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NLRB Decision Guides Unions on Non-Member Employee Objectors: Private-Sector Non Members Not Entitled to Audit Verification Letter for Calculation of Fees and Some Lobbying Expenses May Be Chargeable to Objectors

May 6, 2013 by

The referenced case clarifies required documentation where Union membership is not required but private sector employee non-members pay reduced Union fees for direct bargaining and representation expenses.  National Labor Relations Board (NLRB) decisions continually guide Labor Law practice for Unions.  By way of background, Unions must provide, upon request, a statement of budget categories and financial information sufficient to calculate fee reduction for employee objectors.  In a case involving non-member objectors employed at a private-sector health facility, the NLRB clarified its view on Beck agency-fee issues in two areas:  whether private-sector employees, like public-sector employees, must receive an audit verification letter as part of their agency fee packet; and whether lobbying expenses may ever be chargeable to objecting fee payers.

With regard to the need for presentation of an audit verification letter, the Board explained that the Union’s failure to provide one in this case must be analyzed under the duty of fair representation and held that the duty of fair representation does not impose a per se obligation on unions to provide objectors with an audit verification letter. The Board distinguished this case from those involving public sector unions, whose conduct is evaluated under a “heightened First Amendment standard.” Here, the decision found that the Union acted reasonably by promptly providing the objectors with the their reduced fee amounts, charts setting out the major categories of expenses, and an assurance that the figures had been independently verified by a certified public accountant.  The Board did not require the Union to present the actual audit verification letter.

Perhaps the most important aspect of the decision was with respect to lobbying fees.  The Board held that such expenses are chargeable to objectors “if they are germane to collective bargaining, contract administration, or grievance adjustment.”  Chargeable expenses are not limited to those made in support of the ratification or implementation of a CBA, the Board noted. Instead, a wider range of lobbying expenses may be chargeable, so long as they are not “purely partisan.” Objectors employed by both private and public sector employers may be charged for political expenses in limited circumstances, but public sector unions’ expenses will be subject to constitutional scrutiny to make sure they don’t violate objectors First Amendment rights, while private sector unions’ expenses will be reviewed for compliance under the more lenient duty-of-fair-representation standard.   This foundational decision declares that lobbying expenses can be charged to objecting non-members.  However, the Board can be expected in future decisions to further develop what kinds of lobbying expenses are and are not “germane to collective bargaining.”

Attorneys and law firms representing Union interests in both private and public sector organizations must keep up to date on NLRB and case law decisions.  The Beeson, Tayer and Bodine (BT&B) website contains information regarding labor law practice as well as  summaries and news  that assists Unions and employees in understanding current labor relations and employment issues.

United Nurses and Allied Professionals (Kent Hospital), 359 NLRB 42 (2012). Summary provided by BT&B.

The material on this website is provided by Beeson, Tayer & Bodine for informational purposes only and does not constitute legal advice. Readers should consult with their own legal counsel before acting on any of the information presented. Some of the articles are updated periodically, and are marked with the date of the last update. Again, readers should consult with their own legal counsel for the most current information and to obtain professional advice before acting on any of the information presented.