Abrams v. Communications Workers of America

• Decision Date: 21 July 1995
• Docket Number: Nos. 93-7171,93-7172,s. 93-7171
• Citation: 59 F.3d 1373
• Parties: 149 L.R.R.M. (BNA) 2928, 313 U.S.App.D.C. 385, 130 Lab.Cas. P 11,389, 32 Fed.R.Serv.3d 442 Kenneth ABRAMS, et al., Appellants Cross-Appellees v. COMMUNICATIONS WORKERS OF AMERICA, An unincorporated Labor Organization, Appellee Cross-Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1373

59 F.3d 1373

149 L.R.R.M. (BNA) 2928, 313 U.S.App.D.C. 385,

130 Lab.Cas. P 11,389, 32 Fed.R.Serv.3d 442

Kenneth ABRAMS, et al., Appellants Cross-Appellees v. COMMUNICATIONS WORKERS OF AMERICA, An unincorporated Labor Organization, Appellee Cross-Appellant.

Nos. 93-7171, 93-7172.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 21, 1994.

Decided July 21, 1995.

Appeals from the United States District Court for the District of Columbia (87cv02816).

Hugh L. Reilly, Springfield, VA, argued the cause for the appellants/cross-appellees. On brief was Raymond J. LaJeunesse, Jr., Springfield, VA.

James B. Coppess, Washington, DC, argued the cause for the appellee/cross-appellant. On brief was Laurence S. Gold, Washington, DC.

Before: SILBERMAN, HENDERSON and TATEL, Circuit Judges.

Separate opinion concurring in part and dissenting in part filed by Circuit Judge TATEL.

KAREN LeCRAFT HENDERSON, Circuit Judge:

The appellants are four telephone company employees (employees) represented by the Communications Workers of America (CWA or Union) in collective bargaining with their respective employers. They are not members of the Union and have objected to paying CWA a mandatory agency fee above the amount necessary to compensate it for the costs of representing them. The employees allege that the Union has breached its duty of fair representation by providing inadequate notice to workers of their right to object and by using improper procedures to calculate the portion of its expenses attributable to collective bargaining and to processing objections. They appeal the district court's grant of summary judgment against them on all but one issue as well as the denial of their two motions for class certification. ¹ We affirm in part and reverse in part.

I. BACKGROUND

As the district court recognized, "[t]he facts of this case are long and complicated. They are, however, not in dispute." Abrams v. Communications Workers of Am., 818 F.Supp. 393, 395 (D.D.C.1993). In summary, the Union is the appellants' exclusive representative under the National Labor Relations Act (NLRA). 29 U.S.C. Sec. 159(a). The NLRA authorizes the Union to require as part of its collective bargaining agreement with employers that all nonmember employees represented by it "shall as a condition of employment pay or tender to the Union amounts equal to the periodic dues applicable to members." 29 U.S.C. Sec. 158(a)(3); see Joint Appendix (JA) 172. To opt out of subsidizing union expenses unrelated to worker representation, a nonmember employee must affirmatively object each year to paying an amount equivalent to the dues paid by member employees.

CWA informs nonmembers of their right to object by a notice distributed yearly to all employees. The notice appears in the Union newsletter, the CWA News. JA 74. The notice provides a general description of the Union's procedure for receiving and handling objections and the classes of expenses it considers both "chargeable" (related to collective bargaining and other employee representation activities) and "nonchargeable" (related to other union activities). Id. The Union distributes the notice in March and objectors may file at any time through mid-June. CWA's fee year begins in July. The Union accepts late objections only from new employees or those with a "reasonable excuse." 818 F.Supp. at 397. At the beginning of the fee year an objector receives from the Union an "advance reduction" payment equal to the amount attributable to nonchargeable expenditures that will be deducted from his paychecks during the coming year. Along with the payment the Union provides a detailed accounting of its expenses and a description of the expenses it considers chargeable and nonchargeable. The description is more detailed than the one included in the Union's general notice. JA 75-91.

The amount of advance reduction payment is calculated by an outside accounting firm. The firm bases its calculation on the portion of time Union employees spent on activities not related to collective bargaining during the preceding year. It obtains the data underlying its calculation from timesheets distributed to the Union staff once every thirteen weeks. Any employee who challenges the amount of the advance reduction must do so within 30 days of receiving the payment. Under CWA policy the objection is then referred to arbitration. JA 74.

In October 1987 the employees brought suit against CWA in district court. JA 38. Their complaint alleged that the Union's objection procedures violated its duty of fair representation arising under the NLRA. The district court initially denied the employees' request for class certification of

nonmembers of the CWA employed by employers in interstate commerce who are subject to collective bargaining arrangements made under color of NLRA Sec. 8(a)(3) ... and Sec. 9(a) ... which require them to pay fees to CWA as a condition of employment.

JA 9 (D.D.C.1989). It subsequently denied the employees' motion to certify two subclasses, one comprised of objectors, the other of "free-riders," whom the district court described more simply as one of "potential objectors." JA 13 (D.D.C.1991).

The employees' claims fall into three categories. First, they challenge the Union's notice of its objection procedures, asserting that the notice is premised on an overbroad definition of chargeable expenditures and does not adequately notify the employees of their rights. Second, they argue that the Union's accounting methods are unreliable and inaccurate. Third, they challenge the CWA's system for receiving objections and processing refunds, maintaining that the Union can neither limit the period for objectors to object, including on an annual basis, nor require arbitration of fee disputes. The district court granted summary judgment to the Union on all claims except CWA's arbitration policy. 818 F.Supp. at 400-07. The employees appeal the summary judgment as well as the denial of their class certification requests and CWA cross-appeals the district court's ruling on its arbitration policy.

II. DISCUSSION

The Union's status as an exclusive bargaining representative "includes a statutory obligation to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct." Vaca v. Sipes, 386 U.S. 171, 177, 87 S.Ct. 903, 910, 17 L.Ed.2d 842 (1967). These obligations are referred to as the duty of fair representation. See id. A claim that a union has breached its duty of fair representation ordinarily is evaluated to determine whether "a union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith." Id. at 190, 87 S.Ct. at 916. A union's fair representation duty in the context of a mandatory agency fee hinges on its compliance with section 8(a)(3) of the NLRA, 29 U.S.C. Sec. 158(a)(3). Communications Workers of Am. v. Beck, 487 U.S. 735, 742-44, 108 S.Ct. 2641, 2647-48, 101 L.Ed.2d 634 (1988). ²

"Taken as a whole, Sec. 8(a)(3) permits an employer and a union to enter into an agreement requiring all employees to become union members as a condition of continued employment, but the 'membership' that may be so required has been 'whittled down to its financial core.' " Id. at 745, 108 S.Ct. at 2648 (quoting NLRB v. General Motors Corp., 373 U.S. 734, 742, 83 S.Ct. 1453, 1459, 10 L.Ed.2d 670 (1963) (footnote omitted)). ³ The Supreme Court has defined the types of expenses within the financial core that a union can lawfully require nonmember employees to pay and has outlined procedures necessary to protect the rights of objectors. See, e.g., Ellis v. Railway Clerks, 466 U.S. 435, 104 S.Ct. 1883, 80 L.Ed.2d 428 (1984) (delineating permissible expenses under section 2, Eleventh of the Railway Labor Act); Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986) (describing adequate procedures to protect objectors). This case requires us to decide whether CWA correctly designated the expenses within the financial core and whether CWA's objection procedures are authorized under Supreme Court precedent.

A. Class Certification

We initially consider whether the district court erred in denying the employees' requests for class certification. The employees sought under Fed.R.Civ.P. 23 to certify a class comprised of "themselves and all other nonmembers of the CWA employed by employers ... who are subject to collective bargaining agreements made under or under color of [the NLRA], which require them to pay fees to CWA as a condition of employment." JA 40. The district court denied certification, reasoning, first, that no cause of action existed for a "potential" objector because a worker's dissent cannot be presumed and, second, that the plaintiffs had not shown that their claims for relief are typical of all nonmembers, whether "potential" objectors or "actual" objectors who had expressed their dissent. JA 10. We conclude, however, that all agency shop employees can assert a common interest for the purpose of class certification in challenging the adequacy of the union's notice alerting them to their right to object to full payment of union dues.

It is irrelevant to the notice issue whether an agency shop employee later becomes an "actual" objector or remains a "potential" objector since the union must provide notice in advance of an employee's decision to object. ⁴ All members of the class sought to be certified have an interest in requiring the Union to fully inform them of their objection rights so they can decide whether to exercise them. The district court's concern that the relief sought might not be typical of all class members is answered by the same analysis. If the Union's notice were found to be inadequate, all workers would be entitled to injunctive and declaratory relief.

Despite the district court's...