Concerning Processing of Beck Cases
OF THE GENERAL COUNSEL
|MEMORANDUM GC 98-11
||August 17, 1998
TO: All Regional Directors,
Officers-in-Charge, and Resident Officers
FROM: Fred Feinstein, Acting General Counsel
SUBJECT: Guidelines Concerning Processing of Beck
In Communications Workers v. Beck, 487 U.S. 735
(1988), the Supreme Court held that a collective-bargaining representative under the NLRA
may not charge an objecting nonmember covered by a contractual union-security clause for
union activities unrelated to collective bargaining, contract administration or grievance
adjustment. In ALPA v. Miller, -- U.S. --, 158 LRRM 2321 (May 26, 1998), the
Supreme Court recently held that agency fee objectors under the Railway Labor Act could
not be required to exhaust union-established arbitration procedures before bringing their
fee disputes to federal court. This Memorandum is intended to provide guidance on the
processing of unfair labor practice charges alleging that unions have improperly charged
objectors for nonrepresentational activities, in light of ALPA v. Miller.
In California Saw, 320 NLRB 224, 233 (1995), enf'd
133 F.3d 1012 (7th Cir. 1998), the Board held that, "when or before a union seeks to
obligate an employee to pay fees and dues under a union-security clause, the union should
inform the employee that he has the right to be or remain a nonmember and that nonmembers
have the right (1) to object to paying for union activities not germane to the union's
duties as bargaining agent and to obtain a reduction in fees for such activities; (2) to
be given sufficient information to enable the employee to intelligently decide whether to
object; and (3) to be apprised of any internal union procedures for filing objections. If
the employee chooses to object, he must be apprised of the percentage of the reduction,
the basis for the calculation, and the right to challenge these figures." Thereafter,
in United Brotherhood of Carpenters and Joiners of America, Local Union No. 943
(Oklahoma Fixture Co.),1 the Board "made it clear that when a union seeks to
require an objecting employee to pay dues under a union security clause, reasonable
procedures must be available for filing challenges to the amounts charged."
While the above requirement to have a challenge procedure
is based upon the union's duty of fair representation obligation, this requirement has as
its genesis the Supreme Court decision in Chicago Teachers Union Local 1 v. Hudson,
475 U.S. 292 (1986). In Hudson, the Court held that first amendment considerations
required, inter alia, that a union must give objectors "a reasonably prompt
opportunity to challenge the amount of the fee before an impartial decision maker."
475 U.S. at 310. The Court in Hudson, however, did not answer the question of whether
agency fee objectors would be required to utilize or exhaust this arbitration remedy
before commencing a federal-court action.
In ALPA, the Supreme Court answered the above
question and held that agency fee objectors cannot be required to exhaust union
arbitration procedures to challenge a union's allocation of its expenditures despite the
requirement in Hudson that the union make such an arbitration available to agency fee
objectors. The Court found no basis for forcing into arbitration a party who never agreed
to submit his claim arising under federal law to such a process.
The Court, however, acknowledged ALPA's argument that
arbitration was an efficient way to identify facts and issues in dispute and avoid
multiple litigation. The Court also noted the union's argument that "it is difficult
to conceive how a court could fairly try an agency fee dispute ab initio, given
that the plaintiffs who challenge an agency fee calculation are not required to state any
grounds whatsoever for their challenge." (158 LRRM at 2325).
In responding to the above union contentions, the Court
viewed ALPA as overstating the difficulties of holding a federal-court hearing without a
preparatory arbitration. Thus, in responding to ALPA's assertions, the Court held that
while prior court decisions found that an objector's burden is only to make any objection
known2 and that the union retains the burden of proof,3 this does not mean that a
plaintiff can file a generally phrased complaint and then require the union to prove the
germaneness of all of its expenditures without any specificity from the objector.
Specifically the Court held that,
Agency fee challengers, like all other civil litigants,
must make their objections known with the degree of specificity appropriate at each stage
of litigation their case reaches: motion to dismiss; motion for summary judgment; pretrial
conference (158 LRRM at 2325).
The Court stated:
The very purpose of Hudson's notice requirement is to
provide employees sufficient information to enable them to identify the expenditures that,
in their view, the union has improperly classified as germane. See 475 U.S. at 306-307.
With the Hudson notice, plus any additional information developed through reasonable
discovery, an objector can be expected to point to the expenditures or classes of
expenditures he or she finds questionable. Although the union must establish that those
expenditures were in fact germane, the shifted burden of proof provides no warrant for
blocking dissenting employees from bringing their claim in federal court in the first
instance, if that is their preference. (158 LRRM at 2326).
The Court's holding in ALPA is equally applicable to agency
fee objector cases arising under the NLRA. In this regard, the Court made clear that the
exhaustion of remedies doctrine has no application to any agency fee arbitration since
such private unilaterally established arbitration is not encompassed within the normal
application of exhaustion of remedies principles (158 LRRM at 2325). Thus, any requirement
to arbitrate agency fee disputes must be based on the agreement of the agency fee
objector. Absent such an agreement, the Court would not impede access to federal courts.
(158 LRRM at 2324-25)
The same concern of the Court not to impede agency fee
objectors' access to federal courts "for adjudication of their federal rights"
(id. at 2326) is also shared by the Board and the Court concerning impeding access to
Board processes. See NLRB v. Industrial Union of Marine and Shipbuilding Workers,
391 U.S. 418 (1968), where the Supreme Court agreed with the Board's conclusion, 159 NLRB
1065 (1966), that a union violated Section 8(b)(1)(A) by expelling from membership a
member who had filed an unfair labor practice charge against the union without first
exhausting internal union procedures to resolve his dispute with the union, which he had
accused of causing his discharge by his employer.
Consistent with Marine & Shipbuilding Workers, the
Board has not required an employee to exhaust internal union procedures before filing an
unfair labor practice charge alleging a breach of the duty of fair representation. See,
e.g., IBEW Local 581, 287 NLRB 940, 948 fn. 25 (1987); IBEW Local 367, 230
NLRB 86, 94-95 (1977), aff'd 578 F.2d 1375 (3d Cir. 1978), cert. denied 439 U.S. 1070
(1979); IBEW Local 592, 223 NLRB 899, 902 fn. 10 (1976). In these cases, the unions
had internal procedures for dealing with complaints about the operations of their hiring
halls and argued that the Board should dismiss unfair labor practice charges relating to
those operations because the disgruntled employees had failed to exhaust the internal
union grievance procedures before filing their unfair labor practice charges. The Board
rejected these arguments, holding that the employees had not forfeited their statutory
rights even though they had failed to exhaust the internal union procedures. These
conclusions reflected Board concern with preserving free and open access to the Board and
Finally, while the Board held in California Saw that
RLA precedents premised on constitutional principles are not controlling in the context of
the NLRA (320 NLRB at 226), the Board will look for guidance in Supreme Court RLA cases,
particularly when the Court appears to be resting its analysis on the duty of fair
representation (320 NLRB at 227 n.25). Further, in California Saw (320 NLRB at
232-233), the Board found that cases arising out of the NLRA share the same concern about
fairness as public sector and RLA cases and that this fairness equated to a union's duty
of fair representation. Therefore, in California Saw, 320 NLRB at 224 fn. 1, the
Board agreed with the ALJ, who had held at 276-77, that deferral of the objectors'
challenges to the union's internal dispute resolution procedure, including AAA
arbitration, was not appropriate, relying on IBEW Local 581, supra. The Board
specifically noted its agreement with the ALJ, even though no party had filed exceptions,
as to this holding. The Board similarly found deferral inappropriate in Electronic
Workers IUE (Paramax Corp.), 322 NLRB 1 n. 5 (1996), remanded on other grounds sub
nom. Ferriso v. NLRB, 125 F.3d 865 (D.C. Cir. 1997).
In summary, based upon duty of fair representation
considerations alone, the weight of authority under the NLRA is that employees raising
duty of fair representation claims cannot be required to exhaust internal union dispute
resolution procedures before filing unfair practice charges. Since, as noted above, a
union's Beck obligations flow from its duty of fair representation, it follows that
Beck objectors similarly cannot be required to use internal union dispute
resolution procedures to resolve their Beck disputes with a union.4 Instead,
objectors have the right to present their fee disputes with unions directly to the Board.5
At the same time, however, agency fee objectors have the burden of making known their
objections with the required degree of specificity.
Applying these principles to the investigation and
litigation of unfair labor charges alleging the charging of agency fees prohibited by Beck,
it is initially noted that historically the Agency has required more than a generalized
allegation of an unfair labor practice before proceeding with an investigation and merit
determination. Thus, Casehandling Manual Section 10056.1 requires the charging party to
file a statement outlining and be ready to submit proof concerning the basis for the
charge, including dates, documents, and a list of witnesses. Failure to submit such
evidence may result in dismissal. Also, CHM Section 10056.5 provides that only when the
investigation of the charging party's evidence and pertinent leads points to a prima facie
case should the charged party be contacted to provide evidence. This approach to the
investigation of ULP charges, which includes allegations of improper charging of agency
fees, is consistent with the Supreme Court's view in ALPA that the agency fee objector
cannot meet his burden in litigation by merely filing a generalized challenge.
Accordingly, pursuant to the Manual and historical Agency
practice, in charges filed with the Agency, the charging party agency fee objector is
required to explain why a particular expenditure treated as chargeable in a union's
disclosure is not chargeable and to present evidence or to give promising leads that would
lead to evidence that would support that assertion. Therefore, an unfair labor charge
alleging improper agency fee charges should be dismissed if the objecting party generally
asserts that he has been improperly charged and contends merely that it is the union's
burden to prove the germaneness of all of its charges. Such a dismissal would be
consistent with the Casehandling Manual and the Supreme Court decision in ALPA as
discussed above. All cases raising questions as to whether the charging party has met this
burden should be submitted to the Division of Advice.
Once the charging party has met his burden of presenting
sufficient evidence which points to a violation, the burden is then on the "union to
establish that the expenditures were in fact germane." ALPA, 158 LRRM at 2326.
In this regard, during the investigation the union should be informed of the specific
expenditures that are claimed to be non-chargeable and the specific evidence which raises
doubt as to the validity of these union charges to objectors. If the union is unable to
meet its burden of demonstrating that the expenditures were germane, complaint should
issue. All cases raising questions as to whether the charged party has met this burden
should be submitted to the Division of Advice.6
Once complaint has issued, the General Counsel has the
burden of specifying the expenditures for which the union improperly charged objectors and
why there is reason to believe that contention. The burden is then on the union to
establish that the expenditures were in fact germane or properly allocated. This burden of
proof was initially placed on the union in Railway Clerks v. Allen, 473 U.S. 113,
122 (1963) (the burden of proving the proportion of political to total union
expenditures). The Court expanded this burden in Hudson by requiring the union to
have an arbitration proceeding and then placing the burden on the union during arbitration
to demonstrate the validity of the expenditure (475 U.S. at 316-308). Finally, in ALPA
the Court placed the same burden on the union in federal court litigation which it has in
the arbitration proceeding (158 LRRM at 2326).
This allocation of burden in unfair labor practice
litigation is not inconsistent with NLRB v. Transportation Management Corp., 462
U.S. 393 (1983), or with the General Counsel's obligation under Section 10(c) of the Act.
It is clear that a union has a duty of fair representation obligation to charge an agency
fee objector only those expenses germane to the union's representational role. We would
also contend, based on Allen, Hudson, and ALPA, that since the union
is in possession of all the facts and records, a union also has a duty of fair
representation obligation to demonstrate the validity of the expenditures. Thus, once the
General Counsel has presented evidence to establish a prima facie case that there is
reason to believe that an objector was improperly charged, the union can defend against
the General Counsel's case by showing that the charge was consistent with the union's duty
of fair representation obligation of charging only for germane expenditures. The General
Counsel ultimately prevails in his complaint that the union violated its duty of fair
representation obligation if the union cannot finally demonstrate the validity of the
All questions not addressed by this memorandum should be
submitted to the Division of Advice.
Acting General Counsel
To Be Released to the Public
1 322 NLRB 825 (1997).
2 Abood v. Detroit Board of Education,
431 U.S. 209, 241 (1977).
3 Hudson, 475 U.S. at 306 n.16.
4 Of course, objectors may choose to use a
union's nonexclusive arbitration system instead of Board proceedings to challenge a
union's charges. See ALPA, 158 LRRM at 2326. All cases raising questions concerning
ULP charges attacking resulting arbitral awards should be submitted to the Division of
5 This is the same conclusion the D.C. Circuit
Court reached in Abrams v. CWA, 59 F.3d 1373 (1995), where it held that a union
violated its duty of fair representation when it required an objector to go through
6 Whether the union relies on an audit performed
by an outside independent auditor is relevant to the question of whether the union has met
its burden of proper allocation.