Olsen v. Communications Workers of America (CWA), Civ. A. No. 82-3443.

• Decision Date: 16 March 1983
• Docket Number: Civ. A. No. 82-3443.
• Citation: 559 F. Supp. 754
• Parties: Allen OLSEN, et al., Plaintiffs, v. COMMUNICATIONS WORKERS OF AMERICA (CWA), et al., Defendants.
• Court: U.S. District Court — District of New Jersey

559 F. Supp. 754

Allen OLSEN, et al., Plaintiffs, v. COMMUNICATIONS WORKERS OF AMERICA (CWA), et al., Defendants.

Civ. A. No. 82-3443.

United States District Court, D. New Jersey.

March 16, 1983.

Henry A. Stein, Jeffry A. Mintz, Stein & Shapiro, Medford, N.J., and Nelson Kieff, National Right to Work Legal Defense Foundation, Inc., Springfield, Va., for plaintiffs.

Irwin I. Kimmelman, Atty. Gen. of N.J. by Alfred E. Ramey, Jr., Deputy Atty. Gen., Trenton, N.J., for defendant, Thomas H. Kean, Governor, State of N.J.

Steven P. Weissman, CWA District 1, Trenton, N.J., James B. Coppess, Adair & Goldthwaite, P.C., Michael T. Leibig, Zwerdling, Schlossberg, Leibig & Kahn, Washington, D.C., Sidney Reitman, Reitman, Parsonnet, Maisel & Duggan, Newark, N.J., for Communications Workers of America, AFL-CIO, CWA District 1, and Locals 1031, 1032, 1033, 1034, 1037, 1038, 1039, and 1040; Laurence Gold, AFL-CIO, Washington, D.C., of counsel.

OPINION

DEBEVOISE, District Judge.

Plaintiffs, employees of the State of New Jersey who are not members of the union which is the majority representative of their employment unit, instituted this action attacking the validity of N.J.S.A. 34:13A-5.5 and 5.6. These statutory provisions permit a public employer and a majority representative to include in a collective bargaining agreement provisions requiring non-members to pay a representation fee to the union. Plaintiffs also assert that they have been deprived of First Amendment rights to oppose implementation of the statute and to seek to persuade other State employees to join them in their opposition.

Defendants are Communications Workers of America, AFL-CIO ("CWA") (the majority representative), CWA District 1, CWA Locals 1031, 1032, 1033, 1034, 1037, 1038, 1039 and 1040, the State of New Jersey and Thomas H. Kean, Governor of the State of New Jersey.

In their complaint, plaintiffs seek to be designated representatives of a class pursuant to Fed.R.Civ.P. 23(b)(2) and (b)(3). The class is asserted to consist "of all public employees represented by CWA's locals, but who exercised their right not to be a member of defendant union and, therefore, have paid, and are paying, a representation fee pursuant to N.J.S.A. 34:13A-5.5 and 5.6." Plaintiffs seek injunctive and declaratory relief, nominal and punitive damages, and attorneys fees and expenses of suit.

On December 6 and 7, 1982, a hearing was held on plaintiffs' application for preliminary injunctive relief. Decision was reserved. Thereafter, plaintiffs' motion for class certification was denied for the reason that the positions and interests of nonmembers of the union are likely to be diverse and for the reason that the principal objective of a class action can be realized by treating this as a test case. This opinion constitutes my findings of fact and conclusions of law upon the preliminary injunction application.

FINDINGS OF FACT

A. The Statute: The statutory provisions which are applicable in this case are described in the opinion in Robinson v. State of N.J., 547 F.Supp. 1297, 1299-1301 (D.N.J.1982).

B. The Majority Representative: CWA is a national labor organization which has established Districts as geographic subdivisions. The Districts are staffed and financed as divisions of the national union and are not independent organizations.

The national union charters local unions which are separate organizations, electing their own officers and setting their own budgets. Under the CWA constitution, collective bargaining within the established bargaining units must be conducted under the direction of the CWA Executive Board, and all contracts and agreements entered into must be in the name of the national union.

In March 1981, CWA was certified as the majority representative for a State-wide unit of Administrative and Clerical State Employees. In August 1981, CWA was certified as the majority representative for three additional State-wide bargaining units consisting of Professional Employees, Primary Level Supervisors and Higher Level Supervisors, Eight State Locals were chartered by CWA for the purpose of representing employees in the four bargaining units—Locals 1031, 1032, 1033, 1034, 1037, 1038, 1039 and 1040. The Locals are not the certified bargaining representatives. Rather, as mentioned above, the CWA national union is the collective bargaining representative and signs all collective bargaining agreements.

Plaintiff Anderson is employed within Local 1032's jurisdiction (Department of Transportation and New Jersey Public Broadcasting Authority). Plaintiff Lang is employed within Local 1034's jurisdiction (Departments of Environmental Protection, Health, and Labor and Industry employed in Mercer County). Plaintiffs Olsen, Smartt and Harrington are employed within Local 1039's jurisdiction (Departments of Human Services, Corrections and Parole and Community Affairs employed in designated counties). Plaintiff Yull is not an employee in a CWA bargaining unit and, unlike the other plaintiffs, has not paid representation fees.

CWA and the State of New Jersey entered into negotiations and in October 1981 the negotiations resulted in four two-year collective bargaining agreements (one for each bargaining unit), retroactive to July 1, 1981.

Article II, Section B(2) of each contract provides for the deduction of a representation fee in lieu of dues from the regular paychecks of non-union members in the respective units. Deductions commenced on or about July 12, 1982. The amount of the deduction is determined as follows:

b. Amount of Fee

Prior to the beginning of each contract year, the Union will notify the State in writing of the amount of regular membership dues, initiation fees and assessments charged by the Union to its own members for that contract year, and the amount of the representation fee for that contract year. Any changes in the representation fee structure during the contract year shall be in accordance with B.1.d. above.

The representation fee in lieu of dues shall be in an amount equivalent to the regular membership dues, initiation fees and assessments charged by the majority representative to its own members less the cost of benefits financed through the dues, fees and assessments and available to or benefiting only its members, but in no event shall such fee exceed 85% of the regular membership dues, fees and assessments.

CWA member dues were set at an amount equal to two hours pay. Dues and representation fees are forwarded directly to national CWA. National CWA retains 40% of the funds; it places 50 cents for each employee into a CWA Defense Fund; and it remits the balance of almost 60% to the locals. It will be noted that (subject to the 85% limitation) the representation fee is to be an amount equal to regular member dues, initiation fees and assessments less the cost of member only benefits but not less the amounts spent for activities of a partisan or political or ideological nature. This, of course, is consistent with the New Jersey statutory provision permitting representation fees.

Article II, Section B(2) of each contract also provides for the creation of a Demand and Return System:

d. Demand and Return System

The representation fee in lieu of dues only shall be available to the Union if the procedures hereafter are maintained by the Union.

The burden of proof under this system is on the Union.

The Union shall return any part of the representation fee paid by the employee which represents the employee's additional pro rata share of expenditures by the Union that is either in aid of activities or causes of a partisan political or ideological nature only incidentally related to the terms and conditions of employment, or applied toward the cost of other benefits available only to members of the majority representative.

The employee shall be entitled to a review of the amount of the representation fee by requesting the Union to substantiate the amount charged for the representation fee. This review shall be accorded in conformance with the internal steps and procedures established by the Union.

The Union shall submit a copy of the Union review system to the Office of Employee Relations. The deduction of the representation fee shall be available only if the Union establishes and maintains this review system.

If the employee is dissatisfied with the Union's decision, he may appeal to a three-member board established by the Governor.

C. Details of the Demand and Return System: In contrast to the Demand and Return System described in Robinson v. State of N.J., supra, CWA has established a highly sophisticated method for determining what expenditures are reimbursable, what expenditures are not reimbursable and how to apportion expenditures which are for both reimbursable and non-reimbursable items.

Under the New Jersey CWA Demand and Return System, an employee seeking reimbursement must submit a request in writing to CWA's secretary-treasurer in Washington, D.C. Upon receipt of the request, 40 percent of the payments received from the objecting fee payer is placed in an escrow account to be held until a rebate is paid to the objector and any dispute concerning the amount of the rebate has been resolved. The account bears interest at 5.25% annually and rebates to objectors include interest at this rate for the period their money is held. For the fiscal year ended September 30, 1982, CWA received more than 2000 rebate requests from workers employed by the State of New Jersey and represented by CWA.

The CWA Executive Committee determines the amount of the union's rebatable activities for the year on the basis of the calculation described below and on the basis of data which the CWA locals representing New Jersey State employees forward to the Executive Committee. The Executive Committee is required to make its determination by the January 1 following the close of the fiscal year.

Along with any rebate payment, an objector receives an...