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Thursday, November 1, 2007

Paycheck Protection: Much Less Than Meets the Eye

Without Exclusive Representation, Paycheck Protection Would Be Unnecessary

On June 14 the U.S. Supreme Court handed down its unanimous verdict in Davenport v. Washington Education Association (WEA) in which the Court upheld the constitutionality of the “paycheck protection” section of a Washington state campaign-finance-regulation initiative adopted in 1992 by 72 percent of the voters. That section required labor unions to get the permission of agency fee payers before the unions could spend any of those fees for election-related purposes. The decision was widely hailed as a significant victory for workers who are represented by unions but do not want their money used for union politicking. Alas, the victory was much less than meets the eye.

American union law denies individual workers the right to decide for themselves whether to be represented by a union on their jobs. Rather, under the doctrine of “exclusive representation,” if a majority of employees on a job want a union to represent them, all workers must submit to such representation whether they want it or not. They don’t have to be union members, but they must accept representation. Except in the 22 right-to-work (RTW) states, this often gives rise to “union security” arrangements in which every worker who is not a member of the union is forced to pay “agency fees” to the union in order to keep his job. Washington is not an RTW state.

In its 1977 Abood decision the Court said, on First Amendment grounds, that agency fee payers in government employment do not have to pay for a union’s political and ideological advocacy. In its 1986 Hudson decision the Court set out minimal procedural rules unions must follow to enforce the Abood decision. The minimal rule at stake in the Davenport case was that agency fee payers must be given a chance to opt out of paying any fees unions would use for political purposes. If they opted out, fee payers would get a refund of a portion of the agency fees. If they said nothing, unions could use their agency fees for politics.

The paycheck-protection provision of Washington’s 1992 campaign-finance law went beyond Hudson’s opt-out rule. It said that before a union could use any agency fees for politics, the fee payers must first consent. In other words, they would have to opt in. Silence was now taken as denial of permission to use the fees for politics.

The WEA ignored the opt-in rule of the initiative until, in 2000, the Evergreen Freedom Foundation filed a complaint with then-attorney general Christine Gregoire, who proceeded to launch the litigation that culminated in the Court’s Davenport ruling. Along the way six of the justices on the Washington state Supreme Court declared the paycheck-protection measure unconstitutional because it placed too much of a burden on the WEA’s right of free political speech. The state court said the Supreme Court’s earlier agency-fee jurisprudence (Abood, Hudson, among others) balanced the constitutional right of unions to receive money from those they represent in order to participate in political speech against the constitutional rights of agency fee payers not to be coerced into funding political speech with which they disagree. The paycheck protection provision, the state court said, broke that balance.

Justice Antonin Scalia, who wrote the Davenport decision, quickly dispensed with that bit of sophistry: “The agency-fee cases did not balance constitutional rights in such a manner because unions have no constitutional entitlement to nonmember employees’ fees.” First Amendment rights inhere in individuals, not groups. Scalia also wrote, “It is undeniably unusual for a government agency to give a private entity the power to tax government employees.” Only unions representing government employees have that privilege, and there is nothing in the Constitution that prohibits government from regulating that privilege. Governments can revoke that privilege altogether (as in the RTW states), and they can restrict it, as Washington voters did, by implementing an opt-in rule.

Since the 1950s the National Right to Work Committee has tried to enact RTW laws in as many states as possible. The Committee is now promoting a national RTW law which would eliminate the collection of forced union dues throughout the country. Many RTW supporters have regarded paycheck-protection legislation as, at best, a diversion of resources, effort, and attention from the more fundamental RTW effort. Nevertheless, the National Right to Work Legal Defense Foundation participated in the Davenport litigation against the WEA. It did so because if the state Supreme Court’s ruling that unions have a constitutional right to receive money from nonmembers to fund the unions’ political speech had been allowed to stand, the whole RTW principle would have been in legal jeopardy.

The main significance of Davenport is that it is now clear the unions have no constitutional right to seize money from nonmembers. However, except in the RTW states, unions continue to have a statutory privilege to do so. This is the “unusual” legal, but immoral privilege of “a private entity . . . to tax government [and private] employees” Justice Scalia alluded to. That egregious grant of tax powers to unions is what ought to be addressed. Paycheck protection accepts what is evil and merely attempts to make it less burdensome. This is better than doing nothing, but it is very little indeed.

Because of Davenport, other state governments and/or voters may be encouraged to enact paycheck-protection legislation. However, if they do so I do not think workers who want to be union-free will be much better off than they are now. Notwithstanding Davenport, the opt-in provision of paycheck protection is no longer available to Washington state employees. In anticipation of the Court’s decision, Washington’s legislature and Governor Christine Gregoire simply repealed the opt-in rule. The Court said that states may impose opt-in rules, but it did not say states must do so. Oh, yes: The legislation that removed the opt-in rule included an emergency clause that makes it impossible for Washington voters to restore paycheck protection by another referendum. Such is the union-based politics of plunder.

Unenforceable Protection

Various paycheck protection measures have been enacted in several states. Even in those cases where politicians do not conspire with unions to repeal or amend them, they are practically unenforceable. The paycheck-protection principle is that agency fee payers should not be forced to pay for union politicking. All it takes is a bit of creative accounting and imaginative tinkering with definitions for unions to evade the law. For example, when the Washington legislature and governor, at the behest of their union bosses, repealed the opt-in provision, they also declared that henceforth no nonmember agency-fee money would be considered to have been spent on politics if the union receiving the fees had sufficient other money to have made the political expenditures. The fact that money is fungible makes this a nonsense proposition. The agency fees will simply take the place of the non-fee money that would otherwise be spent on something else. The bottom line is the same: Agency fees make increased political spending possible.

Classical liberals should be interested in fighting coercive unionism. The fundamental instrument of coercion is exclusive representation. Without that, the whole union-security question and its concomitant RTW issue would be moot. Without exclusive representation there would be nothing about unions from which a paycheck would need protection.

  • Charles Baird is a professor of economics emeritus at California State University at East Bay.

    He specializes in the law and economics of labor relations, a subject on which he has published several articles in refereed journals and numerous shorter pieces with FEE.