of "agency fees"17 can take their case to court rather than proceed to arbitration.18 On January 14, 1998, the U.S. Circuit Court of Appeals for the Seventh Circuit issued a decision on the use of in-house union auditors to verify the calculation of agency fees.19 Its decision, however, directly contradicts a September 1997 decision by the U.S. Court of Appeals for the District of Columbia.20 Codifying Beck will not address these conflicting court decisions; Congress needs to settle these issues. Workers should not have to fight for their rights in court only to have to fight again to have the court's decision enforced.

Codifying Beck also will not correct the union's use of procedural hoops that workers must jump through in order to exercise their Beck rights. Workers who object to the use of their dues for political purposes usually must do so within a limited amount of time each year. This means, for example, that members of the Teamsters who object to their union's decision to spend $195,000 on a campaign to legalize the use of marijuana in California may have to wait an entire year before they can exercise their right to receive a refund for the portion of their dues that went to this campaign.21 As one worker testified before Congress:

I wrote the letters required by law, but somehow they kept getting lost.... I wrote several letters that according to the union official that I was dealing with were never received or were not worded properly.... I kept calling the union office, at least three or four additional times to find out the status of my request. Finally in desperation, I wrote another letter and had my husband drive to the San Diego Teachers' Union office, hand carry the letter and had a copy of the original letter dated and time stamped. That was the only way that I finally was able to exercise my right to withdraw as a member of the organization.22

It should be simpler and less burdensome for workers to exercise their Beck rights. Unions should have to obtain approval from workers before using a portion of their dues for non-collective bargaining purposes, and workers should be able to revoke that authority with a 30-day written notice.

Finally, codifying Beck would amount to codifying taxation without representation in the workplace. Under Beck, most unions require employees who exercise their right to a refund of the portion of their dues used for political purposes to resign from the union. In most union workplaces, workers who resign are still represented by the union,23 yet they have no right to participate in union elections, strike votes, or contract ratification votes. Under union security agreements,24 a nonmember can be forced-as a condition of employment-to pay dues for the costs of union representation while being denied participation in all decisions regarding that representation. As another worker testified, "The local lodge president…immediately started a campaign to discredit me and all the other members who exercised their rights…. They stripped me of my membership, told me I was in bad standing with the union, and disallowed me of any and all voting rights including voting on contractual matters and strike votes."25

HOW THE WORKER PAYCHECK FAIRNESS ACT ADDRESSES THE SHORTCOMINGS OF THE BECK DECISION

H.R. 1625's notice and disclosure provisions represent an important improvement over current policy. Under the bill, unionized employers would have to post a notice informing workers of their rights, and unions would have to provide the information their workers need to determine the portion of their dues being used for collective bargaining purposes. All workers would know their rights and would be in a better position to make informed decisions about how they want their dues to be used.

The Worker Paycheck Fairness Act would empower workers by requiring unions to obtain written approval from each member before using their dues for political purposes. Union dues no longer would be spent for non-collective bargaining purposes unless workers first approved such use-and members would be able to revoke that authorization by giving their union a 30-day written notice. Therefore, they would not be forced to spend their hard-earned money to stop their unions from spending dues on objectionable political purposes. The bill's up-front consent provision is also designed to keep unions from giving workers the indefinite run-around while escaping accountability.

H.R. 1625 would allow workers who pay for the cost of union representation to participate in union decisions regarding representation. Its anti-retaliation and anti-coercion provisions would prevent unions from forcing workers to resign their union membership and endure taxation without representation in the workplace. Employees who exercise their Beck rights and continue to pay so-called agency fees26 to the union no longer would give up such critical workplace rights as the right to vote on ratifying contracts or approving strikes.

The Worker Paycheck Fairness Act also might help unions restore workers' trust in the honesty and integrity of their unions. As one worker who tried to exercise her Beck rights has testified, "Discovering I had no control over the use of my hard earned money left me feeling disenfranchised and misrepresented since I knew it was going to support a paid political program I disagreed with. I felt taken advantage of. My trust was violated."27 By eliminating the stonewalling and harassment that frequently confronts workers who try to exercise their Beck rights, H.R. 1625's up-front consent provision could remove a significant source of tension that now exists between many workers and their unions. Workers who believe strongly in collective bargaining but not in union politics would no longer be forced to choose between their First Amendment rights and their right to organize and bargain collectively with employers.28

WHAT H.R. 1625 DOES NOT DO

While the Worker Paycheck Fairness Act goes a long way toward ending the involuntary use of union dues for political purposes, it does not address three key probems.

First, it does not settle the issue of conflicting court decisions-specifically, the use of independent third-party audits of union dues in the calculation of agency fees. There are two different U.S. Court of Appeals decisions on this issue. In September 1997, the U.S. Court of Appeals for the District of Columbia overturned an NLRB decision that allowed the use of internal union audits. The court ruled that "nonmembers cannot make a reliable decision as to whether to contest their agency fees without trustworthy information about the basis of the union's fee calculations," and added "that an independent audit is the minimal guarantee of trustworthiness." However, on January 14, 1998, the U.S. Circuit Court of Appeals for the Seventh Circuit (Chicago) issued a decision to allow the use of in-house union auditors to verify the calculation of these agency fees. Unless Congress acts to settle this issue, two regions of the country will be operating under different interpretations of the NLRA-a situation that inevitably is confusing to workers.

Second, the bill does not cover state and local employees; it pertains only to private-sector union members who are covered by federal law. The 5.7 million state and local workers-34.6 percent of all union members-would not be covered. Either state legislators will have to act or voters will have to speak through ballot initiatives to protect and empower state and local workers.

In 1992, voters in Washington State passed a ballot initiative (I-134) to make it illegal to collect or use union dues for political purposes without prior written approval from members. The measure was approved by 70 percent of the state's voters. The number of state public employee union members willing to make political contributions to their union fell from over 40,000 to just 82, suggesting that the vast majority of workers want the freedom to determine how their paychecks will be spent. On June 2, 1998, California voters will have an opportunity to pass a similar ballot initiative, and legislation similar to H.R.1625 has been introduced in at least ten other states.

Third, the Worker Paycheck Fairness Act is a second-best solution to the problem of union abuse of workers' paychecks. The root cause of the problem is mandatory or forced union dues themselves, not the abuse or maladministration of those dues.29 The best solution would be to rescind the privilege of exclusive representation that Congress conferred on unions in the NLRA, and which is the source of most union security agreements. The problem of the deduction of forced union dues from workers' paychecks would largely disappear, leaving workers with the ability to contribute voluntary dues for political activities if they so choose. However, given the small likelihood that Congress will act to change exclusive representation in the near future, it should seek instead to grant workers the ability to exercise their legal rights freely and easily.

CONCLUSION

As the U.S. Supreme Court's Beck decision has been implemented over the past ten years, the ability of American workers to exercise their rights under this ruling has proven to be elusive. Not only are many union members unaware of their rights, but-as first-hand congressional testimony has demonstrated-many of those who try to exercise their legal rights are stonewalled, threatened, and intimidated. Merely codifying the Beck decision will not improve the information available to workers about how their dues are spent; nor can it protect them adequately from taxation without representation in the workplace.

Congress should ensure that workers can exercise their Beck rights easily, and it should settle some of the issues surrounding union dues. Ignoring the problems and forcing individual workers to fight their unions in court is unacceptable. As long as federal law requires employers to bargain with unions and gives unions exclusive representation rights over their employees, individual workers must have the freedom to decide, up front, whether their hard-earned money should be used for non-collective bargaining purposes, including political campaigns. Far from silencing workers' voices, the policies embodied in the Worker Paycheck Fairness Act would help make it possible for them to exercise, in full measure, the political freedoms that are the birthright of all Americans.

D. Mark Wilson is the Rebecca Lukens Fellow in Labor Policy at The Heritage Foundation.30

Endnotes

1. 487 U.S. 735 (1988).

2. Thomas Jefferson, Statute of Religious Freedom, adopted by Virginia in 1785.

3. In one poll, 67 percent of union members were not aware of the U.S. Supreme Court's Beck decision. See John McLaughlin & Associates, National Voter Survey, October 1, 1997.

4. Charles Barth, testimony before the Committee on Education and the Workforce, U.S. House of Representatives, 105th Cong., 1st Sess., July 9, 1997. See also statements of other witnesses at www.house.gov/eeo/beckquotes.htm.

5. On November 18, 1997, the House Committee on Education and the Workforce approved H.R. 1625 by a voice vote.

6. Charles W. Baird, "Toward Equality and Justice in Labor Markets," The Journal of Social, Political and Economic Studies, Vol. 20, No. 2 (Summer 1995). The National Labor Relations Act contains a significant restriction on the right of workers to engage in voluntary private contracts (or exchange); Section 9(a), the exclusive bargaining provision, effectively limits the ability of workers who lose faith in their unions to form a new union and negotiate an independent contract with their employer.

7. Bureau of National Affairs, "Labor Department Rejects for Second Time Request to Revise Minimum Wage Poster," Labor Relations Week, Vol. 11, No. 49 (December 17, 1997), p. 1311.

8. National Labor Relations Act, Section 9(a).

9. Union security agreements cover 90 percent of all private-sector union members and require workers to pay dues as a condition of employment. See U.S. Department of Labor, Bureau of Labor Statistics, "Major Collective Bargaining Agreements: Union Security and Dues Checkoff Provisions," Bulletin No. 1425-21, May 1982.

10. Baird, "Toward Equality and Justice in Labor Markets."

11. Bureau of National Affairs, "Union Security Clause Violates Labor Act, Sixth Circuit Rules in Reversing NLRB Order," Labor Relations Week, Vol. 11, No. 36 (September 17, 1997), p. 959.

12. Mark Schneider, testimony before the Committee on Education and the Workforce, U.S. House of Representatives, 104th Cong., 2nd Sess., April 18, 1996.

13. Private-sector and federal employee unions must file an annual report with the U.S. Department of Labor to disclose their financial condition and operations. Copies of these forms can be obtained from the Labor Department by submitting a request in person, through the mail, or over the Internet. The forms, which are not currently available across the Internet, cost 15 cents per page over the first 30 pages.

14. Bureau of National Affairs, "Labor Department Rejects for the Second Time," op. cit.

15. Kerry W. Gipe, testimony before the Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, U.S. House of Representatives, 105th Cong., 1st Sess., March 18, 1997.

16. Currently, unions are only required to report expenses according to what accountants call an "object classification" which identifies expense categories such as salary, rent, and transportation. Although this provides a flat dollar amount spent on certain items, it does not enable someone looking at the forms to determine how much was spent on collective bargaining, on grievances, or for political purposes.

17. Agency fees are union dues minus the amount a union spends on politics.

18. Bureau of National Affairs, "Justices Agree to Resolve Whether Pilots Can Skip Arbitration in Union Fee Dispute," Labor Relations Week, Vol. 11, No. 47 (December 3, 1997), p. 1263.

19. Bureau of National Affairs, "Machinists' Calculation of Union Fees Is Upheld, As Seventh Circuit Defers to NLRB," Labor Relations Week, Vol. 12, No. 3 (January 21, 1998), p. 73.

20. Bureau of National Affairs, "D.C. Circuit Overturns NLRB on Audits of Union Calculations of Agency-Fee Offsets," Labor Relations Week, Vol. 11, No. 38 (October 1, 1997), p. 1016. The U.S. Court of Appeals for the District of Columbia ruled that union calculations of reductions in agency fee payments should be reviewed by an independent auditor. The Seventh Circuit ruled that an independent auditor was not necessary.

21. Editorial, "Unions and Politics," San Diego Union-Tribune, January 7, 1998, p. B6.

22. Nadia Q. Davies, testimony before the Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, U.S. House of Representatives, 105th Cong., 1st Sess., December 11, 1997.

23. Section 9(a) of the National Labor Relations Act requires unions to represent all employees, both members and nonmembers, in the bargaining unit for the purposes of collective bargaining on pay, wages, hours of employment, or other conditions of employment.

24. Union security agreements cover 90 percent of all private-sector union members. See U.S. Department of Labor, Bureau of Labor Statistics, "Major Collective Bargaining Agreements."

25. John M. Masiello, testimony before the Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, U.S. House of Representatives, 105th Cong., 2nd Sess., January 21, 1998.

26. In states without a right-to-work law, unions with a security clause in their contract can require that workers continue to pay an agency fee (union dues minus what unions spend on politics) as a condition of employment, even though those workers are no longer officially members of the union.

27. Karen Koog, testimony before the Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, U.S. House of Representatives, 105th Cong., 1st Sess., December 11, 1997.

28. Gary Dunham, oral testimony before the Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, U.S. House of Representatives, 104th Cong., 2nd Sess., April 18, 1996. See www.house.gov/eeo/beckquotes.htm.

29. Morgan O. Reynolds, testimony before the Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, U.S. House of Representatives, 105th Cong., 2nd Sess., January 21, 1998.

30. Based on testimony delivered to the Subcommittee on Employer-Employee Relations, Committee on Education and the Workforce, U.S. House of Representatives, 105th Cong., 2nd Sess., January 21, 1998.

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