When Must The Fair Share Fee Amount Be Disclosed To Fee Objectors?

Stephen R. McCutcheon, Jr., Attorney at Law

Employees in a workplace subject to a union security clause may object to the union’s spending of funds on political matters and other issues that are not germane to collective bargaining. Such employees may resign from the union, but must pay to the union an amount equivalent to the initiation fee and monthly dues to cover representational and contract administration activities. This is typically called a “fair share fee.” On September 10, 2014, the National Labor Relations Board issued a decision in United Food & Commercial Workers International Union, Local 700 (361 NLRB No. 39) rejecting the General Counsel’s invitation to require unions to provide employees information on the percentage of union expenditures spent on non-germane issues before forcing them to decide not to join the union and formally object to the non-germane expenses.

There are trade-offs that employees must consider when making this decision, as resigning from or declining to join the union means that he or she may not vote in union elections, on contract ratification, and other matters, and may result in hostility and ostracism. These ramifications are often weighed against the objections a employee may have against union political activities, and the decrease in fees that would not be charged.

Existing decisions of the National Labor Relations Board do not require the union to disclose to the employee how much of the union’s expenses are attributable to germane representational duties vs. non-germane political and other activities until the employee has properly resigned from or refused to join the union, and taken the additional step of making a proper objection to nongermane expenses.

The NLRB’s General Counsel urged the Board to reconsider this rule, and require the union to disclose this information when an employee is first informed of a union-security clause requiring either membership or payment of the fair share fee on the ground that the disclosure was necessary for the employees to make an informed choice of whether to become a fee objector.

In a split decision, a majority of the Board declined the General Counsel’s request to require unions to provide these disclosures before employees must decide to refuse to join the union and state their objection. Balancing the convenience of the unions and the burden of calculating the reduced fees that would apply to a fee objector against the interest of employees, a majority of the Board concluded that its current rule “is not only permissible, but also strikes the most reasonable balance between the competing interests at stake.”

Members Miscamarra and Johnson disagreed, concluding:

Requiring that unions provide employees with the percentage of nonrepresentational expenses [when making the initial notice of the right to object], before the employees must decide their status under a union-security clause, comports with basic considerations of fairness, is essential to the exercise of their statutory rights, and is consistent with the overwhelming national approach of “more notice, not less.”

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