Topic:
LABOR UNIONS; POLITICAL PARTIES (GENERAL); SUPREME COURT DECISIONS;
Location:
TRADE UNIONS;

OLR Research Report


March 4, 2005

 

2005-R-0232

UNION DUES

By: Kristin Sullivan, Research Analyst

You asked what states have done to restrict labor unions' practice of using union dues for political purposes and to provide for greater disclosure of unions' expenditures. You also asked if there are any proposed bills in Connecticut that would reform unions' political activities.

SUMMARY

States have taken a variety of different actions to prohibit or restrict deductions of union dues for political purposes. Several have banned the “reverse check-off” practice, enacted so-called “paycheck protection” legislation, and encouraged greater disclosure of unions' expenditures. A “reverse check-off” allows money collected as dues through automatic payroll deductions to be used for corporate or union political activity unless the employee signs a statement that he objects. Conversely, “paycheck protection” laws commonly require unions to obtain upfront, written approval from individual workers before they can spend dues on political or other non-workplace-related activities.

Most of these actions occurred after the U.S. Supreme Court decision in Communication Workers of America v. Beck, 487 U.S. 735 (1988). The Beck Court held that nonunion employees who are required to pay union dues as a condition of employment could not be forced to support union activities, such as political contributions, that are unrelated to workplace representation.

 

OLR Report 98-0655, which we have attached, describes state actions between 1988 and 1998. The present report summarizes pertinent changes in state law since the original report and reviews the Beck decision.

Since 1998, Idaho and Utah banned the practice of using automatic payroll deductions for political activity and Colorado passed a law that prohibits the automatic approval of government-administered payroll deductions, diminishing the ability of unions to collect pubic employees' dues and use them for political purposes. Idaho law also requires unions to disclose on the face of any solicitation that contributions are voluntary and will be used for political activities. Arkansas, Georgia, Hawaii, New Jersey, Pennsylvania, and South Carolina are considering legislation this year that would limit or ban the use of union dues for political activity. Proposals in three of these states, Georgia, Pennsylvania, and South Carolina, also contain disclosure requirements.

We are unaware of any bills before the Connecticut legislature to reform unions' political activities.

CURRENT STATE LAWS

Colorado

In 1996, Colorado enacted legislation repealing the automatic approval of all written requests for state government-implemented payroll deductions. Pursuant to this reform, the Department of Personnel, General Support Services must approve all non-state-sponsored or statutorily authorized deductions (Colo. Rev. Stat. 24-50-104(8)(c)). Because the statutes do not define which deductions are "state-sponsored for all state employees," Colorado's governor issued an executive order in May of 2001 to adopt a policy consistent with the intent of the law (D-007-01). The governor designated the Colorado Combined Campaign—an employee charitable giving program—as the only entity that meets this criteria, thereby removing unions' ability to deduct members' dues for political and other purposes via state-administered payroll deduction. Currently, deductions are permitted only when:

1. required by federal law or state statute (e.g., tax withholdings or court ordered child support);

2. authorized by federal or state statute (e.g., employee benefits or tax treatment elections);

3. expressly authorized for state sponsorship by executive order of the governor and available to all state employees (e.g., Colorado Combined Campaign); or

4. used to facilitate the reimbursement of monies owed to the state from an employee (e.g., higher education tuition, uniforms, and salary overpayments).

Idaho

Idaho passed an act in March of 2003 that prohibits labor organizations that represent state and local public sector employees from using members' dues for political purposes. Among other things, Idaho's Voluntary Contributions Act (VCA) requires labor unions to:

1. establish a separate, segregated fund for political action;

2. disclose in clear and unambiguous language on the face of the solicitation that contributions are voluntary and will be used for political activities;

3. use contributions, not union dues, to pay for the cost of administering the fund;

4. affirmatively inform employees, orally or in writing, of the fund's political purpose and of their rights to refuse to contribute without fear of reprisal; and

5. register the fund as a political action committee (PAC) and file a financial a statement disclosing contributions received and expenditures made on behalf of a candidate or PAC (Idaho Code 44-2601 to 44-2605).

In reaction to the VCA's passage, a coalition of the Idaho's national labor union affiliates filed a suit in U.S. district court on June 23, 2003 seeking an injunction. Their suit named as the defendants the secretary of the state, attorney general, and prosecuting attorney. The defendants filed a motion to dismiss the action on the ground that they did not have any authority to enforce the VCA, but the district court denied their request. The defendants appealed that decision to the U.S. Court of Appeals for the Ninth Circuit. On February 3, 2005 the court issued a summary judgment finding that the secretary of the state, but not the other parties, is the proper defendant and as such, the original suit is pending.

Utah

Utah's legislature passed a VCA in 2001. The act prohibits unions that represent state and local public sector employees from making membership contingent upon political contributions. It further stipulates that a union wishing to make expenditures for political purposes must establish a political fund and:

1. maintain the fund as a separate, segregated account apart

from any account containing union dues;

2. ensure that each contribution to the fund is voluntary;

3. register the political fund as a PAC; and

4. use only fund monies when making expenditures for political

purposes (Utah Code 20A-11-1401 to 20A-11-1404 and 20A-11-1406).

PENDING STATE PROPOSALS

Table 1 provides an overview of states' pending paycheck protection legislation.

Table 1: Pending State Proposals

State

Bill(s)

Application to Entities

Key Provisions

Arkansas

Senate Bill 528 and House Bill 1438

municipal governments

Both bills require municipal governments to obtain a written request by an employee before withholding union or professional association membership dues.

Georgia

House Bill 153 (Voluntary Contributions Act)

public and private labor organizations - excludes those governed by the federal Railway Labor Act and the federal National Labor Relations Act (i.e. , most unions that represent private sector employees)

Limits labor organizations' ability to fund political activities. Among other things, the bill requires unions to (1) establish a separate, segregated fund from which to make political expenditures, (2) disclose on the face of any solicitation that contributions are voluntary and will be used for political activities, (3) ensure that each contribution to the fund is voluntary, (4) affirmatively inform employees, orally or in writing, of the fund's political purpose and of their rights to refuse to contribute without fear of reprisal, and (5) use contributions, not union dues, to pay for the cost of administering the fund. Also requires unions to register funds as a campaign committee and to file a financial a statement disclosing all contributions received and expenditures made.

Hawaii

Senate Bill 67

employers or other entities responsible for disbursing wages or salaries

Prohibits employers from diverting a portion of employee's wages or salaries for contributions to political committees without that employee's specific written request.

New Jersey

House Bill 2965

employee organizations and public sector employers

Prohibits the use of public sector union dues for political activities and requires specific written authorization for such use in the private sector.

Pennsylvania

House Bill 405 (Voluntary Payroll Deduction for Political Contributions Act)

unions that represent both pubic and private sector employees

Requires employers to obtain written consent prior to deducting union dues from paychecks for political purposes. Further requires unions to (1) establish a fund for political expenditures, (2) solicit those funds independent of regular union dues, and (3) inform employees of the fund's political purpose and of their right to refuse contribution without fear of reprisal.

South Carolina

Senate Bill 324

any labor organization that advocates on behalf of employees about, among other things, labor disputes, wages, or conditions of employment

Makes it illegal for labor organizations to make contributions to, or expenditures on behalf of, a political candidate or committee from union dues. Requires unions to (1) establish a separate, segregated fund for political activities, (2) disclose on the face of any solicitation that contributions are voluntary and will be used for political activities, (3) ensure that each contribution to the fund is voluntary, (4) affirmatively inform employees in writing of the fund's political purpose and of their rights to refuse to contribute without fear of reprisal, and (5) use contributions, not union dues, to pay for the cost of administering the fund.

THE BECK CASE

The National Labor Relations Act (29 U.S.C. 151-169) permits an employer and a union to enter into an agreement requiring all employees in a bargaining unit to pay union dues as a condition of continued employment, whether or not the employees become union members. The Communications Workers of America entered into a collective bargaining agreement that contained a union-security clause under which all represented employees who did not become union members paid the union “agency fees” in amounts equal to the dues paid by union members. Nonunion workers took issue and filed suit because their dues were being used for nonrepresentational activities.

In 1988, the U.S. Supreme Court decided Communication Workers v. Beck, which established the rights of employees working under certain union contracts to pay only those dues necessary for the performance of a union's employee representation duties. Under Beck, fees that support union expenditures unrelated to workplace representation, such as political, social, or charitable contributions, are not mandatory. Nonmember employees who object to the union's political activities are required only to pay for the actual costs of contract negotiation, administration, and other representation activities—the "agency fee."

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