NLRB Ban on Union Use of Non-Member Funds for Lobbying Upheld

Sept. 16, 2020, 7:06 PM

The National Labor Relations Board’s ban on private-sector union use of non-member fees to help fund union lobbying efforts has been upheld by a federal appeals court.

Union lobbying, even when it is relevant to collective bargaining duties, amounts to political activity that can’t be funded by nonmember “agency fees,” the U.S. Court of Appeals for the First Circuit said in a ruling Tuesday.

The appellate court rejected the Rhode Island-based United Nurses and Allied Professionals’ challenge to the NLRB’s 2019 ban. Previously unions could use those so-called agency fees to pay for lobbying that was germane to its role as collective bargaining agent.

The ruling creates binding law in the First Circuit—which covers Massachusetts, New Hampshire, Rhode Island, Maine, and Puerto Rico—that restricts private-sector union funding for political activities. That sets labor law precedent in the First Circuit that would survive a differently composed NLRB flip-flopping on the legality of agency fee-funded lobbying.

The decade-old case stems from an unfair labor practice charge that nonunion nurse Jeanette Geary filed against United Nurses.

Geary was represented by the National Right to Work Legal Defense Foundation, a foe of organized labor that has won several important cases on union financing. Those victories include the U.S. Supreme Court’s 1988 ruling in Communications Workers of America v. Beck, which allows workers to refuse to pay unions for activities beyond those needed for collective bargaining.

The First Circuit’s opinion affirmed the protections established in Beck, Foundation President Mark Mix said in a statement.

“No worker should be forced to pay for union political activity, including lobbying,” Mix said.

High Court Cited

The First Circuit based its ruling to uphold the NLRB’s 2019 decision on Supreme Court authority. Although there wasn’t a directly applicable high court holding, there was a type of discussion of the issue that’s known as “considered dicta,” which is binding on lower courts, the circuit court said.

The appellate panel pointed to the Supreme Court’s 1991 decision Lehnert v. Ferris Faculty Association, a public-sector case saying that political and ideological activities can’t be funded by nonmember fees. It also cited the high court’s 2014 ruling in Harris v. Quinn that suggested a line between lobbying and collective bargaining.

U.S. Circuit Judge William Kayatta wrote the First Circuit opinion, joined by Circuit Judge Bruce Selya and retired Supreme Court Justice David Souter sitting by designation.

United Nurses’ attorney on the case, Christopher Callaci, wasn’t immediately available for comment.

The case is United Nurses and Allied Professionals v. NLRB, 1st Cir., No. 19-1490, Ruling 9/15/20.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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