Elvin v. Oregon Public Employees Union

• Jurisdiction: Oregon
• Court: Oregon Supreme Court
• Writing for the Court: GILLETTE; UNIS
• Citation: Elvin v. Oregon Public Employees Union, 832 P.2d 36, 313 Or. 165 (Or. 1992)
• Decision Date: 01 May 1992
• Parties: , 140 L.R.R.M. (BNA) 2347 James ELVIN, Joyce E. Bedient, Gary F. Burnett, Jack Fulton, David M. Garrick, Roland Giesbrecht, Harold W. Jacobs, Warren C. Johnson, Jr., Loren P. Link, Dennis D. Mattison, Doug Sanford, Gregg L. Spooner, Thomas W. Tesch, Kenneth N. Twidwell, Albert S. Wenzel, James E. Yost, and Paul Berg, Respondents on Review, v. OREGON PUBLIC EMPLOYES UNION, Petitioner on Review. ERB UP 38-87; CA A50465; SC S37333.

Page 36

832 P.2d 36

313 Or. 165, 140 L.R.R.M. (BNA) 2347

James ELVIN, Joyce E. Bedient, Gary F. Burnett, Jack Fulton David M. Garrick, Roland Giesbrecht, Harold W. Jacobs Warren C. Johnson, Jr., Loren P. Link, Dennis D. Mattison Doug Sanford, Gregg L. Spooner, Thomas W. Tesch, Kenneth N Twidwell, Albert S. Wenzel, James E. Yost, and Paul Berg, Respondents on Review, v. OREGON PUBLIC EMPLOYES UNION, Petitioner on Review.

ERB UP 38-87; CA A50465; SC S37333.

Supreme Court of Oregon.

Argued and Submitted Dec. 4, 1990.

Decided May 1, 1992.

James S. Coon of Imperati, Barnett, Sherwood & Coon, P.C., Portland, argued the cause and filed the petition for petitioner on review.

Milton Chappell, Staff Atty. for Nat. Right to Work Legal Defense Foundation, Inc., Springfield, Va., argued the cause for respondents on review.

Before CARSON, ^* C.J., and PETERSON, ^** GILLETTE, VAN HOOMISSEN, FADELEY and UNIS, JJ.

GILLETTE, Justice.

In this labor relations case, the Employment Relations Board (ERB) found that the Oregon Public Employes Union (OPEU) had committed an unfair labor practice under the Public Employees Collective Bargaining Act (PECBA), ORS 243.650 to 243.782, in the way in which OPEU collected "fair share" payments from nonunion public employees who were members of bargaining units represented by OPEU. ERB ordered OPEU to refund the fair share payments. On appeal, the Court of Appeals affirmed. Elvin v. OPEU, 102 Or.App. 159, 793 P.2d 338 (1990). We allowed review and now affirm.

The issue in the present case is one of administrative law--whether ERB exceeded its authority under PECBA in ordering OPEU to refund to respondents their fair share payments. Because the predicate for ERB's order was its determination that OPEU had violated the standards set by Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986), we first discuss the labor law background that gave rise to the present case.

A union which exclusively represents public employees incurs costs. ¹ Because such a union must represent all public employees fairly, many states have adopted statutes like PECBA that authorize assessment to all public employees of the costs of collective bargaining. Such an arrangement, the Supreme Court of the United States has said, "has been thought to distribute fairly the cost of [collective bargaining] activities among those who benefit, and it counteracts the incentive that employees might otherwise have to become 'free riders'--to refuse to contribute to the union while obtaining benefits of union representation that necessarily accrue to all employees." Abood v. Detroit Board of Education, 431 U.S. 209, 222, 97 S.Ct. 1782, 1792-93, 52 L.Ed.2d 261 (1977).

The foregoing would be unremarkable, were it not for the fact that forcing a person--even a member of a collective bargaining unit--to be affiliated with and, to some extent, to thereby further the social and political views of a union has an impact on the person's rights of free speech and association. Abood v. Detroit Board of Education, supra, 431 U.S. at 222, 97 S.Ct. at 1792-93. ² That impact is nonetheless constitutional, because the state's interest in collective bargaining is compelling. Abood v. Detroit Board of Education, supra, 431 U.S. at 222, 97 S.Ct. at 1792-93. See Ellis v. Railway Clerks, 466 U.S. 435, 455-56, 104 S.Ct. 1883, 1895-96, 80 L.Ed.2d 428 (1984) ("It has long been settled that [a state's] interference with First Amendment rights [by requiring fair share payments] is justified by the governmental interest in industrial peace." ). The fair share payments, however, cannot be used by the union to "contribute to political candidates and to express political views unrelated to [the union's] duties as exclusive bargaining representative." Abood v. Detroit Board of Education, supra, 431 U.S. at 234, 97 S.Ct. at 1799.

"The fact that the [nonunion employees] are compelled to make, rather than prohibited from making, contributions for political purposes works no less an infringement of their constitutional rights. For at the heart of the First Amendment is the notion that an individual should be free to believe as he will, and that in a free society one's beliefs should be shaped by his mind and his conscience rather than coerced by the State."

Id. at 234-35, 97 S.Ct. at 1799. (Footnote omitted.)

To prevent compulsory subsidization of a union's ideological activity by nonunion public employees, without restricting that union's ability to require every employee to contribute to the cost of collective bargaining, the Supreme Court in Chicago Teachers Union v. Hudson, supra, announced three procedural safeguards to insure the protection of a nonunion employee's First Amendment rights. In that case, the Chicago Teachers Union had imposed, with the approval of the Chicago Board of Education, a fair share payment of 95 percent of the union membership dues. 475 U.S. at 295, 106 S.Ct. at 1070. The fees were deducted from the nonunion employees' paychecks. After the paycheck deductions, nonunion employees could pursue objections by writing the union president within 30 days of the first payroll deduction, which would lead to a series of internal union hearings, potentially resulting in an arbitration paid for by the union. If the nonunion employee's objection proved correct, the union would immediately reduce future fair share payments and offer a rebate to the objector.

The Supreme Court held that the Chicago Teachers Union's procedures for the collection and use of the fair share payments violated the First Amendment. The Court further held that the union's subsequent adoption of an escrow arrangement for disputed payments did not cure any constitutional defect. Three procedural safeguards are required, the Court held, in order for a fair share deduction system to pass constitutional muster.

The first procedural safeguard is a prohibition against permitting a union to exact a fair share payment without first offering a procedure by which the employee may object. The second is that the procedure must provide nonunion employees with adequate information about the basis for the amount of the fair share payment. The third procedural safeguard is that the state must provide for a reasonably prompt decision, by an impartial decisionmaker, when a nonunion employee objects to the amount of the fair share payment. Chicago Teachers Union v. Hudson, supra, 475 U.S. at 305-07, 106 S.Ct. at 1075-76.

The Supreme Court emphasized that "[t]he purpose of these safeguards is to insure that the government treads with sensitivity in areas freighted with First Amendment concerns." Id. at 303 n. 12, 106 S.Ct. at 1074 n. 12.

"Procedural safeguards are necessary to achieve this objective for two reasons. First, although the government interest in labor peace is strong enough to support an 'agency shop' notwithstanding its limited infringement on nonunion employees' constitutional rights, the fact that those rights are protected by the First Amendment requires that the procedure be carefully tailored to minimize the infringement. Second, the nonunion employee--the individual whose First Amendment rights are being affected--must have a fair opportunity to identify the impact of the governmental action on his interests and to assert a meritorious First Amendment claim."

Id. at 302-03, 106 S.Ct. at 1074. (Footnotes omitted.)

With the foregoing in mind, we turn to a discussion of the specific facts and, particularly, of the remedy that ERB ordered in the present case. Based on the facts, ERB's rationale for its order, and in the language used in that order, we hold that ERB permissibly imposed an order of restitution.

Respondents are 21 public employees who are represented by but not members of OPEU. Under PECBA, the state is permitted to recognize OPEU as a bargaining representative on behalf of public employees in a bargaining unit. OPEU is required to bargain on behalf of all employees in the bargaining unit, regardless of individual membership in OPEU. ³

OPEU and the state entered into a collective bargaining agreement for 1985-87 which provided, in part, that "bargaining unit members who are not members of the Union shall either become members of the Union or make payment in lieu of dues to the Union." These "payments-in-lieu-of-dues," also called "fair share payments," are defined by ORS 243.650(16) as "an assessment to defray the cost for services by the exclusive representative in negotiations and contract administration of all persons in an appropriate bargaining unit who are not members of the organization serving as exclusive representative of the employees."

In December 1986, OPEU adopted a set of procedures to determine the amount of and to collect fair share payments from nonunion employees. The procedures were crafted to comply with the First Amendment safeguards established in Chicago Teachers Union v. Hudson, supra. In mid-January 1987, OPEU sent a notice to all nonunion employees announcing the amount of the fair share payment, discussing what expenses were chargeable to collective bargaining and how nonunion employees could challenge the amount of the fee.

Respondents timely notified OPEU of their objection to the collection and use of a fair share payment by OPEU for any purpose other than respondents' pro rata share of the local bargaining unit's cost of collective bargaining, contract administration, and grievance adjustment. Further, respondents objected to the procedures used by OPEU to determine and collect the amount of the fair share payments.

Upon receiving respondents' objections, OPEU sent a revised rebate check and a notice to each respondent for 1985-86. On OPEU's request, the American Arbitration Association (AAA) arranged for an arbitrator to conduct a hearing on respondents' objections. Respondents retained counsel and objected to AAA's administration of the hearing and OPEU's collection...