Lowary v. Lexington Local Bd. of Educ.

• Decision Date: 17 May 1990
• Docket Number: No. 88-4191,88-4191
• Citation: 903 F.2d 422
• Parties: 134 L.R.R.M. (BNA) 2264, 58 USLW 2735, 60 Ed. Law Rep. 709 William LOWARY and Sara Wyatt, Plaintiffs-Appellants, v. LEXINGTON LOCAL BOARD OF EDUCATION, Ohio Education Association, Lexington Teachers Association, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 422

903 F.2d 422

134 L.R.R.M. (BNA) 2264, 58 USLW 2735,

60 Ed. Law Rep. 709

William LOWARY and Sara Wyatt, Plaintiffs-Appellants, v. LEXINGTON LOCAL BOARD OF EDUCATION, Ohio Education Association, Lexington Teachers Association, et al., Defendants-Appellees.

No. 88-4191.

United States Court of Appeals Sixth Circuit.

Argued Sept. 28, 1989.

Decided May 17, 1990.

James A. Calhoun, Calhoun, Benzin, Kademenos & Heichel, Mansfield, Ohio, Glenn M. Taubman, National Right to Work Legal Defense Found., Springfield, Va., for plaintiffs-appellants.

Alexander M. Andrews, Ulmer & Berne, Cleveland, Ohio, for defendants-appellees Lexington Local Bd. of Educ., Mark Plotnick, Susan Umbarger, James Bollinger, Rick Bell, and Helen Gilroy.

Bruce R. Lerner, Robert H. Chanin, Bredhoff & Kaiser, Washington, D.C., Ira J Mirkin, Green, Haines, Sgambati, Murphy & Macala, Youngstown, Ohio, for defendant-appellee Lexington Teachers Ass'n.

Jeremiah A. Collins, argued, Bredhoff & Kaiser, Washington, D.C., Ira J Mirkin, Green, Haines, Sgambati, Murphy & Macala, Youngstown, Ohio, Loren L. Braverman, Office of the Atty. Gen. of Ohio, Columbus, Ohio, for defendant-appellee Ohio Educ. Ass'n.

Before: MERRITT, Chief Judge, RYAN, Circuit Judge, and PECK, Senior Circuit Judge.

MERRITT, Chief Judge.

Plaintiffs, dissenting nonunion teachers of a "closed-shop" bargaining unit in Ohio, attack as unconstitutional various procedures contained in the dues collection plan of the local and state teacher's unions. They appeal the adverse portions of the District Court's judgment in their action challenging the constitutionality of three fair share fee provisions in the dues collection plan made a part of a collective bargaining agreement. 704 F.Supp. 1476.

Specifically, the two nonunion teachers brought suit pursuant to 42 U.S.C. Sec. 1983 against their employer, the Lexington Local Board of Education (School Board); their local union, the Lexington Teachers Association; and its state affiliate, the Ohio Education Association. They asserted that the so-called "fair share" fee collections or union dues charged against them violate the Supreme Court's decision in Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986). They sought relief for the 1985-86 collections, which already had occurred, as well as future collections, particularly the 1986-87 and 1987-88 collections made during the pendency of this litigation.

Four issues are raised on this appeal. First, plaintiffs challenge the District Court's holding that Hudson cannot be applied retroactively to allow recovery for the 1985-86 fee collections. Second, plaintiff Wyatt challenges the District Court's absolute denial of all relief for the 1985-86 collections, assuming the retroactive application of Hudson, because of her failure to file a formal objection with the union pursuant to the terms of the unconstitutional collection fee plan. Third, plaintiffs object to the District Court's decision to uphold the union's 1987-88 fee collection plan containing a so-called "local union presumption" under which the chargeable portion of the local teacher union dues is presumed to be the same as the chargeable portion of the state teacher union dues. Fourth, plaintiffs challenge the District Court's refusal to order restitution for all of the fees which had been collected in 1985-86 and 1986-87 pursuant to the unconstitutional fee collection plans.

We affirm the District Court in part, and reverse the District Court in part. We hold that Hudson should be applied retroactively under the three-pronged test set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). In addition, plaintiff Wyatt is entitled to relief despite her failure to file a formal objection with the union because the fee plan, including its notice provisions, is unconstitutional. We also hold that the "local union presumption" contained in the 1987-88 plan is unconstitutional. However, we affirm the District Court's order denying restitution for all fees which had been collected in 1985-86 pursuant to unconstitutional fee collection plans. Plaintiffs may recover only the nonchargeable portions of the collected fees.

I. Facts

A collective bargaining agreement between the School Board and the local union provided that those bargaining unit members who did not join the union would be required to have a "fair share fee" deducted from their salaries to defray the costs of union representation. These fair share fee collection provisions changed each year from 1985-87, and fees were collected pursuant to each of these three plans.

A. The 1985-86 School Year

The 1985-86 fee collection plan provided that each nonunion employee must pay an initial fee equal to 100% of the union dues paid by union members. In previous years, both plaintiffs had been informed of certain objection procedures, although no objection procedure information was contained in the plan for the 1985-86 school year. Any teacher who objected to paying the full fair share fee, by following specific objection notice procedures contained in earlier plans, could receive a rebate of any portion paid that would have been used to fund partisan political or ideological causes unrelated to the collective bargaining function of the employee organization. But under the plan, the unions unilaterally selected their own umpire to determine the ultimate amount to be rebated to objecting nonmembers.

Plaintiff Lowary objected and a small portion of his dues was escrowed. Plaintiff Wyatt did not object and none of her fair share fee was escrowed.

Subsequently, the Supreme Court in Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986), set forth the "constitutional requirements for [a union's] collection of agency fees." Id. at 310, 106 S.Ct. at 1078. The Sixth Circuit elaborated on these requirements in Tierney v. City of Toledo, 824 F.2d 1497 (6th Cir.1987). Plaintiffs then brought this suit claiming that defendants' actions failed to meet the procedural requirements set forth in Hudson and Tierney.

In October 1987, the District Court initially held that the 1985-86 fee collections were unconstitutional under Hudson and Tierney but that only plaintiff Lowary was deemed entitled to relief because plaintiff Wyatt had failed to make a formal objection under the otherwise unconstitutional plan. Then a year later, on motion of the defendants, the District Court vacated its order as to plaintiff Lowary and denied relief for the 1985-86 fair share fee collections to both plaintiffs Lowary and Wyatt, holding that Hudson and Tierney should not be applied retroactively under the three-pronged test set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971).

B. The 1986-87 School Year

The 1986-87 fee collection plan provided that each nonmember might receive notice of the fee collections and financial disclosure prior to the collections. This notice advised each fair share feepayer of his right to an advance reduction of the nonchargeable portion of his fair share fee only if he agreed to waive his right to object before an impartial decisionmaker. In other words, an objector could either (1) accept a union-determined rebate and receive that rebate immediately, or (2) pay 100% of his dues into escrow and challenge the Ohio Education Association's determination before an impartial decisionmaker.

The District Court entered a preliminary injunction prohibiting further payroll deductions for fair share fees until the School Board certified that the entire amount deducted would be placed in escrow. An escrow account was established and further deductions occurred. Plaintiffs appealed this preliminary injunction to this Court, which ruled that any collection of the 1986-87 fees was improper (even if held in escrow), and ordered that the escrowed fees be remitted to the plaintiffs. Lowary v. Lexington Local Bd. of Educ., 854 F.2d 131 (6th Cir.1988).

On October 21, 1987, the District Court held that the 1986-87 fee collection plan was unconstitutional. Denying plaintiffs' request for the restitution of all of the fees which had been seized pursuant to the unconstitutional fee collection plan, the District Court held that plaintiffs were "entitled to a return of all monies determined to be non-chargeable by the impartial decisionmaker." The impartial decisionmaker, who was selected pursuant to the unconstitutional plan, determined that the bulk of the fees were chargeable. Plaintiffs also were awarded nominal damages and a declaratory judgment.

C. The 1987-88 School Year

In response to this Court's decision in Tierney, the unions proposed a revised fee collection plan to take effect for the 1987-88 school year. The District Court found that, in all relevant respects, the procedures satisfied the constitutional requirements established in Hudson and Tierney, including a "local union presumption" used to calculate the amount of the advance reduction for objecting feepayers. The Court clearly stated that the presumption was not binding on the impartial decisionmaker in determining the ultimate amount of the fee. The "presumption" provides that:

[t]he percentage of chargeable expenditures by local and district associations will be presumed by the arbitrator to be whatever percentage is found to be appropriate for chargeable OEA expenditures. Since the local and district associations spend a significantly larger percentage of their budgets on chargeable expenditures, this presumption means that objectors will be charged less than they lawfully could be charged.

Lowary v. Lexington Bd. of Educ., 704 F.Supp. 1456, 1466-67 (N.D.Ohio 1988). (emphasis added).

Plaintiffs argue that this "local union presumption" allows the unions to avoid providing audited financial disclosure statements to nonunion employees merely by producing unaudited one-page expenditure sheets. Defendants...