The State Worker

Chronicling civil-service life for California state workers

December 10, 2010
SEIU Local 1000 wins union fee case in 9th Circuit Court

Thumbnail image for 100609 gavel.jpgThe U.S. 9th Circuit Court of Appeals has overturned a lower court's decision that SEIU Local 1000 didn't appropriately notify members and fair-share payers when it temporarily raised fees in 2005 and 2006.

The union raised about $12 million from the fee increase. Local 1000 attorney Anne Giese said this afternoon that if SEIU lost, it probably would have paid "nominal damages" of about $1 per union member.

The plaintiffs can ask the U.S. Supreme Court to review the 9th Circuit ruling, but the high court rarely accepts such requests.

Justices David R. Thompson and Sidney R. Thomas ruled in favor of the union with Justice J. Clifford Wallace dissenting.

The lawsuit was backed by the National Right to Work Legal Defense Foundation, which describes itself as "nonprofit, charitable organization providing free legal aid to employees whose human or civil rights have been violated by abuses of compulsory unionism."

We'll knit together the essentials of the case from the 43-page court decision that we've Scribd at the end of this post:

In June 2005, Local 1000 sent members and fair-share fee payers their "Hudson notice," which is the annual letter unions send to dues and fee payers that explains the fees for the coming year and where the money for the previous year went. With that information, the members can object to the fee.

... on July 30, 2005 the Union's Budget Committee proposed an emergency temporary assessment to create what was termed in the agenda item introducing it as a "Political Fight Back Fund." This agenda item stated the Fund "will be used for a broad range of political expenses" in response to several "anti-union" propositions on the November 2005 special election ballot in California, and that the fund "will not be used for regular costs of the union--such as office rent, staff salaries or routine equipment replacement."

Union delegates OK'd the increase, and on Aug. 31, Local 1000 sent letters to all members and fair-share fee payers explaining the fee hike and that it would be used to fight two anti-union propositions and future attacks on pensions and other activities.

The Union material indicated that the fund would be used for political activities. Yet, in response to inquiries, the Union specifically stated it intended to split the increase "between political actions and collective bargaining actions." Further, not all of the political activities fell into the "non-chargeable" category. The assessment itself included no spending limitations, and the money was actually used for a range of activities, both political and not, and both chargeable and not. Pursuant to the increase, the Controller began collecting additional fees from Plaintiffs at the end of September 2005.

But the August letter wasn't a Hudson notice.

Employees with the defense foundation's support sued the union in November 2005, alleging that the assessment violated their First, Fifth and 14th Amendment rights because the union should have sent a second Hudson notice with the corresponding opportunity to object. They also said that the union's method of reporting backward in its Hudson letter wasn't legal, that it should disclose anticipated spending of member fees since its members are committing money for the year ahead, not the year gone by.

The 9th Circuit's majority decision overturned the district court's ruling that the union should have sent a second letter.

Want to get more deeply into this case? Here you go:

9th Circuit's Ruling on Knox v. SEIU Local 1000

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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