Tavernor et al v. IL Federation of Teachers

• Decision Date: 06 September 2000
• Docket Number: No. 99-2766,99-2766
• Citation: 226 F.3d 842
• Parties: (7th Cir. 2000) Bernadette Tavernor, et al., Plaintiffs-Appellants, v. Illinois Federation of Teachers and University Professionals of Illinois Local 4100, Defendants-Appellees
• Court: U.S. Court of Appeals — Seventh Circuit

Page 842

226 F.3d 842 (7th Cir. 2000)

Bernadette Tavernor, et al., Plaintiffs-Appellants, v. Illinois Federation of Teachers and University Professionals of Illinois Local 4100, Defendants-Appellees.

No. 99-2766

In the United States Court of Appeals For the Seventh Circuit

Argued January 21, 2000

Decided September 6, 2000

Appeal from the United States District Court for the Central District of Illinois, Springfield Division. No. 99-3050--Jeanne E. Scott, Judge.

Before Posner, Diane P. Wood, and Evans, Circuit Judges.

Diane P. Wood, Circuit Judge.

Two points in the area of public labor relations are by now well established. First, public employers may have a collective bargaining agreement with a union that requires all employees, union members and nonmembers alike, to contribute to the union's representational activities--that is, the agreement may include a "union security clause." Second, those who object to nonrepresentational activities of the union have the right to pay fees that exclude contributions to those activities--so-called "fair share fees." See Hudson v. Chicago Teachers Union Local No. 1, 475 U.S. 292, 302 (1986), citing Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977).

In this case, we must assess the system used by the union representing certain clerical employees of the University of Illinois at Springfield to implement those rules, to ensure that this system respects the First Amendment rights of objecting employees. The district court upheld the union's system. We conclude, however, that even though the union followed the mechanics of certain statutory procedures established by the State of Illinois, its system in operation did not provide sufficient protection to the objectors. We therefore reverse and remand for further proceedings.

I

The plaintiff employees work in a bargaining unit represented exclusively by the University Professionals of Illinois, Local No. 4100 (UPI), an affiliate of the Illinois Federation of Teachers (IFT). IFT in turn is an affiliate of the American Federation of Teachers, a national labor organization. The University's collective bargaining agreement (CBA) makes UPI the recognized exclusive bargaining agent for members and nonmembers alike. It also contains a union security clause that requires employees either to join the union or to pay "fair share fees" to cover the cost of their representation in collective bargaining.

Fair share fees are the solution to free rider problems in the collective bargaining context. Unions assist employees by helping them bargain more effectively with employers. The idea is the simple "strength in numbers" aphorism: if employees are united and speak with one voice, they are more likely to get what they want. Not all employees want to join unions, however. This presents a possible free-rider problem because all employees are covered by a collective bargaining agreement, it is possible for employees who elect not to join the union to reap the benefits of the union's representation without paying the dues associated with union membership. And if representation is "free", fewer employees would elect to join unions, leaving it to their co-workers to bear the costs. Fair share fees ensure that the costs of collective bargaining are borne by all employees, regardless of their choice to join the union. Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507, 517 (1991); Communications Workers of America v. Beck, 487 U.S. 735, 748 & n.5 (1988); Ellis v. Brotherhood of Ry., Airline & S.S. Clerks, 466 U.S. 435, 447 (1984); Abood, 431 U.S. at 221-22, 224.

The Illinois legislature has adopted the Illinois Educational Labor Relations Act (IELRA), 115 ILCS 5/1 et seq., which establishes procedures governing collective bargaining arrangements between public educational institutions and their employees, including the assessment of fair share fees for objectors. See 115 ILCS 5/11. The Illinois Education Labor Relations Board (IELRB) administers the IELRA, and among other things, resolves disputes between objectors and unions regarding fair share fees. Under the IELRA and the governing regulations, see Ill. Admin. Code sec. 1125.10 et seq., unions and employers may agree to charge fair share fees to public employees who are not members of the union but are covered by the collective bargaining agreement. The union certifies the amount of the fair share fee to the employer. The amount certified can neither exceed union dues nor include any costs related to supporting candidates for political office. The employer deducts the certified fair share fee from nonmembers' earnings and pays the fee to the union. At least two weeks before the deductions begin, the union must provide notice of the fair share fee to all nonmembers as well as the right to object to that amount. Ill. Admin. Code sec. 1125.20.

A nonmember has six months after the first deduction in which to object to the fair share fee; the nonmember waives any objection to fees collected before the objection. Id. sec. 1125.30. Objections are effective only for the year in which the fair share fee is sought, id., so objections must be renewed on an annual basis. If a nonmember objects to the amount of the fair share fee (either in whole or in part), the objecting nonmember's full fee continues to be deducted; however, the fee (or the portion thereof in dispute) is placed in an interest- bearing escrow account managed by the IELRB or the union. The IELRB then consolidates all fair share fee objections for a single bargaining unit and conducts an administrative hearing to determine the correct fair share fee. Id. sec. 1125.60. The hearing is held within 30 days of the last possible time for filing objections--in other words, seven months after the first deduction. Id. sec. 1125.80.

IFT developed the fair share fee program adopted by UPI. Because UPI represents educational employees, it uses the school year calendar for the calculation (and deduction) of fair share fees. As provided for in the IELRA, the University automatically deducts fair share fees from nonmembers' paychecks. In this case, UPI has instructed the University to deduct an amount equivalent to 100 percent of union dues as nonmembers' fair share fee payment. The notice UPI sent to nonmembers indicates the amount of the fair share fee (expressed as a percentage of union dues) as well as information about how the fee was calculated. For the 1997-98 school year, the notice said that the fair share fee was 84.46 percent of full union dues; for the 1998-99 school year it was 86.78 percent. Notwithstanding those calculated percentages, however, in both years the notice also said that a fair share fee equivalent to 100 percent of union dues would be deducted. The notice indicated how objections could be filed with the IELRB. As the IELRA requires, when someone objects, the full amount of the deducted fees (i.e., 100 percent of the union dues for that objector) is held in an interest bearing escrow account managed by the IELRB. If a person does not object within the period allowed, he waives the right to object to the fee, and the UPI receives the amount deducted (in this case, 100 percent of union dues) in its entirety.

The plaintiffs filed objections to the collection of funds exceeding the calculated fair share fee with the IELRB for both the 1997-98 and 1998-99 school years. As the system required, the University continued to deduct an amount equivalent to 100 percent of union dues from their paychecks, but it placed these funds in an escrow account instead of turning them over to the union. In July 1998, the IELRB consolidated the plaintiffs' objections to the 1997-98 fees and set a hearing for September 10, 1998. The hearing was eventually held on October 30, 1998; the Administrative Law Judge rendered a decision on May 17, 1999.

Just before the IELRB hearing was scheduled to take place, IFT had offered all objectors an immediate refund, in an amount greater than the calculated non-chargeable portion of the fee, in exchange for dropping their objections. The Labor Board approved the withdrawal of their charge and disbursed their escrowed fees, thinking that the settlement had been accepted. In fact, it had not been. Instead, the plaintiffs had withdrawn their objections without accepting the settlement offer, without notifying the union, and without telling their lawyer. (This explains why these plaintiffs, although listed as objectors at the initial stages of the proceeding, are absent from the list of objectors at the conclusion of the IELRB proceedings.) The union attempted to rectify the situation when it discovered what had happened by determining the amount that had been disbursed from the plaintiffs' escrowed funds, adding interest at the prime rate through May 1999, and sending the non-chargeable amounts to the plaintiffs' attorney.

None of this satisfied the plaintiffs, who were out to establish a broader principle. Tavernor, along with Richard Barnes, Carol Dixon, Cynthia Ervin, Donna Johnson, Peggy Kitchen, Ginger Mayer, Angela Pezold, Marcia Rossi, and Linda Squires, filed a class action complaint on behalf of (1) all nonmembers who were not notified that they could object to the Union's collection of fees for indisputably nonchargeable activities and have their fee reduced accordingly and (2) nonmembers who took the step of making their objection known to UPI. The plaintiffs asked to have the union fair share fee collection procedure declared a violation of the First Amendment. They argued that UPI's process does not include sufficient procedural safeguards (as required under the First and Fourteenth Amendments) and that UPI must reduce fair share fees upon receipt of the nonmembers' objection for all costs that are indisputably not chargeable to collective bargaining. By way of relief, they sought an injunction against the collection of fair share fees and a refund with interest of all funds they had paid...