Petition for Writ of Certiorari — Crawford v. Air Line Pilots Ass'n

Supreme Court brief1993

Ask Donna

What actually matters in this document.

Text

372181»

No.

IN THE | GFFGE OF Isr Hh

Supreme Court of the Gnited States

OCTOBER TERM, 1993

PETER CRAWFORD, et alia,

Petitioners,

Vv.

AIR LINE PILOTS ASSOCIATION,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ROBERT F. GORE *

National Right to Work Legal

Defense Foundation, Inc.

8001 Braddock Road, Suite 600

Springfield, Virginia 22160

(703) 321-8510

ATTORNEY FOR PETITIONERS

* Counsel of Record

August 1993

QUESTION PRESENTED

[On Apnil 28, 1993—after five years of consideration including two

en banc oral arguments—a deeply, divided U. S. Court of Appeals

for the Fourth Circuit issued its decision applying this Court's prior

rulings involving union-security agreements. ]

Il.

III.

Whether the Court of Appeals disregarded the rules of

pleading and burden of proof enunciated by this Court in

Abood and Allen by refusing to address petitioners’

challenges to extra-bargaining unit litigation expenses, such

expenses having been held non-chargeable to objecting

nonunion employees in this Court's Ellis and Lehnert

decisions.

Whether the Court of Appeals disregarded this Court's

holding in Lehnert that the chargeability of each union

expenditure must be made on a case-by-case analysis when

it failed to address petitioners’ challenges to financing the

extra-bargaining unit expenditures at Eastern because the

district court held that such expenditures at Continental and

United were chargeable.

Whether the Court of Appeals misconstrued and misapplied

the Lehnert and Ellis tests for determining chargeability of

extra-bargaining unit expenses by holding that any such

expenditures were chargeable if they may ultimately inure to

the benefit of the bargaining unit.

- ll -

PARTIES TO THE PROCEEDINGS BELOW

In addition to Peter Crawford, the following airline pilots

were plaintiff-appellants in the Court of Appeals and are

petitioners here: namely, Fredrick J. Adam, Robert F. Bauman,

Richard L. Brown, William A. Burbage, Robert Erchak, Ron E.

Merzlak; Leroy Rogers, Roger F. Seely, Warren Wells, Dale

Cross, Richard Pederson, Clyde B. Smith, Ernest Mueller, Ruel

Neeley, Robert Buley, Thomas Giefer, Thomas Klemens, Howard

L. Jones, Herbert A. Light, Joseph R. MacKenzie, Michael T.

McQuillen, John R. Yotz, Harold Bagnall, Richard P.

Barthelemy, Clinton Davis, Edison L. Denny, George Gawrilow,

John J. Lumley, Albert Newton, Eugene Palsson, Dale B. Petty,

Deryl Roark, Donald D. Ecker, Karl A. Jadrnicek, Howard S.

Morton, Richard W. Rew, Donovan Wholers, Donald K.

Brewster, Peter Hayes, Laurence J. Stuppy III, and Roger Veon.

The respondent Air Line Pilots Association, International

was the only defendant-appellee in the proceedings below.

- lil -

TABLE OF CONTENTS

Page

Sg ee i

PARTIES TO THE PROCEEDINGS ............... ii

pp eS gy el ey) > V

EO ce ee conn ce evevsctevesers 1

ee oe oes iu 46 b-wd dw ee ea ee 2

STATUTORY PROVISIONS INVOLVED ........... 2

STATEMENT OF THE CASE .................... 4

REASONS FOR GRANTING THE WRIT ........... 14

I Petitioners Fully Support And Adopt

The Dissenting Opinion And Submit That

Its Reasoning Justifies Review .................. 15

II The Court Of Appeals Misconstrued This

Court's Test For Determining “Charge-

ability” Of “Extra-Unit” Expenditures ............ 15

III The Court Of Appeals Failure To Determine *

“Chargeability” On A Case-By-Case Basis

Compels Petitioners To Financially Support

Union Activities Without The Union Having

6 16

IV The Court Of Appeals Failure To Address

Petitioners’ Challenges To “Extra-Unit”

Litigation Expenditures Conflicts With This

Court's Holdings On The Rules Of Pleading

And Burden Of Proof In Agency Fee Cases ........ 17

TABLE OF CONTENTS - (Continued)

Page

ce re rene een ee 19

APPENDICES

A En Banc Decision Of The United States

Court Of Appeals For The Fourth Circuit

foe 2 reer ry ee rere la

B_ Panel Decision Of The United States

Court Of Appeals For The Fourth Circuit

Ge Bs OE > 64-060. o dee See eavareneons 47a

C Memorandum Opinion Of The United States

District Court For The Eastern District

Of Virginia (March 25, 1988) .............. 60a

TABLE OF . -THORITIES

CASES

Abood v. Detroit Board of Education.

es ee Oh. yj ee en ee

Beck v. Communications Workers,

776 F.2d 1187 (4th Cir. 1985),

affd 487 U.S. 735 (1988) ...........

Brotherhood of Railway Clerks v. Allen,

BPE Wa SER COUOED 600-00 ks eatvdaxn

Chicago Teachers Union v. Hudson,

SID US. TIE (ISEB) nw ccc wvwves

Communications Workers v. Beck,

GE? Gi FAP UUM bo eos Sr beekses

Crawford v. Air Line Pilots Ass'n.,

870 F.2d 155 (4th Cir. 1988) ........

Crawford v. Air Line Pilots Ass'n.,

992 F.2d 1295 (4th Cir. 1993)(en banc)

Ellis v. Brotherhood of Railway Clerks,

SOO U.S. 455 (99BD) oc cccccccvncs

International Ass'n of Machinists v. Street,

367 U.S. 740 (1961) ...............

Lehnert v. Ferris Faculty Ass'n.,

881 F.2d 1388 (6th Cir. 1989),

pe te eT | rrr

Page

eter passim

eer e er passim

- vi -

TABLE OF AUTHORITIES - (Continued)

Cases (Cont'd)

Lehnert v. Ferris Faculty Ass'n.,

bee es) ee rere re rr

Pilots Against Illegal Dues v. Air Line Pilots Ass'n,

938 F.2d 1328 (10th Cir. 1991) ............

Railway Employes Dept. v. Hanson,

hd re rn ee

CONSTITUTIONS & STATUTES

Constitution of the United States

Fisst AMIGMOMRORE 2. ww ccc ccc cc ccccecces

Paes Pe sg vg Fa Kae aw eae een

Judicial Code

WUAC SUMEG. 26.624.

WUSE CUES. 6xéesdicdcteee

Railway Labor Act (RLA), 45 U.S.C. §§ 151-188

RLA § 2 Fourth 45 U.S.C. § 152 Fourth

RLA § 2 Eleventh 45 U.S.C. § 152 Eleventh

Page

IN THE

Supreme Court of the Gniled States

OCTOBER TERM, 1993

No. 93-

PETER CRAWFORD, et alia,

Petitioners,

Vv.

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Peter Crawford, et alia hereby petition this Court to issue a

writ of certiorari to the United States Court of Appeals for the

Fourth Circuit to review that court’s decision and judgment in

Crawford v. Air Line Pilots Association, 992 F.2d 1295 (4th Cir.

1993).

OPINIONS BELOW

The opinion of the en banc Court of Appeals which is the

subject of this petition is reported at 992 F.2d 1295, and

reprinted in the Appendix hereto at 1a. The prior panel opinion

of the Court of Appeals is reported at 870 F.2d 155, and

reprinted in the Appendix at 47a. The unreported memorandum

opinion of the District Court is reprinted in the Appendix at 60a.

xy 2

JURISDICTION

The Court of Appeals, sitting en banc on petition for

rehearing, entered its opinion and judgment on April 28, 1993.

This Court, by order dated July 16, 1993, extended the time for

filing this petition for certiorari to and including August 10, 1993.

This Court has jurisdiction under 28 U.S.C. §§ 1254(1) and

2101(c).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The constitutional and statutory provisions involved in this

petition include the First and Fifth Amendments to the United

States Constitution and Sections 2, Fourth and 2, Eleventh of the

Railway Labor Act (RLA), as amended, 45 U.S.C. §§ 152, Fourth

and 152, Eleventh.

Constitution of the United States

The First Amendment states in pertinent part: “Congress shall

make no law * * * abridging the freedom of speech * * * or

the right of the people peaceably to assemble, and to

petition the government for a redress of grievances.” U.S.

CONST. amend. I.

The Fifth Amendment maintains that “no person shall be * * *

deprived of life, liberty, or property, without due process of

law * * *.” U.S. CONST. amend. V.

Railway Labor Act

Section 2 Fourth provides that “Employees shall have the right

to organize and bargain collectively through representatives

of their own choosing. The majority of any craft or class of

employees shall have the right to determine who shall be the

representative of the craft or class for the purposes of this

chapter. No carrier * * * shall deny or in any way question

the right of its employees to join, organize, or assist in

organizing the labor organization of their choice, and it shall

be unlawful for any carrier to interfere in any way with the

organization of its employees, or to use the funds of the

carrier in maintaining or assisting or contributing to any

labor organization, * * * or in performing any work therefor,

or to influence or coerce employees in an effort to induce

them to join or remain or not to join or remain members of

any labor organization, or to deduct from the wage of

employees any dues, fees, assessments, or other contributions

payable to labor organizations, or to collect or to assist in

the collection of any such dues, fees, assessments, or other

contributions: * * *.” 45 U.S.C. § 152 Fourth.

Section 2 Eleventh provides that “Notwithstanding any other

provisions of this chapter, or of any other statute or law of

the United States, * * * or of any State, any carrier * * *

and a labor organization * * * authorized to represent

employees * * * shall be permitted—

(a) to make agreements, requiring, as a condition of

continued employment, that * * * all employees shall

become members of the labor organization representing their

craft or class: Provided, That no such agreement shall require

such condition of employment with respect to employees to

whom membership is not available upon the same terms and

conditions as are generally applicable to any other member

or with respect to employees to whom membership was

denied or terminated for any reason other than the failure

of the employee to tender the periodic dues, initiation fees,

and assessments (not including fines and penalties) uniformly

required as a condition of acquiring or retaining membership.

***” 45 U.S.C. § 152 Eleventh.

STATEMENT OF THE CASE

Factual Background. Petitioners are forty-two nonunion

airline pilots who, at the time this litigation commenced, were

employed by one of nine airline companies—Eastern, Braniff,

Midway, Northwest, Pan American, Trans World, United, USAir

and Western'—and represented for purposes of collective

bargaining by the respondent labor union, the Air Line Pilots

Association (ALPA). In 1987, ALPA represented approximately

37,000 pilots at forty-three airlines. Labor relations in the airline

industry are governed by the RLA and, pursuant to § 2 Eleventh

of the RLA, ALPA had agency shop agreements with twenty-two

airlines, including those employing petitioners. Under its agency

shop agreements with the various airlines, some 1,400 nonunion

pilots were compelled to financially support ALPA by paying an

agency fee. The average ALPA represented pilot earned

approximately $ 80,000 per year and paid $ 1,880 in dues or

agency fees, not including assessments. [Stipulate Facts (SF)

# 1-5, made part of the district court’s opinion and reproduced

herein at App. 67a-68a].

ALPA is a large, unitary national labor union and is not

composed of local unions like most other labor organizations; all

ALPA members belong only to one organization and pay their

dues only to ALPA. The union employs a staff of approximately

300 persons, who are organized into 12 separate departments:

Representation, Legal, Engineering and Air Safety, Accident

Investigation, Legislative Affairs, Communications, Retirement

and Insurance, Finance, Office Administration, Information

Systems, Human Resources, and Organizing. Additionally, ALPA

maintains regional offices throughout the country. [SF # 6-7,

App. 68a-69a].

| Since the filing of this lawsuit in 1987, Braniff, Eastern, Midway, Pan Am

and Western have gone out of business and TWA is presently in

bankruptcy. Of the forty-two petitioners, at least twelve have retired, six

have changed airlines, and cight are unemployed because of the union's

1989 sympathy strike at Eastern.

Although ALPA is the exclusive bargaining representative

of the pilots at each of the individual airlines, it conducts its day-

to-day activities at each airline through a Master Executive

Council (MEC) made up of officials elected from Local Councils

located at the pilot domiciles within that airline. Each individual

MEC (with assistance from the ALPA Staff) is responsible for

the day-to-day administration of the ALPA contract with its

airline. Each MEC has its own spending authority, e.g, in 1987

the United MEC’s spending authority was 2.1 million dollars.

Additionally, each MEC appoints its own negotiating

committee who, with the assistance of a professional negotiator

employed in ALPA’s Representation Department, negotiate any

changes to ALPA’s agreement with that airline. Although the

individual MECs actually negotiate ALPA’s collective bargaining

activities, they are to a large extent directed and coordinated by

its national officers and governing bodies. Broad bargaining goals

and policies are established by ALPA’s Board of Directors and

Executive Board, and are binding on the entire Organization. All

collective bargaining negotiations and agreements must be

approved by its President. [SF # 6-9, App. 68a-70a].

Although they were required to financially support the union

as a condition of continued employment, petitioners objected to

financially supporting union expenditures that went beyond

expenses germane to the negotiation and administration of the

collective bargaining agreement executed by their own airline. A

brief review of petitioners’ long Odyssey to obtain relief will put

this petition in perspective.

Beginning in 1978, agency fee payers objected to the uses of

their agency fees and for the period from 1978 through 1983,

ALPA rebated to each objector a percentage of the agency-fee

paid, plus interest, based on ALPA’s computation of the

percentage of its expenditures that ALPA considered to be for

political purposes. There were no procedures by which objectors

could challenge ALPA’s calculations of the amount it considered

rebatable. [SF # 19-20, 23; App. 74a-75a]. In 1984, ALPA revised

its procedures for calculating agency-fee rebates and established

an interest-bearing escrow account into which it has subsequently

deposited a portion of all objectors’ agency-fees for each year.

ALPA escrowed 150 percent of the amount it estimated would be

rebated at the end of any objection year.

In 1983-84, ALPA was involved in a strike at Continental Air

Lines and agency fees from pilots at other carriers were used to

help fund the strike. Agency fees were also used to help fund

ALPA’s 1985 strike at United Air Lines.

In October of 1985, because of the financial costs of these

strikes, ALPA increased its “dues” (and “agency fees”) to 2.35%

of gross airline earnings. The additional income was to be used

to create a one-hundred million dollar “war chest” or “major

contingency fund.”

When ALPA paid the 1984 rebate in June of 1986, there

was still no procedure by which objectors could challenge the

rebate calculations. However, later in 1986, ALPA amended its

rebate procedures to allow objectors to challenge the amount of

their 1985 agency fee rebate through arbitration. Subsequently,

ALPA made arbitration a formal part of its agency fee rebate

policy. [SF # 25, App. 75a].

ALPA computed the 1985 rebate based on its total

expenditures of $ 50,697,105 and determined that $1,345,497

should be rebated. This figure was then reduced to a percentage

of ALPA total expenditures to determine that 2.69% of an

objectors agency fees should be rebated. [SF # 32-35, App. 77a-

78a]. In making its rebate computations, any expenditures, includ-

ing expenditures from the “war chest,” that ALPA considered

germane to collective bargaining were charged to all agency fee

payers, regardless of the airline or airlines involved.

In September of 1986, ALPA mailed the 1985 agency-fee

rebate checks, its Rebate Calculation Report for 1985, and a

Cover Letter explaining the rebate and ALPA’s newly adopted

procedure for challenging the amount of the rebate through

arbitration. Copies of the 1985 Rebate Report and the ALPA

cover letter explaining the rebate and its new procedures were

only mailed to those 240 agency fee payers who were already

aware of their rights and had filed objections to the 1985 agency

fee. [SF # 37, App. 78a]. The other 1,160 agency fee payers,

including 16, petitioners, were not advised of ALPA’s new

procedures for objecting and challenging the amount of their

agency fee.

Although the 1985 Rebate Report mailed to the objecting

agency fee payers explained the basis for ALPA’s determination

that 2.69% of fees was rebatable, it did not contain sufficient

information for objectors to determine why they were required to

pay the other 97.3% of their agency fees. For example, the 1985

Report stated that over $ 27,000,000 was expended in 1985 for

negotiations but failed to provide a breakdown as to how much

was spent in negotiations at each airline. The 1985 report also

failed to inform objectors that ALPA had given $ 1,100,000 to

another union, the Association of Flight Attendants (AFA), for

its support during the United strike.

Additionally, the 1985 rebate report failed to provide either

the total amount of litigation expenses or a breakdown of which

litigation affected which bargaining units. The report simply

stated:

ALPA reviewed its litigation and representational expenses

in 1985 on a case-by-case basis and determined that $ 7,488

of its total litigation expenses is rebatable. This amount

represents the costs associated with several cases brought in

conjunction with ALPA’s attempt to organize non-union

pilots at one airline, because the law deems organizing

expenses to be rebatable.

Fifteen of the 1985 objectors, including twelve of the

petitioners, requested arbitration of ALPA’s computation of the

1985 rebate. This arbitration was finally held in August 1987—

some 32 months after ALPA began collecting its 1985 agency

fees. The arbitration was adjourned because of the imminent

filing of this lawsuit. [SF # 39-40, App. 78a-79a].

: e

On September 3, 1987, plaintiffs commenced the present

lawsuit alleging:

1) that ALPA’s agency shop agreements were unenforce-

able because the union had failed to establish the

necessary constitutional safeguards and protections

articulated by Chicago Teachers Union v. Hudson, 475

U.S. 292 (1986) (advanced reduction of nonchargeable

expenses, adequate explanation of the basis for the fee,

and a reasonably prompt opportunity to challenge the

amount of the fee before an impartial decisionmaker);

and

2) that ALPA was violating the RLA by conditioning

plaintiffs’ continued employment upon financial support

of union activities outside their individual bargaining

units and by compelling them to contribute funds to the

union’s one-hundred million dollar “war chest.”

After the suit was filed, ALPA computed its 1986 rebate and

determined that 3.39% of its 1986 expenditures were rebatable.

Additionally, ALI’A amended its Rebate Procedures to provide

the necessary Hudson procedural safeguards commencing in May

of 1988. In December of 1987, ALPA mailed a copy of the 1986

rebate report and the new procedures, to all agency fee payers,

not just those who had filed objections. [SF # 46, App. 80a].

Although the 1986 Rebate report contained far more detail

than any previous rebate report, it failed to provide an airline by

airline breakdown of expenditures. And, although the 1986 report

detailed $ 1,022,167 in Continental Air Lines Strike Litigation

and another $ 888,759 in General Litigation, ALPA stated that

it “reviewed its litigation and representational expenses in 1986

on a case-by-case basis and determined that none of its total

litigation expenses are rebatable.”

Arbitration of the 1986 rebate calculations were stayed

pending resolution of this litigation.

= 2

As previously noted, in October 1985 ALPA increased its

dues (and agency fees) from 1.35% to 2.35% of airline income to

create a “contingency fund” or War “chest.” The record at the

district court showed that through November 1987, ALPA had

expended over $ 22 million from the fund including: $ 1,100,000

in support to another union during the United strike, $ 3,695,908

in legal/professional support of the Continental strike, and over

$ 3,600,000 in strike preparations at Eastern. (Compl. Ex. B,

SF # 16-18, App. 73a-74a]. In 1989, while this case was on

appeal, ALPA conducted a nine-month sympathy strike at

Eastern which was financed from the contingency fund.

Procedural History.

District Court. As previously noted, on September 3,

1987, the petitioners filed a class action complaint on behalf of

themselves and 1,400 other non-union pilots seeking declaratory

and equitable relief against ALPA.’ The district court moved the

case with great dispatch. Class certification was denied and a one-

day non-jury trial was held on March 15, 1988. The parties had

filed extensive pretrial “Stipulations of Fact” [App. 67a-82a], and

the court heard live testimony from three “typical” plaintiffs and

two ALPA officials (its President and Director of Finance). The

court also received into evidence 49 exhibits tendered by the

plaintiffs and 35 exhibits tendered by the defendant. Following

the filing of post-trial briefs, the court issued its opinion on

March 25, 1988 [App. 60a-66a].

As to the pilots claims that ALPA’s 1985 and 1986 rebate

procedures did not comply with Hudson, the district court found

that

Petitioners sought to enjoin ALPA from enforcing its agency shops until it

had established the necessary Hudson safeguards. Additionally, petitioners

sought restitution of all agency fees collected in violation of their

constitutional and statutory rights.

“the procedures for the year 1987 are well within the

requirements of Hudson, and the procedures for the

year 1986 substantially within them. For the years prior

to 1985 there may have been deficiencies; however, no

specific damage to any plaintiff as a result of any

deficiency in the rebate program itself has been shown,

and the court is unwilling to require an audit, notice, or

an opportunity to object on the possibility that there

may be revealed some inappropriate expenditures

warranting additional rebates.” [App. 62a].

The district court also rejected petitioners’ claims that under

the “chargeability test” enunciated by this Court in Ellis v.

Brotherhood of Railway Clerks, 466 U.S. 435 (1984), objecting

nonunion pilots could not be required to support ALPA’s strike

activities at other bargaining units (airlines) or to contributed to

ALPA’s 100 million dollar “war chest.” In the district court’s

view, since all pilots throughout the industry, both union and

nonunion, benefited from ALPA’s strikes against Continental and

United, objecting nonunion employees at other airlines could

lawfully be compelled to financially support ALPA’s efforts. The

district court did not address the strike preparation expenditures

at Eastern Air Lines.

The -district court also found that since the United and

Continental strikes had considerably weakened ALPA’s financial

position—thereby making it vulnerable to a prolonged strike—

objecting nonunion employees could lawfully be required to

contribute to the “contingency fund” because it was a “device

reasonably employed to implement the duties of the union as

exclusive representative.” [App. 65a].

Accordingly, the district court entered judgment in favor of

ALPA and dismissed petitioners’ claims. Petitioners appealed.

Proceedings Before A Panel Of The Fourth Circuit. On

appeal, petitioners argued inter alia that before a union could

lawfully compel nonmembers to financially support its activities,

it had to have established the necessary pre-collection safeguards

enunciated in Hudson. In support of this claim, petitioners

pointed out numerous Hudson violations, including the fact that

the 1985 Rebate Report which spawned this litigation was only

distributed to those agency fee payers who were aware of their

rights and had already filed objections. ALPA’s failure to provide

the other 1,160 agency fee payers, including 16 petitioners, with

sufficient information to judge the appropriateness of fee violated

the Hudson adequate notice requirement.’

Petitioners also challenged the district court’s broad

construction of Ellis to permit ALPA to finance its strike

activities in one bargaining unit (airline) with agency fees from

objecting nonunion pilots in another bargaining unit (airline).

Petitioners argued that such a construction was inconsistent with

both the plain reading of the Ellis chargeability test and this

Court’s application of that test to “organizing” and “extra-unit

litigation” expenditures.

Similarly, petitioners challenged the district court’s holding

that the Ellis test sanctioned compulsory financial support of the

“contingency fund” to ensure ALPA’s continued bargaining

power. Petitioners pointed out that the intent of Congress in

enacting RLA § 2, Eleventh was to prevent “free-riders, and

“Basic considerations of fairness, as well as concern for the First

Amendment rights at stake, also dictate that the potential objectors be

given sufficient information to gauge the propriety of the union's fee.

Leaving the nonunion employees in the dark about the source of the figure

for the agency fee—and requiring them to object in order to receive the

information—does not adequately protect the careful distinctions drawn in

Abood.” Hudson, 475 U.S., at 306

In Ellis, the Court reiterated that “Congress' essential justification for

authorizing the union shop was the desire to eliminate free

(continued...)

£8.

that the legislative history specifically rejected the notion that § 2,

Eleventh was being enacted to strengthen the union “bargaining

power.”

On December 5, 1988, a panel made up of Chief Judge

Ervin, Senior Circuit Judge Butzner, and District Court Judge

Howard (D. Md.) heard oral arguments. On March 17, 1989,

Judge Butzner issued the panel’s decision affirming the district

court.

Petitioners sought rehearing and rehearing en banc urging

that the panel had misconstrued and misapplied the Hudson and

Ellis decisions to the case at bar.

En Banc Proceedings Before The Fourth Circuit. The

Fourth Circuit granted rehearing en banc in May of 1989 and

heard oral arguments on October 3, 1989. However, after this

Court granted certioran in Lehnert v. Ferris Faculty Ass’n., 881

F.2d 1388 (6th Cir. 1989), the Fourth Circuit deferred its en banc

decision pending a decision in Lehnert. After Lehnert was

decided, 111 S.Ct. 1950 (1950), the Fourth Circuit requested

supplemental briefs and heard reargument en banc in February

of 1992. On April 28, 1993, a deeply, divided Fourth Circuit

issued its decision affirming the district court. The court split 6-1-

5, with Senior Circuit Judge Butzner writing the opinion of the

court. [992 F.2d 1295, App. 1a].

As to petitioners’ claims that ALPA’s 1985 and 1986 rebate

system did not comply with Hudson, the court after noting that

ALPA’s present procedures were not being challenged, affirmed

the district court’s holding that “the challenged plans substantially

complied with Hudson and that [petitioners] had proved no

damages arising out of delay or minor procedural deficiencies.”

‘(...continued)

riders—employees in the bargaining unit on whose behalf the union was

obliged to perform its statutory functions, but who refuse to contribute to

the costs thereof.” 466 U.S., at 447.

———

o 13 -

(Id. at 1302, App. 12a]. While petitioners disagree, they do not

believe that the holding warrants review by this Court.

Petitioners do, however, seek review of the Fourth Circuit's

holdings on their Ellis claims. Petitioners assert that the six-judge

majority misapplied this Court’s Lehnert decision when it held

that objecting agency-fee payers could be charged for their pro

rata share of the union’s: (1) extra-unit strike activities, and

(2) costs incurred by the major contingency fund for extra-unit

activities. [/d. at 1301, App. 10a]. Additionally, petitioners submit

that the majority erred in refusing to address petitioners’

challenges to extra-unit litigation expenses allegedly because they

had not been properly presented and preserved below.

Circuit Judge Wilkinson (joined by Judge Wilkins of the

majority), concurred in judgment on the grounds that this Court’s

Lehnen decision compelled such a result. [Id. at 1302, App. 12a].

In his 31-page dissent, Circuit Judge Russell writing for the

five dissenting Judges, pointed out that the majority had erred:

(1) by not addressing the challenges to extra-unit litigation

expenditures even though petitioners had satisfied the

necessary pleading requirements of Abood v. Detroit

Board of Education, 431 U.S. 209, 241 (1977) and

Railway Clerks v. Allen, 373 U.S. 113, 118 (1963), and

the issue had been argued on appeal;

(2) by not analyzing challenges to the expenditures for the

Eastern strike on a case-by-case basis as required by

Lehnert; and

(3) by misapplying this Court’s test for determining extra-

unit expenditures as enunciated in Lehnert.

Petitioners contend that the five-dissenting judges properly

interpreted and applied this Court’s precedents and that the

majority and concurring opinions are in error.

a” =

REASONS FOR GRANTING THE WRIT

For almost forty years, nonunion employees covered by the

RLA have been secking guidance on their rights and obligations

viz-a-viz the unions that serve as their exclusive bargaining

representatives. Despite numerous decisions regarding the

application and scope of RLA union-security agreements, see e.g.

Railway Employes Department v. Hanson, 351 U.S. 225 (1956);

International Ass'n of Machinists v. Street, 367 U.S. 740 (1961);

Brotherhood of Railway Clerks v. Allen, 373 U.S. 113 (1963); and

Ellis v. Brotherhood of Railway Clerks, 466 U.S. 435 (1984), RLA

unions and nonunion employees have been unable to develop a

workable formula for determining what categories of union

expenditures are chargeable to objecting nonunion employees.

This issue of determining the proper “chargeability” test has also

divided this court. Compare Justice Blackmun’s three-prong

“germane to collective bargaining” test, Lehnert, 111 S.Ct. at

1959, with Justice Scalia’s “statutory duties” test, id. at 1979

(Scalia, J., dissenting).

As the present case clearly demonstrates, the lower courts

and the interested parties need further clarification and guidance

from this Court, especially in regard to the proper test for

determining the “chargeability” of “extra-unit” expenditures.

Given the current labor unrest in the transportation industry, the

recent changes in the Court’s composition, and the parties

compelling need for clarification, petitioners submit that this

RLA case provides an appropriate vehicle for reconsidering the

appropriateness of adopting Justice Scalia’s “statutory duties” test

(“a union cannot constitutionally charge nonmembers for any

expenses except those incurred for the conduct of activities in

which the union owes a duty of fair representation to the

nonmembers being charged.”) /Jd.* Petitioners submit that

Petitioners attempted to have the en banc Fourth Circuit adopt this test,

but it properly declined on the grounds that only ihis Court may overrule

One of its precedents, 992 F.2d at 1303, App. i4a (Wilkinson, J.,

concurring).

aoa

» 8

adoption of such a test would go along way toward solving the

“chargeability” issue.

I Petitioners Fully Support And Adopt The Dissenting

Opinion And Submit That Its Reasoning Justifies Review.

In seeking review by this Court, petitioners rely heavily on

the arguments and rationales contained in Circuit Judge Russell's

extensive, detailed analysis of the issues in this case, as well as his

detailed recitation of the errors contained in the majority and

concurring opinions. Petitioners adopt by reference all of the

dissent’s arguments for they clearly demonstrate why review by

this Court is appropriate. See 992 F.2d 1303-18 (Russell, J.,

dissenting). The following comments are meant to supplement the

reasons articulated by Judge Russell.

Il The Court Of Appeals Misconstrued This

Court’s Test For Determining “Chargeability”

Of “Extra-Unit” Expenditures.

The court below affirmed the district court’s holding that

ALPA’s Continental and United strike expenditures were

chargeable to objecting employees because in its view, there was

“some indication that the payment [was] for services that may

ultimately enure to the members of the local union by virtue of

their membership in the parent organization.” By so doing, both

the majority and concurring opinions misconstrued and misapplied

this Court’s standard for determining chargeability.

As Judge Russell correctly points out, the standard adopted

by the court below is fundamentally different from the standard

adopted by this court, namely that the validity of charges assessed

against dissenters must be “germane” to the collective bargaining

of the dissenter’s unit. See, e.g., Communications Workers v.

Beck, 487 U.S. 735, 745 (1988); Ellis, 466 U.S. at 448; Abood, 431

U.S. at 236; Allen, 373 U.S. at 121. Lehnert, 111 S.Ct. at 1959,

and would lead to wildly different results.

Rather than utilizing the “germane to collective bargaining”

test, the court below appears to adopt a standard that extra-unit

expenses are chargeable if there is “some indication that the

payment is for services that may ultimately enure to the benefit

of the members of the local uniou by virtue of their membership

in the parent organization.” As Judge Russell points out, the

problem with this standard is that extra-unit organization and

extra-unit litigation expenses, for example, would become

chargeable, even though this Court has held them to be

nonchargeable under the germane test. The conflicting standard

adopted by the court below is in error and will tend to further

confuse chargeability analysis if allowed to stand.

Whatever the appropriate test for determining the

chargeability of the Continental and United strike expenditures,

petitioners submit that ALPA’s extra-unit donation of $ 1,100,000

to another union participating in the United strike can never be

chargeable to objecting employees. Lehnert, 111 S.Ct. at 1961

(Union does not have carte blanche to expend dissenters’ funds

and may not charge objecting employees for a direct donation to

an unrelated bargaining unit); Beck v. Communications Workers,

776 F.2d 1187, 1212 (4th Cir. 1985)(cannot charge nonunion

employees for expenditures in support of a strike by another

union). Clearly, the courts below were in error in holding that

such donations were chargeable to petitioners.

III The Court Of Appeals Failure To Determine

“Chargeability” On A Case-By-Case Basis

Compels Petitioners To Financially Support

Union Activities Without The Union Having

Met Its Burden Of Proof.

The Court of Appeals erred in upholding the chargeability

of ALPA’s “extra-unit” expenditures in support of Eastern strike

activity, i.e. 1986-87 strike preparations and the 1989 sympathy

strike in support of another union. Under this court’s precedents,

these challenged expenditures were not chargeable because the

union failed to present any evidence or proof that such

expenditures were germane to collective bargaining. As Judge

hi cieeertsiaeeeenteneenalls

Russell’s dissent makes clear, the union bears the burden of proof

regarding chargeability of challenged expenditures, Abood, 431

U.S. at 239 n. 40; Allen, 373 U.S. at 122, and the chargeability of

each expenditure is to be determined on a case-by-case basis,

Lehnert, 111 S.Ct, at 1959. Instead of addressing the chargeability

of the challenged Eastern expenditures, the court below relied

upon the district court’s findings that "support for the striking

pilots [in the industry] was of crucial importance in establishing

the union’s bargaining position in each airline unit.” By failing to

analyze the chargeability of the challenged Eastern expenditures,

the court below effectively relieved ALPA of its burden of proof.

Also, as Judge Russell points out, ALPA’s extra-unit

expenditures for the Eastern sympathy strike in support of

another union were most likely impermissible as a matter of

constitutional and statutory law. 992 F.2 at 1305, App. 19a.

The failure of the courts below to follow this Court’s

precedents and require ALPA to meet its burden of proof

warrants review by this Court.

IV The Court Of Appeals Failure To Address

Petitioners’ Challenges To “Extra-Unit”

Litigation Expenditures Conflicts With This

Court’s Holdings On The Rules Of Pleading

And Burden Of Proof In Agency Fee Cases.

The courts below erred in failing to address petitioners’

challenges to extra-unit litigation expenditures. The majority

avoided the issue by holding the issue was not raised in the

complaint, stipulation of facts, or in the district court’s findings.

Therefore, the issue had not been presented or preserved. 992

F.2d 1301, App. 10a. While it is true that extra-unit litigation was

not named as one of the challenged expenditures, it was an

integral part of those expenditures and the parties to the

litigation believe that it was an issue. Even the majority concedes

that it was.extensively briefed during the appeal.

As Judge Russell correctly points out in his dissent:

« Be

“Allen and Abood establish that to put in issue the validity of

charges by the union against dissenting employees under an

agency bargaining contract, dissenters are not required to

identify the specific expenditures to which they object; it is

only necessary that they allege generally that they oppose

being charged for “expenditures of any sort” that are

impermissible. Abood, 431 U.S. at 241; Allen, 373 U.S. at

118. Such an allegation puts in issue all the charges made by

the union in the case and places on the union the burden of

showing that such charges were proper. Abood, 431 U.S. at

239 n.40; Allen, 373 U.S. at 122; see also Chicago Teachers

Union v. Hudson, 475 U.S. 292, 306 & n.16 (1986); Beck v.

Communications Workers, 776 F.2d 1187, 1209 (4th Cir.

1985), aff'd, 487 U.S. 735 (1988).

“Plaintiffs here stated in their complaint that they objected

to any charges by the union that were impermissible under

RLA § 2 Eleventh, 45 U.S.C. § 152 Eleventh. In addition,

with regard to the charges for litigation in connection with

the United and Continental strikes, they made more than a

general objection because they expressly opposed in their

complaint the union’s charges for the expenses for United

and Continental strikes, and the litigation expenses were part

of expenses charged for the strikes. Plaintiffs, therefore,

clearly exceeded the requirements set forth in Abood and

Allen to put in issue the validity of the union’s charges for

these litigation expenses.”

992 F.2d at 1304, App. 16a.

As this Court’s decisions make abundantly clear, extra-unit

litigation expenditures are not chargeable to objecting nonunion

employees. Ellis, 466 U.S. at 453; Lehnert, 111 S.Ct. at 1964; see

also Pilot Against Illegal Dues v. Air Line Pilots Ass’n, 938 F.2d

1123 (10th Cir. 1991). There can be no doubt that petitioners

were objecting employees challenging the chargeability of

expenditures from ALPA’s major contingency fund. It is also

clear that portions of the fund expenditures involved litigation.

For example, over $ 3,000,000 (70%) of the challenged

- 19.

Continental expenditures involved legal/professional fees. See

Compl. Ex B. Given the fact that such expenditures are

nonchargeable, the Court below erred in failing to address

petitioners challenges.

CONCLUSION

For the foregoing reasons and those listed in Judge Russell’s

dissent, the petition should be granted and a writ of certiorari

issued to the U. S. Court of Appeals for the Fourth Circuit.

Respectfully submitted,

ROBERT F. GORE*

National Right To Work Legal

Defense Foundation, Inc.

8001 Braddock Road, Suite 600

Springfield, Virginia 22160

(703) 321-8510

Attorney For Petitioners

* Counsel of Record

August 10, 1993

APPENDICES

APPENDIX A

DECISION OF THE UNITED STATES

COURT OF APPEALS FOR THE FOURTII CIRCUIT

April 28, 1993

- la-

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PriER CRAWFORD; FREDERICK J.

ADAM: ROBERT F. BRAUMAN: RICHARD

L. BROWN; WILLIAM A. BURBAGE:

ROBERT ERCIAK:; RON E. MERZLAK:

LEROY ROGERS; ROGER F. SEELY:

WARREN WELLS: DALE CROSS: RICHARD

PEDERSON; CLYDE B. SMITH: ERNES1

MUELLER; RUEL NEELEY: ROBER1

BULEY:; THOMAS GIEFER: KLEMENS

THOMAS; HOWARD L. JONES: TLTER-

BERT A. LIGITL: JOSEPTL R. No. 88-2083

MACKENSIF: MICHAEL T. MCQUILLEN:

JOUN R. YOUZ; HAROLD BAGNALL:

RICHARD P. BARTHELEMY: CLINTON

DAVIS; EDISON L. DENNEY: GEORGE

GAWRILOW; JOHN J. LUMLEY: ALBERT

NEWTON; EUGENE PALSSON: DALE: B.

PETTY; DERYL ROARK: DONALD D.

ECKER; KARL A. JADRNICEK: HOWARD

S. MORTON: RICHARD. W. REW:

DONOVAN WIHOLERS: DONALD K.

BREWSTER: PETER TIAYES: LAURENCI

J. ShUPPY, TIE; ROGER VEON,

Plaintiffs-Appellants,

AIR LINE PILOTS ASSOCIATION

INTERNATIONAL.

Defendant-Appellee.

PRANSP( IRTATION COMMUNIC “ATIONS

NTERNATIONAI UNION.

Amicus Curiae.

- 2a -

Appeal from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Albert V. Bryan, Jr., Senior District Judge.

(CA-87-891-A)

Argucd: February 4, 1992

Decided: April 28, 1993

Before ERVIN, Chicf Judge, RUSSELL, WIDENER,

HALL, PHILLIPS, MURNAGHAN, WILKINSON,

WILKINS, NIEMEYER, HAMILTON, and LUTTIG,

Circuit Judges, and BUTZNER, Senior Circuit Judge.

Affirmed by published opinion. Senior Judge Butzner wrote

the majority opinion, in which Chict Judge Ervin, Judge Hall,

Judge Phillips, Judge Murnaghan, and Judge Wilkins joined.

Judge Wilkinson wrote a concurring opinion, in which Judge

Wilkins joined. Judge Russell wrote a dissenting opinion, in

which Judge Widener, Judge Nicmeyer, Judge Hamilton, and

Judge Luttig joined.

* * * *

OPINION

BUTZNER, Senior Circuit Judge:

Appellants are forty-two nonunion airline pilots employed

by one of cight airline companics—Eastcrn, Braniff, Midway,

Northwest, Pan Amcrican, United, Western, or USAir—operat-

ing under the labor scheme of the federal Railway Labor Act

(RLA), 45 U.S.C. § 151 et seg. See 45 U.S.C. § 181 (air carriers

regulated under the Act). Each of the airlines had an agree-

ment with the Air Line Pilots Association (ALPA) (appellees),

designating it as exclusive bargaining representative for the pilots

employed by that airline. Under the authority of § 2, Eleventh,

of the RLA, the agreement required pilots employed by the

- 3a -

irlines cither to join ALPA or to remit to ALPA an agency fee

n licu of dues to compensate it for its services in bargaining and

‘epresentation. 45 U.S.C. § 152, Eleventh (a). The nonunion

yilots contend that ALPA’s expenditures of exacted funds

‘iolated their rights under the RLA and the First and Filth

Amendments. They also charge that ALPA’s methods of

collecting and accounting for agency lees exacted under these

agreements violated the procedural requirements of Chicago

Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292 (1986).

The district court entered judgment for ALPA. A pancl of

this court affirmed in Crawford v. Air Line Pilots Ass'n Int'l, 870

F.2d 155 (4th Cir. 1989). The court subsequently granted

rehearing en banc. Thereafter, while the case was pending, the

Supreme Court granted certiorari in a public-sector union case

involving somewhat similar issucs. Lehnert v. Ferris Faculty

Ass'n. 881 F.2d 1388 (6th Cir. 1989), cert. granted, 110 S. Ct.

2616 (1990). This court then held its decision in abeyance

pending the Supreme Court's decision in Lehnert. After that

decision. Lehnert v. Ferris Faculty Ass'n, 111 S. Ct. 1950 (1991),

we requested supplementary bricts. Following receipt of the

briefs. the case was argued before the full court, which now

alfirms the judgment of the district court.

The partics entered into a lengthy stipulation of facts

before trial. and the district court augmented these with detailed

findings of fact in its opinion. We revicw these findings for

clear error. Lehnert v. Ferris Faculty Ass'n, 111 S. Ct. at 1965;

Anderson v. Bessemer City, 470 U.S. 504, 575 (1985).

The stipulation discloses that ALPA during the relevant

period represented some 37,000 pilots at 43 airline companics,

of whom 34,500 were members of ALPA. ALPA charges its

members dues of 2.35 percent of their gross pay. The average

ALPA member made $80,000 annually and paid $1,880 in union

dues. ALPA is a unitary national labor organization that is not

composed of local unions like most other labor organizations.

- 4a -

Members’ duces go to ALPA directly, and collective bargaining

and negotiating policy are directed by the national officers and

governing bodics of ALPA, with the assistance of the union’s

300-member national staff. The pilots employed at cach airline

with a union contract clect a Master Executive Council for that

airline, and negotiations affecting that airline's collective

bargaining agreement are conducted by a committce appointed

by the Master Exccutive Council, assisted by the ALPA staff.

Negotiating strategy, and any agreement reached, must be

approved by ALPA’s national president.

Continental Air Lines in 1983 filed for bankruptcy and

sought to abrogate its collective bargaining agreement with

ALPA. Continental pilots responded by striking. ALPA

members in other airlines by secret ballot repeatedly approved

a special assessment to their ducs to pay a monthly benefit to

the striking Continental pilots, and these benefits were paid until

February 1986. In 1985, United Air Lines entered negotiations

with its pilots secking a two-ticr wage structure or “B-scale” that

would pay newly hired pilots less than those already employed.

ALPA resisted this demand, and a strike ensued. Eventually the

parties signed a contract granting United a temporary B-scale to

end in five years, with binding arbitration to determine its form

thereafter. After this agreement, ALPA won similar agreements

from other airlines, whose pilots it represented, secking to

impose B-scales.

The disputes with Continental and United weakened ALPA

financially. In October 1985, ALPA’s membership approved an

increase in their ducs to create a major contingency fund to be

uscd in important labor disputes or for other expenditures that

could not be funded adequately out of the normal budget.

Funds were used to support the strikes at Continental and

United and were used to prepare for a possible strike at Eastern

Air Lines. Some funds were also used for the expense of union

organizing drives. These organizing expenses, ALPA agrees, are

not chargeable to nonunion agency fee payers.

The district court supplemented the stipulation by findings

of fact and inferences that it reasonably drew from the facts, all

of which are amply supported by the evidence. We quote the

findings at some length, because they are cssential to an

understanding of why ALPA’s expenditures are germanc to

collective bargaining with all the airlines whose pilots it repre-

sents.

(Collective bargaining negotiations at any one airline

are directly affected by, and also directly affect, negou-

ations at all other airlines. Each airline strives to keep

its labor costs no higher than those of its compctitors.

Thus, when one airline obtains some cost-cutting

concession from ALPA, other airlines generally seck to

obtain the same or an cquivalent concession. On the

other hand, when ALPA succeeds in negotiating a

wage or benefit increase with one airline, that enhanc-

es its ability to negotiate a similar increase with other

airlines.

Because of this industry pattern, the court found,

it was important to ALPA, in the interest of all the

pilots which it represented, to ensure that what had

happened at Continental, namcly, a bankruptcy where-

by the collective bargaining agreement was abrogated

and pilots’ salaries were cut in half, not become an

industry norm to be sought by other airlines in the

bargaining process. For this reason it was in the

interest of all pilots, members and nonmembers alike,

that ALPA uscd its funds to pay the pilots at Conti-

nental to make up for their lost wages.

The court further found that

in 1985, United sought in bargaining to impose a

concession which American Airlines had achieved [with

another union], namely, a B-Scale two-ticr payment

arrangement under which airline cockpit personnel

- 6a -

hired after a certain date would be paid on a lower pay

scale (the B-Scalc). ALPA supported financially the

pilots who struck United, and ultimately, after a

twenty-nine day strike, secured from United a six-year

parity requirement under the B-Scale arrangement.

This accomplishment has been used to benefit all

members (and non-members) in all the airlines, not

just those employed by United.

In its discussion of the major contingency fund, the court

found that

{t}he United and Continental strikes considerably

weakened ALPA’s financial stability. Since a financial-

ly weak ALPA was vulncrable to a prolonged strike,

ALPA lost its credibility with management because the

other airlines knew it could not financially sustain a

long strike. For this reason, the Major Contingency

Fund was created.... It was from this fund that some

expenditures, beginning in 1985, were made to support

the striking pilots at Continental and United. Plaintiffs

attack the fund as an improper expenditure of the dues

of the objccting plaintiffs. Again the court finds the

creation of the fund to be a device reasonably em-

ployed to implement the dutics of the union as exclu-

sive representative of the employces in the bargaining

unit.

The principal complaint of the objecting nonunion pilots

concerns ALPA'’s use of their agency [ces to support strikes and

other activitics of bargaining units at airlines where they are not

employed. Closcly related is their complaint that ALPA used

their agency fees to support the major contingency fund. The

nonunion pilots assert that use of agency fees for expenses

rclated to bargaining outside the unit at the airline where a pilot

works violates both the Railway Labor Act and their constitu-

tionally protected rights of free association.

-7a-

Section 2, Eleventh of the Railway Labor Act provides that

sgulated carriers and unions may agree that “as a condition of

yntinued employment, ... all employees shall become members

f the labor organization representing their craft and class.” 45

1.S.C. § 152, Eleventh (a). This provision was added to the

-LA in 1951. Five years later, the Supreme Court sustained the

gency-fee provisions of the RLA against attack on their facial

onstitutionality under the First and Fifth Amendments.

ailway Employees Dep't v. Hanson, 351 U.S. 225, 238 (1956).

\t the same time, it found that the requirement that unwilling

orkers pay agency fees to the union might under other

ircumstances pose a constitutional problem, since the cnact-

vent of § 2, Eleventh is “the governmental action on which the

‘onstitution operates, though it takes a private agreement to

woke the federal sanction.” Hanson, 351 U.S. at 232.

The intrusion into individual freedom of choice is justified

y Congress’ desire to ensure “[i]ndustrial peace along the

ricrics of commerce,” Hanson, 351 U.S. at 233, and by the

eed to reduce labor friction through “the climination of the

tee riders’-—those employees who obtained the bencfits of the

inions’ participation in the machinery of the Act without

inancially supporting the unions.” = International Ass'n of

Jachinists v. Street, 367 U.S. 740, 761-62 (1961). However, the

.LA does not give “unions, over an employce’s objection, the

ower to use his exacted funds to support political causes which

Lehnen v. Ferris Faculty Ass'n, 111 S. Ct. 1950 (1991),

oncerned not a carrier regulated by the RLA but a public-

mployee union exacting agency feces pursuant to a state statute.

lowever, “|b]ecause the Court expressly has interpreted the

RLA ‘to avoid serious doubt of [the statute's] constitutionality,’

he RLA cases necessarily provide some guidance regarding

vhat the First Amendment will countenance in the realm of

inion support of political activitics through mandatory asscss-

nents.” Lehnert, 111 S. Ct. at 1957 (citations omitted).

*xamining the prior cases, the Court deduced that the constitu-

- Sa -

uonailty or cnailenged’ agency-lce expenditures must be mca-

sured against a three-part test. Chargeable activitics must

(1) be “germanc” to collective-bargaining activity, (2)

be justified by the government's vital policy interest in

labor peace and avoiding “free riders”; and (3) not

significantly add to the burdening of free speech that

is inherent in the allowance of an agency or union

shop.

111 S. Ct. at 1959.

Applying these principles, the Court specifically reyected the

agency-fee objectors’ contention that the “local union may not

utilize dissenters’ fees for activities that, though closely related

to collective bargaining gencrally, are not undertaken directly on

behalf of the bargaining unit to which the objecting employees

belong.” The Court found this contention “to be foreclosed by

our prior decisions.” 111 S. Ct. at 1959. To require that

expenses concern the specific bargaining unit “would be to

ignore the unificd-membership structure under which many

unions, including those here, operate.” 111 S.Ct at 1961.

Under this structure, “|t]he essence of the affiliation relationship

is the notion that the parent will bring to bear its often consider-

able cconomic, political, and informational resources when the

local is in need of them. Consequently, that part of a local’s

affiliation fee which contributes to the pool of resources

potentially available to the local is assessed for the bargaining

unit's protection, even if it is not actually expended on that unit

in any particular membership year.” 111 S. Ct. at 1961.

The Court recognized limitations on the union’s power to

spend exacted fees for bargaining activitics unrelated to the

bargaining unit: the Constitution bars “a direct donation or

interest-free loan to an unrelated bargaining unit for the

purpose of promoting employee rights or unionism generally,”

as well as a “contribution by a local union to its parent” that is

“in the nature of a charitable donation.” 111 S. Ct. at 1961.

Nevertheless, extra-unit bargaining expenditures are legitimate

hii eneeenieeaneeieemacmesall

- 9a -

if there is “some indication that the payment is for services that

may ultimately cnure to the benefit of the members of the local

union by virtue of their membership in the parent organization.”

111 S. Ct. at 1961-62. Among the expenditures approved by the

Lehnert Court in this context were funds used to prepare for a

potential strike. The Court upheld the district court's findings

that such preparations are “reasonable bargaining tools.” 111 S.

Ct. at 1965.

The holding in Lehnert, read in conjunction with the district

court's extensive findings of fact, makes the union’s case for the

challenged expenditures, if anything, stronger than it had been

under previous precedent. ALPA’s “unified-membership

structure,” 111 S. Ct. at 1961, is even tighter than that of the

union in Lehnert. As the district court found, negotiations at

other airlines were not only germane to the bargaining process

at cach airline bargaining unit, but in essence determined the

result of the bargaining process. Expenditures to prevent the

extraction of concessions from ALPA by individual airlines

handily mect the Lehnert test. Because support for the striking

pilots was of crucial importance in establishing the union's

bargaining position in cach airline unit, the requirement that

agency-fce objectors provide funds for the strike benefits was

clearly justified by the bargaining pattern and practice in the

airline industry.

Appellants attempt to challenge the use of their fees for the

major contingency fund as an “involuntary loan.” While the

Lehnert Court cautioned in dictum that exacted funds could not

be used for an “interest-free loan to an unrelated bargaining

unit for the purpose of promoting employee rights or unionism

generally,” 111 S. Ct. at 1961, the ALPA fund does not match

that description. The fund is, in the findings of the district

court, “a device reasonably employed to implement the duties of

the union as exclusive representative of the employees in the

bargaining unit.” Like the payments to the national union

approved in Lehnert, the fund “contributes to the pool of

a ee

- 10a -

resources potentially available to the local” and thus “is assessed

for the bargaining unit’s protection, even if it is not actually

expended on that unit in any particular membership year.” 111

S. Ct. at 1961. Here, the purposes for which the fund was

created were, by finding of the district court, germane to

collective bargaining. As they were designed to further the

union's duty of representation, they were by definition justified

by the policies underlying the RLA. Finally, we do not believe

that the burden to constitutional rights imposed by permissible

exaction of fees is heightened simply because the funds are

assessed in advance of labor actions rather than contemporanc-

ously or afterwards.

Accordingly, applying the test enunciated by the Court in

Lehnert, we hold that a pro rata share of strike support benclits

for pilots in other bargaining units and of the pro rata cost of

the major contingency fund may be charged to objecting

agency-fee payers. Accord Pilots Against Illegal Dues v. Airline

Pilots Ass’n., 938 F.2d 1123, 1131 (10th Cir. 1991).

In their supplemental bricls, both parties debate the

implications of Lehnert for litigation expenses. However,

nowhere in appellants’ complaint, the stipulations of fact, or the

district court’s findings is there any mention of extra-unit

litigation expenses in this case. The issue simply has not been

properly presented and preserved below, and therefore we

express no vicw about it. See United States v. One 197]

Mercedes Benz, 542 F.2d 912, 915 (4th Cir. 1976).

The appellants also complain that 1985 and 1986 rebate

system for agency fees did not comply with the requirements

imposed by Chicago Teachers v. Hudson, 475 U.S. 292 (1986).

They do not complain about the current rebate system. Hudson

holds that union procedures for accounting and rebate or

advance reduction of agency fees must “include an adequate

explanation of the basis for the fee, a reasonably prompt

Opportunity to challenge the amount of the fee before an

er ere era

- lla-

impartial decisionmaker, and an escrow for the amounts

reasonably in dispute while such challenges are pending.”

Hudson, 475 U.S. at 310.

Pointing out that Hudson dealt with a public employer and

public employees, ALPA contends that state action and consc-

quent applicability of the First Amendment are not involved in

this case, because airline transportation is a private industry.

Supporting this thesis with recent Supreme Court decisions that

deny the applicability of the state action doctrine to private

transactions, ALPA asserts that the procedures required by

Hudson do not apply to private collective bargaining agreements.

We cannot accept ALPA’s position. It is squarely rebutted

by Hanson, 351 U.S. at 232, and we do not agree that the

Supreme Court has implicitly overruled Hanson. ALPA must,

and now does, provide nonunion pilots the same procedural

protection required by Hudson.

From 1978 until 1983, ALPA rebated to cach nonunion

agency fee payer who objected to use of agency fees for political

purposes a percentage of the fee paid, plus interest, based on

ALPA’s computation of the percentage of its total expenditures

that were used for political purposes. ALPA revised its rebate

procedures after the Supreme Court decided Ellis v. Brotherhood

of Ry. Clerks, 466 U.S. 435 (1984). The new procedures,

designed to conform to Ellis, established an interest-bearing

escrow account into which ALPA deposited 150 percent of the

amount it estimated would be rcbatable at the end of the

relevant year. In 1986, after the Supreme Court's decision in

Hudson, ALPA set up a procedure by which dissenting agency

fee payers could seck arbitration of disputes about the proper

amount of rebates. ALPA pays the expense of arbitration. By

mutual agreement, arbitration for years since 1985 has been

stayed pending this litigation.

In November 1987, ALPA granted agency fee payers an

option to receive cither an advance reduction of their dues or

a rebate with interest from the escrow account. In December

- 12a -

1987, a summary and explanation of the 1986 rebate system was

sent to all agency fee payers. Previously, such information had

been sent only to agency fee payers who had objected to use of

their fees for nonchargeable expenscs.

The district court held that appellants’ claims were barred

by the statute of limitations; however, the court also found that

the procedures for the year 1987 are well within the

requirements of Hudson, and the procedures for the

year 1986 substantially within them. For the years

prior to 1985 there may have been deficiencies; howev-

cr, no specific damage to any plaintiff as a result of any

deficiency in the rebate program itself has been shown,

and the court is unwilling to require an audit, notice,

Or an Opporiunity to object on the possibility that there

may be revealed some inappropriate expenditures

warranting additional rebates.

A panel of this court held that the appellants’ claims were not

time-barred. For reasons stated in its opinion, we affirm that

ruling. Crawford v. Air Line Pilots Ass'n Int'l, 870 F.2d 155, 159

(4th Cir. 1989). The panel affirmed the alternative holding of

the district court that the challenged plans substantially complied

with Hudson and that appellants had proved no damages arising

out of delay or minor procedural deficiencies. With respect to

the procedural aspect of the rebate system, we affirm the district

court for reasons stated in the panel opinion. See Crawford, 870

F.2d at 159-61.

AFFIRMED

WILKINSON, Circuit Judge, concurring:

I vote to affirm the district court’s judgment because |

believe that we are required by Lehnert v. Ferms Faculty

Association, 111 S. Ct. 1950 (1991), to do so. Judges are in the

business of taking language seriously, and the language in

Lehnert nails the result here to the mast.

- 13a -

In Lehnert, a majority of the Supreme Court held that non-

icological expenses may be chargeable to union dissenters even

1 the absence of “a direct relationship between the expense at

suc and some tangible benefit to the dissenters’ bargaining

nit.” /d. at 1961. Although Lehnert docs not “grant a local

nion carte blanche to expend dissenters’ dollars for bargaining

ctivities wholly unrelated to the employees in their unit,” id., all

hat is required is “some indication that the payment is for

ervices that may ultimately cnure to the benefit of the members

{the local union by virtue of their membership in the parent

ganization,” id. at 1961-62; see also id. at 1981 (Scalia, J.,

oncurring in the judgment in part and dissenting in part)

approving a pooling arrangement because “lijt is a tangible

enefit” to a bargaining unit to have “services on call, even in

he years when they are not used” by that unit).

Because ALPA’s strike reserve fund was _ potentially

wailable for the benefit of pilots at every bargaining unit,

yayments for creation and maintenance of the fund “may

iltimately enure to the benefit” of pilots at cach bargaining unit

ind therefore the fund passes muster under Lehnert. The strike

eserve fund is a pooling arrangement into which pilots, both

union and non-union, at the various airlines with which ALPA

has agency shop agreements pay a certain percentage of their

airline salaries. The fund is intended to be used for major labor

Jisputes and for other expenditures that cannot be funded

through ALPA’s normal budgeting practices and policics. It is

potentially available for the benefit of pilots, including non-

members, at all airlines. Lehnert approved such pooling

arrangements and made clear that pooled funds necd not

directly benefit any particular bargaining unit in any given ycar.

Moreover, in Lehnert the Court held that strike-preparation

activities—such as ALPA’s strike reserve fund—are adjuncts to

the bargaining process and are therefore chargeable to union

dissenters. See 111 S. Ct. at 1965-66; id. at 1981 (Kennedy, J.,

concurring in the judgment in part and dissenting in part).

Likewise, I must conclude that the expenditures in support

of the United and Continental strikes, and in preparation for a

- 14a -

possible Eastern strike, are chargeable under Lehnert. In this

case, as Judge Butzner notes, the district court made detailed

and exhaustive factual findings. Based on these findings, it

concluded that “collective bargaining negotiations at any one

airline are directly affected by, and also directly affect, negotia-

tions at all other airlines.” These factual findings—which are

not clearly erroncous and which are similar to the conclusions

of other courts, see Pilots Against Illegal Dues v. Air Line Pilots

Ass'n, 938 F.2d 1123, 1128 (10th Cir. 1991)—compel me to

conclude that there is “some indication” that these expenditures

“may ultimately enure to the benefit” of pilots at airlines other

than Continental, United, and Eastern.’

Plaintiffs have been candid before this court. They

recognize that Lehnert is anything but a favorable case for their

position. Included in their supplemental bricf is a chart of the

Justices’ various positions on the different issues presented in

that case. Plaintiffs note “the deeply divided court” that decided

Lehnert and “the retirement of Justice Marshall,” and invite us

to adopt the position of the Lehnert dissent. That is not an

invitation, however, that a court of appeals judge can accept.

See Rodnquez de Quijas v. Shearson/Amencan Express, Inc., 490

U.S. 477, 484 (1989) (noting that lower courts should follow a

precedent with “direct application in a case” and “leavje] to [the

Supreme] Court the prerogative of overruling its own deci-

sions”); Thurston Motor Lines, Inc. v. Jordan K. Rand, Litd., 460

U.S. 533, 535 (1983) (per curiam) (“Needless to say, only this

Court may overrule one of its precedents.”).”

}

The direct impact of bargaining at one airline on bargaining at other

airlines may be the result both of the somewhat unique organizational structure

of ALPA and of the national nature of the industry. In cases involving other

industrics and other unions, therefore, such a factual finding may not be

present. In such circumstances, of course, application of Lehnert may very well

result in a different outcome.

Plaintiffs also suggest that, while Lehnert may govern constitutional

challenges to agency fees, we should adopt the Lehnert dissent as the proper

interpretation of Railway Labor Act (RLA) §2, Eleventh, 45 U.S.C. §152,

- 15a -

The charged expenses here were not idcological, and the

cncy fees were not assessed to promote cither the cause of

1ionism in general or political positions that a union Icadership

ight support but to which individual members might take

gorous exception. See Lehnert, 111 S. Ct. at 1957-58. Apart

om such constitutional concerns, the judgment of whcther

rangements such as ALPA’s will promote industrial peace or

ad to disruptions in transportation and commerce must be left

Congress. Because Lehnert makes clear that no constitutional

irricrs exist to the chargeability of the expenses in this case, |

are the court’s conclusion that the judgment of the district

yurt must be affirmed.

I am authorized to say that Judge Wilkins joins in this

inion.

USSELL, Circuit Judge, dissenting:

I feel impelled to dissent from the majority and concurring

pinions. My reasons, stated in largely summary form, are as

lows:

(1) In addressing, or failing to address, the charges assessed

y the union against plaintiffs for litigation connected with the

rikes at United Airlines and Continental Airlines, both the

ajority and the concurring opinions disregard the rules of

lcading and of burden of proof cnunciated by the Supreme

eventh. I find this argument unconvincing. Plaintiffs have cited no authority

support their argument that the standard governing under the RLA ts

erent from that governing under the First Amendment, and both the

‘inert majority and dissent relied on statutory cases and recognized that there

no bright line separating the constituuonal and statutory analyses. See

thnert, 111 S. Ct. at 1957 (“Although they are Cases of statutory construction,

reet and Allen arc instructive in delineating the bounds of the First Amend-

ent in this area as well.”); id. at 1978 (Scalia, J., concurring in the judgment

part and dissenting in part) (“Srreet, Ellis, and Beck were statutory cases, but

ere ws good reason to treat them as merely reflecting the constitutional ruic

- 16a -

Court in Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977), and

Brotherhood of Ry. & S.S. Clerks, Freight Handlers, Express &

Station Employees v. Allen, 373 U.S. 113 (1963). These litigation

expenses were a substantial portion of the charges against

plaintiffs; in fact, the union justified its need for additional

assessments for the Major Contingency Fund on the ground that

these expenses had been very large. The majority, however,

completely avoids addressing these litigation charges by holding

that plaintiffs failed to put in issue their validity because

“nowhere in appellants’ complaint, the stipulations of fact, or

the district court’s findings is there any mention of litigation

expenses,” it even goes so far as to chide the parties for

addressing the validity of these charges in their briefs. The

concurrence fails entirely even to acknowledge that litigation

expenses are part of this case.

Allen and Abood establish that to put in issuc the validity of

charges by the union against dissenting employees under an

agency bargaining contract, dissenters are not required to

identify the specific expenditures to which they object; it is only

necessary that they allege gencrally that they oppose being

charged for “expenditures of any sort” that are impermissible.

Abood, 431 U.S. at 241; Allen, 373 U.S. at 118. Such an

allegation puts in issuc all the charges made by the union in the

case and places on the union the burden of showing that such

charges were proper. Abood, 431 U.S. at 239 n.40; Allen, 373

U.S. at 122; see also Chicago Teachers Union v. Hudson, 475

U.S. 292, 306 & n.16 (1986); Beck v. Communications Workers,

776 F.2d 1187, 1209 (4th Cir. 1985), aff'd, 487 U.S. 735 (1988).

Plaintiffs here stated in their complaint that they objected

to any charges by the union that were impermissible under

Section 2, Eleventh of the Railway Labor Act (“RLA”), § 2

(Eleventh), 45 U.S.C. § 152 (Eleventh). In addition, with regard

to the charges for litigation in connection with the United and

Continental strikes, they made more than a general objection

because they expressly opposed in their complaint the union's

charges for the expenses for United and Continental strikes, and

the litigation expenses were part of expenses charged for the

- 17a -

strikes. Plaintiffs, therefore, clearly exceeded the requirements

sct forth in Abood and Allen to put in issue the validity of the

union's charges for these litigation expenses.

It should be noted that counsel for the union and counsel

lor amicus, both of whom devoted substantial portions of their

bricfs to addressing the validity of these litigation charges, did

not even attempt to argue that these charges were not at issue.

That these two counsel, who are both experienced in labor

litigation and have been involved with several of the Supreme

Court decisions in this area of labor law, took this position

illustrates well how far-fetched the majority’s and concurrence’s

conclusion is that the litigation charges are not at issue here.

The majority's and concurrence’s error in this respect is

particularly critical. In Ellis v. Brotherhood of Ry., Airline & S.S.

Clerks, Freight Handlers, Express & Station Employees, 466 U.S.

35, 453 (1984), and Lehnert v. Ferns Faculty Ass’n., 111 S. Ct.

1950, 1964 (1991), the Supreme Court, in positive, clear-cut

terms, declared as bluntly as it could that expenses for litigation

outside of a dissenter’s unit (“extra-unit litigation”), were not

chargeable against the dissenter. For the great majority of

plaintiffs here,’ the litigation in connection with the United and

Continental strikes was extra-unit litigation.” Thus, under Ellis

and Lehnert, the expenses for this litigation were not chargeable

against the great majority of plaintiffs. As a result, this issue

alone is sufficient to require reversal of the decision of the

district court herein.

(2) In their treatment, or lack of treatment, of the charges

issessed by the union against non-union members for the

hreatened strike and strike at Eastern Airlines, the majority and

‘The exceptions are plaintiffs who are United pilots. No Continental

nlots are plainuffs.

lor an explanation of why the Air Line Pilots Association (“ALPA”) is

livided into separate units, see page 37 infra

- 18a -

the concurring opinions ignore the Supreme Court's directive in

Lehnert that in determining whether a union’s charges are

proper, each expenditure must be analyzed individually. At issue

in this case are the union’s expenditures for strikes at United

and Continental and for a threatened strike and strike at

Eastern. Both the majority and the concurrence analyze the

chargeability of all of these expenditures together. The majority

reiterates the district court's findings and interprets them to

establish that “support for the striking pilots [in the industry}

was of crucial importance in establishing the union’s bargaining

position in cach airline unit.” As a result, it holds that the

expenditures for the United, Continental and Eastern controver-

sies were “clearly justified.” The concurrence similarly is

“compellled] .. . to conclude” that “the expenditures in support

of the United and Continental strikes, and in preparation for a

possible Eastern strike, are chargeable” based on the district

court's findings that “collective negotiations at any one airline

are directly affected by, and also directly affect, negotiations at

all other airlines.”

Lehnert, however, requires “a case-by-case analysis in

determining which activities a union ... may charge to dissenting

employees.” /d. at 1959 (emphasis added). This required “case-

by-case analysis” compels us to examine individually the charge-

ability of the union’s expenditures for the threatened strike and

strike at Eastern.

When the chargeability of the expenditures on the contro-

versy at Eastern is examined individually, the majority’s and

concurrence’s summary conclusions that these expenditures are

chargeable cannot stand. The union had the burden of showing

that charging plaintiffs for the expenditures was proper. Abood,

431 U.S. at 239 n.40; Allen, 373 U.S. at 122. The record,

however, is completely barren of any explanation of the Eastern

controversy or any reason why the controversy affected plaintiffs’

collective bargaining. Indeed, while the circumstances of the

Continental and United strikes were set forth by the union in

the testimony of ALPA’s president, the union failed to offer any

evidence whatsoever about the Eastern controversy. No court

- 19a -

yuld possibly find on this record that the union met its burden

showing that the expenditures on the Eastern strike were

oper.

In addition, the district court, on whose findings the

ajority and concurrence base their summary conclusions that

¢ union's expenditures on the United, Continental, and

astern controversies are chargeable, made no finding that the

astern controversy affected bargaining in the plaintiffs’ units.

) fact, it made clear that it was not even aware that charges for

¢ Eastern controversy were at issuc in the case: “Plaintiffs’ ...

aim is that ... expenses for certain union activities, namely, the

ipport of the pilots’ strikes at United Airlines and Continental

irlines, ... were improper.” (cmphasis added).

Moreover, it is highly probable that, as a matter of constitu-

ynal and statutory law, charges for the expenditures on the

astern controversy were impermissible. Plaintiffs stated at oral

gument that the strike at Eastern was a sympathy strike in

ipport of a strike by a Machinists’ Union unit. If plaintiffs’

atement is true, the expenditures on the Eastern controversy

ould have had no effect on the plaintiffs’ collective bargaining

id clearly could not have been charged. See Beck, 776 F.2d at

12 (holding that charging non-union cmployecs in a unit of a

ymmunications union for expenditures in support of a strike by

¢ United Mine Workers was improper). Needless to say, I

slieve that this issue alone is also sufficient to require reversal

. the district court’s holding that all the union’s charges against

jaintiffs were proper.

(3) In setting forth their standard for determining the

(penses unions are permiticd to charge against dissenting

nployees, the majority and the concurring opinions grievously

isconstrue the Supreme Court's opinion in Lehnert and give to

a meaning that its author, Justice Blackmun, never contem-

ated or intended. The majority and the concurring opinions

tch onto a single, isolated sentence in Lehnert: “There must be

me indication that the payment is for services that may

timately enure to the benefit of the members of the local

- 20a -

union by virtue of their membership in the parent organization.”

Lehnert, 111 S. Ct. at 1961-62. They read this sentence as

establishing a standard that any expenditures by the union for

activitics Outside a dissenting employce’s unit may be charged

against the dissenting cmployee if the union shows that the

aclivitics “may ultimately enure” in this way.

As I will explain more fully below, this sentence in Lehnert

was intended to set a charggability standard only for a limited

class of extra-unit expenses, not for all extra-unit expenses. See

pages 34-36 infra. That it was not intended to be applied to all

cxtra-unit expenses is clear for at least two reasons. First, the

Court in Lehnert itself expressly declined to apply it as the

chargeability standard for several of the extra-unit expenditures

at issuc before it. In addressing the chargeability of extra-unit

litigation expenses, for example, the Court stated that “|w]hile

respondents are clearly correct that precedent established

through litigation on behalf of one unit may ultimately be of

some use to another unit, ... such activities are not germane to

the union’s duties as exclusive bargaining representative” and

may not be charged against dissenting employees. /d. at

1963-64. In other words, even though expenses “may ultimately

cnure to the benefit of the members of the local union,” they

are not chargeable because they are not germane.

Second, the sentence latched onto by the majority and

concurrence as the chargeability standard for all extra-unit

expenses is fundamentally different from the standard for

chargcability that the Court has employed in every opinion it has

rendcred relating to the issue before us and that Lehnert itself

reaffirmed and adopted. The Court has held in every opinion

rclating to this issue that the standard for determining the

validity of charges assessed against dissentcrs was that charges

be “germane” to the collective bargaining of the dissenter’s unit.

See, e.g., Communications Workers v. Beck, 487 U.S. 735, 745

(1988) (“The statutory question presented in this case, then, is

whether [a dissenter’s obligation to support the union] includes

_ the obligation to support union activities beyond those germane

to collective bargaining, contract administration, and grievance

-2la-

adjustment. We think if does not.”) (emphasis added); Ellis, 466

U.S. at 448; Abood, 431 U.S. at 236; Allen, 373 U.S. at 121.

Under the “germaneness” standard, expenses for litigation

“incident to negotiating and administering the contract or to

scttling grievances and disputes arising in the bargaining unit”

were found chargeable, Ellis, 466 U.S. at 453, expenses for

extra-unit litigation, id., and extra-unit organizing, id. at 451-53,

were held not chargeable.

Lehnert specifically adopted this same germancness standard

and, in doing so, expressly reaffirmed the holdings in all of these

prior cases. Lehnert, 111 S. Ct. at 1959. Applying this standard,

it determined that extra-unit litigation expenses, id. at 1963-64,

and public-relations expenses “which covered informational

picketing, media exposure, signs, posters and buttons,” id. at

1964 (quotation omitted), were not chargeable, while expenses

for a threatened strike in the dissenting employee's unit were

chargeable, id. at 1965-66.

The great difference between the standard that the majority

and the concurrence read Lehner to establish and the germanc-

ness standard is readily apparent when the former is applicd to

any of the expenditures the Court has analyzed under the

germaneness standard. Extra-unit organization and extra-unit

litigation, for example, would be chargeable under the majority's

and concurrence’s standard because there is “some indication

that the payment [for them] is for services that may ultimately

enure to the benefit of the members of the local union by virtue

of their membership in the parent organization.” /d. at 1961-62.

The Supreme Court has settled beyond doubt, however, that

these expenditures fail to meet the germaneness test and may

not be charged against dissenting employces.

In sum, Lehnert did not adopt a standard that extra-unit

expenses are chargeable whenever there is “some indication that

the payment is for services that may ultimately enure to the

benefit of the members of the local union by virtue of their

membership in the parent organization.” /d. at 1961-62. The

majority and the concurrence err in adopting this language as a

- 22a -

gencral standard for the chargeability of extra-unit expenses and

in holding that the expenditures for the strikes at United and

Continental are chargeable on the ground they satisfy this

mistaken standard.

(4) In indicating that Lehnert’s treatment of the charge-

ability of expenses used to prepare for a strike supports its own

holding that the expenditures here for the controversies at

Continental, United and Eastern were chargeable, the majority

opinion misinterprets Lehnert again. Lehnert addressed the

chargeability of certain “expenses incident to preparation for a

strike” within the dissenters’ bargaining unit. Jd. at 1965. It

explained that these expenses were chargeable because they

“f[c]ll within the range of reasonable bargaining tools available

to a public sector union during contract negotiations.” /d.

(quotation omitted). The majority cites this holding as support-

ing its holding that the expenditures for the strikes at United

and Continental and the threatened strike and strike Eastern

were chargeable.

It is clear from the Lehnert Court's analysis that its holding

that these expenditures are chargeable rests upon the facts that

(1) the threat of strike was in the unit of which the dissenters

were members, and (2) the expenditures were made “during

contract negotiations.” So circumscribed, Lehnert’s holding does

not apply to the expenditures here for the threatened strike at

Eastern because, for the great majority of plaintiffs,’ these were

lor a threatened strike in another unit. It also does not apply to

the strikes expenditures at United, Continental and Eastern

because these expenditures were also “extra-unit” expenditures

for the great majority of plaintiffs’ and, as they were used for

* The exceptions arc, obviously, plaintiffs who are Eastern pilots.

* Obviously, with regard to the expenditures on the Eastern strike, the

exceptions are the plainuffs who are Eastern pilots; with regard to the

expenditures on the United strike, the exceptions are plaintiffs who are United

pilots.

- 23a -

irikes and not threatened strikes, they were unrelated to

contract negotiations.” The majority, thus, errs in relying on

ehnert’s holding regarding preparation for a strike to support

s holding that the expenditures on the United, Continental and

-astern controversies are chargeable.

We now state in greater detail our reasons for disagreement

vith the majority and the concurring opinions, beginning with a

tatement of some of the facts that were not fully set forth in

hese opinions.

The Air Line Pilots Association (ALPA), which is the

icfendant in this action, is a national labor organization engaged

n representing the pilots cm ployed by twenty-two domestic

irlines. The “governance structure” of ALPA, as described in

he statement of Stipulated Facts, is that of “a unitary national

abor organization not composed of local unions like other labor

yrganizations; all ALPA members belong only to once organiza-

ion and paying their dues only to ALPA.” Appendix (“App.”)

it 43. It operates as follows:

Airlines station their pilots at domiciles (bases)

and ALPA establishes a Local Council for each

domicile of an airline. The pilots assigned to that

domicile elect Local Council representatives for each

pilot position—i.e., captain, first officer, second offi-

cer—stationed at that domicile. All of the local

council representatives at cach airline constitute the

“Master Executive Council” (MEC) for that airline.

Each MEC elects a Chairman, Vice-Chairman, and

Secretary-Treasurct....

All of the MEC’s at all of the airlines constitute

ALPA’s Board of Directors, which is its highest

governing body. The Board of Directors elects four

national officers—President, First Vice President,

Secretary, and Treasurer—and five Executive Vice

- 24a -

Presidents. These officers are also ex officio members

of the Board of Directors....

App. at 44.

The master executive council of cach airline selects its own

“negotiating committce” to conduct contract negotiations. App.

at 45-46. It is true that these negotiating committees “report ]

regularly to the President on the progress of such negotiations,”

“exchange information on what is happening at their respective

airlines,” and share “a staff of economic and financial analysts

who collect data and perform studies relevant to collective

bargaining.” App. at 46. At bottom, however, each negotiating

committee negotiates separately from the negotiating commit-

tees at other airlines and signs a separate collective bargaining

agreement with each airline. App. at 45-46 (“The actual

negotiations at each airline are conducted by a Negotiating

Committee selected by the MEC at that airline....”). In many

instances, these agreements contain different provisions. App.

at 47-48.

The plaintiffs in the action are forty-two pilots employed by

Braniff, Eastern, Midway, Northwest, Pan American, United,

USAir, or Western. They do not belong to the union, and

object to any charges against them by the union, under the

heading “Dues,” that went beyond expenses germane to the

negotiation and administration of the collective bargaining

agreement executed by their own employer.

The plaintiffs’ objections focus on charges made against

them bythe union to support strikes at Continental, United, and

a threatened strike and strike at Eastern in 1983-1987.° The

* These charges were assessed against the plaintiffs in two ways. First, the

union used part of the normal union dues, which the plaintiffs were required

to pay, tO support these strikes. App. at 86. Second, in June, 1985, to better

its ability to support strikes, the union increased its dues in order to create a

“Major Contingency Fund.” App. at 48. Plaintiffs were required to pay these

- 25a -

record is not entirely clear as to exactly how these charges were

used to support these strikes and this threatened strike through-

out this period. It is clear, however, that a portion of the

charges assessed against the plaintiffs in 1985, 1986, and 1987 to

support the Continental strike was used to fund litigation related

to that strike. App. at 86, 99, 110A, 121, 126, 128. In addition,

at least in 1986, some of the charges assessed against the

plaintiffs to support the United strike were used to finance

litigation related to that strike. App. at 98. The proportion of

strike expenditures used to fund litigation was apparently

substantial because the union justified its additional assessments

for the Major Contingency Fund on the ground that it had

incurred heavy litigation expenscs in connection with the

Continental and United strikes.

The record is also hopelessly unclear on the cause of the

threatened strike and strike at Eastern. The only witness to

testify about the causes of the several strikes the plaintiffs were

charged to support was ALPA’s president, Captain Henry Duffy.

Counsel for the union examined Captain Duffy in detail about

the cause of the Continental strike, Trial Transcript (“Tr.”) at

68-70, and the cause of the United strike, Tr. at 70-72; he did

not ask him a single question about the threatened strike at

Eastern. At argument, plaintiffs’ counsel stated that the

threatened strike was in sympathy with a strike by the members

of a local union of the Machinists’ Union at Eastern.

The district court found all of the union’s charges lawful

and dismissed plaintiffs’ claims. Quoting Ellis, 466 U.S. at 448,

it stated that the union could properly charge plaintiffs for

expenses incurred for “activities or undertakings normally or

reasonably employed to implement or execute the duties of the

union as exclusive bargaining representative.” (emphasis added).

The expenditures on strikes at United and Continental, it

increased dues to create and develop this fund, which was used from 1985-1987

almost exclusively to support the United, Continental, and Eastern strikes. App.

at 128.

- 26a -

determined, “were reasonably employed to implement the duties

of the union as exclusive representative of the employees in

jother] bargaining unit|s]” because, since “collective bargaining

negotiations at any one airline are directly affected by, and

directly affect, negotiations at all other airlines,” expenses to

support strikes at United and Continental were “directly

beneficial to the bargaining unit of each plaintiff.” It did not

acknowledge that a significant portion of these expenditures

were incurred for litigation in connection with the strikes.

The district court did not address whether the expenditures

on the threatened strike at Eastern were reasonably employed

to implement the union's duties as bargaining agent. In fact,

while the record clearly shows that plaintiffs were charged for

these expenses and that plaintiffs specifically objected to them

in their complaint, the district court never recognized that such

expenses were at issuc in the case. As it understood the case,

“[pjlaintiffs’ ... claim [was] that ... expenses for certain union

activities, namely, the support of the pilots’ strikes at United

Airlines and Continental Airlines, ... were improper.” (emphasis

added); in fact, nowhere in its opinion is there a single reference

to the Eastern controversy. However, by sustaining all of the

union's charges against plaintiffs, the district court held, unknow-

ingly, that expenses incurred for the threatened strike and strike

at Eastern were chargeable against plaintiffs.

The majority affirms the district court’s holding that all of

the union’s charges were proper. It states that under Lehnert,

which was decided after the district court issued its opinion, the

union may charge dissenters for the expenditures on the

controversies at United, Continental, and Eastern if there is

“some indication that the payment [for them] |was] for services

that may ultimately enure to the benefit of the members of the

local union by virtue of their membership inthe parent organi-

zation.” Lehnert, 111 S. Ct. at 1961-62. It holds that these

charges “handily meet the Lehnert test” because “negotiations

at other airlines ... determined the result of the bargaining

process [at each airline bargaining unit].” The majority declines

to address the charges for litigation expenses incurred in

- 27a -

sonnection with the United and Continental strikes on the

sround that the issue of their validity “was not properly present-

ed or preserved below.”

The concurrence, too, would affirm the district court’s

holding that all the union's expenses here are chargeable. It

finds Lehnert to establish as the chargeability standard here the

same standard used by the majority, and concludes that the

expenses on the United, Continental, and Eastern controversies

satisfy this standard because “collective bargaining negotiations

at any one airline are directly affected by, and also directly

affect, negotiations at all other airlines.” It fails even to

mention that a substantial portion of the strike expenses at

United and Continental were incurred for litigation.

II.

The issue in this appeal is a recurring one which involves

the construction of important provisions of both the RLA and

the National Labor Relations Act (“NLRA”), 29 U.S.C. § 151

et seg., and which has unquestionable constitutional implications.

It is whether a union, designated as exclusive bargaining agent

for an employer’s employees under an agency contract,” may

impose On non-union employees in the bargaining unit “dues”

to be used in whole or in part for activities objected to by the

non-union employees in the bargaining unit. The problem

emerged in the enactment of Section 2, Eleventh, in the 195]

revision of the RLA, which authorized the execution of agency

contracts. Under the agency contract concept, the union, when

selected as bargaining agent, functions as the exclusive bargain-

ing agent for all employees, union or non-union, with the power

to exact from all of them “dues.”

In Railway Employees Dept. v. Hanson, 351 U.S. 225 (1956),

the Supreme Court addressed the constitutionality of these

* For an explanation of the difference between a strict: union-shop

agreement and an agency shop, see Abood, 431 U.S. at 217.

- 28a -

agency contract arrangements. The Court recognized that

exacting dues from non-union employees implicated their

constitutional rights. /d. at 235. The Court held, however, that,

since the union as bargaining agent was obligated to represent

the non-union employee along with the union employee, the

union was entitled to charge the non-union employee for the

costs of the “work of the union in the realm of collective

bargaining” which it was statutorily required to conduct. Jd.

Five years later, in International Ass'n of Machinists v.

Street, 367 U.S. 740 (1961), the Court made clear that unions’

power to charge dissenting employees was limited. In Street, the

plaintiffs, non-union employees, challenged as impermissible

certain charges made by the union to further its political

purposes. The Court found that such expenditures, which were

incurred for the purpose of “support{ing] candidates for public

office, and advanc[ing] political programs, [are] not [for] a use

which helps defray the expenses of the negotiation or adminis-

tration of collective agreements, or the expenses entailed in the

adjustment of grievances and disputes.” Jd. at 768. As a result,

it held the challenged expenses not chargeable. Jd. at 768-69.

As had Hanson, Street eschewed going beyond the actual

challenged expenditures before it, stating that “[w]e are not

called upon to delineate the precise limits of thle] power [to

charge dues] in this case.” /d. at 768.

Between Street and Ellis, which was decided in 1984, the

Supreme Court laid down in Allen and Abood the rules of

pleading and burden of proof to be followed in alleging a proper

cause of action contesting the propriety of charging an imper-

missible expenditure in the agency collective bargaining context.

Plaintiffs in Allen alleged that some of the dues exacted from

them under the agency contract “have been and are and will be

regularly and continually used by the defendant Unions to carry

on, finance and pay for political activities directly at cross-

purposes with the free will and choice of the plaintiffs.” Allen,

373 U.S. at 118. The Court held that “[t}his allegation suffi-

ciently states a cause of action,” because “[i]t would be impracti-

cable to require a dissenting employee to allege and prove each

- 29a -

stinct union political expenditure to which he objects; it is

nough that he manifests his opposition to any political expendi-

ires by the union.” /d. (emphasis in original). The Court

‘asoned that “[s]ince the unions possess the facts and records

om which the proportion of political to total union expendi-

ires can reasonably be calculated, basic considerations of

irness compel that they, not the individual employees, bear the

urden of proving such proportion.” /d. at 122. This ruling in

llen was reaffirmed in Abood:

But in holding that as a prerequisite to any relicf each

appellant must indicate to the Union the specific

expenditures to which he objects, the Court of Appeals

ignored the clear holding of Allen. As in Allen, the

employees here indicated in their pleadings that they

opposed ideological expenditures of any sort that are

unrelated to collective bargaining. To require greater

specificity would confront an individual employee with

the dilemma of relinquishing either his right to with-

hold his support of ideological causes to which he

objects or his freedom to maintain his own beliefs

without public disclosure. It would also place on cach

employee the considerable burden of monitoring all of

the numerous and shifting expenditures made by the

Union that are unrelated to its dutics as exclusive

bargaining representative.

thood, 431 U.S. at 241 (footnote omitted).’

Ellis, decided almost twenty years after Abood, was a critical

tep in the development of the case law in this area because it

vas the first decision to give real substance to the chargeability

inalysis that the Court initiated in Hanson and Street. The

Sourt in Ellis indicated that its prior opinions on chargeability

’ ‘The Supreme Court in Abood also held that there was no real difference

‘etween collective bargaining in the public and private sectors for constitutional

uurposes. Abood, 431 U.S. at 230.

- 30a -

had established the polar extremes in the chargeability analysis:

expenses relating directly to a dissenting employee's collective

bargaining agreement could be charged against him, while

expenses for the union's political or ideological activities could

not. Id. at 447. At the same time, the Court recognized that its

prior cases had not required it to address the chargeability of the

plethora of union expenses falling between these two extremes;

it had gone no further than to state simply that such expenses

were chargeable if they were “germane” to collective bargaining.

Id.

Before proceeding to evaluate the chargeability of several

such expenses under Section 2, Eleventh of the RLA, the Court

elected to define more explicitly its “germaneness” standard:

{T]he test must be whether the challenged expendi-

tures are necessarily or reasonably incurred for the

purpose of performing the duties of an exclusive

representative of the employees in dealing with the

employer on labor-management issues. Under this

standard, objecting employces may be compelled to pay

their fair share of not only the direct costs of negotiat-

ing and administering a collective-bargaining contract

and of settling grievances and disputes, but also the

expenses of activities or undertakings normally or

reasonably employed to implement or effectuate the

duties of the union as exclusive representative of the

employees in the bargaining unit.

Id. at 448.

The first expense to which the Court applied this test was

for “conventions.” The conventions for which dissenters were

charged were “national convention|s] at which the members

elect[ed] officers, establish{ed] bargaining goals and priorities,

and formulate[d] overall union policy.” Jd. The Court found

that these conventions allowed the union to “maintain its

corporate and associational existence, ... elect officers to manage

and carry on its affairs, and ... consult its members aboui overall

-3la-

bargaining goals and policy.” Jd. Such things related to

collective bargaining in each local unit because they “guide|d]

the union’s approach to collective bargaining” and increased “its

effectiveness in negotiating labor agreements.” Jd. at 449

(quotations omitted). The Court concluded that this relationship

to “the union's discharge of its dutics as bargaining agent,” id.,

was sufficiently close to allow the union to charge their expenses

against dissenters. /d. at 448.

The Court next analyzed the chargeability of expenses of

the national union for social activities. These social activities

expenses had “go|ne] toward purchasing refreshments for union

business meetings and occasional social activities.” Jd. at 449.

The Court found that “[l]ike conventions, social activities [were]

a standard feature of union operations.” Jd. at 450. “While

these affairs [were] not central to collective bargaining,” id. at

449, the Court determined that they did relate to it “because

they brfought] about harmonious working relationships, pro-

mote|d] closer ties among employees, and create|d] a more

pleasant environment for union meetings,” id. at 449-50. It held

that this was a sufficiently close relationship to collective

bargaining to allow unions to charge these “de minimis”

expenses, id. at 450, to dissenting employees, id. at 449.

The Court then turned to expenses for “publications.” The

national union “put{] out a monthly magazine” for all the

employees in cach of its local unions,’ and charged dissenting

employees for the portion of its costs that were attributed to

articles “concerning collective bargaining, contract administra-

tion, and employees’ rights.” /d. at 450 (quotations omitted).

* In the union involved in Ellis, the Brotherhood of Railway, Airline and

Steamship Clerks, Freight Handlers, Express and Station Employees, the

national union is referred to as the “Grand Lodge” and the local unions are

referred to as “Local Lodges.” Ellis v. Brotherhood of Ry., Airline & S.S. Clerks,

Freight Handlers, Express & Station Employees, 685 F.2d 1065, 1068 (9th Cir.

1982), rev'd, 466 U.S. 435 (1984). The publication expenses, as well as the

social expenses that are addressed infra, were expenses of the Grand Lodge.

- 32a -

The Court found that publication of such articles related to the

collective bargaining of each dissenter’s unit because the articles

were “the union’s primary means of communicating information

concerning [such matters],” which were related to collective

bargaining. Jd. (quotations omitted). The Court decided that

such a relationship to collective bargaining was sufficient to

allow these expenses to be charged against dissenters. /d. at

451. It made clear, however, that publications expenditures for

articles not relating to collective bargaining, contract administra-

tion, or employees’ rights were not chargeable. Jd.

The Court also considered the chargeability of expenses

incurred by the union for “organizing” and “litigation” outside

the dissenting employee's collective bargaining unit, and found

them to be of a different character than expenses for conven-

tions, social activities, or publications. It acknowledged that

expenses on organizing in another unit bore at least an “attenu-

ated connection” to collective bargaining in the dissenter’s unit

because the “organizing efforts [were] aimed toward a stronger

[national] union, which in turn would be more successful at the

bargaining table.” Jd. at 451. The Court found, however, that

this relationship to collective bargaining in the dissenter’s unit

was not sufficiently close to sustain the chargeability of expenses

for extra-unit organizing under section 2, Eleventh for two

reasons. /d. First, the benefit to collective bargaining gained by

extra-unit organizing is secured only through “the overall

expansion of union power” and expanding union power was not

the purpose of section 2, Eleventh, which limits chargeable

activities to those matters germane to the union’s duties as

exclusive bargaining representative. Jd. at 451-52. Second,

while “it may be that employees will ultimately ride for free on

the union’s organizing efforts outside the bargaining unit,” id. at

452, {ree riding on these benefits is not the type of free riding

that Section 2, Eleventh seeks to prevent, id. at 452-53.

The court addressed the chargeability of litigation expenses

similarly and its conclusion was equally clear: “The expenses of

litigation incident to negotiating and administering the contract

or to settling grievances and disputes” and of certain other types

- 33a -

Mf litigatton were chargeable to dissenters only if the litigation

rose within the dissenters’ unit. /d. at 453. “The expenses of

tigation not having such a connection with the bargaining unit

re not to be charged to objecting employees.” /d.

Having determined that the RLA permitted the union to

harge dissenters for these conventions, social activities and

yublications, the Court addressed whether these charges violated

he First Amendment and determined that they did not. It

tated that forcing dissenters to contribute to union social hours

loes not “trigger First Amendment protection” because

the communicative content |of being forced to contrib-

utc to these activities] is not inherent in the act [of

contributing], but stems from the union’s involvement

in it. The objection is that these are union social

hours. Therefore, the fact that the employee is forced

to contribute does not increase the infringement of his

First Amendment rights already resulting from the

compelled contribution to the union [that is inherent

in allowing the union shop].

d. at 456 (emphasis in original). The Court concluded that

harges for the union conventions and publications distributed

nly to union members were constitutionally permissible for the

ame reason. /d. While both of these activities “have direct

ommunicative content and involve the expression of ideas,” the

-ourt “perceived little additional infringement of First Amend-

nent rights beyond that already accepted” because this “commu-

licative content” and “expression of idcas” was not in any way

lirected outside of the union. Jd.

The Court’s most recent decision relating to the issues here

vas Lehnert.” In Lehnert, the employer was a public education-

After Ellis and prior to Lehnert, the Court decided Beck, a case which

rose in our Circuit. Beck addressed the chargeability of certain expenses under

ection 8(a)(3) of the NLRA, which is interpreted identically with Section 2,

- 34a -

al institution established under Michigan law. An affiliate of the

Michigan Educational Association and the National Educational

Association, the defendant Ferris Faculty Association (“FFA”),

was the exclusive bargaining agent of the members of the faculty

of FFA. The plaintiffs were members of the faculty of FFA

and, as such, were subject to the payment of dues as set by the

union for members of the Association. These faculty members

objected to being charged by the union for the costs of (1)

lobbying and electoral politics; (2) bargaining, litigation, and

other activities on behalf of persons not in petitioners’ bargain-

ing unit; (3) public relations efforts; (4) miscellaneous profes-

sional activities; (5) meetings and conventions of the parent

unions; and (6) preparation for a strike by the FFA which, had

it materialized, would have violated Michigan law. The lower

court had held that all the challenged charges were “sufficiently

related to the union’s duties as the exclusive bargaining repre-

sentative ... to justify compelling petitioners to assist in subsidiz-

ing |[them].” Jd. at 1956.

The Supreme Court, after reviewing the earlier relevant

Supreme Court decisions, declared that in determining which

expenditures may be charged by the bargaining representative

against dissenting cmployces in the bargaining unit, the Court

should engage in a “case-by-case analysis” of each charge. /d.

at 1959. In applying this analysis, the Court stated that to be

chargeable against dissenting employees the costs “must (1) be

Eleventh. It is relevant to the case at bar for two reasons. First, the Court

there strongly reaffirmed the “germaneness” test that the majority and con-

curring Opinions would destroy. The Court stated: “The statutory question

presented in this case, then, is whether [a dissenter’s obligation to support the

union] includes the obligation to support union activities beyond those germane

to collective bargaining, contract administration, and grievance adjustment. We

think uf does not.” Beck, 487 U.S. at 745. Second, we had held that expendi-

tures by a communications union to support a strike by the United Mine

Workers were not chargeable to dissenting employees in the communications

union. The union sought, and was granted, certiorari, but did not request

review of our decision on this point; our decision that the payments to the

United Mine Workers were not chargeabie is, thus, the law in this Circuit.

- 35a -

sermane’ to collective-bargaining activity; (2) be justified by the

overnment’s vital policy interest in labor peace and avoiding

ree riders’; and (3) not significantly add to the burdening of

ree speech that is inherent in the allowance of an agency or

nion shop.” Id.

In following those instructions, the Court first held that

ven in the case of public employees whose salaries are fixed to

ome extent politically, where “lobbying activities relate not to

he ratification or implementation of a dissenter’s collective-

argaining agreement, but to financial support of the employee’s

rolession or of public employees generally, the connection to

he union's function as bargaining representative is too attenuat-

d to justify compelled support by objecting employees.” Jd. at

959-60. It invalidated such “assessments for political activities

utside the scope of the collective-bargaining context” in part

ecause they “would present ‘additional interference with the

irs’ Amendment interests of objecting employees.’” Jd. at

960 (quoting Ellis, 466 U.S. at 456).

Somewhat similar to the charge for “lobbying” was one

overing (1) the costs of a program to secure funds supporting

ublic education in Michigan, a program which could be

xpected to increase financial assistance to the academic

rogram at Ferris State College, and (2) that portion of a MEA

ublication reporting the progress of the program. Although,

rguably, these costs might “ultimately benefit” to some extent

ie members of FFA, the Court responded firmly to the claim

{ chargeability for such activities that “none [of these charges]

lay be supported through the funds of objecting employees”

ecause “[njone of these activities was shown to be oriented

ward the ratification or implementation of petitioner's

lective-bargaining agreement.” Jd. at 1963. It should be

sted that the language of Justice Blackmun in this instance, as

cll as his conclusion in the previous instance of “lobbying,” was

1 an expression of a perfunctory opinion. Justice Marshall

ssented specifically because of the majority opinion’s reason

r disallowing this charge (i.e., that it was not “oriented toward

- 36a -

the ratification or implementation of a petitioner's collective

bargaining agreement’).

The cost of litigation, which the union sought to charge

against dissenters, provides an important ruling that relates

directly to the case at bar. “Litigation costs” were discussed in

connection with the claimed “allowance of several activities that

the union did not undertake directly on behalf of persons within

petitioners’ bargaining unit.” Jd. at 1963. Some of these

activilics embraced “gencral coliective-bargaining costs of the

State or national parent union.” Jd. These the Court approved.

The Court found that “[t}his rationale d[id] not extend, however,

to the expenses of litigation that does not concern the dissenting

employees’ bargaining unit or, by extension, to union literature

reporting on such activities.” Jd. The Court added:

While respondents are clearly correct that precedent

established through litigation on behalf of one unit

may ultimately be of some use to another unit, we find

extra-unit litigation to be more akin to lobbying in both

kind and effect. We long have recognized the impor-

tant political and expressive nature of litigation. See,

e.g., NAACP v. Button, 371 U.S. 415, 431, 83 S. Ct.

328, 337, 9 L.Ed.2d 405 (1963) (recognizing that for

certain groups, “association for litigation may be the

most clfective form of political association”). More-

over, union litigation may cover a diverse range of

areas {rom bankruptcy proceedings to employment

discrimination. See Ellis, 466 U.S. at 453, 104 S. Ct.,

at 1894. When unrelated to an objecting employee's

unit, such activities are not germane to the union's

duties as exclusive bargaining representative. Just as

the Court in Ellis determined that the RLA, as in-

formed by the First Amendment, prohibits the use of

dissenters’ fees for extra-unit litigation, ibid., we hold

that the Amendment proscribes such assessments in

-the public sector.

Id. at 1963-64.

- a -

“Strike benefits” was a large item in the charges made

against the dissenters by the union bargaining agent. This issue

arose in this case at a time when the FFA was “engaged in

negotiating a new collective-bargaining agreement.” Jd. at 1965.

The negotiation proceedings appeared to be making little

progress, and for that reason the union was proceeding “to go

out on strike” as a means of promoting progress in the negotia-

ions. Jd. The Court of Appeals had asserted that the rationale

lor charging the costs of these preparations ratably against the

dissenting employces was that “such expenditures fall within the

range of reasonable bargaining tools available to a public sector

union during contract negotiations.” Jd. The Court accepted

this rationale, declaring that, “[i]n sum, these expenses are

substantively indistinguishable from those appurtenant to

-ollective-bargaining negotiations.” /d. It is manifest that this

ruling was in the context of a period of actual contract negotia-

ions involving the very unit of which the dissenting employces-

plaintiffs were members.

Finally, the Court of Appeals had approved certain “[p]ublic

rclations expenditures designed to enhance the reputation of the

caching profession.” Jd. at 1964. The Court, however,

Jisagreed, stating:

|PJublic speech in support of the teaching profession

generally is not sufficiently related to the union's

collective-bargaining functions to justify compelling

dissenting employees to support it. Expression of this

kind extends beyond the negotiation and grievance-

resolution contexts and imposes a substantially greater

burden upon First Amendment rights than do the

latter activities.

d. The Court went on to dismiss the reasoning of the Court of

\ppeals, which would liken these changes to certain of the “de

ninimis” charges approved in Ellis. It rejected the analogy,

aying that any such rule would not extend to the public

clations charges asserted by the union in Lehnert, which

- 38a -

“covered informational picketing, media exposure, signs, posters

and buttons.” /d.

Ellis and Lehnert make clear that chargeability analysis

under both the RLA and the Constitution is driven by whether

compelling contributions for the activity at issue implicates

dissenters’ First Amendment rights. Whether First Amendment

rights are implicated is driven, in turn, by whether the activity

has “communicative content” outside of the union. Ellis

recognized that union conventions, publications distributed only

to union members, and union social activities had no communi-

cative content outside the union, Ellis, 466 U.S. at 456, and it

allowed the union to charge dissenters for these activities merely

by showing that they related to collective bargaining in the

dissenters’ unit in such small ways as “bringing about harmonious

working relationships,” id. at 449, and “maintain[ing] [the

union's] corporate or associational existence,” id. at 448. On the

other hand, extra-unit organizing and litigation, which clearly

had communicative content outside of the union, could not be

charged against dissenting employees even though the Court

acknowledged that they had at least an “attenuated connection”

to the dissenters’ collective bargaining. /d. at 451.

Lehnert explicitly recognized that expenses for activities that

have no communicative content outside of the union, which it

termed “non-idcological expenses,” are to be given different

trcatment in the chargeability analysis:

While we consistently have looked to whether non-

ideological expenses are “germane to collective bar-

gaining,” ... we have never interpreted that test to

require a direct relationship between the expense at

issue and some tangible benefit to the dissenters’

bargaining unit.

The Court recognized as much in Ellis. There it

construed the RLA to allow the use of dissenters’

funds to help defray the costs of the respondent

union’s national conventions. It reasoned that “if a

- 39a -

union is to perform its statutory functions, it must

maintain its corporate or associational existence, must

elect officers to manage and carry on its affairs, and

may consult its members about overall bargaining goals

and policy.” ... We see no reason why analogous public

sector union activities should be treated differently.

We therefore conclude that a local bargaining

representative may charge objecting employees for

their pro rata share of costs associated with the other-

wise chargeable activities of its state and national

affiliates, even if those activities were not performed

for the direct benefit of the objecting employees’

bargaining unit. This conclusion, however, does not

scrve to grant a local union carte blanche to expend

dissenters’ dollars for bargaining activities wholly

unrelated to the employees in their unit.... There must

be some indication that the payment is for services that

may ultimately enure to the benefit of the members of

the local union by virtue of their membership in the

parent organization.

Lehnert, 111 S. Ct. at 1961-62 (emphasis added) (citations and

lootnotes omitted). In other words, “non-ideological” expenses

may be charged against dissenting employees on the mere

showing that they “may ultimately enure to the benefit of the

nembers of the local union by virtue of their membership in the

yarent organization.” Jd.

The Court approved on this basis the union’s charges for

informational support services” that informed union members

ibout “teaching and education generally, professional develop-

nent, unemployment, job opportunities, award programs of the-

MEA, and other miscellaneous matters” because these services

vere “neither political nor public in nature” and were “compara-

le” to the social activities in Ellis. Id. at 1964. The Court also

pproved the union’s charges for its national conventions under

his lenient rule. /d. at 1964-65.

- 40a -

The expenses addressed by the Court that had communica-

tive content outside of the union were not analyzed under this

rule and were accorded stricter treatment. Extra-unit litigation,

which the Court found “political and expressive,” could not be

charged against dissenters despite the fact that “precedent

established through litigation on behalf of one unit may ulti-

mately be of some use to another unit.” Jd. at 1963. Similarly,

the Court found that public-relations activities involving

“informational picketing, media exposure, signs, posters and

buttons” had “communicative content” that did not “derive

solely from the union’s involvement in them” and held such

activities not chargeable even though they were clearly of some

benefit to dissenters’ collective bargaining. Jd. at 1964. The

only activity with communicative content directed outside the

union that the Court found could be charged against dissenters

was preparation for a strike in the dissenters’ unit because it was

“within the range of reasonable bargaining tools available to a

. union during contract negotiations.” /d. at 1965.

IIL.

I have reviewed the facts and the applicable law in this case,

and turn now to applying that law to the expenditures at issue

here. These expenditures are best divided into three groups:

expenditures for the Continental and United strikes that were

incurred on litigation, expenditures for the strike and threatened

strike at Eastern, and expenditures for the Continental and

United strikes that were not incurred on litigation. I will

address eae group in turn.

1 begin by addressing the union’s charges for the litigation

in connection with the United and Continental strikes for two

reasons. First, counsel for ALPA and counsel for amicus, both

of whom, as I mentioned earlier, are very experienced in labor

litigation, gave special prominence and consideration in their

briefs to the issue of whether these charges were proper.

Second, the justification offered by ALPA to its members and

- 4la -

non-members in demanding additional assessments for its Major

Contingency Fund was that it had incurred heavy litigation

expenses in connection with the Continental and United strikes.

This makes evident that these litigation expenditures were

substantial and relevant, which is reaffirmed by the abundance

of references to them in the Appendix hercin. See App. at 86,

98, 99, LIOA, 121, 126, 128.

Both Ellis and Lehnert establish, in as clear terms as are

possible, an unqualified rule that charges for extra-unit litigation

expenses are improper. Ellis, 466 U.S. at 453; Lehnert, 111 S.

Ct. at 1963-64. ALPA is divided into separate units by airline.

The union at each airline elects its own negotiating representa-

lives and negotiates its collective bargaining agreement with its

airline employer separately from the union at other airlines.

The record shows that in a number of instances the agreements

reached by the union at different airlines have had different

provisions. _. a result, regardless of the fact that these negoti-

ating representatives have certain interactions with each other

and with ALPA, ALPA's organization is not materially different

from the organization of the unions in Ellis or Lehnert, which

the court found to be composed of separate units. Charges

were assessed against plaintiffs, most of whom are pilots from

units other than United and Continental, for expenditures on

litigation in connection with strikes at United and Continen-

tal." Such charges are clearly both statutorily and constitution-

ally improper under Ellis and Lehnert. 1 would, therefore,

reverse the district court's holding with respect to these charges.

Neither the district court, nor the majority, nor the concur-

rence address these litigation expenses. The district court and

the concurrence do not even acknowledge that they were

Obviously, litigation expenses incurred in connection with the United

strike were nol extra-unit expenses with respect to plaintiffs who were United

pilots. However, as no Continental pilots are plaintiffs in this case, these

ixpenses are extra-unit expenses for all plaintiffs except those that are United

nlots.

- 42a -

charged against the plaintiffs and the majority concludes that the

plaintiffs did not put their validity in issue. Given the rules of

pleading in Allen and Abood and the Court’s clear rule that

cxtra-unit litigation is not chargeable, it is incredible that the

district court allowed these substantial extra-unit litigation

charges without comment. Even more incredible is the action

of the majority and concurrence who, despite having the benefit

of both Ellis and Lehnert, affirm the district court’s holding

allowing these charges.

The union seeks to persuade us to find these extra-unit

litigation expenses chargeable by suggesting that Justice

Blackmun’s opinion in Lehnert is not the majority opinion on

the issue of extra-unit litigation. It reasons that only Justices

Rehnquist, White, and Stevens join Justice Blackmun on this

issue, and that the concurring and dissenting opinions written by

Justices Scalia, Marshall and Kennedy for the rest of the Court

indicate that they would allow charges for extra-unit litigation.

While the union’s suggestion is creative, it is not persuasive as

Justice Scalia began his opinion by stating that he “would hold

that contributions can be compelled only for the costs of

performing the union’s statutory duties as exclusive bargaining

agent.” Lehnert, 111 S. Ct. at 1975 (Scalia, J. dissenting). Quite

clearly, supporting litigation in other units is not a “duty” that

the RLA required the union here to perform.

I addressed in detail in my introductory statements the

chargeability of the union’s expenditures for the threatened

strike and strike at Eastern. Analyzing these expenditures

independently from the expenditures for the strikes at United

and Continental, as Lehnert requires us to do, id. at 1959, no

court could conclude that the union has met its burden, under

Allen and Abood, of showing that these expenses are chargeable

because there is literally nothing in the record cither explaining

the Eastern controversy or showing why the controversy affected

the union’s collective bargaining duties. Moreover, it is highly

probable the union could not, as a matter of law, make the

- 43a -

required showing because plaintiffs stated at oral argument that

the Eastern strike was a sympathy strike and charging dissenters

lor expenditures to support a sympathy strike would be statutori-

ly and constitutionally impermissible. See Beck, 776 F.2d at

1212. Thus, I would also reverse the district court's holding with

respect to the charges for the strike and threatened strike at

Eastern.

The expenditures for the Continental and United strikes

that were not incurred for litigation connected with these strikes

must be addressed under the chargeability analysis of Ellis and

Lehnen. Ellis and Lehnert allow unions to charge dissenters for

“nonidcological expenses” if the activities on which these

activilics are incurred “may ultimately enure to the benefit of

the members of the local union.” Lehnert, 111 S. Ct. at 1961-62.

However, expenses for activities that have “communicative

content” directed outside of the union are more difficult to

charge. In addressing such expenses, the Court has found that

expenses for extra-unit litigation, Ellis, 466 U.S. at 453; Lehnert.

111 S. Ct. at 1963-64, for extra-unit organizing of non-members,

Ellis, 466 U.S. at 451-53, and for public-relations activities

involving “informational picketing [and] media exposure,”

Lehnert, 111 S. Ct. at 1964, are not sufficiently related to

sollective bargaining in the dissenter’s unit to be chargeable,

while expenses for a threatened strike in the dissenter’s unit

juring contract negotiations are sufficiently related, id. at 1965.

The union's expenditures for strikes at United and Conti-

iental are not the type of “nonideological expenses” the Court

ontemplated in Lehnert because the strikes clearly have

communicative content” that is directed outside the union.

he strikes are, thus, unlike the union conventions, union social

clivitics, union informational support services for union

xembers, or union publications distributed to union members:

istead, they are similar to union litigation, organization, and

nion public-relations activities involving picketing and media

xposure. Therefore, their chargeability is not properly analyzed

- 44a -

under the standard of whether they “may ultimately enure to the

benefit of the members of the local union,” but under the

Court’s more difficult chargeability standard.

Under this standard, the expenses for the strikes at United

and Continental are not chargeable. For the majority of

plaintiffs, these are extra-unit strike expenses. See note 10

supra. In Lehnert and Ellis, the Court addressed several

expenses for extra-unit activities that had communicative content

outside of the union, including expenses for extra-unit litigation,

extra-unit organizing, and public-relations activities by the

national union involving picketing and media exposure. It found

every one of these expenses to be not chargeable against the

dissenting employees. I can see no reason why the expenses

here for extra-unit strikes should be distinguished from all of the

other expenses the Court has addressed for extra-unit activities

with communicative content outside the union, and particularly

no reason why they should be distinguished from extra-unit

litigation. "'

Moreover, Lehnert specifically held that a union could not

charge for activities that had the kind of relationship to bargain-

ing in the dissenters’ units that these strikes had. These strikes

are related to bargaining in the dissenters’ units because each

contract in the industry serves as precedent for future contracts

and, thus, a strike in one unit directly affects collective bargain-

ing in the other units in the industry. Lehnert, however, held

that extra-unit litigation, which has this same kind of relationship

to collective bargaining in the dissenters’ units, was not charge-

able. It stated that “[w]hile respondents are clearly correct that

precedent established through litigation on behalf of one unit

may ultimately be of some use to some other unit,” extra-unit

litigation is not chargeable because it is “not germane to the

'' As I indicated in my introductory statements, Lehnert’s discussion of

strike preparation expenses is not applicable to the strike expenses here because

it was confined to addressing only strike preparation within the dissenters’ unit

- 45a -

union's duties as exclusive bargaining representative.” Jd. at

1963-64.

In sum, I would reverse the district court’s holding that the

expenses for the strikes at United and Continental were

chargeable."°

The majority and the concurrence only avoid this result by

taking a single, isolated sentence in Lehnert and adopting it as

a standard for determining the chargeability of all extra-unit

expenses. As I indicated in my discussion of the law, this

sentence—"There must be some indication that the payment is

lor services that may ultimately enure to the benefit of the

members for the local union by virtue of their membership in

the parent organization”—only applies to the chargeability of

expenses for “nonidcological” activities that have no communica-

live content directed outside the union. Ironically, the Court

intended the sentence to limit the chargeability of expenses for

activitics with no communicative content outside of the union,

not, as the majority and concurrence interpret it, to expand

immenscly the chargeability of all extra-unit expenses. As |

indicated in my introductory statements, the majority's and the

concurrence’s interpretation of the sentence as establishing a

standard for the chargeability of all extra-unit expenses is belied

by the facts that (1) LeAnen itself did not apply the sentence as

a standard for all the extra-unit expenses before it and (2) this

standard would fundamentally alter the chargeability standard of

“germaneness” that the Court has used in all of its Cases relating

to this issue and that Lehnert itself explicitly adopted."

* I stated in Part B supra that | would hold the expenses on the Eastern

Strike and threatened strike not chargeable because the union did not meet Its

burden of showing otherwise. | explain here that, under Ellis and Lehnert. no

expenses lor extra-unit strikes are chargeable. This is a second reason why the

expenses on the Eastern strike are not Chargeable.

'* The concurring Opinion indicates that it would Only apply this standard

10 “nonidcological” extra-unit expenses. It does not claborate, however, on the

Meaning of “nonideological” and summarily holds that the strike expenses here

- 46a -

IV.

In conclusion, I would hold that none of the union's

expenditures at issuc in this case may be charged against the

plaintiffs and would, thus, reverse the district court's decision on

all of these charges.

Judge Widener, Judge Niemeyer, Judge Hamilton, and

Judge Luttig join in this dissent.

are “nonidcological” expenses. The concurring opinion is correct that this

Standard applies only to “nonidecological” expenses. However, it fails to note

that “nonideological” expenses are expenses for activities that have no

communicative contact directed outside of the umion; they are not some

broader, amorphous category into which these strike expenses may be placed

APPENDIX B

DECISION OF THE UNITED STATES

COURT OF APPEALS FOR THE FOURTH CIRCUIT

March 17, 1989

BEST AVAILABLE COPY

- 47a -

Peter CRAWFORD; Frederick J. Adam; Robert F. Brau-

man; Richard L. Brown; William A. Burbage; Robert

Erchak; Ron E. Merzlak; Leroy Rogers; Roger F.

Seely; Warren Wells; Dale Cross; Richard Pederson;

Clyde B. Smith; Ernest Mueller; Ruel Neeley; Robert

Buley; Thomas Giefer; Klemens Thomas; Iloward L.

Jones; Ilerbert A. Light; Joseph R. Mackensie; Mi-

chael T. McQuillen; John R. Yotz; Harold Bagnall;

Richard P. Barthelemy; Clinton Davis; Edison L.

Denney; George Gawrilow; John J. Lumley; Albert

Newton; Eugene Palsson; Dale B. Petty; Dery! Roark;

Donald D. Ecker; Karl A. Jadrnicek; Howard S.

Morton; Richard W. Rew; Donovan Wholers; Donald

K. Brewster; Peter Hayes; Laurence J. Stuppy, III;

Roger Veon; Plaintiffs-Appellants,

AIR LINE PILOTS ASSOCIATION INTERNATIONAL,

Defendant-Appellee,

Transportation Communications International Union,

Amicus Curiae.

No. 88-2083.

United States Court of Appeals,

Fourth Circuit.

Argued Dec. 5, 1988.

Decided March 17, 1989.

Rehearing In Banc Granted May 11, 1989.

7. = =

Belore ERVIN, Chief Judge, BUT¢ WER, Senior Circuit

Judge, and MALCOLM J. HOWARD, United States District

- 48a -

Judge for the Eastern District of North Carolina, sitting by

designation.

BUTZNER, Senior Circuit Judge:

Forty-two nonunion commercial airline pilots appeal a

judgment of the district court, entered after a bench trial, in

favor of the Air Line Pilots Association, which is a union

representing pilots employed by various airlines. The district

court held that the Association need not rebate the portion of

the pilots’ agency fees the Association spent to support strikes

at airlines that did not employ the objecting pilots or the portion

of the fees that the Association allocated to a contingency fund

for support of future strikes. The district court also held that

the Association's current procedure for making rebates to the

pilots, adopted after the decision of Chicago Teachers Union,

Local No. 1 v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d

232 (1986), satisfied the requirements explained in that case and

that the procedure used before Hudson was decided substantially

complied with the requirements. We affirm on both issues.

Sectior 2 Eleventh of the Railway Labor Act, 45 U.S.C. §

152 Eleventh, which is applicable to airlines, permits employers

and unions to execute bargaining agreements requiring employ-

ccs to become union members. The Supreme Court sustained

the constitutionality of section 2 Eleventh under the commerce

clause. Railway Employees’ Dep't v. Hanson, 351 U.S. 225, 76

S.Ct. 714, 100 L.Ed. 1112 (1956). Nevertheless, the Court has

consistently held that a union cannot exact funds from a

nonmember to spend for purposes that would infringe non-

members’ constitutional rights. In Jnternational Association of

Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141

(1961), the Court construed the statute to allow employees to

clect not to join the union, or to resign, and to pay agency fees

to the union in licu of dues. In Street and subsequent cases, the

Court drew a line between two categories of expenditures, those

germanc to collective bargaining and those which would infringe

- 49a -

a nonmember’s rights. It recognized that Congress enacted the

statute to eliminate “free-riders—employees in the bargaining

unit on whose behalf the union was obliged to perform its

statutory functions, but who refused to contribute to the cost

thereof.” Ellis v. Brotherhood of Ry., Airline & S.S. Clerks, 466

U.S. 435, 447, 104 S.Ct. 1883, 1892, 80 L.Ed.2d 428 (1984). Ir

Ellis, the Court explained what portion of the nonmembers’

agency fees a union could retain and what portion it must

rebate. The Court prescribed the following test:

.. [W]hen employees such as petitioners object to being

burdened with particular union expenditures, the test must

be whether the challenged expenditures are necessarily or

reasonably incurred for the purpose of performing the

dutics of an exclusive representative of the employces in

dealing with the employers on labor-management issues.

Under this standard, objecting employees may be compelled

to pay their fair share of not only the direct costs of

negotiating and administering a collective bargaining

contract and of settling grievances and disputes, but also the

expenses of activities or undertakings normally or reason-

ably employed to implement or effectuate the duties of the

union as exclusive representative of the employees in the

bargaining unit.

466 U.S. at 448, 104 S.Ct. at 1892.

The pilots challenge several specific expenditures that the

Association classified as germane to collective bargaining and

therefore not reimbursable to agency fee-payers. They maintain

that expenditures in 1985, 1986, and 1987, in support of strikes

at United Airlines and Continental Airlines, and in preparation

lor a possible strike at Eastern Airlines, should not be charged

to agency fee-payers who are not United, Continental, or

Eastern employees. They also object to use of their agency fees

lor the creation and maintenance of a strike reserve fund called

the war chest or major contingency fund. The pilots assert that

usc Of agency fees for bargaining expenses outside of the

immediate bargaining unit, or airline, for which the fee-payer

- 50a -

works, violates both the Railway Labor Act and their constitu-

tionally protected free association rights.

If an expenditure is germane to a union’s obligation as the

employees’ representative, the union may charge a proportionate

share of that expenditure to agency fee-payers, without offend-

ing either the Railway Labor Act or the first amendment. See

Ellis, 466 U.S. at 444-47, 104 S.Ct. at 1890-92. As stipulated by

the parties, and found as a fact by the district court, the

Association is a “unitary national labor organization.” It has no

locals, and all dues and fees are paid directly to the national

union, which negotiates contracts with the various airlines for

the pilots of whom it is the exclusive bargaining representative.

Bargaining policies are established by its national officers, and

all negotiations and agreements must be approved by them.

This kind of industry-wide bargaining is neither unique to the

airline industry nor novel to the courts. See Childers v. Brother-

hood of R.R. Trainmen, 192 F.2d 956, 959 (8th Cir.1951) (“the

national organization, not the local lodges, is the collective

bargaining representative within the meaning of the Railway

Labor Act”). The Railway Labor Act “generally has been

considered to absorb and give statutory approval to the philoso-

phy of bargaining as worked out in the labor movement in the

United States.” Order of R.R. Telegraphers v. Railway Express

Agency, 321 U.S. 342, 346, 64 S.Ct. 582, 585, 88 L.Ed. 788

(1944).

The district court’s findings of fact, which we quote at some

length, are essential to an understanding of why the Associa-

tion’s expenditures are germane to collective bargaining with all

airlines whose pilots it represents. With respect to the nature

of collective bargaining in the airline industry, the court found:

[Cjollective bargaining negotiations at any one airline are

directly affected by, and also directly affect, negotiations at

all other airlines. Each airline strives to keep its labor costs

no higher than those of its competitors. Thus, when one

airline obtains some cost-cutting concession from [the

Association], other airlines generally seek to obtain the

- Sla -

same or an equivalent concession. On the other hand, when

[the Association] succeeds in negotiating a wage or benefit

increase with one airline, that enhances its ability to

negotiate a similar increase with other airlines.

With respect to the expenditure of funds to support the striking

Continental! employees, the court found:

Consequently, it was important to [the Association], in

the interest of all the pilots which it represented, to ensure

that what had happened at Continental, namely, a bank-

ruptcy whereby the collective bargaining agreement was

abrogated and pilots’ salaries were cut in half, not become

an industry norm to be sought by other airlines in the

bargaining process. For this reason it was in the interest of

all pilots, members and non-members alike, that [the

Association] used its funds to pay the pilots at Continental

to make up for their lost wages.

The court also found justification for the Association's

refusal to rebate agency fees used along with other union funds

to support the strike at United Airlines. It found:

[I]n 1985, United sought in bargaining to impose a conces-

sion which American Airlines had achieved [with another

union], namely, a B-Scale two-tier payment arrangement

under which airline cockpit personnel hired after a certain

date would be paid on a lower pay scale (the B-Scale).

[The Association] supported financially the pilots who

struck United, and ultimately, after a twenty-nine day strike,

secured from United a six year parity requirement under

the B-Scale arrangement. This accomplishment has been

used to benefit all members (and non-members) in all the

airlines, not just those employed by United.

\ With respect to expenditures for the strike reserve or

contingency fund, the court found:

- 52a -

The United and Continental strikes considerably

weakened [the Association]’s financial stability. Since a

financially weak | Association] was vulnerable to a prolonged

strike, [the Association] lost its credibility with management

because the other airlines knew it could not financially

sustain a long strike. For this reason, the Major Contingen-

cy Fund was created with a concomitant increase in annual

membership dues from 1.35% to 2.35% of each member’s

airline earnings. It was from this fund that some expendi-

tures, beginning in 1985, were made to support the striking

pilots at Continental and United. Plaintiffs attack the fund

as an improper expenditure of the dues of the objecting

plaintiffs. Again the court finds the creation of the fund to

be a device reasonably employed to implement the duties

of the union as exclusive representative of the employces

in the bargaining unit.

Moreover, after the Association reached a favorable strike

settlement with United, it was able to negotiate similar agree-

ments with other airlines. The district court’s findings that all of

these strike-related expenditures were germane accord with the

policy underlying charging agency fee-payers for germane

expenses “to ensure that those who enjoy union-negotiated

benefits contribute to their cost.” Communication Workers v.

Beck, — U.S. —, 108 S.Ct. 2641, 2649, 101 L.Ed.2d 634 (1988).

The objecting pilots have not shown that they did not

benefit from the Association’s financial support of the strikes at

Continental and United or that they will never benefit from the

contingency fund. Instead, they argue that Ellis not only defined

the criteria for assessing germaneness, but also significantly nar-

rowed the category of union expenses that could permissibly be

charged as germane. They assert that the Supreme Court, by

referring to “employees in the bargaining unit,” 466 U.S. at 448,

104 S.Ct. at 1892; intended to limit the expenses assignable to

an agency fee-payer to costs incurred only by his relevant

bargaining unit.

- 53a -

Ellis does not Support the restrictive reading that the

objecting pilots assign to it. In Ellis the Court analyzed which

types of expenditures could be charged against nonmembers’

fees. It did not decide how a national union must allocate the

expenditures that are germane to bargaining among the bargain-

ing units it represents. That issuc was not presented in Ellis.

Nevertheless, the Court’s discussion of the types of expenditures

that can be charged against nonmembers’ fees is instructive.

Significantly these expenditures were not limited to individual

bargaining units. The Court held that nonmembers’ fees could

be used to pay their Proportional share of the union’s national

conventions. 466 U.S. at 448-49, 104 S.Ct. at 1892-93. The

Court also approved the expenditure of agency fees by the

national unions for the purchase of refreshments at union

business meetings and occasional social activities. It observed

that while these affairs are not central to collective bargaining,

they are sufficiently related to it to be charged to all employees.

466 U.S. at 449, 104 S.Ct. at 1893. Another national expendi-

ture not confined to any particular unit was for a monthly

magazine. The Court held that the union could charge nonmem-

bers for their share of the costs of publication about activities

germane to bargaining, but it could not charge them for the

costs of publishing articles about activities for which no contribu-

tion could be levied. Again, the distinction the Court drew was

between the types of expenditures—not whether the cost should

be allocated to the specific unit in which an employee worked.

466 U.S. at 450-51, 104 S.Ct. at 1893-94. The Court also

distinguished between litigation involving the negotiations of

agreements or settlement of grievances, which can be charged

(0 nonmembers, and litigation that does not involve these

subjects, which cannot be charged to nonmembers. 466 U.S. at

453, 104 S.Ct. at 1895. The Court held that organizing expenses,

even within the bargaining unit, could not be charged to

nonmembers, but this category of expenditures is not an issue

here.

Applying Ellis to the analogous provision for agency shop

contracts under the National Labor Relations Act. this court has

recognized that agency fees may be allocated to expenses of

- 54a -

both a national union and its locals. See Beck v. Communication

Workers, 776 F.2d 1187, 1210-13 (4th Cir.1985), reh’g en banc,

800 F.2d 1280 (4th Cir.1986), aff'd — U.S. —, 108 S.Ct. 2641,

101 L.Ed.2d 634 (1988).' In Beck, we held that a union could

not charge agency fee-payers for its political and lobbying

expenses, community service and charitable donations, and

expenditures in support of strikes by other unions in other

industries. See 776 F.2d at 1210-12. We suggested that unions

could charge fee-payers for properly documented collective

bargaining expenses, as well as for grievance and contract

administration expenses. See 776 F.2d at 1212-13.

The district court’s factual findings about the purpose of the

expenditures for strikes and a contingency fund and effect of

these expenditures on all units where the Association is the

bargaining agent demonstrate that the expenditures satisfy the

test Ellis prescribes. They were “necessarily or reasonably

incurred for the purpose of performing the duties of an exclu-

sive representative of employees in dealing with the employer in

labor-management issues.” 466 U.S. at 448, 104 S.Ct. at 1892.

Addressing the objecting pilots’ claims for refunds of fees

they had paid, the district court held that the six-month statute

of limitations for actions alleging breach of a union’s duty of fair

representation barred recovery for all claims arising prior to

March 3, 1987. The pilots argue that Virginia’s two-year statute

of limitations for personal injuries applies because they are

asserting a constitutional claim.

Regardless which statute of limitations is applied, the pilots’

claims are not barred. The statute of limitations began to run,

' The rehearing en banc dealt with the issue of federal jurisdiction and the

Supreme Court affirmed on that ground. The panel’s disposition of the

fee-allocation issue was not disturbed by the en banc court. See 800 F.2d at

1282.

- 55a -

with respect to the 1985 agency fees, on September 11, 1986,

the date that the 1985 rebate and rebate report were distributed.

The Association does not dispute that the dissenting pilots

objected in a timely fashion to the 1985 rebates, in accordance

with the Association's rebate objection procedures. The parties

then entered arbitration, and the statute of limitations was tolled

during the arbitration proceedings. See Zuniga v. United Can

Co., 812 F.2d 443, 450 (9th Cir.1987); Galindo v. Stoody Co.,

793 F.2d 1502, 1510 (9th Cir.1986) (duty of fair representation

claim “tolled while good faith attempts are made to resolve that

claim through grievance procedures”): cf. Trent v. Bolger, 837

F.2d 657, 659-60 (4th Cir.1988). The parties then agreed to stay

arbitration pending this litigation. This suit was filed on

September 3, 1987, within either a six-month or a two-year

Statute of limitations. The additional claims, based upon 1986

and 1987 agency fees, arose after the commencement of the

litigation.

II]

In Chicago Teachers Union, Local No. 1 v. Hudson, 475

U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986), the Court

explained the procedural safeguards required by the First

Amendment for “*‘ preventing compulsory subsidization of

ideological activity by employees who object thereto without

restricting the Union's ability to require every employee to

contribute to the cost of collective-bargaining activities.” 475

U.S. at 302, 106 S.Ct. at 1074. Hudson involved a public

employer and public employees. The Association takes the

position that the state action, and the consequent applicability

of the first amendment, that concerned the Court in Hudson is

not involved here because airline transportation is a private

industry.

The Association acknowledges that in 1956, the Supreme

Court held directly to the contrary, ruling that “[t]he enactment

of the federal statute authorizing union shop agreements is the

governmental action on which the Constitution operates, though

it takes a private agreement to invoke the federal sanction.”

- 56a -

Hanson, 351 U.S. at 232, 76 S.Ct. at 718. The Association

contends, however, that recent Supreme Court decisions have

called into question whether the definition of state action is so

broad as to encompass the kind of private collective bargaining

agreements here in issue.”

We cannot accept the Association’s argument. The Su-

preme Court has not repudiated Hanson. In Ellis, 466 U.S. at

439, 104 S.Ct. at 1887, the Court assumed the continuing validity

of Hanson, as it did in Beck, 108 S.Ct. at 2656-57. We therefore

conclude that unions with agency shop agreements authorized

by the Railway Labor Act must provide agency fee objectors the

same procedural safeguards prescribed by Hudson for objectors

in the public sector.

In Hudson, the Supreme Court cnunciated a three-part

constitutional test that must be satisfied by a union plan for the

collection of agency {ces from nonmembers. These safeguards

were intended to ensure that unions operating under agency

shop contracts would not “collect from dissenting employees any

sums for the support of ideological causes not germane to its

duties as collective bargaining agent.” Ellis, 466 U.S. at 447, 104

S.Ct. at 1892. The Court specified

that the constitutional requirements for the Union’s

collection of agency fees include an adequate explanation

for the basis of the fee, a reasonably prompt opportunity to

challenge the amount of the fee before an impartial

* The Association relies on Blum v. Yaretsky, 457 U.S. 991, 1002-12, 102

S.Ct. 2777, 2784-90, 73 L.Ed.2d 534 (1982); Rendell-Baker v. Kohn, 457 U.S.

830, 839-43, 102 S.Ct. 2764, 2770-73, 73 L.Ed.2d 418 (1982); United Steel-

workers v. Weber, 443 U.S. 193, 200, 99 S.Ct. 2721, 2726, 61 L.Ed.2d 480

(1979); Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 164-66, 98 S.Ct. 1729,

1737-39, 56 L.Ed.2d 185 (1978); and Jackson v. Metropolitan Edison Co., 419

U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974).

- 57a -

decisionmaker, and an escrow for the amounts reasonably

in dispute while such challenges are pending.

Hudson, 475 U.S. at 310, 106 S.Ct. at 1078. An adequate

explanation requires verification by an independent auditor, 475

U.S. at 307 n. 18, 106 S.Ct. at 1076 n. 18. The district court

held that the procedure adopted by the Association after

Hudson complied with that case’s requirements. It held that

procedure in effect before Hudson was decided substantially

complied.

In conformity with Hudson. the Association relies on

independently audited financial statements to divide its expenses

from the previous year into those that are germane to collective

bargaining and those that are not. The report of germane and

nongermane expenses is sent to every agency fee-payer by May

31. The district court found that the rebate calculation report

of 29 pages for 1986 which was distributed in 1987 gave an

adequate explanation of the basis of the fee. This finding is not

clearly erroneous.

Any pilot who has a complaint about the application of the

Association's policies and procedure pertaining to rebates may

request that his complaint be submitted to an independent

arbitrator. At a pilot's request, the amount in dispute is

escrowed pending arbitration. Unless the Parties otherwise

agree, the selection of the arbitrator and the procedures of

arbitration will be governed by the American Arbitration

Association rule for impartial arbitration of union fees. The Air

Line Pilots Association will pay the fees and expenses of the

arbitrator. The plan’s provision for arbitration satisfies Hudson.

Each year the Association deposits in an interest-bearing

escrow account 150 percent of the estimated amount of its

rebate obligation. As allowed by Hudson, the Association bases

this estimate on the previous years’ experience. See 475 U.S. at

307 n. 18, 106 S.Ct. at 1076 n. 18. It also considers budget

projections and any other available information. Experience has

shown the escrowed amount to be sufficient. Hudson does not

- 58a -

require that 100 percent of the agency fees be escrowed pending

rebate. 475 U.S. at 310, 106 S.Ct. at 1078.

The Association defends its interest-bearing escrow

provision by reliance on Ellis, where the Court held that

“advance reduction of dues and/or interest-bearing escrow

accounts” are acceptable. 466 U.S. at 444, 104 S.Ct. at 1890.

Courts differ over the question whether Hudson now requires

advance reduction of agency fees for political and ideological

expenditures. Compare Damiano v. Matish, 830 F.2d 1363, 1370

(6th Cir.1987) (advance reduction required) with Andrews v.

Education Ass'n of Cheshire, 829 F.2d 335, 338-40 (2d Cir. 1987)

(escrow sufficient). Hudson, like Ellis, condemns the failure to

pay interest on rebates. 475 U.S. at 303-06, 106 S.Ct. at 1074.

But Hudson does not expressly or impliedly overrule Ellis with

respect to providing an interest-bearing escrow account as an

alternative to advance reduction. This court has interpreted

Ellis to permit an escrow-and-rebate plan. See Beck, 776 F.2d

at 1213-14. Relying on Ellis and Beck, we reject the contention

that the Association’s plan is deficient because it does not

provide for advance reduction of agency fees.

Actually, the Association currently operates a_ hybrid

reduction-escrow system. The airlines treat all employees, union

and nonunion, uniformly with regard to checkoff. But nonmem-

bers may opt out of checkoff and pay their fees monthly. The

Association pays a lump sum rebate with interest when it

distributes its Report of Germane and Non-Germane Expenses.

In addition, the Association reduces monthly payments of

nonmembers who have made a timely request and whose fees

are not checked off. The advance reduction is based on the

current year’s estimated ratio of germane and nongermane

expenses. A year-end adjustment is made after the actual ratio

is determined. This procedure, we believe, fully satisfies

Hudson's concerns that a union not exact an involuntary loan

from a nonmember for nongermane expenditures.

The Association’s plan in effect for 1985, before Hudson

was decided, was designed to comply with Ellis, which was

- 59a -

decided in 1984. The Association deposited its estimated

obligation for rebates in an interest-bearing escrow account. It

furnished a copy of the expenditure report to nonmembers who

gave notice that they did not wish to pay any nongermane

expenditures, but it did not send the report to other fee-payers.

This plan provided for arbitration.

We agree with the district court that the plan was sufficient.

The cight-page explanation of germane and nongermane

expenditures was adequate. No nonmember has shown preju-

dice because he did not receive the report. Although the report

was not circulated as promptly as the present plan envisions and

the

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.