Amicus Curiae Brief — Air Line Pilots v. Miller

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Supreme Sourt, U.S.

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No. 97-428 A GieaK ey

IN THE <

Supreme Court of The United States

OCTOBER TERM, 1997

AIR LINE PILOTS ASSOCIATION,

Petitioner,

v.

ROBERT A. MILLER, et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE MACKINAC CENTER FOR PUBLIC

POLICY AS AMICUS CURIAE

IN SUPPORT OF RESPONDENTS

Of Counsel: FRANK T. MAMAT*

ROBERT P. HUNTER J. WALKER HENRY

GEORGE M. MESREY

MACKINAC CENTER FOR

CLARK HILL P.L.C.

PUBLIC POLICY

140 West Main Street 500 Woodward Avenue

P.O. Box 568 Suite 3500

Midland. MI 48640 Detroit, MI 48226-3435

(517) 631-0900 (313) 965-8300

Counsel for the Amicus Curiae

*Counsel of Record

Baimar Legal Publishing Services, Washington. D.C., (202) 682-9800

_ BEST AVAILABLE COPY!

i

TABLE OF CONTENTS

TABLES OF AU TEES te ccevcsiccecesesesecscdeccvesornscencctovescoosers ill

INTEREST OF THE AMICUS CURIAE.............ccc0sc00e00eeeee0ees l

PRELIMINARY STATEMENT ...............:ccccssessesseeseessneseeeseees 3

SUMMARY OF ARGUMENT .............ccccccsecsesseseeseesssensensenes 6

AIRE SA TOIT ansevinreratenigminesinersinninenintmtetinininiibédsionibeintannened 8

I. THE EXHAUSTION OF REMEDIES REQUIRE-

MENT ADVOCATED BY THE PETITIONER IS

HARMFUL TO EMPLOYEE RIGHTS AND IN-

IMICAL TO THE LEGAL AND POLICY CON-

SIDERATIONS WHICH LED THE COURT TO

ADOPT THE CONSTITUTIONAL SAFEGUARDS

FOR COLLECTION OF AGENCY FEES IN

Ee Annccnenacenatinlenisiatiintecbetceiansintarinainsimininnarten 8

Il. IMPOSING AN EXHAUSTION OF INTERNAL

REMEDIES REQUIREMENT IN AGENCY FEE

DISPUTES SLANTS THE PROCESS IN FAVOR

OF UNIONS AND HINDERS EMPLOYEES

FROM ASSERTING THEIR CONSTITUTIONAL

AND STATUTORY RIGHTS .............cccccseseoseeseeseeeees 13

Il. THE DISTRICT OF COLUMBIA CIRCUIT'S

CONCLUSION THAT A UNION CANNOT

UNILATERALLY FORCE AN EMPLOYEE TO

ARBITRATE HIS OR HER FEE DISPUTE CLAIM

IS THE PROPER LEGAL INTERPRETATION OF

THE “IMPARTIAL DECISION MAKER”

PROCEDURE FORMULATED IN HUDSON.............. 16

IV. THE COURT SHOULD DETERMINE THAT

THE STATUTORY IMPOSITION OF AN

AGENCY SHOP AGREEMENT CONSTITUTES

STATE ACTION AND THUS, EMPLOYEES

SUBJECT TO SUCH AGREEMENTS ARE

PROTECTED BY THE CONSTITUTION

REGARDLESS OF WHETHER THEY WORK IN

THE PUBLIC OR PRIVATE SECTOR AND

REGARDLESS OF WHICH FEDERAL LABOR

LAW REGULATES THE INDUSTRY IN WHICH

TABLE OF AUTHORITIES

CASES

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

RRR Ra Se ea AIRS ATS 2 Oe eae a ee 17

Air Line Pilots Association v. Miller, U.S. ___, 118

EEE ee a ee eee 3

AT&T Technologies, Inc. v. Communication Workers, 475

5B SE LR Oe Re Ae IC 16

Bethlehem Mines Corp. v. Mine Workers, 344 F.Supp.

1161 (W.D. Pa 1972), affd, 494 F.2d 726

Ge Tals PPD crccnennpanpicrnpnannrgicempmmemennsatagmmness 14

Bromley v. Michigan Education Association-NEA, 82

CR ES ee 17

Chicago Teachers Union, Local #1 v. Hudson, 475 U.S.

it a 3 2 hs RTD ne ASIII Te passim

Communication Workers v. Beck, 487 U.S. 735 (1988) .. passim

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938

Rebecca ty de ntl Rint lates Ra iti 16

Gateway Coal Co. v. Mine Workers, 414 U.S. 368 (1974)......16

Hohe v. Casey, 956 F.2d 399 (3d Cir. 1992) .ccccccccccccosseesesssen 17

Kroger, Inc. and United Food & Commercial Workers,

Local 1099, (Case Nos. 9-CA-31116, 9-CB-8672),

I 17

Lenhert v. Ferris Faculty Association, 500 U.S. 507

—_* SAR eS SE 9-10

McCarthy v. Madigan, 503 U.S. 140 (1992) ....c..cc...sseesooee 12

Miller vy. Air Line Pilots Association, No. CTV. A. 91-

3161 (NHJ), 1995 WL 864556 (DDC.

FON, Fi acacia itilittianeniearniiihnaninnnitititntiaante 5

Miller v. Air Line Pilots Association, 108 F.3d 1415

ere Sah Be cccnntnntnmemeneuitienmentiiiaiiaemmnmnnen passim

NLRB v. Marine and Shipbuilding Workers, 39\ U.S. 418

iv

Patternmakers’ League of North America AFL-CIO vy.

Pe SERRE Ee eS 8, 16

Railway Employees Dept. v. Hanson, 351 U.S. 225

Cee cnsecactnininabiicnrcnnnncietsiinditediatateaiibeatiabiiininaieiatinonsiadlainnssiiins 19

Soho Segarra v. Sea-Land Serv., Inc., 581 F.2d 291

CR, We ieccetencerennnssiiitisnntinnitinsiintingiarisittinncitialtinaindiiltale 16

United Food and Commercial Workers, Local 951 vy.

Mulder, 31 F.3d 365 (6th Cir. 1994) 000... ccccccccccceeceeneees 17

CONSTITUTION AND STATUTES

RR Re ee ae passim

National Labor Relations Act, 29 U.S.C. §§ 151-69

(SF cereiinintnsinisincisiinthinrslibhiditeiniitiacbiitieil, 7, 10, 17, 19, 20

Railway Labor Act, 45 U.S.C. §§ 151-88 (1988)............. passim

Taft-Hartley Act, 29 U.S.C. § 141 ef. $€Qo.........ccccccccecceseeseee 9,19

Wagner Act, July 5, 1935, c. 372, 49 Stat. 449 00 9

MISCELLANEOUS

15 Daily Labor Report (BNA) A-2 (Jan. 23, 1998)................. 17

American Arbitration Association, Rules for Impartial

Determination Of Union Fees ...........cccceccceeeveneeenernereenrennvnenes 4

I. Brant, James Madison: The Nationalist 354 (1948)............. 10

George Meany, Foreword to Samuel Gompers, Seventy

Years of Life and Labor (V957)...............s--0seeseeseeeneseneeenenes 9

Robert P. Hunter, A Mackinac Center Report:

Compulsory Union Dues in Michigan, (1997)......................- 2

Florence Calvert Thorne, Samuel Gompers-American

ES Cae aa 8-9

Charles W. Baird, “The Permissable Uses of Forced

Union Dues: From Hanson to . Beck,”

Policy Analysis 174, at 12-13 (July 24, 1992) ................... 19

No. 97-428

IN THE

Supreme Court of Che United States

OCTOBER TERM, 1997

AIR LINE PILOTS ASSOCIATION,

Petitioner,

v.

ROBERT A. MILLER, et al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE MACKINAC CENTER FOR PUBLIC

POLICY AS AMICUS CURIAE IN

SUPPORT OF RESPONDENTS

The Mackinac Center for Public Policy (“Mackinac

consent of the parties as provided for in the Rules of this

Court.’

INTEREST OF THE AMICUS CURIAE

The Mackinac Center is a non-partisan research and

education organization devoted to improving the quality of

life for all Michigan citizens by promoting sound solutions to

'—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 submission of this brief.

2

federal, state and local policy questions. The Mackinac

ES CRS Se ee ee

political and economic understanding among Michigan

citizens and decision makers. Committed to its independence,

the Mackinac Center neither seeks nor accepts any

government funding. Instead, it enjoys the support of

foundations, individuals and businesses who share a concern

for Michigan’s future and recognize the important role of

sound public policy. The Mackinac Center Board of Scholars

consists of some of the country’s foremost experts in

economics, science, law, psychology, history and related

disciplines.

Michigan citizens have been a catalyst in establishing

constitutional protections in the area of compulsory union

dues. In fact, a significant amount of the Court's

jurisprudence on this subject has involved Michigan citizens

and unions. Thus, the Mackinac Center is particularly

interested in the issues raised in this case and believes that its

perspective, information and expertise will assist the Court in

conducted extensive research on the impact of compulsory

which culminated in a recently published treatise considered

to be one of the most authoritative and comprehensive

publications of its kind.’ In addition, the Mackinac Center has

taken an active role in shaping Michigan and national labor

policy on this issue. For example, Mackinac Center Director

of Labor Policy, Robert P. Hunter, a former member of the

National Labor Relations Board (1981-1985), testified before

a subcommittee of the United States House of Representatives

Committee on Education and the Workforce on January 22,

1998, regarding the impact of compulsory union dues.

The Mackinac Center believes that the Court’s decision

in this case will have a profound impact on all employees’

2

Robert P. Hunter, A Mackinac Center Report: Compulsory Union

Dues in Michigan, (1997).

3

ability to exercise their statutory and constitutional rights in

the workplace, and asserts that the District of Columbia

Circuit Court of Appeals decision below strikes the proper

PRELIMINARY STATEMENT

The Court granted the Petition for a Writ of Certiorari to

consider the following question:”

When nonunion employees wish to challenge the

agency fee they are required to pay under an

agency-shop agreement, must they exhaust the

“impartial decision maker” procedure mandated by

this Court’s decision in Chicago Teachers Union,

Local #1 v. Hudson, 475 U.S. 292 (1986), before

bringing their claim to court?

The relevant facts in this case are straightforward and set

out at length by the court of appeals below. The Air Line

Pilots Association (“ALPA” or “Petitioner”) is the exclusive

bargaining representative of all pilots (“Pilots” or

“Respondents”) employed by Delta Airlines (“Delta”). In

1991, ALPA and Delta entered into an agency shop collective

bargaining agreement (“CBA”) under the Railway Labor Act

(“RLA”)’ which requires all Delta Pilots who choose not to be

union members to pay a service charge to ALPA “as a

contribution for the administration of the [collective

bargaining agreement] and the representation of [all]

> Air Line Pilots Association v. Miller, US. __, 118 S.Ct. 554

(1997).

* Miller v. Air Line Pilots Association, 108 F.3d 1415 (DC. Cir.

1997).

> 45 USC. $§ 151-88.

4

employees.” In conjunction with the agency shop agreement,

ALPA unilaterally devised and implemented written “Policies

and Procedures Applicable to Agency Fees” (“Union

Policy”). Under the Union Policy, ALPA calculates, on a

yearly basis, which of its expenditures it believes are germane

to collective bargaining and which are not and reports those

findings in a “Statement of Germane and Nongermane

Expenses” (“SGNE”). The SGNE sets forth germane and

nongermane project codes and indicates how much money

was spent on each code. The SGNE does not, however,

provide objecting employees with any precise information

concerning ALPA’s expenditures.

If a nonmember Pilot objects to ALPA’s use of agency

fees for purposes not germane to collective bargaining, ALPA

will reduce the objector’s fees by a predetermined amount (as

calculated by ALPA). If the objecting employee protests the

predetermined calculation, ALPA will unilaterally initiate

arbitration proceedings under its Union Policy. The

arbitration is conducted pursuant to the American Arbitration

Association (“AAA”) Rules for Impartial Determination of

Union Fees. At the request of ALPA, AAA will select an

arbitrator from “a special panel of arbitrators experienced in

employment relations.” | The Union Policy affords the

objecting employee no opportunity to participate in the

arbitrator selection process. More importantly, an objecting

employee is forced to submit his or her dispute to the

arbitrator prior to initiating an action in federal court. ALPA

will pay for the cost of the arbitration but not for the objecting

employee's attorneys fees. ALPA has never allowed the

Pilots any role in formulating the Policy, and significantly,

none of them ever agreed to be bound by its provisions.

In the instant case, a number of nonmember Pilots were

dissatisfied with the procedures in the Union Policy as well as

the propriety of 1992 SGNE calculations/designations and

they complained to ALPA about it. ALPA reacted by

unilaterally initiating arbitration proceedings. In response,

some of the nonmember Pilots joined together and filed a

5

lawsuit against ALPA in federal district court seeking judicial

resolution of their fee dispute. Additionally, they requested

the arbitrator not to proceed but he refused. Thereafter, the

Pilots filed a motion for a preliminary injunction with the

district court seeking to enjoin the arbitration proceeding, but

it too was denied.

Prior to the arbitration hearing, the Pilots sought

discovery in order to properly evaluate ALPA’s summary data

conceming germane/nongermane expenditures but the

arbitrator refused to exercise the authority he possessed under

the AAA rules to permit this critical process. Thus, the only

evidence before the arbitrator was summary data created and

generated by ALPA which reflected only general. categories

of union spending and not the specific expenditures. Without

discovery, the Pilots had no way of determining the accuracy,

honesty or even the calculation used in reporting the

expenditures. Not surprisingly, the arbitrator subsequently

sustained most of the challenged union fee determinations as

being germane to collective bargaining.

The district court thereafter granted ALPA’s motion for

summary dismissal of the Pilots’ claim that ALPA breached

its duty of fair representation by failing to properly calculate

its germane and nongermane expenses.” The district court did

not review the arbitrator’s findings of fact de novo but

instead, evaluated them based merely on a “clearly erroneous”

standard. The district court also rejected the Pilots’ argument

that ALPA could not unilaterally force them to arbitrate their

claims pursuant to the internal union procedure before

bringing an action in federal court.

The court of appeals reversed the district court’s decision

holding, inter alia, that the pilots were not required to submit

their fee dispute to the ALPA arbitration procedure before

bringing an action in federal court. In reaching this decision,

the court of appeals stated:

* Miller v. Air Line Pilots Association, No. CIV.A. 91-3161(NH)J),

1995 WL 864556 (D.D.C. Aug. 30, 1995).

6

we simply see no legal basis for forcing into

arbitration a party who never agreed to put his

dispute over federal law to such a process. Nor is

there anything in the Hudson majority opinion that

even suggests that the Court thought it was putting

protesting agency shop employees in that position.

We therefore align ourselves with the Sixth and

Third Circuits in holding that an employee who

wishes to bring an action in federal court is not

obliged to proceed first to arbitration, at the union’s

option.” Miller, 108 F.3d at 1421.

“

SUMMARY OF ARGUMENT

The Mackinac Center is a staunch advocate of employee

rights. Therefore, it is particularly concerned about the

destruction of employees’ rights, whether it be by unions,

employers or the government. The first argument centers on

the Mackinac Center’s belief that the central purpose behind

Hudson was to protect employees’ rights. The exhaustion of

internal union remedies requirement advocated by Petitioner

- and its amici curiae is contrary to this Court’s stated objective

in Hudson to broaden the constitutional protections for

employees subject to agency shop agreements. Therefore, the

Mackinac Center contends that any exhaustion requirement

would be a step backward and seriously undermine the

positive protection and impact that Hudson has had upon

employees’ constitutional and statutory rights.

The second argument advanced by the Mackinac Center

originates from the same pro-employee ideological

perspective. Simply stated, due to the unique nature of

agency fee disputes, an exhaustion requirement would likely

discourage individual employees from pursuing their

resources of the Unions, and in many cases, only serve to

“exhaust” the employee and effectively prevent judicial

review. These risks are magnified ten-fold in the instant case

because the internal union procedure here, which was never

7

agreed to by Respondents, is inherently one-sided and

provides no safeguards to assure a fair and cost effective

forum for objecting employees to resolve agency fee disputes.

The Mackinac Center further contends, in accord with

the decision of the court of appeals below, that there is no

legal basis whatsoever for forcing a party to participate in a

one-sided arbitration procedure when it never agreed to do so

in the first place. This simple principle is well grounded in

the jurisprudence of the Court and should be applied in the

instant case to prevent a mandatory exhaustion requirement.

Finally, the Mackinac Center urges the Court to use this

case as an opportunity to clear up the law pertaining to the

constitutional impact of union security agreements upon

private sector employees covered by the NLRA.’ As

described in detail below, the Mackinac Center believes that

there is no difference in the government action present

through the imposition of agency fee agreements whether it is

imposed upon employees by the RLA or the NLRA. Thus,

the Court should conclude that all agency fee agreements

authorized and perpetuated by federal labor law constitute

state action and should be subject to constitutional scrutiny.

7

29 U.S.C. §§ 151-69.

8

ARGUMENT

L

THE EXHAUSTION OF REMEDIES RE-

QUIREMENT ADVOCATED BY THE PETI-

TIONER IS HARMFUL TO EMPLOYEE

RIGHTS AND INIMICAL TO THE LEGAL

AND POLICY CONSIDERATIONS WHICH

LED THE COURT TO ADOPT THE CON-

STITUTIONAL SAFEGUARDS FOR COL-

LECTION OF AGENCY FEES IN HUDSON

The rights contained in the First Amendment’ are among

the most fundamental tenets of a free society. As this Court

has acknowledged,

“|. . at the heart of the First Amendment is the

notion that an individual should be free to believe as

he will, and that in a free society one’s beliefs

should be shaped by his mind and conscience rather

than coerced by the State.” Hudson, at 302 n.9.

Closely intertwined with the First Amendment is the

longstanding federal labor policy of voluntary unionism. See,

e.g., Patternmakers’ League of North America AFL-CIO v.

NLRB, 473 U.S. 95 (1985). In fact, the great leader of the

American labor movement, Samuel Gompers once wrote that:

“[t}here may be here and there a worker who for

certain reasons unexplainable to us does not join a

union of labor. This is his right, no matter how

* The First Amendment to the Constitution of the United States

provides as follows:

“Congress shall make no law respecting an establish-

ment of religion, or prohibiting the free exercise

thereof; or abridging the freedom of speech, or of the

press; or the nght of the people peaceably to assemble,

and to petition the Government for a redress of

grievances.”

9

morally wrong he may be. It is his legal right and

no one can dare question his exercise of that legal

right.” Florence Calvert Thorne, Samuel Gompers-

American Statesman 24 (1957).

The late George Meany, the legendary and fiery president of

the AFL-CIO (an amicus curiae in this case), later said of

Gompers on this issue, “[{hje founded the American

Federation of Labor on the bedrock of voluntarism.” George

Meany, Foreword to Samuel Gompers, Seventy Years of Life

and Labor (1957).

This notion of freedom of association is the fundamental

underpinning of the concept of voluntary unionism and led

Congress, through passage of the Taft-Hartley Act in 1947,”

to reject the Wagner Act’s regime of compulsory unionism.

Communication Workers v. Beck, 487 U.S. 735, 755 (1988).

This critical policy decision.was the product of extensive

hearings wherein Congress determined that the closed shop

and the abuses associated with it “created too great a barrier

to free employment to be longer tolerated.” Beck, 487 U.S. at

748 (citing from S.Rep. No. 105, 80th Cong., Ist Sess., 6

(1947) (S.Rep.), Legislative History of the Labor

Management Relations Act, 1947 (Committee Print compiled

for the Senate Committee on Labor and Public Welfare, p.

412 (1974)(Leg.Hist.). In 1951, Congress amended the

Railway Labor Act to extend “to railroad labor the same

rights and privileges of the union shop that are contained in

the Taft-Hartley Act.” Beck, at 487 U.S. at 746 (citing from

96 Cong.Rec. (1951) - remarks of Rep. Brown).

Congress and the Court have acknowledged that agency

shop agreements and their inherent requirement that objecting

employees still financially support their collective bargaining

representative, significantly shrink employees’ First

Amendment and statutory rights. See, e.g., Lenhert v. Ferris

Faculty Association, 500 U.S. 507, 516 (1991) (constitutional

* 29 U.S.C. § 141 ef. seq.

10

rights); Beck, 487 U.S. at 755 (statutory rights). In this

regard, the Lenhert Court observed that:

“fuJnions have traditionally aligned themselves with

a wide range of social, political, and ideological

viewpoints, any number of which might bring

vigorous disapproval from individuals. To force

employees to contribute, albeit indirectly, to the

promotion of such positions implicates core First

Amendment concerns.” Lenhert, 500 U.S. at 516.

However, Congress and the courts have allowed limited

interference with employees’ constitutional and statutory

rights through the imposition of agency shop agreements in

order to promote the government’s policy interest in securing

labor peace through the elimination of the “free rider”

problem that would otherwise accompany union recognition.

See, e.g., Lenhert, 500 U.S. at 516, 520-21; Hudson, 475 U.S.

at 301-02.

Acknowledging the harmful impact that agency shop

agreements have had upon employee rights, the Court has

determined that both the RLA and the NLRA authorize the

exaction of only those fees and dues necessary to “performing

the duties of an exclusive representative of the employees in

dealing with the employer on labor-management issues.”

Beck, 487 U.S. at 762-63. Thus, a union is prohibited from

collecting from objecting employees any sums for the support

of ideological causes 9 <ermane to its duties as collective

bargaining agent. Huds «1,475 U.S. at294. While he may

have been slightly before his time, even Thomas Jefferson

commented nearly two centuries ago that “[t]o compel a man

to furnish contributions of money for the propagation of

opinions which he disbelieves, is sinful and tyrannical.” I.

Brant, James Madison: The Nationalist 354 (1948).

This concept of the sanctity of individual employees’

constitutional and statutory rights is at the very heart of the

Court’s decision in Hudson. As the Hudson Court

acknowledged,

aa a 2

11

“[P]rocedural safeguards often have special bite in

the First Amendment context. . . . The purpose of

these safeguards is to insure that the government

treads with sensitivity in areas freighted with First

Amendment concerns.” Hudson, 475 U.S. at 303

n.12.

Because of the destruction of employees’ constitutional

rights inherent in agency shop agreements, the Hudson

decision expanded the protection of employee rights by

imposing the following constitutional requirements upon

unions that insist upon collecting agency fees: (1) the union

must provide an adequate explanation for the basis for the fee

assessed; (2) the union must provide employees with a

reasonably prompt opportunity to challenge the amount of the

fee before an impartial decision maker; and (3) the union must

provide an escrow for the amounts reasonably in dispute

while the fee dispute is pending. Hudson, 475 U.S. at 310

(emphasis added).

ALPA and its amici curiae misconstrue the purpose of

the constitutional requirements set forth in Hudson for the

collection of agency fees. Specifically, by arguing that the

employee to exhaust internal union-devised complaint

procedures before seeking redress for constitutional violations

in the federal courts, they are asking this Court to retreat from

the very reason that it issued the Hudson decision: namely

fundamental fairness and protection of employee rights. It is

most telling that Petitioner concedes on page 22 of its Brief

that “...it is, after all, to their [referring to the Respondent

employees] advantage to have a choice of forums.” The

created in Hudson should be interpreted to protect employees.

Most notably, it is employees’ constitutional and statutory

rights that are restricted through the imposition of agency

shop agreements and it is their money that is being used for

12

abhorrent. Thus, imposing the extreme requirement of

exhaustion of remedies upon employees with limited

resources is contrary to the precise reasons this Court issued

the Hudson decision and would be an affront to the

fundamental principle of voluntary unionism. The court of

appeals below refused to allow this to happen commenting

“{njor is there anything in the Hudson majority opinion that

even suggests that the Court thought it was putting protesting

agency shop employees in that position.” Miller, 108 F.3d at

1421.

ALPA cad ts emicl cories eonsthatens gue tat, snes

the constitutional requirements set forth in Hudson are

judicially created, this Court should exercise its discretion and

impose the inherently punitive and oppressive requirement

that objecting employees must first submit their disputes to

internal union-dominated arbitration procedures in order to

retain their right to later sue in federal court. The Mackinac

Center agrees that, in the absence of an explicit Congressional

mandate requiring exhaustion, sound judicial discretion

governs. See, e.g., McCarthy v. Madigan, 503 U.S. 140, 144

(1992). However, the Mackinac Center strenuously disagrees

with the argument that exhaustion should be imposed in

constitutional and statutory agency fee disputes, especially

when the “internal remedy” is one-sided and unilaterally

promulgated and totally administered by the alleged

wrongdoer. Instead, the Mackinac Center urges the Court to

exercise its discretion not to impose an exhaustion

requirement. To conclude otherwise would seriously

jeopardize the protections already extended to employees in

Hudson by the Court.” Surely, setting up another roadblock

Many of the arguments raised by the Petitioner and its amicus curiae

in support of exhaustion directly or indirectly involve speculative

“institutional inconveniences” that labor unions might have to endure if

employees have the choice between utilizing internal union procedures or

filing directly in federal court. Simply stated, these inconveniences pale in

comparison to the chilling effect upon employees’ statutory and

Moreover, it is disingenuous to argue that the minor inconveniences that

13

to the protection of the federal courts for the constitutional

and statutory rights involved here hardly serves to enhance

employee rights. In fact, as discussed below, it is likely that

without mutual agreement as to who will decide the dispute

and without a meaningful opportunity for discovery will

discourage or prevent them from exercising their rights at all.

I.

IMPOSING AN EXHAUSTION OF INTER-

NAL REQUIREMENT _ IN

AGENCY FEE DISPUTES SLANTS THE

PROCESS IN FAVOR OF UNIONS AND. HIN-

DERS EMPLOYEES FROM ASSERTING

THEIR CONSTITUTIONAL AND STATU-

TORY RIGHTS

The Mackinac Center contends that requiring an

exhaustion of internal remedies in this case would discourage

and/or prevent employees from exercising their constitutional

and statutory rights. It takes fortitude and strength of

conviction for individual employees to stand up to a union,

co-workers, and sometimes even family members, especially

in light of the fact that most employees have a significant

amount of time, emotional energy and personal dignity

invested in their jobs and their relationships in the workplace.

Moreover, their employers may be outwardly hostile to their

efforts or, at best, hesitant to provide support for fear of

angering the union or meddling in “internal union affairs.”

Thus, employees who object to a union’s use of their dues for

personally offensive ideological or political views often find

themselves in a precarious position, opposed by the union, the

employer and fellow employees. Significantly, such agency

fee objectors almost find themselves in an even darker “no-

man’s-land” than the striker who crosses the picket line to

might occur would significantly hamper a union's ability to properly

represent its members.

14

return to work while the strike continues: a person with legal

rights and beliefs, mistrusted and abused by his Union, his

employer and his peers.

In light of these workplace realities, the practical effect

of imposing an exhaustion requirement when the internal

union arbitration procedure is so one-sided in its design and

ication would be that many employees would be

intimidated and elect not to exercise their right to object at all.

An employee who has made the courageous decision to object

may reasonably view the prospect of suffering through an

intrusive arbitration procedure unilaterally devised and

imposed by the union as not worth the emotional and mental

anguish that would likely result. Thus, there is a significant

chance that the only practical effect of imposing an

exhaustion of internal remedies requirement in this case

would be to “exhaust” objecting employees and effectively

prevent them from seeking judicial redress for constitutional

and statutory violations. NLRB v. Marine and Shipbuilding

Workers, 391 U.S. 418, 425 (1968).

Moreover, while under Hudson a union must provide

(and pay for) an impartial decision maker, the ALPA

arbitration procedure effectively requires employees, as a

practical matter, to hire and pay for their own counsel in order

to have any reasonable chance of properly presenting their

case and preserving their rights for a subsequent challenge in

federal court. This would be expensive and in many cases,

" his also raises the issue of whether the Petitioner's process for

unilaterally selecting an arbitrator is The court of appeals

below stated “{i}t may well be that, for instance, that the arbitrators chosen

by the AAA from a group ‘experienced in labor matters’ would not be

perceived as typically sympathetic to such plaintiffs (or thew counsel).”

Miller, 108 F.3d at 1421. Moreover, ALPA’s unilateral determination as

to the method for selecting the arbitrator defies an essential element of

arbitration “that the selection of the particular arbitrator or the method of

selection of an arbitrator be established by mutual agreement between the

parties.” Bethlehem Mines Corp. v. Mine Workers, 344 F.Supp. 1161.

1165 (W_D. Pa. 1972), aff'd, 494 F.2d 726 (3d Cir. 1974).

Ee

A A a

15

deplete an employee’s financial resources to the point where a

challenge in federal court would not be possible.

This problem is exacerbated by the limited availability of

discovery in the arbitration policy adopted by Petitioner. In

order to have a meaningful arbitration process to determine

agency fees, the employee must have access to union records

in order to assess the propriety of the union’s allocations and

not just summary data. The Court should note that, in the

instant case, the arbitrator denied Respondents discovery in

further is the danger that the factual basis for the arbitration

award may not be reviewed de novo by a federal court. This

could lead to an employee being essentially “frozen out.”

Because of these dangers, an employee would be foolish to

a to Petitenes’s esteemed’ ; ith the

assistance of counsel. Even with the assistance of counsel,

however, the arbitration procedure as it currently stands is

impermissibly slanted in favor of Petitioner.

_ Thus, unless employees are provided with the option of

into federal court, there is a significant chance that they will

their constitutional and iehts. Practicall king.

most objecting employees probably only have enough

emotional and financial capital to make their fight one time in

one forum and it should be the forum of their choice, not that

they were given more say in the selection of the arbitrator and

the development of the rules for discovery options and

regulating the proceeding. Miller, 108 F.3d at 1421.

However, under the arbitration procedure devised by

Petitioner in the instant case, objecting employees have no

16

input whatsoever and are disadvantaged by the one-sided

rules and regulations ALPA has unilaterally imposed.

IT.

THE DISTRICT OF COLUMBIA CIRCUIT’S

CONCLUSION THAT A UNION CANNOT

UNILATERALLY FORCE AN EMPLOYEE TO

ARBITRATE OR FEE DISPUTE

CLAIM IS THE PROPER LEGAL INTER-

PRETATION OF THE “IMPARTIAL DECTI-

SION MAKER” PROCEDURE FORMULATED

IN HUDSON

It is a fundamental principle of federal labor law that a

party can never be compelled to submit its dispute to

arbitration unless it has expressly agreed to do so. E.g. First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995);

AT&T Technologies, Inc. v. Communications Workers, 475

U.S. 643, 648-49 (1986); Gateway Coal Co. v. Mine Workers,

414 U.S. 368, 374 (1974). This axiom recognizes that

arbitrators derive their authority to resolve disputes only from

the parties’ agreement allowing them to do so. Gateway

Coal, 414 U.S. at 374. In addition, as Respondents are not

members of ALPA, they are “not bound by contract with the

union to exhaust any formal internal union appeals before

resorting to a judicial forum.” Soho Segarra v. Sea-Land

Serv., Inc., 581 F.2d 291, 295 (ist Cir. 1978). Moreover,

nonmember status was the crucial fact in Patternmakers

which led the Court to rule that a union cannot apply its

internal disciplinary rules to individuals who have resigned

from the union. Patternmakers, 473 U.S. at 106.

In the instant case, the arbitration procedure devised by

point did Respondents consent to arbitration of disputes over

the use and calculation of agency fees. Therefore, the court of

appeals below rejected Petitioner's arguments and correctly

held that there is no legal basis for forcing Respondents to

17

ie ee ee they

never agreed to submit their dispute over federal law to such a

process. Miller, 108 F.3d at 1421.

This conclusion is in accord with those of other circuits

as well. The Sixth and Third Circuits have concluded in

filing an action in federal court. Bromley v. Michigan

Education Association-NEA, 82 F.3d 686 (6th Cir. 1996);

Hohe v. Casey, 956 F.2d 399 (3d Cir. 1992). Likewise, the

District of Columbia Circuit and the Sixth Circuit have

59 F.3d 1373 (D.C. Cir. 1995); United Food and Commercial

Workers, Local 951 v. Mulder, 31 F.3d 365, 367-68 (6th Cir.

1994). The Mackinac Center urges this Court to adopt the

off provisions of the contract violates Section 8(b\(1\(A)

and (2) of the Act.” 15 BNA Daily Labor Report at A-3.

The Mackinac Center believes that this passage is directly on point and

urges that this Court adopt the same rationale in the instant case.

18

statutory rights. While arbitration can be beneficial in certain

situations, the lack of mutual consent and the inability to

discover essential information to properly prepare for the

hearing, in the instant case, creates a tribunal which is

contrary to the concept of fundamental fairness and is legally

defective.

IV.

THE COURT SHOULD DETERMINE THAT

THE STATUTORY IMPOSITION OF AN

AGENCY SHOP AGREEMENT CONSTI-

TUTES GOVERNMENT ACTION AND THUS,

EMPLOYEES SUBJECT TO SUCH AGREE-

MENTS ARE PROTECTED BY THE CON-

STITUTION REGARDLESS OF WHETHER

THEY WORK IN THE PUBLIC OR PRIVATE

SECTOR AND REGARDLESS OF WHICH

FEDERAL LABOR LAW REGULATES THE

INDUSTRY IN WHICH THEY 4RE

EMPLOYED

employees. The law, as it currently stands, is fractured and

leads to contradictory results. Thus, your amicus curiae urges

the Court to use this case as a vehicle to clear up the legal

inconsistencies in the interpretation of agency shop agreements

and properly conclude that state action is involved whenever

federal law allows the imposition of such agreements.

19

In Railway Employees Dept. v. Hanson, 351 U.S. 225,

232 (1956), the Court acknowledged that

takes a private agreement to invoke the federal

sanction.”

The Hanson Court went on to point out that, since the RLA

law to the contrary, the RLA has the imprimatur of federal law

upon it. Hanson, 351 U.S. at 232. In a footnote, the Court

commented that “(t]he parallel provision in s 14(b) of the Taft

Hartley Act ... makes the union shop agreement give way

:

:

if

definitively ruled on. Beck, 487 U.S. at 761-62.

The reality is that governmental action is plainly behind

all union security arrangements authorized by federal iaw,

provision, entered into between an employer and a union is the

product of state action. Charles W. Baird, “The Permissable

Uses of Forced Union Dues: From Hanson to Beck,” Policy

Analysis 174, at 12-13 (July 24, 1992). Employees in states

which have not enacted right to work legislation pursuant to

Section 14(b) of the NLRA are in exactly the same situation as

private sector employees covered by the RLA. This is clear

since the Court held in Beck that the union security provisions

Section 14(b) of the NLRA (29 U.S.C. §164(b)) states as follows:

Nothing in this Act shall be construed 4s authorizing the execution or

nantten af + ceathtiein a iden ~onid

as a condition of employment in any State or Territory in which such

execution or application is prohibited by State or Territorial law.

=

20

under the RLA and the NLRA and should be interpreted

identically. Beck, 497 U.S. at 762-63.

In sum, a determination that there is sufficient state action

whenever federal law sanctions an agency shop agreement

would clarify the law in this area and provide employees,

employers and unions with certainty in conducting their affairs.

It should be noted that the National Education Association has

alluded to this problem in footnote 2 of its Brief as an amicus

curiae on behalf of the Petitioner. Moreover, inasmuch as the

NLRB has slated a case for accelerated review so the Court

will have the benefit of its views when deciding this case, the

time is right to finally rule on this issue. See n.12, supra.

CONCLUSION

Contrary to the position urged by Petitioner and its amici

curiae, allowing employees to exercise their constitutional

and statutory rights to the fullest extent possible is certainly

not anti-union. Instead, it is pro-employee. This principle of

employee rights was the underlying reason the Court adopted

the constitutional safeguards in Hudson and it should be the

Court’s focus in the instant case. Thus, for the reasons set

forth in this Brief, and upon the entire record, the judgment of

the court of appeals below should be affirmed

Date: February 6, 1998

George M. Mesrey

500 Woodward Avenue

Suite 3500

Detroit, Michigan 48226-3435

(313) 965-8300

Attorneys for Amicus Curiae

Mackinac Center for Public Policy

*Counsel of Record