Tavernor, Bernadette v. IL Fed Teachers ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 99-2766
Bernadette Tavernor, et al.,
Plaintiffs-Appellants,
v.
Illinois Federation of Teachers
and University Professionals of
Illinois Local 4100,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of Illinois, Springfield Division.
No. 99-3050--Jeanne E. Scott, Judge.
Argued January 21, 2000--Decided September 6, 2000
Before Posner, Diane P. Wood, and Evans, Circuit
Judges.
Diane P. Wood, Circuit Judge. Two points in the
area of public labor relations are by now well
established. First, public employers may have a
collective bargaining agreement with a union that
requires all employees, union members and
nonmembers alike, to contribute to the union’s
representational activities--that is, the
agreement may include a "union security clause."
Second, those who object to nonrepresentational
activities of the union have the right to pay
fees that exclude contributions to those
activities--so-called "fair share fees." See
Hudson v. Chicago Teachers Union Local No. 1, 475
U.S. 292, 302 (1986), citing Abood v. Detroit Bd.
of Educ., 431 U.S. 209 (1977).
In this case, we must assess the system used by
the union representing certain clerical employees
of the University of Illinois at Springfield to
implement those rules, to ensure that this system
respects the First Amendment rights of objecting
employees. The district court upheld the union’s
system. We conclude, however, that even though
the union followed the mechanics of certain
statutory procedures established by the State of
Illinois, its system in operation did not provide
sufficient protection to the objectors. We
therefore reverse and remand for further
proceedings.
I
The plaintiff employees work in a bargaining
unit represented exclusively by the University
Professionals of Illinois, Local No. 4100 (UPI),
an affiliate of the Illinois Federation of
Teachers (IFT). IFT in turn is an affiliate of
the American Federation of Teachers, a national
labor organization. The University’s collective
bargaining agreement (CBA) makes UPI the
recognized exclusive bargaining agent for members
and nonmembers alike. It also contains a union
security clause that requires employees either to
join the union or to pay "fair share fees" to
cover the cost of their representation in
collective bargaining.
Fair share fees are the solution to free rider
problems in the collective bargaining context.
Unions assist employees by helping them bargain
more effectively with employers. The idea is the
simple "strength in numbers" aphorism: if
employees are united and speak with one voice,
they are more likely to get what they want. Not
all employees want to join unions, however. This
presents a possible free-rider problem: because
all employees are covered by a collective
bargaining agreement, it is possible for
employees who elect not to join the union to reap
the benefits of the union’s representation
without paying the dues associated with union
membership. And if representation is "free",
fewer employees would elect to join unions,
leaving it to their co-workers to bear the costs.
Fair share fees ensure that the costs of
collective bargaining are borne by all employees,
regardless of their choice to join the union.
Lehnert v. Ferris Faculty Ass’n, 500 U.S. 507,
517 (1991); Communications Workers of America v.
Beck, 487 U.S. 735, 748 & n.5 (1988); Ellis v.
Brotherhood of Ry., Airline & S.S. Clerks, 466
U.S. 435, 447 (1984); Abood, 431 U.S. at 221-22,
224.
The Illinois legislature has adopted the
Illinois Educational Labor Relations Act (IELRA),
115 ILCS 5/1 et seq., which establishes
procedures governing collective bargaining
arrangements between public educational
institutions and their employees, including the
assessment of fair share fees for objectors. See
115 ILCS 5/11. The Illinois Education Labor
Relations Board (IELRB) administers the IELRA,
and among other things, resolves disputes between
objectors and unions regarding fair share fees.
Under the IELRA and the governing regulations,
see Ill. Admin. Code sec. 1125.10 et seq., unions
and employers may agree to charge fair share fees
to public employees who are not members of the
union but are covered by the collective
bargaining agreement. The union certifies the
amount of the fair share fee to the employer. The
amount certified can neither exceed union dues
nor include any costs related to supporting
candidates for political office. The employer
deducts the certified fair share fee from
nonmembers’ earnings and pays the fee to the
union. At least two weeks before the deductions
begin, the union must provide notice of the fair
share fee to all nonmembers as well as the right
to object to that amount. Ill. Admin. Code sec.
1125.20.
A nonmember has six months after the first
deduction in which to object to the fair share
fee; the nonmember waives any objection to fees
collected before the objection. Id. sec. 1125.30.
Objections are effective only for the year in
which the fair share fee is sought, id., so
objections must be renewed on an annual basis. If
a nonmember objects to the amount of the fair
share fee (either in whole or in part), the
objecting nonmember’s full fee continues to be
deducted; however, the fee (or the portion
thereof in dispute) is placed in an interest-
bearing escrow account managed by the IELRB or
the union. The IELRB then consolidates all fair
share fee objections for a single bargaining unit
and conducts an administrative hearing to
determine the correct fair share fee. Id. sec.
1125.60. The hearing is held within 30 days of
the last possible time for filing objections--in
other words, seven months after the first
deduction. Id. sec. 1125.80.
IFT developed the fair share fee program
adopted by UPI. Because UPI represents
educational employees, it uses the school year
calendar for the calculation (and deduction) of
fair share fees. As provided for in the IELRA,
the University automatically deducts fair share
fees from nonmembers’ paychecks. In this case,
UPI has instructed the University to deduct an
amount equivalent to 100 percent of union dues as
nonmembers’ fair share fee payment. The notice
UPI sent to nonmembers indicates the amount of
the fair share fee (expressed as a percentage of
union dues) as well as information about how the
fee was calculated. For the 1997-98 school year,
the notice said that the fair share fee was 84.46
percent of full union dues; for the 1998-99
school year it was 86.78 percent. Notwithstanding
those calculated percentages, however, in both
years the notice also said that a fair share fee
equivalent to 100 percent of union dues would be
deducted. The notice indicated how objections
could be filed with the IELRB. As the IELRA
requires, when someone objects, the full amount
of the deducted fees (i.e., 100 percent of the
union dues for that objector) is held in an
interest bearing escrow account managed by the
IELRB. If a person does not object within the
period allowed, he waives the right to object to
the fee, and the UPI receives the amount deducted
(in this case, 100 percent of union dues) in its
entirety.
The plaintiffs filed objections to the
collection of funds exceeding the calculated fair
share fee with the IELRB for both the 1997-98 and
1998-99 school years. As the system required, the
University continued to deduct an amount
equivalent to 100 percent of union dues from
their paychecks, but it placed these funds in an
escrow account instead of turning them over to
the union. In July 1998, the IELRB consolidated
the plaintiffs’ objections to the 1997-98 fees
and set a hearing for September 10, 1998. The
hearing was eventually held on October 30, 1998;
the Administrative Law Judge rendered a decision
on May 17, 1999.
Just before the IELRB hearing was scheduled to
take place, IFT had offered all objectors an
immediate refund, in an amount greater than the
calculated non-chargeable portion of the fee, in
exchange for dropping their objections. The Labor
Board approved the withdrawal of their charge and
disbursed their escrowed fees, thinking that the
settlement had been accepted. In fact, it had not
been. Instead, the plaintiffs had withdrawn their
objections without accepting the settlement
offer, without notifying the union, and without
telling their lawyer. (This explains why these
plaintiffs, although listed as objectors at the
initial stages of the proceeding, are absent from
the list of objectors at the conclusion of the
IELRB proceedings.) The union attempted to
rectify the situation when it discovered what had
happened by determining the amount that had been
disbursed from the plaintiffs’ escrowed funds,
adding interest at the prime rate through May
1999, and sending the non-chargeable amounts to
the plaintiffs’ attorney.
None of this satisfied the plaintiffs, who were
out to establish a broader principle. Tavernor,
along with Richard Barnes, Carol Dixon, Cynthia
Ervin, Donna Johnson, Peggy Kitchen, Ginger
Mayer, Angela Pezold, Marcia Rossi, and Linda
Squires, filed a class action complaint on behalf
of (1) all nonmembers who were not notified that
they could object to the Union’s collection of
fees for indisputably nonchargeable activities
and have their fee reduced accordingly and (2)
nonmembers who took the step of making their
objection known to UPI. The plaintiffs asked to
have the union fair share fee collection
procedure declared a violation of the First
Amendment. They argued that UPI’s process does
not include sufficient procedural safeguards (as
required under the First and Fourteenth
Amendments) and that UPI must reduce fair share
fees upon receipt of the nonmembers’ objection
for all costs that are indisputably not
chargeable to collective bargaining. By way of
relief, they sought an injunction against the
collection of fair share fees and a refund with
interest of all funds they had paid which were
not chargeable to them as a fair share fee. UPI
and IFT moved to dismiss the complaint for
failure to state a claim (or, in the alternative,
to defer to proceedings before the IELRB). The
district court treated the motion as one for
summary judgment and ruled in favor of UPI and
IFT.
II
The Supreme Court has laid out three
requirements for the collection of "fair share
fees": the union must (1) provide "an adequate
explanation of the basis for the fee"; (2) give
the nonmember "a reasonably prompt opportunity to
challenge the amount of the fee before an
impartial decisionmaker"; and (3) have "an escrow
for the amounts reasonably in dispute while such
challenges are pending." Hudson, 475 U.S. at 310.
Because the payment of a fair share fee has an
effect on the objectors’ First Amendment rights,
the procedures used to collect "fair share fees"
must be "carefully tailored to minimize the
infringement" on those rights. Id. at 303; see
also Lehnert, 500 U.S. at 519 (holding union’s
expenses for activities germane to the collective
bargaining process may be chargeable to
nonmembers where they do not "significantly add
to the burdening of free speech that is inherent
in the allowance of an agency or union shop").
The employee bears the burden of protecting her
First Amendment rights. If she believes that the
union has incorrectly calculated the fair share
fee or has included expenses related to political
or other expression to which the employee does
not wish to contribute, she must make her
objection known. International Ass’n of
Machinists v. Street, 367 U.S. 740, 774 (1961).
Once an employee objects, the burden shifts to
the union to demonstrate that its fair share fee
was correctly calculated and does not include
expenditures related to non-germane matters.
Hudson, 475 U.S. at 306.
Because the employees’ First Amendment rights
are at stake, "the procedure [must] be carefully
tailored to minimize the infringement." Hudson,
475 U.S. at 303; see also id. at 309 (specifying
requirements "necessary to minimize both the
impingement and the burden"). For the objector,
even a requirement that she support the
collective bargaining representative through fair
share fees potentially affects her First
Amendment rights and may "interfere in some way
with [her] freedom to associate for the
advancement of ideas, or to refrain from doing
so, as [s]he sees fit." Abood, 431 U.S. at 222.
For this reason, it is critically important to
ensure that the fair share fee collection
mechanism is no more burdensome on employees’
rights than necessary. See Hudson, 475 U.S. at
307 n.20; see also Dashiell v. Montgomery County,
Md., 925 F.2d 750, 754 (4th Cir. 1991).
Furthermore, "[t]he amount at stake for each
individual dissenter does not diminish [the First
Amendment] concern. For, whatever the amount, the
quality of respondents’ interest in not being
compelled to subsidize the propagation of
political or ideological views that they oppose
is clear." Hudson, 475 U.S. at 305.
In general, there are three systems used to
collect fair share fees, some of which satisfy
these concerns more easily than others. Under a
rebate system, the union collects the full amount
of dues, spends them, and then refunds to
nonmembers the portion that it was not allowed to
exact from nonmembers in the first place (that
is, the amount exceeding collective bargaining
costs). Rebates of this kind--where the union
itself has the disputed funds for a period of
time--are no longer used in contexts where First
Amendment rights are in play (such as the cases
of public employers or those falling under the
Railway Labor Act). The problem is simple: such
a system effectively requires the objector to
make an involuntary (even if temporary) loan to
the union that can be used for expenses not
related to collective bargaining. See Ellis, 466
U.S. at 443-44.
In striking down rebate systems, however, the
Court also signaled what kind of system would be
acceptable, noting that "there are readily
available alternatives, such as advance reduction
of dues and/or interest-bearing escrow accounts,
that place only the slightest additional burden,
if any on the union." Id. In an advance reduction
system, the union collects only what it has
calculated to be the fair share fee (with,
perhaps, a slight cushion to cover any possible
calculation errors) and no more. In an escrow
system (or "deduction-escrow-refund" system, as
it has been described, Grunwald v. San Bernadino
City Unified Sch. Dist., 994 F.2d 1370, 1372 (9th
Cir. 1993)), the union collects some amount from
nonmembers (either an amount equal to full union
dues, the estimated "fair share fee," or the fair
share fee plus some cushion). The union places
the fees collected from nonmembers into an
interest-bearing escrow account. Depending on the
particular system, the union may place into
escrow either the full amount collected or only
the amount reasonably in dispute. The funds
remain in escrow, and cannot be spent by the
union, until one of two things happens: either
(1) the nonmember does not object to the union’s
collection of the funds, in which case the funds
are released to the union, or (2) the nonmember
objects to the collection of the funds and the
proper fair share fee amount is decided by an
impartial decisionmaker. In either case, the
party who has a right to the funds receives them
with interest.
The UPI procedure at issue here is of the
deduction-escrow-refund ilk. What is somewhat
unusual about the procedure is that UPI collects
and escrows an amount that it concedes is more
than the calculated fair share fee. That is,
rather than collect an amount equal to or only
slightly exceeding the 80-odd percent of union
dues that UPI has calculated is allocable towards
"chargeable" expenses (that is, costs associated
with collective bargaining), UPI has the
university collect 100 percent of union dues from
all employees of the bargaining unit, members and
nonmembers alike. It does so even though in
recent memory its chargeable expenses have never
gone much higher than approximately 85 percent of
union dues. The objectors thus have two points to
make: first, the conventional complaint about the
union’s calculation of its fair share charge
(i.e., what expenses are chargeable), and second,
the more uncommon complaint about the systematic
collection of amounts that admittedly exceed the
costs of collective bargaining. The plaintiffs
claim that this is not the kind of narrowly
tailored procedure required by the Supreme
Court’s decisions, and that nothing less than
some sort of advance reduction system would be
constitutional under Hudson.
The circuits are split as to whether such an
absolute rule exists. Most have found that either
advance reduction or a "deduction-escrow-rebate"
approach can satisfy Hudson, as long as the
particular procedure provides sufficient
information to nonmembers and a prompt, impartial
method through which nonmembers can challenge the
calculation of the fee. See Grunwald, 994 F.2d at
1373-76; Pilots Against Illegal Dues v. Air Line
Pilots, 938 F.2d 1123, 1132-33 (10th Cir. 1991);
Gibson v. The Florida Bar, 906 F.2d 624, 631
(11th Cir. 1990); Crawford v. Airline Pilots
Ass’n Int’l, 870 F.2d 155, 161 (4th Cir. 1989);
Hohe v. Casey, 868 F.2d 69, 72 (3d Cir. 1989);
Andrews v. Educational Ass’n of Cheshire, 829
F.2d 335, 339 (2d Cir. 1987). These courts have
found that escrow accounts satisfy the First
Amendment, because (unlike a rebate) an escrow
does not give the union even temporary use of the
dissenters’ funds to pay for political or other
sorts of speech. They also rely on language in
Ellis suggesting that escrow accounts are a
constitutional alternative. See 466 U.S. at 444.
Other courts have not read Ellis quite that
broadly, observing that the Court may have had in
mind the use of escrow accounts only for disputed
amounts. In Hudson, for example, it referred to
an escrow "for the amounts reasonably in dispute
while such challenges are pending." 475 U.S. at
310 (emphasis added). This has led the Sixth
Circuit to hold that only advance reductions
comply with the First Amendment. See Tierney v.
City of Toledo, 824 F.2d 1497, 1504-05 (6th Cir.
1987). Tierney held unconstitutional a fair share
collection procedure under which the union
collected a fee equal to 100 percent of union
dues and refunded the nonchargeable amount upon
objection. See also Damiano v. Matish, 830 F.2d
1363, 1370 (6th Cir. 1987).
In addition to the question whether an advance
reduction is the only constitutionally acceptable
option, several other aspects of fair share fee
procedures have also come under attack. See,
e.g., Kidwell v. Transportation Communications
Int’l Union, 946 F.2d 283, 304 (4th Cir. 1991)
(must the calculation of the fair share fee be
done by professional accountants or an
independent auditor); Ping v. National Educ.
Ass’n, 870 F.2d 1369, 1374 (7th Cir. 1989)
(same); Pilots Against Illegal Dues, 938 F.2d at
1132 (how accurate must the calculation be and
what level of detail is required); Dashiell, 925
F.2d at 756 (same); Shea v. International Ass’n
of Machinists and Aerospace Workers, 154 F.3d
508, 515 (5th Cir. 1998) (can an annual objection
be required); Gibson, 906 F.2d at 632
(composition of arbitral panel). The theme that
we perceive in these cases is a familiar one:
each fair share fee procedure must be assessed as
a whole, to ensure that it meets the "careful
tailoring" requirement of Hudson.
Our review of UPI’s fair share collection
procedure convinces us that the burdens it places
on objectors are too great under Hudson. To begin
with, the independent dispute resolution
procedure is far from prompt. Under the IELRA,
objections do not even begin to be processed
until six months after the initial deduction is
made. The objections must then be consolidated
and a hearing scheduled. It then takes an
additional four to six months for the decision to
be made. And, if either the union or the
objectors disagree with the decision, the funds
remain in escrow pending the resolution of an
appeal. Thus, for at least a year, the objector
does not have access to the portion of her funds
that no one ever claimed the union could keep.
Cf. Grunwald, 994 F.2d at 1372-73 (upholding fair
share fee dispute procedure where lag between
objection and decision was between two and three
months). Moreover, the IELRA requires objections
to be renewed annually, which places an
additional burden on objectors. No sooner does
the objector complete one round than, like
Sisyphus with his rock, he must begin anew with
another. See Shea, 154 F.3d at 515.
It is important to note that the IELRA system
itself does not require the 100% escrow that UPI
uses. Our remarks should therefore not be taken
as facial criticism of the IELRA; we are
addressing only the way that mechanism is being
used here. The union collects some funds that it
realizes it would not be entitled to retain over
a proper objection (but that it is equally
entitled to keep if the nonmember chooses not to
object). Before the deductions are made, the
union has calculated the fair share fee (84 to 86
percent of union dues). The union then requests
the university to deduct an amount equivalent to
full union dues from nonmembers’ paychecks. From
the point of view of the dissenting subset of
nonmembers (however large that may be), although
there is no dispute regarding approximately 15
percent of the funds collected, they are
nonetheless deprived of those funds for well over
a year. This system places a significant burden
on the objection process.
True, UPI responds, but two factors operate
together to save it: first, the union does not
get the benefit of the funds either, because they
are in an outside escrow account managed by
IELRA, and second, when the dust settles the
objectors get the monies they are due with a
proper interest payment. UPI does bear a slight
burden under the disputed system: it, too, is
deprived of funds to which it is indisputably
entitled while dissenters’ objections wend their
way through the administrative system. Indeed, as
a percentage, the union loses far more, because
its ultimate share of the escrowed funds is some
85 percent of the total, while the dissenters’
share is only about 15 percent. From a legal
point of view, however, this simply rephrases the
question: can the union deprive the objectors of
the use of their money for lengthy periods of
time, as long as the ultimate payment is with
interest? As a practical matter, we agree that
the system seems a bit odd at first: why would
UPI design a system that results in its being
deprived of funds due to it? There are two
possible answers. The answer may lie in the
relative size of the two classes of employees. At
oral argument, counsel for UPI estimated that out
of 80,000 represented employees, fewer than 100
object in any given year. By certifying the
maximum fair share fee possible (100 percent of
dues), UPI may be maximizing what it stands to
gain through forfeiture. Coupling that fact with
the reality that the 15 percent shares for the
objectors are relatively small dollar amounts in
absolute terms, the union’s incentive to handle
things this way may be more apparent. We
therefore do not think that the reciprocity of
burdens saves this system.
UPI’s point about interest is in principle a
valid one. In case after case, we point out that
a person is fully compensated for the temporary
deprivation of money if the repayment is made
with a market rate of interest. See, e.g., Medcom
Holding Co. v. Baxter Travenol Lab., Inc., 200
F.3d 518, 519 (7th Cir. 1999); In re Milwaukee
Cheese Wis., Inc., 112 F.3d 845, 849 (7th Cir.
1997). If the money is in an escrow account, the
objector has given nothing to the union to use,
answering the Supreme Court’s objection in Ellis.
And if the ultimate repayment after the
adjudication is over is made with interest, there
is no economic loss. The problem with this
picture, however, lies in the Supreme Court’s
caution that the procedures for administering
fair share systems must be structured so as to
minimize the burden on the objectors’ First
Amendment rights. Anyone who has read even the
first thing in law and economics literature
(perhaps Ronald Coase’s Nobel Prize-winning
works, including his path-breaking article on The
Problem of Social Cost, 3 J. Law & Econ. 1) will
be familiar with the concept of transaction
costs. The interest payment will compensate the
objectors for the lost use of their money during
the adjudicative process, but it will not
compensate them for the transaction costs they
incur in order to obtain it. The Supreme Court
has not asked for the impossible--it has not
demanded that unions find a way to reduce
transaction costs to zero--but it has sent the
message that unions must use systems that will
keep these costs to a manageable level. See also
Grunwald, 994 F.2d at 1375 (stressing the need to
keep procedural burdens down, especially in light
of the small sums involved); Shea, 154 F.3d at
515 (same). It is in that light, therefore, that
we complete our review of the system the UPI
uses.
In support of its procedure, UPI relies heavily
on the Ninth Circuit’s opinion in Grunwald, in
which the court upheld a deduction-escrow-refund
procedure that the union thinks was similar to
its own. But the devil is in the details, and it
is the details of the Grunwald system that
distinguish it from UPI’s. In Grunwald, as here,
an amount equal to 100 percent of union dues was
deducted from nonmembers’ paychecks, and
nonmembers’ fees were placed in an interest-
bearing escrow account. The difference lay in
precisely the transaction cost point we have just
made. In Grunwald, nonmembers did not have to go
through such a cumbersome dispute procedure in
order to collect their refund. Instead, once a
nonmember submitted a notice to the union
objecting to the use of her fees, she could
either accept the union’s calculation of the fair
share fee, in which case she would receive a
refund from the union for the excess, or, if she
disputed the union’s calculation of the fee, she
could request that the appropriate fee be
determined through arbitration. See Grunwald, 994
F.2d at 1372-73. The contrast with the current
system is immediately evident. (We do not believe
that the union’s offer here to settle the case on
the eve of litigation transforms this system into
the Grunwald one; settlement is a matter of
grace, while the system in Grunwald was a matter
of right.)
In our case, those who wish to object (who, it
is worth noting, may be a smaller group than
those who do not choose to become union members)
bear a substantial burden no matter what they do:
they can object and spend substantial time and
energy to collect their refund, or they can forgo
the hassle of objecting and forfeit the funds.
The union only benefits: it either gets exactly
what it is due or, for those who do not have the
time or energy to fight, more than what it is
due. We emphasize that these observations pertain
to the system we are reviewing in this particular
case, where there is a persistent difference of
approximately 15 percent between the amounts
collected and the fair share fee. Unions are
entitled to use reasonable estimates to collect
amounts that include a cushion. The transaction
cost argument, in short, is a double-edged sword.
Nothing we say here should be understood to mean
that objectors have the right to impose
unreasonable transaction costs on unions either,
as for example by forcing them to engage in
elaborate escrow and arbitration procedures over
a couple of dollars, as long as a process is in
place to make sure the books are ultimately
balanced properly for all concerned. Our only
point is that these facts do not present such a
case for the union.
UPI’s primary argument for its objection
procedures is that the current system is more
simple for the University’s payroll. We are not
convinced that it would be particularly hard for
UPI to instruct the University to deduct the
calculated fair share fee plus a slight cushion
(1-2 percent, for example) from each objector and
place the cushion plus any amounts in dispute in
escrow, or for the University to adjust each
employee’s deduction once he or she objects.
(There would be no need for such an instruction
until an objection was filed, however.) Payroll
systems process different sorts of deductions for
different employees all the time. We also note
that "[t]he IFT amended the recommended fair
share fee program for the 1997-98 membership year
from an advance reduction to a post-objection
refund program." Affidavit of James Geppert, Jr.,
Secretary-Treasurer of IFT, dated April 13, 1999.
If the advance reduction was possible a few years
ago, we find it hard to understand why it is
unmanageable today. In addition, the union does
not argue it would be too burdensome for it to
figure out who the objecting employees are each
year. Cf. Grunwald, 994 F.2d at 1376 (finding
adequate explanation for deduction-escrow-refund
system where employees were employed on a year-
to-year basis).
Furthermore, UPI’s present system is not the
only one available to it. There is at least one
other procedure it could use to deduct its fair
share fees that would both comport with the IELRA
and be less burdensome on objectors’ free speech
rights. The UPI could fashion a system similar to
the one approved in Grunwald. That is, the UPI
could continue to certify a fair share fee equal
to 100 percent of union dues. Upon objection,
however, the UPI would deduct only the calculated
fair share fee from the objectors’ paychecks
(that is, the percentage of union dues that the
UPI currently includes in its notice). If the
objecting employee contested the amount
calculated by the UPI, the amounts in dispute
could be placed in escrow and the statutory
procedures followed for the adjudication of that
dispute. Cf. Grunwald, 994 F.2d at 1372-73.
We reiterate finally that in coming to this
decision we need not and do not strike down the
IELRA. UPI and IFT are correct that Illinois law
provides "the exclusive method for handling fair
share fees upon the filing of an objection by an
employee." Ill. Admin. Code sec. 1125.10. The UPI
procedure tracks the IELRA--the union provides
notice of the fair share fee, holds objectors’
fees in escrow, and allows an impartial
decisionmaker (the IELRB) to determine if the
fair share fee (i.e. the chargeable expenses) was
correctly calculated. What is at issue here is
not the system, but the inputs into that system:
that is, whether the union may collect more than
its calculated fair share fee and force objectors
to take action in order to get their money back.
In other words, what is at stake is not the
facial validity of the IELRA; it is only the
application of those procedures in UPI’s contract
with the University. See Robinson v. State of New
Jersey, 806 F.2d 442, 446-47 (3d Cir. 1986)
(discussing difference between facial and as
applied challenges in this context).
III
We conclude that UPI’s practice goes beyond
what Hudson permits because it imposes excessive
burdens on objectors without adequate
justification. We therefore REVERSE the district
court’s summary judgment for UPI and IFT and REMAND
to the district court for further proceedings
consistent with this opinion.