Hudson v. Chicago Teachers Union, Local No. 1, 83 C 2619.

• Decision Date: 16 November 1988
• Docket Number: No. 83 C 2619.,83 C 2619.
• Citation: 699 F. Supp. 1334
• Parties: Annie Lee HUDSON, et al., Plaintiffs, v. The CHICAGO TEACHERS UNION, LOCAL NO. 1, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

699 F. Supp. 1334

Annie Lee HUDSON, et al., Plaintiffs, v. The CHICAGO TEACHERS UNION, LOCAL NO. 1, et al., Defendants.

No. 83 C 2619.

United States District Court, N.D. Illinois, E.D.

November 16, 1988.

COPYRIGHT MATERIAL OMITTED

Edwin Vieira, Jr., Independent Hill, Va., Margaret S. Garvey, Freeborn & Peters, Chicago, Ill., for plaintiffs.

Lawrence Poltrock, Witwer, Burlage, Poltrock & Giampietro, Chicago, Ill., Laurence Gold, David Silberman, AFL-CIO, Washington, D.C., Joseph Jacobs, Charles Orlove, Jacobs, Burns, Sugarman & Orlove, Chicago, Ill., for defendant Chicago Teachers Union.

P. Kevin Connelly, Lederer, Reich, Sheldon & Connelly, Chicago, Ill., Patricia J. Whitten, Law Dept., Chicago Bd. of Educ., Chicago, Ill., for defendant Chicago Bd. of Educ.

MEMORANDUM ORDER

BUA, District Judge.

Under the terms of an agency shop agreement, a union may represent a collective bargaining unit that includes nonunion employees. Ever since it recognized the validity of the agency shop, the Supreme Court has striven to strike an appropriate balance between the competing rights of unions and nonunion employees in the agency shop context. See, e.g., Ellis v. Brotherhood of Railway Clerks, 466 U.S. 435, 104 S.Ct. 1883, 80 L.Ed.2d 428 (1984); Abood v. Detroit Board of Education, 431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 261 (1977). In its latest effort to preserve this delicate balance, the Court has held that before a union can collect fair share fees from nonunion employees, the Constitution requires the union to provide "an adequate explanation of the basis for the fee." Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292, 310, 106 S.Ct. 1066, 1078, 89 L.Ed.2d 232 (1986). Spurred by the Supreme Court's Hudson directive, the Chicago Teachers Union ("CTU") overhauled its constitutionally deficient fair share scheme, developing and promulgating a more elaborate notice of its fair share fee. In the two years since the Hudson case was remanded to this court, the CTU has continued to collect fair share fees, but has deposited these revenues with the Clerk of the Court pending a determination that the CTU's revised notice is constitutionally sufficient. The CTU now moves this court to authorize the release of the fair share funds held in escrow. After examining the CTU's fair share fee notice for the 1987-88 school year, this court concludes that the CTU has satisfied the notice requirement established by the Supreme Court in Hudson. Therefore, the court grants the CTU's motion to release the fair share funds currently held by the Clerk of the Court.

PROCEDURAL HISTORY

Under the terms of a 1967 collective bargaining agreement, the CTU serves as the exclusive representative of a bargaining unit composed of 27,500 employees of the Chicago Board of Education ("Board"). Although the CTU negotiates employment contracts for all employees in the bargaining unit, approximately 5% of these employees do not belong to the CTU. During the first fifteen years of the bargaining unit's existence, dues collected from CTU members provided the sole source of financing for the CTU's collective bargaining efforts. Thus, until the early 1980s, nonunion employees in the bargaining unit received all the benefits of collective bargaining without bearing any of the costs. In an effort to remedy this "free rider" problem, the Illinois General Assembly amended the state's School Code by enacting a fair share fee statute in 1981. The statute provided that when a school board has a collective bargaining agreement with its employees, the board may require that its nonunion employees pay their proportionate share of the cost of collective bargaining to the union representing the bargaining unit. To ensure enforcement of a school board's fair share fee requirement, the statute also authorized the board to make appropriate deductions from the paychecks of nonunion employees. Ill.Rev. Stat. ch. 122, para. 10-22.40a (1987). Acting under this newly granted statutory authority, the Board began to deduct proportionate share payments from the paychecks of its nonunion employees during the 1982-83 school year. The CTU assisted the Board in implementing this fair share scheme by calculating the amount of the proportionate share deduction. Based on financial records from the previous year, the CTU determined that approximately 5% of its expenditures did not relate to collective bargaining or contract administration. Consequently, the CTU set the proportionate share fee at 95% of union dues. In anticipation of complaints from the Board's nonunion employees, the CTU also established a procedure for considering objections to the amount of the proportionate share deduction.

In March 1983, seven of the Board's nonunion employees filed this lawsuit against the CTU, the Board, and their respective officers. Basing their suit on 42 U.S.C. § 1983, plaintiffs assailed the constitutionality of the Illinois fair share fee statute. They asserted that the statute, both on its face and as applied, violated their rights under the First and Fourteenth Amendments. In addition to seeking damages, plaintiffs requested a preliminary injunction prohibiting the Board from making any further proportionate share deductions. After conducting a hearing on the subject, this court denied plaintiffs' motion for a preliminary injunction. 573 F.Supp. 1505 (N.D.Ill.1983). In rejecting plaintiffs' request for injunctive relief, the court found that the challenged statute was facially valid. Id. at 1512-14. The court also determined that defendants' application of the statute did not offend the Constitution. Under the Board's 1982 fair share deduction scheme, the CTU made a prededuction adjustment of the fair share fee. Additionally, the CTU provided nonunion employees with a postdeduction opportunity to object to the fee. If an employee raised a valid objection to the amount of the fee, the CTU would issue rebates of any improperly deducted funds to all nonunion employees. The court concluded that these procedures adequately safeguarded plaintiffs' constitutional rights. Id. at 1514-21.

Disagreeing with this conclusion, the Seventh Circuit reversed this court's judgment. 743 F.2d 1187 (7th Cir.1984). A three-judge appellate panel found that although the fair share fee statute passed constitutional muster, the CTU's procedures for implementing the statute violated plaintiffs' constitutional rights. In particular, the panel criticized the CTU's objection procedure, which provided for postdeduction arbitration and rebates. Writing for two of the three judges on the panel, Judge Posner ruled that this procedure did not take sufficient precautions against the improper use of fair share contributions to finance political or ideological activities unrelated to collective bargaining. Id. at 1194-96. As the Supreme Court recognized in Abood v. Detroit Board of Education, supra, a union's expenditure of fair share funds to support political causes violates nonunion employees' First Amendment rights to free speech and free association. Judge Posner's critique of the CTU's procedure, however, went beyond the First Amendment concerns articulated by Abood. In an unprecedented ruling, he asserted that the Fourteenth Amendment prohibits a union from using fair share funds "to support any union activities that are not germane to collective bargaining, whether or not the activities are political or ideological." 743 F.2d at 1194 (emphasis in original). The challenged CTU procedures did not entirely foreclose the possibility that the CTU might spend fair share contributions on nonpolitical activities unrelated to collective bargaining. Consequently, based on his novel "due process" theory, Judge Posner concluded that defendants' fair share scheme unconstitutionally deprived plaintiffs of their liberty of association without due process. Id. at 1194-96.

Judge Flaum, the third judge on the Hudson panel, concurred in the result. Id. at 1197 (Flaum, J., concurring). He agreed with the other judges on the panel that the CTU's procedure for considering objections to the proportionate share fee did not adequately protect the First Amendment rights of nonunion employees. Id. at 1198-99 (Flaum, J., concurring). With respect to Judge Posner's finding of a due process violation, however, Judge Flaum parted company with his colleagues. According to Judge Flaum, both the Illinois statute and the Board's collective bargaining agreement prohibited the very same expenditures that Judge Posner found impermissible under the due process clause. Since the courts could preclude such improper expenditures simply by applying state law, Judge Flaum reasoned that the Court of Appeals did not need to reach the due process issue. Regarding Judge Posner's due process analysis as unnecessary and inappropriate, Judge Flaum declined to join the majority opinion. Id. at 1199-1200 (Flaum, J., concurring).

Defendants appealed the Seventh Circuit's Hudson ruling to the Supreme Court. A unanimous Court affirmed the Seventh Circuit's finding that defendants' fair share scheme did not adequately guard against ideological expenditures that would violate the First Amendment rights of nonunion employees. 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986). Unlike Judge Posner, however, the nine Justices saw no need to consider the due process implications of nongermane, nonideological expenditures. Id. at 304 n. 13, 106 S.Ct. at 1074 n. 13.¹ Having invalidated the CTU's objection procedure on First Amendment grounds, the Hudson Court focused on devising a procedural framework that would better protect the free speech rights of fair share contributors. The Court held that when a union collects proportionate share fees, the Constitution requires that the union provide nonunion employees with "an adequate explanation of the basis for the fee, a reasonably prompt opportunity to challenge the amount of the fee before an impartial...