January 15, 1997
PUBLIC EMPLOYEES PROTECTION INITIATIVE
by: Charles Baird
Emeritus Professor of Economics and Former Director of the Smith Center
California State University, East Bay, CA 94542
Introduction
The purposes of this white paper are to make a case against union security in general and in government employment in particular, to explain why merely restricting union uses of forced dues is insufficient, and to present the text of a proposed Public Employees Protection Initiative (PEPI) as composed by Patrick J. Manshardt, Staff Attorney with the Individual Rights Foundation in Los Angeles, California.
The Case Against Union Security in General
The issue of union security derives from the principle of exclusive representation. Under exclusive representation workers are not free to designate representatives of their own choosing. Rather, whether a group of employees is to be represented by a union or not is decided by majority vote. It would be more appropriate to call exclusive representation monopoly bargaining. Exclusive representation ought to be repealed, but the proposed initiative does not go that far.
Except in the twenty-one right-to-work states, American labor relations law authorizes unions certified by majority vote as exclusive bargaining agents to agree with employers to include union security clauses in their collective bargaining contracts. The most important types of union security arrangements are the union shop and the agency shop. In the former, all workers represented by a union certified as an exclusive bargaining agent must become members of the union and pay dues whether they want to or not. In the latter, workers do not have to become members, but they have to pay union dues which are usually euphemistically called "agency fees." Forced dues and agency fees are taxes imposed on workers by unions. In exchange, the unions grant permission for the workers to work. In the twenty-one right-to-work states workers do not need to buy permission to work from any labor unions. They are guaranteed that they may work for any employers who are willing to hire them, on terms that are mutually agreeable to the workers and their employers, whether a union likes it or not.
The agency shop is the most common form of union security in state and local government employment. Title VII of the 1978 Civil Service Reform Act, which governs unionism in federal employment, does not allow any form of union security. Therefore, if PEPI became law California state and local government employees would have the same protection against forced dues that federal government employees already enjoy.
Forced dues coercion is justified by unions and their apologists on the basis of a so-called "free rider" argument. Unionists claim that since exclusive representation forces them to represent all workers in a bargaining unit, it is only fair for workers who "enjoy" such representation services to pay their fair share of the unions' costs of providing them. Otherwise some represented workers would be free-riders.
First, note that without exclusive representation there could be no free riders. If unions bargained only for their voluntary members and no one else, there would be nothing on which nonmembers could free-ride. Unions justify exclusive representation on the grounds that it is "democratic." They argue that if a majority of workers on a job vote to be represented by a union, the minority should be forced to go along. After all, as the argument goes, a member of Congress is elected to represent all the citizens in a congressional district, not just the majority. As it is with Congress, the argument concludes, so should it be with unions. But the analogy with congressional elections is inapt. Unions are not governments. They are private groups. Liberty requires a clear distinction between the private and governmental spheres of human action. In private matters decisions are made by individual free choice. Individuals can choose to go along with a majority, as they do in many voluntary organizations like the Rotary, but they cannot be forced to do so. If they don't like what a majority does they can simply leave the voluntary organization without penalty. In contrast, under exclusive representation if a worker refuses to go along with a majority he is penalized by losing his job. Exclusive representation amounts to giving governmental coercive power to private groups called unions. The United States and Canada are the only two countries in the world that have monopoly bargaining based on exclusive representation. Other countries have members-only bargaining -- i.e., unions represent their voluntary members and no one else.
The union establishment fought in earnest to get exclusive representation privileges. In 1934 they even fought President Franklin Roosevelt over the issue. In 1935 they won. Ever since, they have claimed that exclusive representation is a burden on them that justifies coercing nonmembers to pay dues -- i.e., justifies the imposition of private taxes. This is a bit like the Menendez brothers asking for mercy on the grounds that they are orphans.
Second, it is not clear that workers represented by a union "enjoy" any benefits therefrom. Whether unions, on average, make wages of those they represent higher than they otherwise would be is an unsettled question among labor economists. Some unions do, and some don't. Those that do, usually do so at the expense of lower wages for workers they do not represent.
Moreover, even when a union is successful in getting higher wages for those whom it represents, some of those workers may still be worse off than they would be with no union. For example, suppose a union is responsible for a $100 wage increase enjoyed by a particular worker who has a strong religious or philosophical aversion to unions. The fact that the worker is forced to allow the union to represent him could impose a subjective cost on him that he evaluates at, say, $120. Unionization then imposes a net harm of $20 on this worker. If, under union security, he were forced to pay union dues, he would be a forced rider. Given the subjective nature of the relevant costs, it is impossible for anyone other than the worker himself to know whether a union produces net benefits or net harms for him. In other words, it is impossible for any union to prove that any worker is a free rider at any time.
The Further Case Against Union Security in Government Employment
The arguments against union security in general apply to private sector employment as well as government employment. They are grounds for making California a right to work state for all workers. PEPI does not go that far. PEPI would outlaw forced dues of any kind only for state and local government employees in California. The issue is more urgent in the public sector because of the special nature of government employment.
The Bill of Rights protects American citizens, including government employees, against actions of the government. For example, the First Amendment assures all Americans that government may not interfere with their freedom to associate or not associate with any legal private groups. Government is forbidden to discriminate against a person on the basis of his decision to affiliate or not to affiliate with a political party, service club, or union.
Government is the employer of every public sector employee. When a government, or any agency of government, refuses to hire a person simply because he refuses to allow a union represent him, that person's freedom of association is abridged by government. Worse, when a government refuses to hire a person simply because he refuses to pay tribute to a union in order to purchase the union's permission to work, that person's freedom of association is abridged by government.
As Justice Powell wrote in his separate opinion in the Abood case [431 US 209 (1977)]:
The ultimate objective of a union in the public sector, like that of a political party, is to influence public decisionmaking in accordance with the views and perceived interests of its membership.... In these respects the public sector union is indistinguishable from the traditional political party in this country....Nor is there any basis here for distinguishing 'collective bargaining activities' from 'political activities.... Collective bargaining in the public sector is 'political' in any meaningful sense of the term (at 257).
If Justice Powell is correct, and I think he is, when a government forces its employees to be represented by and pay dues to a public sector union it is the same as forcing them to affiliate with a political party. That is obviously unconstitutional
The US Supreme Court acknowledged these First Amendment problems in the Abood case but the majority asserted that the government's interest in keeping labor peace and avoiding free riders was sufficient to override such First Amendment concerns.
I have already explained why the free rider problem is a red herring. As to labor peace, it is hard to imagine what the Court had in mind. The sine qua non of unions is labor strife. The whole idea of unions is that workers and employers are natural enemies, and workers need unions to fight their battles. Moreover, the statistical record is clear: When workers unionize, labor strife increases. Perhaps what the Court had in mind was that if unions are given union security they will cause less strife than they otherwise would. In that case union security is simply a Court-authorized protection racket.
Insufficiency of Restricting Unions' Uses of Forced Dues
In a series of cases from 1961 to 1991 the US Supreme Court imposed restrictions on the permissible uses of forced union dues. Involuntary dues payers can only be charged for the permissible uses. The most important cases for government employees are Abood v. Detroit Board of Education [431 US 209 (1977)], Ellis v. Railway Clerks [466 US 435 (1984)], Chicago Teachers Union v. Hudson [475 US 292 (1986)], and Lehnert v. Ferris Faculty Association [500 US 507 (1991)]. In brief, the permissible uses of forced dues (i.e., the only union activities for which involuntary dues payers can be charged) are collective bargaining, contract administration, grievance adjustment, and activities "closely related" to those three. For example, in one case the union could prove that it spent only 10 percent of its revenue for permissible purposes. Therefore, involuntary dues payers could only be forced to pay 10 percent of the regular dues charged to voluntary union members.
Unfortunately, Supreme Court decisions do not enforce themselves. Unless the decisions are codified (written into a statute) the executive branch of government will not enforce them. Thus the only way that involuntary dues payers can be assured of their rights is by litigation and arbitration. For example, suppose that a union asserts that 90 percent of its revenue is spent for permissible purposes, so it charges its forced dues payers 90 percent of regular dues. If any of those forced dues payers thinks the percent should be, say, 40 percent they must file a formal objection with the union. If the union disagrees with them they then must seek legal counsel either to file a law suit or to represent them in a formal arbitration proceeding. Legal counsel is very expensive. A typical arbitration would involve from $40,000 to $60,000 of legal expenses. In effect, most forced dues payers have to concede to the unions that are ripping them off.
Even if the decisions were codified, there is the problem of determining what specific union expenditures are chargeable to forced dues payers. While the unions must present forced dues payers with audited statements of permissible expenditures, the auditors attest only to the accuracy of the dollar amounts reported in each category. They have nothing to do with defining the categories themselves. The fact that the Supreme Court allows forced dues payers to be charged for activities that are "closely related" to collective bargaining, contract administration and grievance adjustment is a huge loophole which unions have learned to exploit. For example, in a 1996 arbitration proceeding involving teachers in Livermore, California and the California Teachers Association the arbitrator found that the union's activities with respect to opposing Proposition 187 and a teaching conference on such topics as "Preserving Public Education -- Challenges from Extremists" were chargeable to forced dues payer because they were "related to the union's representation of its members." Unions would inevitably play the same sort of definition games no matter how tightly a statute was drawn.
In my judgment it is much better to outlaw all forced dues collections. If PEPI becomes law the whole argument over what is and what is not chargeable to forced dues payers would be moot. No state or local government employee could be a forced dues payers. Individual state and local government employees could be voluntary union members and voluntary dues payers, but no one could be forced to be. I turn now to the proposed text of PEPI.
Proposed Text of PEPI (as of 1/10/97)
I. It shall be unlawful for a public employer to do any of the following:
a. Enter into an agreement with an employee organization which includes a provision or clause for the organizational security of the public employee organization.
b. Impose or threaten to impose reprisals on employees, to discriminate or threaten to discriminate against employees, or otherwise interfere with, restrain or coerce employees because of their exercise of rights guaranteed by this chapter. For purposes of this subdivision, "employee" includes an applicant for employment or reemployment.
c. Fail to post, in a conspicuous place at the place of employment, notice of the rights guaranteed to employees by this chapter.
II. It shall be unlawful for a public employee organization to do any of the following:
a. Enter into an agreement with a public employer which includes a provision or clause for the organizational security of the public employee organization.
b. Impose or threaten to impose reprisals on employees, to discriminate or threaten to discriminate against employees, or otherwise interfere with, restrain or coerce employees because of their exercise of rights guaranteed by this chapter. For purposes of this subdivision, "employee" includes an applicant for employment or reemployment.
c. Cause or attempt to cause the State to violate this chapter.
d. Fail to meet its duty of fair representation to any employee in the bargaining unit of which the employee organization is the exclusive representative, regardless of the employee's status with the employee organization.
III. Enforcement.
Any violation of this chapter shall be considered an unfair labor practice and be within the jurisdiction of the California Public Employment Relations Board. Any employee rights under this chapter are enforceable by an employee by filing an unfair labor practice charge with the Public Employment Relations Board.
Any previous enactments inconsistent with this chapter are to be considered to be superseded by this chapter.
If any part or parts of this chapter are found to be in conflict with federal law or the United States Constitution, the chapter shall be implemented to the maximum extent that federal law and the United States Constitution permit. Any provision held invalid shall be severable from the remaining portions of this chapter.
IV. Employee Wage or Salary Deductions
a. No employee may authorize an employer to deduct money from an employee's wages or salary for purposes of payments of dues or fees to an employee organization making a contribution to any political action committee or fund, or to any intermediary for this purpose. For purposes of this section, intermediary includes, but is not limited to, an employee organization.
b. Nothing in this section shall prohibit an employee from directly making personal contributions to a political action committee or fund.
V. Definitions.
As used in this chapter:
a. "Public employee" means any employee of the State of California, or any of its political subdivisions or agents, who by law is eligible to be represented by an employee organization in their employment relations with a public employer.
b. "Public employer" means the State of California or any of its agents or political subdivisions (including, but not limited to: The University of California, California State University, the California Community Colleges, and all public school districts in the State of California) where the state or any of its political subdivisions or agents acts as an employer of personnel.
c. "Employee organization" means any organization which includes employees of a public employer and which has as one of its primary purposes representing those employees in their employment relations with that public employer.
d. "Exclusive representative" means the employee organization recognized or certified as the exclusive negotiating representative of public employees in an appropriate bargaining unit of a public employer.
e. "Organizational security" means any of the following:
1. An arrangement pursuant to which a public employee may decide whether or not to join an employee organization, but which requires him or her, as a condition of continued or new employment, if he or she does join, to maintain his or her membership in good standing for the duration of the written agreement.
2. An arrangement that requires a public employee, as a condition of continued or new employment, either to join the recognized or certified employee organization, or to pay the organization a service fee for the duration of the written agreement.