Amicus Curiae Brief — Air Line Pilots v. Miller

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Text

No, 97-428

IN THE

Supreme Court of the United States

OCTOBER TERM, 1997

Arr LINE PILOTS ASSOCIATION,

Petitioner,

Vv.

RoBERT A. MILLER, ef ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE AMERICAN FEDERATION OF LABOR

AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

JONATHAN P. HIATT

JAMES B. CoPPESS

815 16th Street, N.W.

Washington, D.C. 20006

LAURENCE GOLD

(Counsel of Record)

1000 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 833-9340

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TABLE OF AUTHORITIES

CASES

Abood v. Detroit Board of Education, 431 U.S. 209

SERIE EST SN OE EE SER Ls oI a ob, passim

Abrams v. Communications Workers, 59 F.2d 1373

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tee . : Alexander v. Gardner-Denver Co., 415 U.S. 36

P TIO cinicitvesiansigalapbacrialnastiamictitneitssamnentiiieietabriadainninesdemhaiaths

Barrentine v. Arkansas-Best Freight System, Inc.,

PS TRS Se, ee

Celotex Corp. v. Catrett, 477 U.S. 317 (1986)

Chicago Teachers Union v. Hudson, 475 U.S. 292

RII iis icciiucciddatneindapntnledeenhiabanibiniealsaae

Clayton v. Automobile Workers, 451 U.S. 679

| ERP RIOR aR OS ee Ge a ae ie eM ber anh aS Sead 15

: Communications Workers v. AT&T, 40 F.3d 426

ae Ke Rr 15

Ts ‘ Communications Workers v. Beck, 487 U.S. 735

a (1) SE FEL

oo a ea re at eee . Corporation of Presiding Bishop v. Amos, 483 U.S.

Pesan dS . . gt FLT ENS RT gitiaigis’s

oid a ea aR | . Ellis v. Railway Clerks, 466 U.S. 435 (1961)

Se ae ? : | Hudson v. Chicago Teachers Union, 922 F.2d 1306

| - (7th Cir.), cert. denied, 501 U.S. 1280 (1991)...

7 or Keller v. State Bar of California, 496 U.S. 1

| EE ACCRA bet ma a

Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507

IID packs tuietinensthnichtestandslacninadbee ean aie Aa iia

Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982) ..

: i Machinists v. Street, 367 U.S. 740 (1961)

‘4 v4 McCarthy v. Madigan, 503 U.S. 140 (1992)... 16

Ye 2

TABLE OF AUTHORITIES—Continued

McDonald v. West Branch, 466 U.S. 284 (1984)... 16

Railway Clerks v. Allen, 373 U.S. 113 (1963) .......... passim

Railway Employes’ Dept. v. Hanson, 351 U.S.

BBE CIDER) nancscnvcenensns ens nnsncesonevseensorerneverencossseornoess 5, 12

Republic Steel Corp. v. Maddox, 379 U.S. 650

C1BGB) non cencensecervecrencnseenenmrorennsenvesenecacsrorssormncsereoanees 18

Texas Dept. Of Community Affairs v. Burdine,

IS 17

STATUTES

National Labor Relations Act § 8(a) (3) -...... ee 6

Railway Labor Act § 2, Eleventh .........................- 5

In THE

Supreme Court of the United States

OcTOBER TERM, 1997

No. 97-428

AIR LINE PILOTS ASSOCIATION,

Petitioner,

Vv.

ROBERT A. MILLER, ef ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE AMERICAN FEDERATION OF LABOR

AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

The American Federation of Labor and Congress of

Industrial Organizations (“AFL-CIO”) a federation of

75 national and international unions with a total mem-

bership of approximately 13,000,000 working men and

women, files this brief amicus curiae with the consent of

the parties as provided for in the Rules of this Court.’

‘No counsel for a party authored this brief amicus curiae in

whole or in part, and no person or entity, other than the amicus

curiae, made a monetary contribution to the preparation or submis-

sion of this brief.

SUMMARY OF ARGUMENT

In a series of decisions, this Court first established a

right of union-represented employees who are not mem-

bers to prevent union expenditures of their contractually-

required agency fees for purposes unrelated to collective

bargaining over the employee's objection; and, then de-

fined a procedure by which unions can vindicate this non-

member right. This procedure, which is drawn from the

substantive law governing agency shop relationships and

crafted to further the purposes of that legal regime, has

a two-fold office: preventing objecting fee payers from

being compelled to subsidize noncollective bargaining ac-

tivities; and, at the same time, allowing unions to fairly

spread the costs of collective bargaining among all repre-

sented employees, including the objectors.

One aspect of the procedural requirements defined by

this Court is the provision by the union of an expeditious

process whereby the objecting fee payers can promptly

challenge the union's calculation of his fee reduction be-

fore an impartial decisionmaker, while the amount rea-

sonably in dispute is held in escrow. The question pre-

sented by this case is whether an objecting nonmember

can bypass the impartial-decisionmaker/escrow stage of

the procedure and challenge the union’s calculation by fil-

ing suit in federal court. The court of appeals answered

that question “yes;” it is our submission that the correct

answer is “no.”

The set of union objection procedure rules this Court

has established can accomplish its purposes only by oper-

ating as a coherent whole. In contrast, allowing the pro-

cedure to be pretermitted at the objector’s option, as does

the court of appeals’ decision, undermines those purposes.

By reason of the procedure’s structure an ddesign, no

objector can be compelled to finance any nonchargeabe

union activities before the procedure has run its course.

That being so, no objector can claim that he has been

compelled to subsidize such activities before the terminal

challenge phase of the procedure is concluded. As a re-

interest of the union in being able to

deploy agency fee receipts for collective bargain-

ing purposes in a manner that spreads the costs of collec-

tive bargaining equally among all represented employees.

ARGUMENT

Chicago Teachers Union v. Hudson, 475 U.S. 292

(1986), “outlined a minimum set of procedures by which

a union in an agency-shop relationship could meet its re-

quirement[s]” with regard to agency fees paid by non-

members who object to financing union activities that are

not germane to collective bargaining. Keller v. State Bar

of California, 496 U.S. 1, 17 (1990).

The court of appeals in this case treated one of these

procedural requirements—the provision by the union of

“a reasonably prompt opportunity to challenge the amount

of the fee before an impartial decisionmaker,” Hudson, 475

U.S. at 310—as a mere option for the sole benefit of ob-

jectors with a preference for prompt decisionmaking.

That, we submit, is to misunderstand Hudson and the

process (although the procedures do, of course, satisfy

due process). Rather, Hudson sets out a carefully bal-

anced set of rules drawn from the substantive law gov-

erning the agency-shop relationship whose office is to

“prevent{] compulsory subsidization of ideological ac-

tivity by employees who object thereto without restricting

the Union’s ability to require every employee to contribute

to the cost of collective-bargaining activities.” Hudson,

475 U.S. at 302 (emphasis added), quoting Abood v.

Detroit Board of Educaiton, 431 U.S. 209, 237 (1977).

The Hudson rules protect the objecting fee payers’ in-

terests by providing that the union is to: (i) promptly

calculate the proportion of total union expenditures that

support its collective bargaining function; (ii) reduce the

objectors’ fees accordingly; (iii) provide the objectors with

an explanation of the basis for the union calculation of

the reduced fee; (iv) provide the objectors the opportu-

nity to challenge the fee reduction calculation before an

impartial decisionmaker in an expeditious process; and

(v) escrow the portion of the objectors’ fees that is rea-

sonably put in dispute by such a challenge.’

Equally to the point, the Hudson rules are framed in

such a way as to minimize the interference with the

union’s ability to apply, with reasonable promptness, the

objectors’ agency fee payments to the support of the

union’s collective bargaining function.

This set of rules can accomplish its salutory purposes

only by operating as a coherent and complete whole and

can only fail of those purposes if the final “challenge”

stage of the procedure can, as the court of appeals be-

lieved, be pretermitted at the objector’s option.

1 Abrams v. Communications Workers, 59 F.3d 1373, 1376 (D.C.

Cir. 1995), details the operation of one union objection proce-

dure conforming to the Hudson requirements. Under the proce-

dure in that case, the union “informs nonmembers of their right

to object by a notice distributed yearly to all employees.” /d. Non-

members may then file objections up to a cut-off date just before

the union’s “fee year” begins. Jd. “At the beginning of the fee

year an objector receives from the Union an ‘advance reduction’

payment equal to the amount attributable to nonchargeable expendi-

tures that will be deducted from his paychecks during the coming

year.” Jd. “The amount of the advance reduction payment is calcu-

lated by an outside accounting firm” based on the union’s expendi-

tures “during the preceding year.” Jd. “Along with the payment

the Union provides a detailed accounting of its expenses and a

description of the expenses it considers chargeable and noncharge-

able.” Jd. “Any employee who challenges the amount of the advance

reduction .. . is then referred to arbitration.” /d.

In the argument that follows we retrace the decisional

path that begins with Machinists v. Street, 367 U.S. 740

(1961), and place Hudson in its proper legal context, to

show that the court of appeals’ approach does not give

full scope of the Hudson procedures or full credit to

Hudson's underlying rationale.

1. Section 2, Eleventh of the Railway Labor Act

(RLA) permits carriers and labor organizations covered

by that Act “to make agreements, requiring as a condi-

tion of continued employment, that . . . all employees

shall become members of the labor organization represent-

ing their craft or class” to the extent of “tender[ing] the

periodic dues, initiation fees, and assessments . . . uni-

formly required as a condition of acquiring or retaining

membership.” 45 U.S.C. § 152, Eleventh (a).

In Railway Employes’ Dept. v. Hanson, 351 U.S. 235

(1953), the Court, in a holding premised on the stated

understanding that “[t}he financial support required re-

lates . . . to the work of the union in the realm of collec-

tive bargaining,” id. at 235, concluded that “the require-

ment for financial support of the collective-bargaining

agency by all who receive the benefits of its work is within

the power of congress under the Commerce Clause and

does not violate either the First or the Fifth Amend-

ments,” id. at 238.

The Court was presented with the same kind of con-

stitutional challenge in Machinists v. Street, supra, this

time on a fuller record of the nature of the union's ex-

penditures. And, Street avoided the constitutional issue re-

served in Hanson by its holding “that § 2, Eleventh of the

RLA does not permit a union, over the objections of non-

members, to expend compelled agency fees on political

causes.” Communications Workers v. Beck, 487 US.

735, 745 (1988).

As the Street Court stressed—and as the Court has re-

peatedly stressed since—the objecting fee payers’ “griev-

ance stems from the spending of their funds for purposes

not authorized by the Act in the face of their objection,

not from the enforcement of the union-shop agreement by

the mere collection of funds.” 367 U.S. at 771.

At the same time, the Court has warned that “restrain-

ing collection of funds . . . might well interfere with the

. . . unions’ performance of those functions and duties

which the Railway Labor Act places upon them to attain

its goal of stability in the industry.” Street, 367 U.S. at

771. Elaborating on this point, the Court explained:

The complete shutoff of this source of income defeats

the congressional plan to have all employees bene-

fited share costs “in the realm of collective bargain-

ing,” Hanson, 351 U.S. at p. 235, and threatens the

basic congressional policy of the Railway Labor Act

for self-adjustments between effective carrier organi-

zations and effective labor organizations. [367 U.S.

at 772.]

The Court, therefore, concluded that “an injunction re-

straining enforcement of the union-shop agreement is . . .

plainly not a remedy appropriate to the violation of the

Act’s restriction on expenditures.” 367 U.S. at 771.

2 See Railway Clerks v. Allen, 373 U.S. 118, 120 (1968) (quoting

this passage from Street); Ellis v. Railway Clerks, 466 U.S. 435,

434 (“In Machinist v. Street, 367 U.S. 740 (1961), the Court held

that the Act does not authorize a union to spend an objecting em-

ployee’s money to support political causes.”) ; Beck, 487 U.S. at 738

(Section 8(a)(3) of the National Labor Relations Act does not

“permit a union, over the objections of dues-paying nonmember

employees, to expend funds so collected on activities unrelated to

collective bargaining, contract administration, or grievance adiust-

ment... .") & 745 (“§ 2, Eleventh of the RLA does not permit »

union, over the objections of nonmembers, to expend compelled

agency fees on political causes.”). See also Lehnert v. Ferris Fae-

ulty Ass'n, 500 U.S, 507, 515 (1991) (“[T)he Street Court con-

strued the RLA to deny unions the authority to expend dissenters’

funds in support of political causes to which those employees

objected.” ).

Accord Allen, 373 U.S. at 122 (“no decree would be

proper which appeared likely to infringe the unions’ right

to expend uniform exactions under the union-shop agree-

ment in support of activities germane to collective bar-

gaining”).

The public sector union security cases that comprised

the next wave of litigation came out in essentially the

same place, albeit on a constitutional rather than a statu-

tory basis. “In Abood v. Detroit Board of Education, 431

U.S. 209 (1977), the Court confronted the issue whether,

consistent with the First Amendment, agency-shop dues

of nonunion public employees ceuld be used to support

political and ideological causes of the union which were

unrelated to collective-bargaining activities.” Keller, 496

U.S. at 9. The Court “held that while the Constitution did

not prohibit a union from spending ‘funds for the expres-

sion of political views . . . or toward the advancement of

other ideological causes not germane to its duties as col-

lective-bargaining representatives,’ the Constitution did

require that such expenditures be ‘financed from charges,

dues, or assessments paid by employees who [did] not

object to advancing those ideas and who [were] not

coerced into doing so against their will by the threat of

loss of government employment.’ Keller, 496 U.S. at 9,

quoting Abood, 431 U.S. at 235-236.

2. The Street/Abood rulings—delineating the legal

limitation imposed on unions in expending agency fees

payable by objectors—generate the following additional

legal question: what must a union that is entitled to col-

lect agency fee payments from an objecting nonmember

do to assure, on the one hand, that the objection receives

a proper response and the objector is not required to fi-

nance the unions “non-collective bargaining” activities,

and to also assure, on the other hand, that the objector

pays his fair share of the union’s “collective bargaining”

costs as contemplated by the national labor policy permit-

ting union security agreements.

The Court has devoted the most mature deliberation

to that question, considering a range of alternatives prior

to arriving at the answer vouchsafed in Hudson. In so

doing, the Court has recognized the need “[t]o attain the

appropriate reconciliation between majority and dissent-

ing interests,” Street, 367 U.S. at 773, and has been

guided by the well proved axiom that “resort to litigation

to settle the rights of labor organizations and employees

a often proves unsatisfactory,” Allen, 373 U.S. at 123-

Just two years after Street, the Allen Court suggested

that “[i}f a union agreed upon a formula for ascertaining

the proportion of political expenditures in its budget, and

made available a simple procedure for allowing dissenters

to be excused from having to pay this proportion of

moneys due from them under the union-shop agreement,

prolonged and expensive litigation might well be averted.”

373 U.S. at 123. See also Abood, 431 U.S. at 240 & 242

(echoing this suggestion in the public sector context).

Ellis v. Railway Clerks, supra, began the process of

putting Allen’s suggestion to the test. The union defend-

ant in Ellis, “conced[ing] that the statutory authorization

of the union shop does not permit the use vf [objecting

fee payers’) contributions for union political or ideologi-

cal activities,” had “adopted a rebate program covering

such expenditures,” and “[t]he Court of Appeals for the

Ninth Circuit . . . held that the union’s rebate plan was

[legally] adequate.” 466 U.S. at 439-440 & 440-441.

This Court disagreed.

The Ellis Court emphasized that the rebate plan there

“allowed the union to collect the full amount of a protest-

ing employee's dues, use part of the dues for objectionable

purposes, and only pay the rebate a year later.” 466 U.S.

at 441. That being so, the Court ruled that such a “re-

bate scheme reduces but does not eliminate the statutory

violation.” Jd. at 444.

In so ruling, the Ellis Court recognized that where a

union has adopted such a scheme “([t]he cost to the em-

ployee is, of course, much less than if the money was

never returned,” and that “[t}he harm would be reduced

[even further] were the union to pay interest on the

amount refunded... .” 466 U.S. at 444. But those re-

ductions in the harm to the objector do not suffice to

meet the Street/Abood legal requirements because “[e]ven

then the union obtains an involuntary loan for purposes

to which the employee objects.” /d.

Having said that much as to the deficiencies of the

Ellis rebate plan, the Court added that “there are readily

available alternatives, such as advance reduction of dues

and/or interest-bearing escrow accounts, that place only

the slightest additional burden, if any, on the union.”

466 U.S. at 444. And, “[gliven the existence of accept-

able alternatives,” the Court held that “the union cannot

be allowed to commit dissenters’ funds to improper uses

even temporarily.” /d.

Ellis thus set the stage for the Hudson case. In Hudson,

the Chicago Board of Education agreed to deduct from

the pay of nonmembers represented by the Chicago Teach-

ers Union (“CTU”) “proportionate share payments” equal

to 95% of normal Union dues and to transmit these fees

to the CTU. 475 U.S. at 295. “Union officials computed

the 95% fee” by identifying “expenditures unrelated to

collective bargaining and contract administration” and

“divid[ing] this amount by the Union’s income for the

year... .” Id. “{A] nonmember could object to the

‘proportionate share’ figure by writing to the Union Presi-

dent within 30 days after the first payroll deduction,” and

“(t]he objection then would meet a three-stage procedure.”

Id. at 296. The first two steps involved consideration of

the objection by the CTU’s Executive Committee and then

by its Executive Board. Id. “[I]}f the objector continued

to protest after the Executive Board decision, the Union

president would select an arbitrator from a list maintained

by the Illinois Board of Education.” Jd. “If an objection

was sustained at any stage of the procedure, the remedy

would be an immediate reduction in the amount of future

deductions for all nonmembers and a rebate for the ob-

jector.” Id.

Four nonmember fee payers filed suit challenging the

Chicago Teachers Union’s objection procedure in federal

district court. 475 U.S. at 297-298. The district court

sustained the procedure in all respects, and the plaintiffs

appealed. Jd. at 298. Thereafter, “(t]he Union modified

its position[, and] [i]nstead of defending the procedure

upheld by the District Court, it advised the Court of

Appeals that it had voluntarily placed all of the dissenters’

agency fees in escrow, and thereby avoided any danger

that [the plaintiffs’) constitutional rights would be vio-

lated.” Jd. at 299. The court of appeals, nevertheless,

held that the Union’s procedure, even as modified to es-

crow the objectors’ fee payments, did not adequately pro-

tect the fee payers’ constitutional rights. Jd. at 299-300.

This Court began by considering first “[t]he procedure

that was initially adopted by the Union and considered

by the District Court,” and concluded that the initial

procedure “contained three fundamental flaws.” 475 U.S.

at 304-305. “First, as in Ellis, a remedy which merely

offers dissenters the possibility of a rebate does not avoid

the risk that dissenters’ funds may be used temporarily for

an improper purpose.” /d. at 305. “Second, the ‘advance

reduction of dues’ was inadequate because it provided

nonmembers with inadequate information about the basis

for the proportionate share.” /d. at 306. “Finally, the

original Union procedure was also defective because it

did not provide for a reasonably prompt decision by an

impartial decisionmaker.” /d. at 307. And, the Court

explained that that “an expeditious arbitration might

satisfy the requirement of a reasonably prompt decision

by an impartial decisionmaker, so long as the arbitrator’s

selection did not represent the Union's unrestricted

choice.” 475 U.S. at 308.*

In sum, “the original Union procedure was inadequate

because it failed to minimize the risk that nonunion em-

ployees’ contributions might be used for impermissible

purposes, because it failed to provide adequate justification

for the advance reduction of dues, and because it failed to

offer a reasonably prompt decision by an impartial deci-

sionmaker.” 475 U.S. at 309.

The Court then turned to the Chicago Teachers Union’s

modified procedure and noted that the CTU’s “creat[ion]

[of] an escrow of 100% of the contributions exacted from

the [plaintiffs]” cured the first flaw by “eliminat[ing]

the risk that nonunion employees’ contributions may be

temporarily used for impermissible purposes. . . .” 475

U.S. at 309. Nevertheless, “the procedure remain[ed]

flawed in two respects,” viz., “[i]t does not provide an

adequate explanation for the advance reduction of dues,

and it does not provide a reasonably prompt decision by

an impartial decisionmaker.” /d.

Restating the foregoing points in affirmative terms,

Hudson holds that, in the public sector, “the constitu-

tional requirements for the Union's collection of agency

8 Justice White’s concurring opinion, joined by the Chief Justice,

stated that “if the union provides for arbitration and complies with

the other requirements specified in our opinion, it should be entitled

to insist that the arbitration procedure be exhausted before resort-

ing to the courts.” 475 U.S. at 311. Although the Court's opinion

did not speak directly to this point, it expressed apparent agreement

with Justice White’s understanding of the proper sequence for fee

challenges by observing that “[{t]he arbitrator’s decision would not

receive preclusive effect in any subsequent § 1983 action.” Jd. at

308 n.21 (emphasis added). On remand, the Seventh Circuit was

of the view that this Court’s decision clearly contemplated resort

to the mandated arbitration before an objecting fee payer could

challenge the union’s calculation of the fee reduction in court.

Hudson v. Chicago Teachers Union, 922 F.2d 1306, 1314 (7th Cir.),

cert. denied, 501 U.S. 1230 (1991).

fees include an adequate explanation of the basis for the

fee, a reasonably prompt opportunity to challenge the

amount of the fee before an impartial decisionmaker, and

an escrow for the amounts reasonably in dispute while

such challenges are pending.” 475 U.S. at 3 10.*

4 Given that the instant case arises under the Railway Labor Act,

to avoid any confusion, we note that “constitutional requirements”

apply to “the Union’s collection of agency fees” in the public sector,

Hudson, 475 U.S. at 310, because the union’s agency shop agree-

ment constitutes joint action with the public employer and “the

actions of public employers surely constitute ‘state action,’” Abood,

431 U.S. at 226. See Lugar v. Edmundson Oil Co., 457 U.S. 922,

939-942 (1982).

Obviously, private sector agency shop agreements cannot be

considered “state action” on any joint action theory, because those

agreements are between private unions and private employers not

government employers.

Nor does the fact that constitutional concerns formed the back-

drop of this Court’s RLA decisions indicate that the Constitution

governs the collection of agency fees by unions under that statute.

Constitutional concerns arose with respect to the RLA, because that

statute preempts state laws forbidding union security agreements,

and hence, in this context, “[i]f private rights are being invaded

it is by force of an agreement made pursuant to federal law which

expressly declares that state law is superseded.” Henson, 351 U.S.

at 232. “Undoubtedly the [government] fijs responsible for [its]

statute,” Lugar, 457 U.S. at 938, and, if this Court had not given a

limiting construction to RLA § 2, Eleventh, the Court would have

been faced with the question of whether Congress had acted uncon-

stitutionally in “[t]he enactment of th{at] federal statute,” Hanson,

851 U.S. at 232. That a limiting construction might have been

necessary to save the statute, does not imply, however, that the

action of railroad or air line sector private parties in negotiating

union security agreements permitted by the RLA is subject to con-

stitutional constraints. To the contrary, “action by a private party

pursuant to [a] statute, without something more, [i]s mot sufficient

to justify a characterization of that party as a ‘state actor.’ Lugar,

457 U.S. at 989 (emphasis added).

It is also worthy of note that the amorphous constitutional

concerns raised by the RLA do not even come into play with re-

spect to the National Labor Relations Act, because that statute

does net preempt state laws forbidding union security agree-

ments. See Beck, 487 U.S. at 761. And the general rule is that

3. The “objective” of a procedure of the ki

fied in Hudson, then, is two-fold: first, to uae vindi.

cate the right of objecting nonmember fee payers by

“preventing compulsory subsidization of ideological activ-

ity by employees who object thereto;” and second, to do

so “without restricting the Union’s ability to require eve

employee to contribute to the cost of cdllasivehinenioing

activities.” Hudson, 475 U.S. i bood

431 US. at 237. Re ee

_ A Hudson objection procedure meets these j

tives by providing that the fees of objecting seni ot

will be promptly reduced on the basis of the union’s cal-

culation of its “collective-bargaining” and “non-collective-

bargaining” expenditures, that the objecting fee payers

will be given “sufficient information to gauge the propri-

ety of the union’s fee,” and that these fee payers will have

a means to preclude the union’s use of the amounts “rea-

rays in jo gaa henge any challenge to the reduced

romptly ke : oa ker.”

475 US. at 306307 & 310 gv é

Where this procedure is in place, an objecting f.

has no cogniza ble complaint that he is rane a

to subsidize non-collective bargaining” union expenditures

a the procedure has run its course. To the extent

at the objector puts any such expenditure into reason-

able dispute, that triggers the escrow of the disputed por-

tion of his payments and prompt review of the ae

calculation by an impartial decisionmaker.

By reason of the structure and desi

of th

procedure, in other words, prior to tos Parting an:

nal point, no objector can be compelled to finance an

nonchargeable union activities. Thus, so long as nd

government inaction in refusing to prohibit i condu

: certain pri

does not constitute constitutionally reviewable pk bce 0

See Corporation of Presiding Bi

Suse Cae ing Bishop v. Amos, 483 U.S. 327, 337-338

Hudson procedure works as a unified whole, the procedure

serves to “eliminate the statutory violation,” Ellis, 466

US. at 444—viz., “the spending of [the objectors’] funds

for purposes not authorized by the Act in the face of their

objection,” Street, 367 U.S. at 771. And, a union that

has adopted such a procedure “should not in fairness be

subjected to sanctions in favor of an employee who makes

no complaint of the use of his money for such activities.”

Street, 367 U.S. at 774.

At the same time, by providing for a prompt determi-

nation by an impartial decisionmaker and thereby limiting

the period of time that funds appropriately owing to the

union must remain in escrow, the Hudson procedure—

working as a unified whole—accommodates the objectors’

interests “without [unnecessarily] restricting the Union's

ability to require every employee to contribute to the cost

of collective-bargaining activities.” Abood, 431 U.S. at

237. See Hudson, 475 U.S. at 310 (recognizing the in-

terest in limiting the escrow requirement). And, the Hud-

son procedure also serves to safeguard a union that has

taken the proper steps “to prevent compulsory subsidiza-

tion of ideological activity by employees who object there-

to,” 475 U.S. at 237, from having the dues and fees prop-

erly payable to the organization eroded in financing the

defense of unnecessary objecting fee payer litigation.

By treating completion of the Hudson procedure as a

matter entirely within the discretion of the objecting fee

payer, the decision below permits an objector who short-

circuits the procedure to proceed in court on the fiction

5 The costs of defending such litigation can easily consume the

union’s agency fee receipts. In such litigation, the union “bears

the burden of proving [the] proposition [of political to total

union expenditures,” and such proof entails “difficult accounting

problems. .. .” Allen, 373 U.S. at 122. What’s more, the union is

likely to have to re-prove the proportion for each fiscal year, “since

the proportion of the union budget devoted to political activities

may not be constant.” /d.

that the union is compelling him to subsidize noncharge-

able union activities, when in fact this “forced subsidiza-

tion” is the result of his voluntary decision to disregard

a straightforward means of preventing any such use of his

~ ——_ Permitting the fabrication of such prema-

ure lawsuits, we submit, cuts deeply against the i

served by the Hudson rules. ding ss piecing

And, of course, the decision below complete! ignores

the union’s interest in being able to commit its oun and

fee income to defraying the costs of its collective bargain-

ing function, and to do so reasonably promptly and ia a

manner that spreads those costs equally among all .

sented employees. an , oar

_ On both scores, the court of appeals’ decision is out of

line with the general course of this Court's agency fee

jurisprudence and at odds with the logic of the Court's

Hudson decision.

4. It is also very much to the point that requiri

the Hudson “arbitration aaeaeate Te par be 5 oes

[an objector may] resort{] to the courts.” Hudson, 475

U.S. at 311 (White, J., concurring), achieves an “appro-

priate reconciliation between majority and dissenting in-

terests,” Street, 367 U.S. at 773, by minimizing the possi-

— os onan. ae and expensive litigation,” Allen, 373

». at 125.

In the first place, allowing an arbitrator to review an

objector’s challenge to the fee calculation “might lead to

noniudicial resolution” of the dispute either by “offer{ing]

him a favorable settlement” or by “demonstrat{ing] that

his underlying . . . claim was without merit.” Clavton vy.

Automobile Workers, 451 U.S. 679, 689 (1981). See

Communications Workers v. AT&T, 40 F.3d 426. 432

(D.C. Cir. 1994) (“[{T]he exhaustion requirement may

render subsequent judicial review unnecessary in many

ERISA cases because a plan’s own remedial procedures

will resolve many claims.”). To the extent the arbitrator

rules in the objector’s favor and his escrowed funds are

turned over tu him, the objector secures complete vindi-

cation. The union will have never used those funds, and

the objector will be compensated for the temporary de-

privation by the accumulated interest. To the extent the

arbitrator rules against the objector, the process of re-

quiring the union to prove the correctness of its calcula-

tion and of securing the arbitrator’s explanation of why

she accepted the union's calculation as proper and its

supporting proof as sufficient, may satisfy the objector

that his claim is without merit.

Even if the arbitration process does not satisfy the

objector’s claim, the record established in the arbitration

and the arbitrator’s award are likely to be of assistance to

a trial court in managing a lawsuit challenging the calcu-

lation. See McCarthy v. Madigan, 503 U.S. 140, 145

(1992) (“{E]ven where a controversy survives adminis-

trative review, exhaustion of the administrative procedure

may produce a useful record for subsequent judicial con-

sideration, especially in a complex or technical factual

context.”). This is true, even if “[t]he arbitrator’s deci-

sion would not receive preclusive effect in any subsequent

... action.” Hudson, 475 U.S. at 308 n. 21, citing Mc-

Donald v. West Branch, 466 U.S. 284 (1984).

“Where an arbitral determination gives full considera-

tion to an employee's [statutory or constitutional] rights,

a court may properly accord it great weight. This is

especially true where the issue is solely one of fact, spe-

cifically addressed by the parties and decided by the arbi-

trator on the basis of an adequate record.” McDonald,

466 U.S. at 293 n. 13, quoting Alexander v. Gardner-

Denver Co., 415 U.S. 36, 60 n. 21 (1974). See also

Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S.

728, 743-744 n. 22 (1981).

Indeed, the American Arbitration Association Rules for

Impartial Determination of Union Fees, incorporated

into the objection procedure of the Air Line Pilots Asso-

ciation in this case, go far to insure that the arbitration

decisions will be entitled to substantial weight in subse-

quent litigation. In the first place, the AAA itself selects

the arbitrator to decide any particular dispute from among

“a special panel of arbitrators experienced in employment

relations.” Pet. App. 2a. Such arbitrators are familiar

with the practicalities of collective bargaining and con-

tract administration, and their views as to what activities

are unrelated to collective bargaining will accordingly be

entitled to respectful consideration. And, the AAA Rules

insure that the arbitrator’s views in this regard will be

fully articulated by providing that the award “shall be

accompanied by a written explanation of the arbitrator’s

decision.” Jt. App. 93. :

Moreover, the AAA Rules provide for the compilation

of “an adequate record.” McDonald, 466 U.S. at 293

n. 13. Under the Rules, “[t}he burden is upon the union

to justify whatever fees are being disputed.” Jt. App. 85.

In addition, the Rules state that “(t]he parties . . . shall

produce such additional evidence as the arbitrator may

deem necessary to an understanding and determination of

the dispute” and that “[t}he arbitrator shall determine

when sufficient evidence has been submitted for an under-

standing and determination of the dispute[,] [a]t which

point, the arbitrator may declare the hearings closed.”

Id. at 90 & 91.

This Court has assigned to the union “the burden of

proving” the validity of the fee calculation because “the

union[] possess[es] the facts and records from which the

proportion of political to total union expenditures can

reasonably be calculated. . . .” Allen, 373 U.S. at 121.

As in other contexts where the burden of producing evi-

dence is assigned to a defendant, this allocation of “eviden-

tiary burdens serves to bring the litigants and the court

expeditiously and fairly to th{e] ultimate question.” Texas

Dept. of Community Affairs v. Burdine, 450 U.S. 248,

253 (1981). The AAA Rules further this process by

allowing the arbitrator to keep the record open until she

is satisfied that the union has produced all available evi-

dence “sufficient” and “necessary to an understanding and

determination of the dispute” over the fee. Jt. App. 90-91.

And, once again, the Rules require “a written explanation”

of why the arbitrator found the evidence sufficient to jus-

tify the fee or insufficient for that purpose. Jt. App. 93.

The arbitrator’s decision, together with the record on

which it is based, could thus provide a proper basis for

resolving a subsequent court case on summary judgment.

See Celotex Corp. v. Catrett, 477 U.S. 317 (1986).

Alternatively, the arbitration award and record could serve

as the basis for managing the discovery process and the

presentation of evidence at trial. See Pet. App. 20a. The

union’s evidence in support of its calculation will have

been assembled in the arbitration record and the arbi-

trator’s decision will provide a neutral review of the suffi-

ciency of that evidence. In the face of such a record,

the objecting fee payer can reasonably be required to

identify in what respects the union’s evidence accepted by

the arbitrator is insufficient to justify the fee.

Allowing the arbitration award and record to play such

a role in any subsequent litigation would encourage both

the union and the objecting fee payers to treat that process

seriously. As a result, the hearing before the arbitrator

will be more likely to produce the sort of record and award

that either will eliminate entirely subsequent litigation or

will greatly assist the court in efficiently disposing of such

litigation. Conversely, allowing objecting fee payers to

bypass the arbitration process and bring their challenges

to the fee calculation directly to court, would tend to dis-

courage the development of procedures that could either

eliminate or minimize the scope of agency fee litigation.

See Republic Steel Corp. v. Maddox, 379 U.S. 650, 656

(1965).

CONCLUSION

The judgment below should be reversed and this case

should be remanded to the court of appeals for further

proceedings consistent with this Court's decision.

Respectfully submitted,