Richard W. Reese George R. Jordan Richard D. Kaufman Betty Slater Larry L. Wygle Marion R. Cramblit Timothy Wanner, on Behalf of Themselves and the Class That They Represent v. City of Columbus Gregory Lashutka, Mayor Local 1632 Ohio Council 8 American Federation of State, County and Municipal Employees
Docket: 94-3108
Court: Court of Appeals for the Sixth Circuit; March 6, 1996; Federal Appellate Court
The case involves a challenge by nonunion city employees in Columbus against the collection of fair share fees by their exclusive representative unions, specifically Local 1632 and its affiliates, for expenses related to collective bargaining activities. The plaintiffs argue that their First, Fifth, and Fourteenth Amendment rights are violated by the mandatory deduction of these fees, which they claim are used for non-chargeable activities such as litigation, lobbying, and advertising.
The district court previously ruled that the unions could collect these fees under Ohio law, which allows for deductions from nonunion employees' paychecks to cover negotiation and enforcement costs associated with collective bargaining agreements. The court also found that the Ohio Council 8 provides necessary legal services to local unions, while Local 1632 operates without permanent staff.
The plaintiffs are appealing the district court's denial of their motion for summary judgment regarding the chargeability of the extra-unit expenses and the decision to lift a preliminary injunction against fee collection. Approximately 1,500 nonunion employees are affected by these deductions.
On March 15, 1992, objecting employees initiated a lawsuit against the defendants, claiming violations of their First Amendment due process rights due to inadequate notice regarding fair share fee collection. The district court issued a preliminary injunction preventing the City from collecting these fees and certified the class, noting constitutional deficiencies in the unions' financial disclosures. Although the unions attempted to address these issues with a second notice and recalculated fees, the court denied their motion to lift the injunction due to ongoing inadequacies.
On January 15, 1993, the objecting employees sought a summary judgment, asserting that the fair share fees collected from June 1990 to May 1992 violated their constitutional rights due to insufficient notices and procedures. The district court partially granted their motion on June 23, ruling that under Lehnert v. Ferris Faculty Association, unions could charge fees for litigation, lobbying, and advertising related to collective bargaining, even if these fees supported activities outside the objectors' unit. On September 22, the court dissolved the preliminary injunction, concluding that the amended fee notice met constitutional standards, while reserving certain issues for trial. A partial settlement was reached, allowing the objecting employees to appeal the chargeability of "extra-unit" expenses.
The review of the injunction's dissolution is subject to an abuse of discretion standard, while legal premises are reviewed de novo. Initially, the district court believed the objectors were likely to succeed on certain unresolved legal issues, but later dissolved the injunction, indicating the objectors did not demonstrate a strong likelihood of success regarding the chargeability of advertising and lobbying expenses. The court's decision was based on the premise that these expenses were chargeable.
Regarding the denial of the summary judgment motion, the court found that genuine issues of material fact remained for trial. The objecting employees cited Lehnert as their primary authority, arguing that the district court erred in deeming the litigation, lobbying, and advertising expenses chargeable, while the unions contended that both legal principles and the majority opinion in Lehnert support the constitutionality of the charges for "extra-unit" expenses.
Lehnert established a three-part test to evaluate whether mandatory fair share fees violate a dissenting employee's First Amendment rights. The test asserts that such fees are constitutional if they (1) relate to collective bargaining, (2) are justified by the government's interest in maintaining labor peace and preventing free-riding, and (3) do not significantly burden free speech beyond what is inherent in agency or union shop arrangements. While Justices Scalia, O'Connor, Souter, and Kennedy advocated for a "statutory duties" test that would limit the fees to costs associated with the union's role as an exclusive bargaining agent, the majority favored the three-prong test in a 5-4 decision.
The district court found that the fair share fee included litigation expenses from Ohio Council 8 for legal services related to collective bargaining. It determined that these expenses were pertinent to grievance handling and enforcement of collective bargaining agreements, justifying their inclusion in the fair share fee. The court concluded that the unions demonstrated that most litigation services from Ohio Council 8 were related to collective bargaining, thus supporting the charge to objecting employees.
The district court did not err in finding a material fact dispute regarding the chargeability of these extra-unit litigation costs and subsequently dissolved an injunction against the fee assessment after initially ruling it unconstitutional. The court later affirmed that the objectors did not present a substantial likelihood of success in contesting the charge, considering it constitutional under Lehnert. Although Justice Marshall noted that the issue of chargeability for extra-unit costs was not directly addressed in Lehnert, the majority opinion's approval of pooled expense charges in similar contexts indicates that Lehnert supports the inclusion of these litigation services in the fair share fee.
Four Supreme Court Justices concurred that extra-unit litigation costs are not chargeable to objecting employees if unrelated to their bargaining unit, as established in Lehnert. However, a majority allowed charges for pooled expense arrangements, stating that local bargaining representatives may charge objecting employees for their share of costs related to chargeable activities of state and national affiliates, provided there is some benefit to the local union members from those activities. The district court ruled that the litigation services in question were not "unrelated" to the objectors' unit and upheld the dissolution of the injunction against these expenses.
Regarding advertising expenses, the district court denied the objecting employees' request to prohibit unions from charging for advertising related to collective bargaining. Although the item did not explicitly show benefits to the objectors' unit, the court found a genuine issue of material fact regarding potential benefits. The court reasoned that collective bargaining-related advertising could be constitutional under Lehnert, drawing parallels to expenses approved in the case. The district court concluded that such advertising is essential for the union's success in negotiations and that the objectors failed to demonstrate a lack of benefit from the expenditures. The court did not abuse its discretion in denying summary judgment to the objecting employees or in dissolving the injunction concerning advertising charges.
The district court granted summary judgment to objectors regarding the chargeability of lobbying expenses not related to collective bargaining agreements. However, it allowed unions to charge for lobbying related to the negotiation, ratification, or implementation of such agreements. The objectors contend that this provision permits charges for lobbying unrelated to their agreements, failing the last two prongs of the three-prong Lehnert test. They misinterpret the Lehnert plurality, where four Justices concluded that lobbying expenses not tied to collective bargaining are nonchargeable, specifically referencing lobbying for the "Preserve Public Education" program. These Justices opined that charges could only be constitutionally imposed in relation to contract ratification or implementation, not for legislative lobbying or political activities, as this would infringe on dissenters' First Amendment rights. Justice Marshall's broader view would allow charges for a public relations campaign related to collective bargaining, despite a lack of close nexus, arguing it affects public-sector labor contract terms without imposing additional First Amendment burdens. The court noted that the lobbying expense must meet the three-prong test, and there is uncertainty whether the lobbying under Item 6 benefited the objectors' unit. The district court did not apply the three-prong test to the lobbying expense in Item 6 nor assess whether there was a genuine issue of material fact regarding its benefit to the objectors' unit, despite Item 6 stating it pertains to collective bargaining-related lobbying, fulfilling the first prong of the Lehnert test.
Objectors do not contest that the charge in Item 6 pertains solely to lobbying related to collective bargaining, satisfying the first prong of the Lehnert test. However, the matter is remanded to assess whether the lobbying expense benefited the objectors' unit and if the expenditure aligns with the government's interests in labor peace and preventing free-rider issues. The district court's judgments are affirmed regarding litigation and advertising expenses; however, the denial of summary judgment for the plaintiffs concerning the lobbying expense is reversed and remanded for further review. Additionally, the dissolution of the preliminary injunction is reversed specifically for the lobbying charge and remanded for further proceedings. The unions charged objecting employees fees for litigation services and lobbying/advertising related to collective bargaining, with some fees benefiting other local unions. Objectors classify certain expenses not solely linked to their Local 1632's collective bargaining agreement as "extra-unit" or "indirect" expenses. The issuance of a preliminary injunction requires an evaluation of four factors: likelihood of success on the merits, potential for irreparable harm, impact on others, and public interest. The district court ruled that Lehnert allowed the charge for extra-unit litigation expenses, indicating the objectors did not demonstrate a substantial likelihood of success on this point. Various justices expressed differing views on charges for strike preparation expenses, with some supporting the idea that these expenses were related to collective bargaining while others opposed it, arguing that such activities fall outside the union's role as a government-appointed bargaining agent. Justice Scalia, applying a statutory duties test, concluded that the lobbying expenses in question were not chargeable, as they were not part of the collective bargaining process, though he and others would allow charges related to a union's statutory duties.
Justices Scalia, O'Connor, Souter, and Kennedy would allow lobbying expenses related to collective bargaining if they benefited the objecting employees' unit and were incurred as part of the unions' statutory representation duties, though this was not the majority view. In the Lehnert case, Justices Blackmun, Rehnquist, White, and Stevens found that lobbying expenses related to the Preserve Public Education program were not chargeable, as they were unrelated to collective bargaining. They ruled that dissenters could only be charged for lobbying expenses in the context of contract ratification or implementation, and not for legislative lobbying or political activities, to prevent infringement on First Amendment rights. They agreed that the first two prongs of their test for chargeability were only met if the lobbying pertained to the dissenters' collective bargaining agreement.
Justice Marshall, however, would have allowed charges for a public relations campaign related to lobbying, seeing it as germane to collective bargaining despite its weak connection to the dissenters' agreement. He argued that it did not impose additional burdens on dissenters' First Amendment rights. The text suggests that Justices Blackmun, Rehnquist, White, Stevens, and Marshall would permit a lobbying expense charge if it met their three-prong test. The case at hand requires a determination of whether the lobbying expense in Item 6 benefited the objectors' unit and if the expense aligns with government interests in labor peace and preventing free-riders, as the district court did not clearly apply the three-prong test or assess material facts regarding the benefit to the objectors' unit. Item 6 claims the charge is for collective bargaining-related lobbying, satisfying the first prong of the Lehnert test, with the objectors not contesting its intended purpose. The case is remanded for further evaluation of the lobbying expense's benefit to the objectors' unit and its justification under government policy interests.
The district court's judgments are affirmed regarding litigation and advertising expenses, while the denial of summary judgment for the plaintiffs concerning lobbying expenses is reversed, with the matter remanded for further proceedings. Similarly, the preliminary injunction's dissolution is reversed solely regarding the lobbying expense charge and remanded. The unions charged objecting employees fees for litigation services and lobbying/advertising expenses related to collective bargaining, which also benefited other local unions. Objectors classified expenses incurred during negotiation, ratification, or implementation of collective bargaining agreements as extra-unit or indirect expenses. A preliminary injunction may only be granted if a legal remedy is deemed inadequate, with the court considering factors such as likelihood of success, potential for irreparable injury, harm to others, and public interest (NAACP v. City of Mansfield). In a 1993 ruling, the district court allowed the charge for extra-unit litigation expenses, indicating objectors failed to show a substantial likelihood of success. Justices Blackmun, Rehnquist, White, and Stevens concluded that strike preparation expenses directly related to collective bargaining did not infringe on dissenters' free speech rights and did not contravene public policy. Justice Scalia ruled that the challenged lobbying expenses were not chargeable, asserting that lobbying activities, while impactful on negotiations, fall outside the collective-bargaining process. He and Justices O'Connor and Souter would allow charges for lobbying expenses if they pertained to the union's statutory duties as a bargaining agent, while Justice Kennedy supported charges for lobbying expenses that were reasonably necessary for fulfilling these duties. However, this view did not reflect the majority opinion.
