The NLRA permits employers and unions to agree to “union security” clauses in a collective bargaining agreement.  This clause requires employees to join the union (and pay dues) or lose their job with the employer.

Congress imposed this “membership” obligation on employees to eliminate what some call the “free rider” problem.  The NLRA requires a union to represent all employees in a bargaining unit.  Without the union security provision, an employee might reap the benefits of the union contract, but not pay dues to the union that secured those benefits through negotiations.

The U.S. Supreme Court has held, however, that the “membership” that is required may not be “full” membership.  Unions incur all sorts of expenses, some of which are not “germane” to the union’s obligation to negotiate a contract with the employer.  Thus, the Court has held, employees who must “join” the union must only pay for those union expenses that are “necessary” for the union to deal with the employer on labor-management issues.  This is often referred to as “financial core” membership.

Last Friday, the NLRB returned to the question of what constitutes “necessary” expenses that are germane to collective bargaining.  In a case involving a dispute over the amounts a union spent on lobbying, the NLRB held that those expenses are not “necessary” for collective bargaining.  Accordingly, the union could not charge those who objected to payment of “full” union dues.

The union, which represented hospital employees, included in the amounts ultimately charged to objectors $21,970 that it spent to subsidize lobbying efforts for bills that were before the Rhode Island and Vermont state legislatures.  These bills addressed hospital safety and operations.  These bills, for example, would have (1) empowered the government to regulate certain hospitals; (2) prohibited hospitals from requiring any employee to work more than 40 hours a week; and (3) provided additional funding for mental healthcare serves at three facilities at which the union represented employees.

The NLRB explained that lobbying is a political activity – not a representational function.  This is true even if the proposed legislation involves a matter that may also be subject to collective bargaining.

NLRB Member Lauren McFerran (D) dissented.  She argued that lobbying expenditures may be chargeable to objectors if the union can demonstrate that they were germane to collective bargaining, contract administration, or grievance adjustment.  Accordingly, whether lobbying expenditures are chargeable to objectors should be determined on a case-by-case, expenditure-by-expenditure approach.  According to McFerran, the majority’s approach “exacerbates the ‘free rider’ problem’” and “arbitrarily undermines a union’s ability to use what might be the best available tool in its arsenal – attempts to influence government actors or government policy – to perform its core representational functions.”

The NLRB’s decision follows on the heels of a memorandum issued by Peter Robb (R), the General Counsel of the NLRB, on two other issues that relate to this same subject.  The first issue relates to when employees may revoke their dues-checkoff authorization.  Employees have the right to revoke their dues-checkoff authorization at least once a year and upon expiration of a CBA.  Robb directed regional offices to issue an unfair labor practice complaint against a union when (1) employees are required to issue their dues-checkoff before the CBA expires; (2) a revocation process requires an employee to send the revocation by certified mail; or (3) a union fails to tell an employee when the next dues-checkoff window will occur.

The second issue relates to the information unions must provide to employees to allow them to determine whether to exercise their right to object to payment of full union dues.  Previously, the NLRB has held that a union must disclose to employees the percentage of dues they would save by objecting.  Robb directed regional offices, however, to issue an unfair labor practice complaint against any union which failed to disclose to employees the actual amount of money they would save by objecting.

Robb’s actions mean that, sooner or later, the NLRB will likely be faced with a case in which it must decide whether Robb’s interpretation of the law is correct.  The NLRB’s holding in its recent case means that unions will be less able to recoup from members who are forced to financially support the union on pain of losing their jobs the $42.2 million that unions spent on lobbying expenses in 2018.