The NLRB issued a decision on July 31, 2014 in a case titled IBT Local 89 (United Parcel Service, Inc.) that represents a forward step for Unions. The decision permits a Union to collect dues or a financial core fee from individuals after they have been expelled from the Union but continue to work under the labor agreement.
The background problem is this:
Traditionally if a Union expelled a member for misconduct, such as trying to decertify the Union, the Union had to accept the fact that the Union could not collect any dues from the individual. The employee would continue to work in the bargaining unit and be represented by the Union, but the Union could not collect dues or even a financial core fee. In these situations the individual would actually be rewarded by his or her conduct in getting tossed form the Union. The individual would become a “free-rider” and continue to be represented by the Union without paying anything for that privilege.
The thought behind this unsavory situation went something like this: federal law only permitted dues to be collected under a union-security clause if membership in the Union was available on the same terms that applied to everyone else. If a Union expelled an individual for misconduct, the thinking went, then the Union could no longer say that membership was available to that employee on the same basis as everyone else. Ergo the Union could not collect dues even though the Union was required to continue to represent that individual.
All that changed for the better with the NLRB’s decision in IBT Local 89.
The IBT Local 89 case arose out of a UPS facility in Louisville, Kentucky, where Local 89 represented the bargaining unit. The employee in question served as Union Steward up until he was expelled from the Union for campaigning on behalf of a rival union.
After the Union expelled the individual from membership, the Union charged the individual a financial core fee. The individual objected to paying anything and threatened to file a charge with the NLRB. The Union refunded the money collected to date under the union-security clause, but warned the individual that the Union would be pursuing a lawsuit to collect the appropriate financial core fees. The Union took the position that the Union did not have to suffer with a free-rider. The Union devised a theory to sue under a concept known as ‘quantum meruit’. A lawsuit based on quantum meruit means roughly that one party is suing for the value of services provided to, and accepted by, the other party.
The NLRB’s General Counsel took the position that the Union was not allowed to threaten a lawsuit of this nature to collect dues or financial core fee. The General Counsel followed the reasoning that once the Union expelled the individual the Union gave up any right to collect anything from the person in exchange for representing him. The General Counsel relied on caselaw that arose in the 1990’s.
The Union took the General Counsel to task, and the case was submitted directly to a panel of the National Labor Relations Board. The three-member panel unanimously found in the Union’s favor, saying that the Union was within its rights to collect a representational fee from this individual for continuing to represent him after he had been expelled from membership. The panel noted that the legislative history fully supported the concept of no ‘free-riders’. The Board held that it would make no sense to allow someone to engage in conduct to get them expelled, like campaigning for a rival union, and then be rewarded by getting representation for free. The Board held that the Union was entitled to keep the fees it had collected, and the Union could threaten a lawsuit to collect future fees, and the Union could actually collect future fees, as long as the person continued to be represented.
The Board decision represents a positive step forward and closes a vexing loophole that seemed to exist for Unions for many years. It is important to note that the Union cannot apply the Union-security clause to get that individual fired, but the Union can use court litigation to collect dues or financial core fees from that individual. However, the Unions can now expel individuals who engage in serious misconduct without having to fear the creation of a free-rider.
Bob
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