Agency Fee Update

January 13, 2011 by Beeson Tayer & Bodine

In both the public and private sectors, non-member employees who object to paying union dues and fees for non-collectivebargaining- related expenses must be allowed to pay a reduced, “agency” fee.

In IAM Local Lodge 2777 (L-3 Communications), 355 NLRB No. 174 (2010), the NLRB ruled that, absent legitimate justification, unions may not require non-members to renew their objects annually. In this case, the union advanced two justifications for its annual renewal policy: to ensure the union has valid addresses for the objectors, and to give nonmembers a chance to change their minds before objecting. The Board found neither explanation convincing. Nonetheless, the Board left open the possibility that a union could come up with a legitimate, nondiscriminatory reason for requiring objectors to renew annually. Any bright ideas out there?

The Ninth Circuit Court of Appeals has held that generally a union need not give additional notice to agency-fee payers when the union adopts a temporary, mid-year fee increase. Knox v. CSEA Local 1000 (State of California) (12/10/10). The Court ruled that under the circumstances of this case, no notice in addition to the union’s annual notice was required. The annual notice explicitly stated that dues and fees were subject to change without further notice to fee payers. But more importantly, the Court noted, the union, like most unions, used its prior year’s experience to determine the current year’s allocation between chargeable and non-chargeable expenses. The Court found nothing wrong with this approach, and concluded that the union would properly account for the temporary fee increase in the calculations used to determine the following year’s agency fee.

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