Ellis v. Brotherhood of Railway, Airline & Steamship Clerks, Freight Handlers, Express & Station Employes

PETITIONER:Ellis
RESPONDENT:Brotherhood of Railway, Airline & Steamship Clerks, Freight Handlers, Express & Station Employes
LOCATION:Board of Immigration Appeals

DOCKET NO.: 82-1150
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 466 US 435 (1984)
ARGUED: Jan 09, 1984
DECIDED: Apr 25, 1984

ADVOCATES:
Laurence Stephen Gold – on behalf of the Respondents
Michael E. Merrill – on behalf of the Petitioners

Facts of the case

Question

Audio Transcription for Oral Argument – January 09, 1984 in Ellis v. Brotherhood of Railway, Airline & Steamship Clerks, Freight Handlers, Express & Station Employes

Warren E. Burger:

We will hear arguments next in Howard Ellis against Brotherhood of Railway, Airline, and Steamship Clerks, Freight Handlers, Express and Station Employees, et al.–

Mr. Merrill, I think you may proceed whenever you are ready.

Michael E. Merrill:

Mr. Chief Justice, and may it please the Court, a familiar presence is in the Court today, the Brotherhood of Railway and Airline Clerks.

It was here in Street.

It was here in Allen.

And it now commences its thirty-third year of litigation against employees whom it represents, disputing the use of compulsory fees obtained from those employees.

The Ellis and Failes cases before the Court today–

Byron R. White:

Do the other unions just defer to you, or–

Michael E. Merrill:

–It is sometimes not pleasant to be special, Your Honor.

The Ellis and Failes cases present the record which has eluded this Court in the past, and permit the Court to issue rulings upon these vital issues: first, the extent of the union’s entitlement to the use of compulsory dues and fees obtained from dissenting employees; second, the standard of proof the union must meet to justify those charges; third, the remedy for dissenting employees whose fees have been or will be misspent.

In this case, we have a hierarchy of interests, that of the petitioners, the fundamental individual First Amendment rights of free speech and association.

Those rights have existed since the Republic was founded.

On the union hand, we have a recently enacted statutory privilege.

The union’s interest is a monetary interest only.

When those two rights are juxtaposed, it is clear that the First Amendment interests of the petitioners must override, absent a compelling governmental necessity for giving sway to the union’s property interest.

William H. Rehnquist:

–Mr. Merrill, are you saying that any time the individual says something that is done to him violates the First Amendment and the person who is violating the First Amendment or alleged to is interested primarily in the financial outcome, that that automatically decides the case?

Michael E. Merrill:

Justice Rehnquist, I do not make that assertion.

We do assert, consistent with Abood, that when a union obtaining money under the force of federal statute uses that money in a way that would otherwise impinge upon associational or expression rights, that that must be… must uphold… that use must meet constitutional standards of the First Amendment.

Interpreting the statutory scheme here, the Railway Labor Act, must be done from the standpoint of viewing it with strict scrutiny.

We must ascertain what Congress sought to accomplish in passing this statute.

We have dependable guidance in making that journey in the decisions of this Court, in the Street case, in the Allen case, and in Abood.

In the latter case, this Court has ruled that the First Amendment sweeps broadly in a context of compulsory dues litigation, that it extends to encompass social interests, economic and philosophical interests, literary interests, and, of course, political and ideological interests of employees.

As noted, there must be a compelling justification to intrude upon those rights and those interests.

In addition, using established First Amendment principles, the means selected by Congress to accomplish the governmental purpose must impose the minimum burden on plaintiff’s constitutional freedoms.

Now, the specific Congressional purpose authorized and not commanded in the 1951 amendments to this statute was that of obtaining payment for specific services.

It was to pay a union representing employees in a specific collective bargaining context for the acts of the union as a negotiating agent, and for its services in administering that contract, and in handling and prosecuting grievances of employees arising under that contract.

Again, we have many decisions of this Court which make it plain that the procedure used to protect the union’s interests in this case, that of obtaining money from the plaintiffs, must be drawn in such a fashion so as not to sacrifice the overriding constitutional interests of the petitioners.

As the Court analyzes this case, it is of extreme importance to remember that the union wears two hats.

The first of those hats, which existed long prior to the occurrence of the statute giving rise to this controversy, is that of a voluntary fraternal organization.

As a fraternal organization, BRAC can do anything it chooses.

Michael E. Merrill:

It can engage in ideological activity, religious activity, sociological, economic, political activity.

There is no limit other than law upon what it chooses to do, and we note that this Court recognized in Street that unions are inherently ideological and political organizations.

Surely no one would argue that a private citizen can be compelled, consistent with the exercise of his First Amendment rights, that one must support the activities of a fraternal organization in that light.

So, we turn then to the second hat warn by BRAC, and it is wearing that hat when it sought the Congressional purpose, the Congressional permission to obtain money from dissenting employees.

It is the collective bargaining representative hat, and when the unions went to Congress in 1950 seeking permission to compel the payment of dues, they stressed that they were required to perform duties with respect to dissenting employees.

They already enjoyed excellent success in generating voluntary membership support.

As the Court noted from the legislative history, voluntary membership levels of 75 to 80 percent were commonplace by the late 1940’s.

Nevertheless, the unions stated to Congress that they were required to provide the duty of fair representation to those who chose not to support the unions, who disagreed with their policies, who wished not to be a part of those organizations.

On the limited basis that those functions had by law to be performed, Congress was persuaded to authorize compulsory payment for those services only.

William H. Rehnquist:

Weren’t there closed shops in the railway industry before the early fifties?

Michael E. Merrill:

There were not, Your Honor.

In the 1934 Act, no form of union security was permitted, so it was strictly voluntary unionism from 1934 until 1951.

William H. Rehnquist:

So this Act didn’t follow the same path as the National Labor Relations Act.

Michael E. Merrill:

That is correct, and I might point out that the railway unions had never found compulsory unionism to be essential to their well-being because at the time of the 1934 statute, only one such organization had compulsory membership provisions in it.

So, we see that the collective bargaining representative hat is that which Congress addressed in the statute, and it is a confusion of those two roles that BRAC urges upon this Court and successfully urged upon the Ninth Circuit.

I point out that not only did BRAC provide a limited statutory role with respect to petitioners, it did so grudgingly, treating them as objectives of collective bargaining.

Petitioners were not entitled under this union’s constitution and practices to attend meetings, to vote for officers, to serve as grievance representatives, to vote for grievance representatives.

Even with respect to the fraternal activities, which this union seeks to compel payment for, petitioners were excluded.

Agency fee payers did not receive union publications.

They were expressly made inelligible for death benefit fund participation.

Only at a later time, when it became apparent that the union might not be able to continue collecting for those functions, after plaintiff’s motion for summary judgment had been filed, did this union generously say, oh, well, we meant to make these benefits available to all.

So, we see that petitioners were treated in a very limited sense by BRAC, just as they were viewed by Congress in a very limited sense.

The Ninth Circuit majority decision has interpreted this statute from the perspective of a financially acquisitive union, not from the perspective of Congress, and not from the perspective that this Court described in the Street case.

If one is to read the statute as did the Ninth Circuit majority, Congress’ objective was to maximize union power in general, and to legitimize charges for any union fraternal activity bearing any conceivable, arguable relationship to the function of the union in the realm of collective bargaining.

John Paul Stevens:

That is really not the test they stated, is it, any conceivable, arguable relationship?

Michael E. Merrill:

Their test is stated that it is anything that is done by the… the work of the union that is germane to the realm of collective bargaining, a test we have not seen in any other case before or since.

John Paul Stevens:

But it is quite a different test than the one you just stated.

Michael E. Merrill:

In practice, Your Honor, I believe that it is exactly the test that I stated.

If one looks closely at the range of activities supported through the compulsory fee by BRAC, one finds no limits other than partisan political activity.

That is the only sphere safeguarded by the trial court judgment as modified by the Ninth Circuit majority.

Michael E. Merrill:

If one is to take this expansive statutory interpretation, it assures us that we will run roughshod over constitutionally guaranteed rights, and destroy the painstaking efforts of this Court to save the constitutionality of the statute.

Such a construction also runs counter to Congress’ intent, because Congress did not favor unions over employers.

Byron R. White:

Well, you don’t think we’ve decided this issue before, do you?

Michael E. Merrill:

The issue before this Court has not been decided other than to the extent–

Byron R. White:

We have left it open.

Michael E. Merrill:

–Except to say–

Byron R. White:

These kinds of things.

Michael E. Merrill:

–The antecedents of the decision are certainly present in Abood, Justice White, when it found that the use of dissenters’ dues over their objection for ideological–

Byron R. White:

Well, we couldn’t have left it open if it is so obvious that it is unconstitutional.

Michael E. Merrill:

–I am prepared to agree.

Byron R. White:

Well, I know.

We left it open.

Michael E. Merrill:

Well, certainly the issues before the Court are presented on the appropriate record for the first time today.

As I mentioned, in 1951, Congress did not enact a statute to favor unions over employees, except in a very limited sense.

It did not favor strong unions over weak unions.

It did not favor unions over employers.

The Railway Labor Act, neither in the 1951 amendments nor in its other provisions, does not allow, does not protect, and does not regulate union activities in general.

William H. Rehnquist:

Mr. Merrill, are you going to address yourself to the so-called Paragraph 22 items one by one at some point during your oral argument?

Michael E. Merrill:

Time does not permit me to address them individually.

I will be happy to respond to any questions.

If there is one or more in particular that Justice Rehnquist inquires about, I would be pleased to address that.

Byron R. White:

What about the annual meeting?

Michael E. Merrill:

That would be the quadrennial convention, Justice White?

Byron R. White:

Yes.

Michael E. Merrill:

I can address the convention, and I think my comments will apply to the other Paragraph 22 activities in question.

The statute was intended to and must be construed to compel payment only for union functions which the union must provide, which the union has a duty to provide as the collective bargaining representative.

There is nothing in the Railway Labor Act and nothing in Section 211 thereof that requires the union to hold a convention.

It chooses to do so as a fraternal organization.

It does so in part because of an extraneous federal statute which does require the election of officers.

William H. Rehnquist:

Part of your response to Justice White suggests to me that you view our previous cases in the Railway Labor Act as saying that the union has to justify any charges it makes to your members, rather than saying that your members must make some sort of a showing to avoid paying what is otherwise the normal agency fee.

Michael E. Merrill:

I believe that I agree with the gist of Justice Rehnquist’s remarks.

The requirement remains that dissenting employees voice an objection to the payment of compulsory dues and fees, and they did in this case.

Each petitioner registered a specific written objection to the use of any dues and fees, but particularly for anything other than direct collective bargaining expenses with Western Airlines.

William H. Rehnquist:

What about social activities?

Now, I can see your point that they probably have virtually nothing to do with collective bargaining activities, but I can’t for the life of me think why they involve any First Amendment considerations either, so it seems to me there the question is pretty clear.

On whom do you put the burden of the argument, so to speak.

Michael E. Merrill:

Well, certainly the Court in Abood recognized that the First Amendment freedoms encompass union social activities.

It is the functioning of a fraternal–

William H. Rehnquist:

In Abood, how did it recognize that?

Michael E. Merrill:

–It recognized that when it listed… when it rejected the union argument that only political and ideological activities of the union were safeguarded by the First Amendment, and the Court said, we have never held that the First Amendment does not also cover social, literary, artistic, philosophical, and religious activity.

William H. Rehnquist:

Well, you think the Court in Abood meant that the First Amendment covers a dance in the union hall?

Michael E. Merrill:

I certainly do.

To the extent that the statute authorizes this union to establish a fraternal organization which undertakes activities of a fellowship nature and a direct association of persons which is not favored, which is opposed by petitioners, I think that the First Amendment certainly does encompass that type of activity.

William H. Rehnquist:

Just how would you go about connecting up the First Amendment with what you say are your clients’ rights here?

Michael E. Merrill:

I would do that by saying, as the Court did in Street, when it placed a strained construction, according to one Justice, upon the statute, and it said only those duties under the Railway Labor Act can be the subject of charges.

There is no duty of an exclusive bargaining representative to hold the dance–

William H. Rehnquist:

Okay.

That is a permissible argument from the point of view that Congress intended only very narrow things to be permissible under the agency fee, but you are saying that there is a First Amendment argument in support of that exemption, that somehow your clients’ First Amendment rights are impinged on when they are required to put a part of their agency fee to support a band at a union hall dance, and I can’t for the life of me see how any case we have ever decided supports that proposition.

Michael E. Merrill:

–I believe that the antecedents of that proposition are present in Abood when it said that there must be a governmental necessity for the extraction of the fees.

Byron R. White:

That isn’t necessarily a constitutional argument.

You could win your case without even mentioning the Constitution.

I mean, logically you could.

It would be a question of statutory interpretation.

Michael E. Merrill:

That is true.

Byron R. White:

You could say that in order to justify any fee, you must show… somebody must show that Congress anticipated that the non-union employees could be charged this much to cover these things.

Michael E. Merrill:

That is correct.

Byron R. White:

And it wouldn’t have to be anything to do with the Constitution.

Michael E. Merrill:

We can win the case, but we cannot obtain the appropriate remedy, because the use of these dissenters’ fees has been expended on activities of the union which violate their First Amendment rights, so the remedy cannot–

Warren E. Burger:

Does it violate their rights in the sense that they pay for it but they are not permitted to take part?

Is that your thesis?

Michael E. Merrill:

–It is not.

That is not my thesis.

It is incidental that they were excluded from those things.

It is that they may not be forced to support them under any circumstances.

Byron R. White:

What if the statute didn’t contemplate your clients being charged for these kinds of things?

Why couldn’t they have a remedy for it?

The union extracts from them something that the statute does not authorize.

Now, what is… why do you need the help of the First Amendment?

Michael E. Merrill:

Because the use by the union inflicts more than a monetary injury.

There is the intangible injury to constitutional rights which cannot be unspent, if the Court will.

If the union extracts–

Byron R. White:

Well, what kind of a remedy do you want?

Michael E. Merrill:

–We want–

Byron R. White:

Do you want somebody to be whipped, or what?

0 [Generallaughter.]

Michael E. Merrill:

–Given the history of intransigence of this union and its approach to the plaintiff’s clients–

Byron R. White:

What do you want?

What kind of a remedy do you want?

Michael E. Merrill:

–We would like–

Byron R. White:

Let’s assume you get your money back because of a statutory violation.

Then what do you want?

Michael E. Merrill:

–We would like to have the Ninth Circuit’s delineation of chargeable activities set aside–

Byron R. White:

Well, you could do that under the statute if you are–

Michael E. Merrill:

–That is correct.

Byron R. White:

–Then what?

Michael E. Merrill:

The case is to be remanded to the trial court, and in the trial court BRAC should be required to prove for the first time its costs of collective bargaining with Western Airlines, and to prove those costs by clear and convincing evidence.

Byron R. White:

So what you want as some remedy for the future, some clear, sharp remedy for the future.

Michael E. Merrill:

We can only have a remedy for the future.

Of course, petitioners would be entitled to their damages for amounts paid in the past, in accordance with the proof to be shown at trial.

Byron R. White:

Well, I don’t know why you couldn’t get all that under the statute, if you are right in your construction of the statute.

Michael E. Merrill:

Well, in addition, we would request that this Court instruct the District Court to enter a judgment declaring that the union’s rebate procedure is constitutionally inadequate.

Sandra Day O’Connor:

Mr. Merrill, since the respondent union was decertified in 1980, why is the issue concerning the rebate plan not moot?

Michael E. Merrill:

The issue is assuredly not moot.

No proof was presented as to union expenditures after December 1st… I’m sorry, December 31st, 1977.

The union collected full dues following that date until late July, 1980, which was following the trial and following the judgment.

So there is unquestionably a period of time during which the only supposed remedy is the operation of the dues rebate procedure prescribed by the union, and I point out that it is a rebate procedure.

In the AFL-CIO’s brief, the terminology is used for the first time that it’s a dues deduction procedure.

It is not.

It is a rebate procedure.

Thurgood Marshall:

Well, don’t you have a statute of limitations problem?

Ten years?

Michael E. Merrill:

I believe that there is no statute of limitations problem at this time.

Thurgood Marshall:

Well, you said you wanted a rebate.

That means money, doesn’t it?

Michael E. Merrill:

The damages claim was brought virtually contemporaneously with the extraction of the funds.

Thurgood Marshall:

Back into 1970?

Michael E. Merrill:

It was brought… the cases were first filed in March, 1973.

Sandra Day O’Connor:

Well, it would be all right then.

Mr. Merrill, was there any issue in the District Court as to what portion of the publication expenses were chargeable to the dissenters?

Michael E. Merrill:

In the motion for summary judgment which led to the Paragraph 22 ruling, we pointed out that not all publication expenses were per se deemed to be non-chargeable.

But the union never attempted at any point to establish the amounts of money attributed to publications which were claimed to be collective bargaining expenditures.

That is the simple reason for the inclusion of publications, that and the fact that the trial court had an extensive stack of union publications to review, and they are indeed, as this Court may know from its review of the record, overwhelmingly political and ideological.

Byron R. White:

Mr. Merrill, was the union decertified entirely?

Michael E. Merrill:

It was.

Byron R. White:

It is now not the collective bargaining agency for any Western employees?

Michael E. Merrill:

I believe that to be true.

It is certainly not the collective bargaining representative for any of the craft or class which included petitioners.

That decertification occurred post-judgment, and of course the union could be recertified if it were to conduct another campaign and be voted in by a majority of the employees there.

If I may, Mr. Chief Justice, I will reserve the remainder of my time for rebuttal.

Warren E. Burger:

Very well.

Warren E. Burger:

Mr. Gold.

Laurence Stephen Gold:

May it please the Court, I think it would be helpful in light of the discussion to this point to state our understanding of the holdings of this Court on this issue to this point and our understanding of the issues that those holdings leave open.

The issue presented here has been before the Court in one form or another four times, in the Hansen case, the Street case, the Allen case, and the Abood case.

Those cases in our judgment establish one point in favor of the petitioners.

That point is the following, and I would like to quote the Court’s opinion in Abood at 431 U.S. 234.

“The appellants argue that they fall within the protection of certain cases because they have been prohibited not from actively associating, but rather from refusing to associate. “

“They specifically argued that they may constitutionally prevent the union spending of a part of their required service fees to contribute to political candidates and to express political views unrelated to its duties as exclusive bargaining representative. “

“We have concluded that this argument is a meritorious one. “

Thus, what has been established to the objecting employee’s or petitioner’s benefit to this point by the cases decided by this Court is that on statutory grounds under the Railway Labor Act and on constitutional grounds with regard to public employees, unions may not spend exacted fees for contributions to political candidates and to express political views unrelated to the union’s duties as exclusive bargaining representative.

Nothing more has been established in the cases to the petitioners’ benefit.

Of equal importance, it seems to us, the Hansen Court upheld the constitutionality of the union shop as such, and that holding was reaffirmed again in Street and in Allen and in Abood, and while Mr. Merrill says that the Ninth Circuit created a new standard for determining the scope of the union shop and of required payments to unions, again, I beg your indulgence to quote two short passages from Hansen which are set out at Pages 23 and 24 of our brief, the red brief, and appear in the original 351 U.S. at 234, I believe, and 238 1st.

The Court in the Hansen opinion said the following:

“The financial support required relates therefore to the work of the union in the realm of collective bargaining. “

That is exactly the phrase decried by Mr. Merrill as no standard at all.

And the Court continued,

“No more precise allocation of union overhead to individual members seems to us to be necessary. “

Then, on 238, the Court stated its holding–

“We hold that the requirement for financial support of the collective bargaining agency by all who receive the benefits of its work is within the power of Congress under the commerce clause and does not violate either the First or the Fith Amendment. “

Now, to this point, the Court has not stated what is encompassed in the area germane to collective bargaining or germane to the work of the union in the realm of collective bargaining, nor has it defined in particular terms what it is that is political activity or political or ideological activity unrelated to collective bargaining, and the phrase “unrelated to collective bargaining”, a conditioning of the protection accorded to petitioners herefore, would hardly have been necessary if every political and every ideological act of the union was unconstitutional if support under the union shop.

And this case, we believe, is a case which on certain basic categories of union expenses, particularly the expenses of national unions, does present the occasion for the Court to answer that question, and to draw or at least to begin the job of drawing that line.

In doing so, we would begin by stressing the following point.

Both of the courts below, the District Court and the Court of Appeals, concluded that the union for the years in question here, 1975 and forward, has met its obligations stated in Street and Allen and Abood to identify and to free objecting employees from any obligation to support the union’s political and ideological activity unrelated to collective bargaining.

The District Court’s findings to this effect are set out in our brief at Pages 9 to 10, again, the red brief, in full.

We would also call the Court’s attention to the joint appendix, Pages 345 to 358 and 421 to 459, which are the trial… which are portions of the trial proceedings and the union’s internal documents establishing the system of identification and of deduction.

It provides that all direct and indirect partisan political expenditures are not charged to an objecting employee.

All direct and indirect legislative lobbying expenditures are not charged to an objecting employee.

All dues to affiliated organizations, such as the AFL-CIO and the Canadian Labor Congress, are not charged to objecting employees, and all contributions to other organizations, such as the Red Cross, the NAACP, and other organizations in the examples given in the union’s internal documents are not charged to objecting employees, and the union has gone to the extent of requiring a detailed contemporaneous accounting of time and effort that goes into these activities.

We believe that the District Court was not only right in this, but that the union has gone well beyond the requirements of law in this area of defining political and ideological activity.

Warren E. Burger:

You haven’t mentioned the social particularly.

Laurence Stephen Gold:

No, Your Honor, because the union defends its right to charge for social activity as that term is used here.

Laurence Stephen Gold:

As the Court of Appeals points out, the social activities are activities either open to members or anyone else who comes in connection with meetings or open to the union’s employees, and are a normal expense of the same kind that any organization undertakes–

Warren E. Burger:

What about chartering a steamer on the Mississippi for $5,000 the week before the union elections?

Where do you think that falls?

Laurence Stephen Gold:

–If it were chartered by one candidate or the other, it would be–

Warren E. Burger:

No, the union, the union is paying the bill.

Laurence Stephen Gold:

–It would be… and the union paid the bill, it would be a violation of the Landrum-Griffin Act, but putting that aside, we believe first of all, and I will turn to this… I will turn to this by way of responding to your question, we believe first of all that the statute contemplates at least normal union expenditures for such social expenditures, and that as Justice Rehnquist said, we cannot understand an argument based on the Constitution insofar as limits on the statute are concerned.

Lewis F. Powell, Jr.:

Mr. Gold, my recollection is that Abood expressly left open the question as to social activities of the union.

Laurence Stephen Gold:

It did indeed, Your Honor.

And I believe that the question is entirely open.

We are arguing here that on analysis, as a matter of statutory interpretation, such expenditures are within the area permitted to be charged.

At least the kinds of expenditures which are on the record here, which as the Court of Appeals noted are de minimis and are part and parcel of the union’s activities either in connection with collective bargaining or union meetings and the like.

We simply don’t have any expenditures, we want to make it plain, of the kind that the Chief Justice was interrogating me about.

Lewis F. Powell, Jr.:

I suppose they are de minimis, but if you did have that boat chartered to go down the river, would non-union members be invited to go also?

Laurence Stephen Gold:

The union’s position in this case is that objecting employees cannot be charged for activities that are closed to them.

Lewis F. Powell, Jr.:

So they could go if they wished to?

Laurence Stephen Gold:

Yes.

Lewis F. Powell, Jr.:

They may not be welcome.

Laurence Stephen Gold:

No, they are welcome.

0 [Generallaughter.]

Byron R. White:

What about the quadrennial meeting?

Laurence Stephen Gold:

The quadrennial meeting, Justice White, was one of the expenses that the proponents of the union security provision said expressly would be covered by the union’s security provision.

The language of the statute was changed to assure–

Byron R. White:

That is one of the activities, though, that is not open to–

Laurence Stephen Gold:

–Well, it is not open to anyone who isn’t elected.

One point I ought to make in terms of my response to that question is that under the statute that Congress wrote, no employee can both be barred from the union under equal and objective standards of admission and charged under the union shop, so what you have is individuals who make a judgment that they do not want to participate in the union.

What Congress was doing in the union shop provision was taking away the economic incentive to opt out in that way.

Congress was saying, if the union will permit you in, and if the union represents you, then you have to bear your proportionate share of the costs, and Congress added a proviso that said, if the union won’t let you in in the first place, then you can’t be charged.

Byron R. White:

–Well, non-members can’t vote at this point.

Laurence Stephen Gold:

No, but they can be members.

The choice–

Byron R. White:

They can be members, but if they aren’t members, they nevertheless can be charged–

Laurence Stephen Gold:

–That’s–

Byron R. White:

–even though they can’t take part in it.

Laurence Stephen Gold:

–Even though they have made the choice not to–

Byron R. White:

So it is different from the river boat.

This is one activity that they can be charged for but they cannot participate–

Laurence Stephen Gold:

–That’s correct.

–They are not even eligible for the election.

Laurence Stephen Gold:

They are not eligible to engage in the political life of the union if they choose–

Byron R. White:

So in general you think that employees can be charged the expenses that a union finds necessary for it to stay in existence as a union, wholly aside from whether they do any collective bargaining.

Laurence Stephen Gold:

–No, the–

Byron R. White:

I mean, if you decide whether these expenses are remotely connected to collective bargaining?

Laurence Stephen Gold:

–No, I–

Byron R. White:

Other than through the fact that the union has to spend this kind of money to even stay in existence.

Laurence Stephen Gold:

–Well, Congress took a very practical judgment.

William J. Brennan, Jr.:

Well, Mr. Gold, wasn’t that all wrapped up in the so-called free rider concept?

Laurence Stephen Gold:

Yes–

William J. Brennan, Jr.:

What are the limitations on that?

Laurence Stephen Gold:

–To us, the limitations on the free rider concept are the limitations the court stated in Hansen, and stated again in Street, and stated again in Allen and Abood.

The record, and I don’t want to say who has to establish it, because that’s a separate question of by what standard, the record has to show that the union activities are germane to its role as an exclusive bargaining representative, and we have on certain items, we have Congress’s judgment on what Congress believed was germane or not, and in one of those specific enlightenments, Congress… it is plain from the legislative history that Congress believed that the expenses of a union to govern itself, a union which has been selected as a collective bargaining representative to govern itself, and to continue its activities, is an expense that would be covered by the union shop provision.

Byron R. White:

So how often does a union have a meeting?

I suppose it differs.

Laurence Stephen Gold:

Different unions–

Byron R. White:

They may have them every month, and the expenses of doing that… and I suppose unions pay the expenses of having their own elections.

Laurence Stephen Gold:

–Yes, Your–

Byron R. White:

And all of those expenses you say Congress specifically anticipated could be allocated in part to non-members.

Laurence Stephen Gold:

–That’s right, and Congress made that judgment, as Justice Brennan has stated.

Congress was seeking to eliminate the problem of the free rider, and certain representations were made to Congress about what the nature of that problem was.

The nature of the problem was that individuals at that point could choose not to become members, and then not to pay the costs of the union.

The union, on the other hand, could not discriminate against those individuals in employment, could not get preferences by reason of other Congressional enactments, could not have those individuals removed from the job, nor could the union negotiate terms and conditions of employment which were less beneficial to those employees.

Byron R. White:

What about death benefits?

Laurence Stephen Gold:

Death benefits are a substitute for and a part of the collective bargaining system.

Some unions go to the employer and they sit down at the collective bargaining table and they say, we want you to provide each individual a $200 benefit or $500 mortuary benefit to help defray the costs of a funeral.

Other unions have historically bargained for an extra two or three cents in the individual’s pocket, and also provided out of dues that death benefit.

Byron R. White:

So these death benefits apply to everyone, not just union members.

Laurence Stephen Gold:

They have to, we believe, to be chargeable to the objecting employee.

In other words, the political life of the union, someone either is in or he’s out, but for–

Sandra Day O’Connor:

Why isn’t that a discrete benefit, that if somebody who is not a union member objects to being covered could be left out and not charged for it?

It just doesn’t make sense.

Laurence Stephen Gold:

–It is discrete in the sense that you can, and I would say in contrast to governance expenses, to expenses of internal communication and so on, imagine a union which is a functioning national union and that meets Congress’s purpose in enacting the union shop, which was to provide for self-adjustment of disputes between two well organized forces.

You can imagine a union which did not provide death benefits, and that would be able to function as a union in that system.

On the other hand, we do know again from the give and take in the legislative process that Congress was specifically told that certain unions provide a death benefit system rather than negotiating for the death benefits directly with the employer, and that Congress indicated an intent to include death benefits.

Finally, it seems–

Sandra Day O’Connor:

Well, certainly not by any very clear language, Mr. Gold.

Laurence Stephen Gold:

–Justice O’Connor, in those terms, the language is extraordinarily clear, because it requires the payment of dues by everyone, whether or not they are a member, and it was against a background where Congress was very fully advised of how unions were going to use that money.

So, if this were not a case which arises against the background it does, and the only issue this morning was who wins under the clear language, I think we would be in a very strong position, but we do see this case as one where the indications are that Congress intended to include death benefits, and that there is sound reason for believing that the provision of death benefits is part of the union’s activity in dealing with the wages, hours, and terms and conditions of employment of workers.

It is one of several ways it could be done, and we believe that it is in that sense germane to collective bargaining.

Secondly, here, as opposed to the situation where you are talking about union political activity, there simply does not seem to us to be any constitutional counterweight on the other side.

We find ourselves with one strong point for us and one point which is weaker.

One, in no sense is this integral to collective bargaining as internal governance and communication and organize.

Secondly, it nonetheless seems germane to collective bargaining.

The legislative history indicates that Congress intended it to be included in the union shop obligation, and the petitioners are bereft of a constitutional argument in this regard in our judgment.

So–

Byron R. White:

Well, Mr. Gold, is there some item that you can imagine other than the direct support of candidates or paying for literature or other kinds of support for purely political activity?

Is there any kind of a union expenditure that you would say couldn’t be charged to non-members?

Laurence Stephen Gold:

–Well, we say–

Byron R. White:

Can you think of one on your position, or is it just that bright line, politics… if it is politics, no; anything else, yes?

Laurence Stephen Gold:

–No, there is a… we recognize the cases to this point as stating a second limitation.

There’s politics and there’s also ideological activity unrelated to collective bargaining.

Byron R. White:

Name one.

Laurence Stephen Gold:

Forwarding a program in favor of the Equal Rights Amendment.

William H. Rehnquist:

Get out the vote drive.

Laurence Stephen Gold:

Activities of that kind.

And unions do engage in such activities, and as we understand the Court’s cases to this point, it is already established that we can charge for that.

Byron R. White:

What if the union runs a… likes to make money on the side, so it has got some money, and it goes into the real estate business, or it goes into the insurance business, and it needs to… and it uses the dues in part to pay the expenses of a losing business venture?

Laurence Stephen Gold:

I would think that is not germane to collective bargaining.

Byron R. White:

Yes.

So it is just not politics.

Laurence Stephen Gold:

Well, it is… we know that it is politics, and we know that it is ideological activity unrelated.

We are not contesting that.

With… Aside from that, what we are arguing is that the test is germane to collective bargaining, and not everything unions do are germane to collective bargaining.

William J. Brennan, Jr.:

For example, Mr. Gold, I take it the purchase of an automobile with a local’s funds for the use by the president and union business would be germane, would it?

Suppose it was a Rolls Royce.

Laurence Stephen Gold:

I… One of the issues before Congress by… created by the opponents was that there ought to be a system of limiting union expenditures within the proper area.

Congress didn’t agree with that.

After all, unions have to go and get dues from their members.

Very few members are willing to pay for Rolls Royces, and in that sense it seems to me that Congress made both a proper–

William J. Brennan, Jr.:

What if it were bought over the objection of a single non-union member, and it was a Rolls Royce?

You say he should lose?

Laurence Stephen Gold:

–I am forced to say that under the statute he loses, and that he doesn’t have any possible constitutional argument.

Now, whether Congress was wise in that regard–

John Paul Stevens:

Mr. Gold, wouldn’t he at least have the same argument that a member might have to extravagant use of union funds to take river boat–

Laurence Stephen Gold:

–Oh, yes, there’s Title 5 of the Landrum-Griffin Act, which provides that union officers must hold union money as a fiduciary, and–

John Paul Stevens:

–So he would be a fiduciary in the same sense that a member would in that kind of challenge?

Laurence Stephen Gold:

–Congress didn’t write the statute to give people who choose not to be members that cause of action, but the cause of action is there if Justice Brennan’s example is changed in one respect, that the union does it over the objection of one union member.

Congress has provided a cause of action.

Congress could provide a cause of action to everyone who is represented if Congress chooses to do so.

John Paul Stevens:

Well, you acknowledge that a non-member would have a cause of action if they gave money to a political party?

Laurence Stephen Gold:

Yes.

John Paul Stevens:

Why wouldn’t they have precisely the same cause of action for wasting union funds?

Laurence Stephen Gold:

They could in theory, and Congress could provide it to them, but my argument, Justice Stevens, is that the statute doesn’t give it to them, and Congress is not constitutionally compelled to give it to them.

Congress to this point has given two different remedies, depending on membership status.

I would like to–

Lewis F. Powell, Jr.:

Mr. Gold, may I interrupt?

Laurence Stephen Gold:

–Yes.

Lewis F. Powell, Jr.:

With respect to the publications of the union, am I right that the union does not charge for the contents of publications that relate to political activities?

Laurence Stephen Gold:

That is correct, Your Honor.

Lewis F. Powell, Jr.:

I think your brief states that.

Laurence Stephen Gold:

That is correct, Your Honor.

While–

Lewis F. Powell, Jr.:

How does the union go about making the accounting judgment as to what the cost of political activities of–

Laurence Stephen Gold:

–By the process of counting lines and dividing the cost of the publication, and if–

Lewis F. Powell, Jr.:

–It is a mechanical process?

Laurence Stephen Gold:

–Yes.

If the article is an article to get out and vote for the union’s endorsed candidate, the union counts the lines of… devoted to that versus the lines in the total issue and divides the total cost.

That is what this union does and what the lower courts approved.

Lewis F. Powell, Jr.:

A minor question, but how do you deal with advertisements, just… where there are no lines?

Laurence Stephen Gold:

I am not positive what is true here, but most union publications either do not accept advertisements or have a rule like Layman versus Shaker Heights, and they don’t take ideological advertisements, one or the other.

In whatever time remains to me, I do want to stress the point that what Congress was doing in adopting the union shop was not, as Mr. Merrill says, providing a system whereby the unions would provide a certain narrow service and then bill people in the union unit.

Rather, Congress understood, and everything in the legislative history shows that Congress understood that the free rider problem was the refusal of objecting members after the majority had selected a representative to support, in George Harrison’s words, the primary union spokesman, the collective bargaining agency from whose existence and activities they derive great benefit.

Byron R. White:

Mr. Gold, let me ask you one… Do you think there is a rebate issue left in this case?

Laurence Stephen Gold:

No, Your Honor.

We argue that there is no rebate issue left, not for the reason that Justice O’Connor gave, which I must say I just hadn’t thought of, but because the District Court in this case didn’t simply approve the union’s rebate plan.

The District Court required that based on Year 1, the union deduct–

Byron R. White:

It’s a deduction, yes.

Laurence Stephen Gold:

–deduct from the next year–

Byron R. White:

Probably inexact.

Laurence Stephen Gold:

–It has to be inexact, because one can never foretell the future, but the point is that the union cannot simply take the money and use it.

The union must under the District Court’s order after it figures, say, the 1975 rebate, which was 4.68 percent, must deduct for 1976 4.68 and then make up any difference.

Byron R. White:

Well, the union didn’t… Assume you lose on these items.

Byron R. White:

You don’t object independently to the District Court’s way of solving the problem?

Laurence Stephen Gold:

No, Your Honor, we do not, and we did not appeal from that part of the order.

We do not object.

Sandra Day O’Connor:

Well, Mr. Gold, the Court of Appeals said that judgment would be entered in favor of respondents.

Now, did that vacate the District Court modification of the rebate plan?

Laurence Stephen Gold:

No.

We didn’t appeal from that aspect.

The District Court… In other words, the District Court ruled that insofar as we had provided an internal system for segregating, allocating, and accounting for political and ideological activities, we had met our obligations, and then added this additional condition.

We didn’t appeal from that.

And we accept that part of the District Court’s opinion, and we told the Court of Appeals we didn’t think that was in the case.

We are saying that here, and we are ready to abide by that, because we think what the District Court did in that regard was correct.

Warren E. Burger:

Mr. Merrill, do you have anything further?

You have seven minutes remaining.

Michael E. Merrill:

May it please the Court, I would point out with great emphasis that Congress was not importuned by the unions because… to grant a privilege to obtain moneys from dissenting employees because of its fraternal activities.

It complained of free riders in the collective bargaining sense.

It did not complain that they were free riders because of its fraternal organization.

And the authority for the petitioners’ point of view is contained in the Street decision at Page 767, when it is stated that it is abundantly clear that Congress did not abandon the policy of full freedom of choice embodied in the 1934 Act, but rather made inroads on it for the limited purpose of eliminating the problems caused by the free rider.

Now, it is without question, we submit, that Congress could not command private citizens to belong to a privately administered welfare program, which is what the BRAC death benefits program is described as by BRAC officers, a welfare program.

Furthermore, we can establish that the union was a free rider on the petitioners in this case, not the converse.

The petitioners in the Ellis case were charged 100 percent of voluntary dues, and were told they were ineligible for death benefits, ineligible for publications, ineligible for the collective bargaining activities for which payment was extracted and for which payment is still sought.

So, if there is an equity at work in the–

John Paul Stevens:

Mr. Merrill, let me just be sure I understand.

Do you now contend that the death benefit and the publications are administered in a discriminatory fashion?

Michael E. Merrill:

–Not presently.

It was following our filing of the motion for summary judgment that the union modified its policy.

However, it is questionable as to what the modification consisted of, because the 1975 quadrennial convention that followed this particular issue having come up in the trial court again specifically raised agency fee payer eligibility for death benefit, and they were again found to be ineligible.

It was a contrary–

John Paul Stevens:

But you are not now challenging it?

I mean, you say maybe you should have challenged it, is what I gather you are saying.

Michael E. Merrill:

–Well, it truly wasn’t important, because we contend that–

John Paul Stevens:

I mean, it seems to me it is a very great difference between an issue as to whether death benefits can be charged when they are administered in a non-discriminatory neutral fashion, and all you have to do is be an employee on the one hand, whereas one that said you have to be a union member would raise quite a different question.

Michael E. Merrill:

–It is our primary position that the death benefits program is not chargeable.

Incidentally, we have pointed out–

Even if neutral?

Michael E. Merrill:

–That’s correct.

Byron R. White:

And it is neutral, isn’t it?

Michael E. Merrill:

It is presently neutral.

Yes.

Michael E. Merrill:

And I might point out, Justice Stevens, in response to your question about waste, as to whether or not a petitioner could file a claim under Title 5 of Landrum-Griffin, Mr. Gold misinterpreted the statute.

Non-members of a labor organization have no standing to file such a claim.

Now–

John Paul Stevens:

I think that’s exactly what he said.

Michael E. Merrill:

–Then I misunderstood him.

No one has commented at any length about organizing, but we see that as one of the most fundamental injuries worked upon plaintiffs as having had their wages extracted for use in that totally ideological program of the union.

Here we have the marketing of the union as a fraternal organization and as a collective bargaining representative when the petitioners don’t want to be represented by this union.

Why ought they to pay for this union to foist itself off on other groups of employees?

The harder question comes when we look at the full gamut of organizing expenses, rating expenses, which are present in the record in this case, and the Constitution say that petitioners who do not wish to be represented by this union ought to be made to pay for this union to weaken and then oust another union, which was attempted in this case, and the amounts of money are most significant.

Thurgood Marshall:

How does that hurt the individual that puts the money up?

Michael E. Merrill:

Well, it takes his funds and expends them–

Thurgood Marshall:

It is paying for his political beliefs, doesn’t it?

Michael E. Merrill:

–Well, it certainly–

Thurgood Marshall:

Isn’t that about all it does?

Michael E. Merrill:

–It is a sweeping ideological intrusion.

If he does not believe in being represented by BRAC, it can scarcely be imagined that he ought to pay for them to force themselves on other groups of employees, which is what organizing has accomplished.

Thurgood Marshall:

And that hurts him?

Michael E. Merrill:

It hurts him very deeply, as the records in this case–

Thurgood Marshall:

It hurts him–

Michael E. Merrill:

–point out.

It hurts him in the pocket.

Over $100,000 was spent in three years, and they did not produce one new member by the union’s own admission.

Michael E. Merrill:

Now, I might point out that contrary to what–

Byron R. White:

–Well, it would be even worse if they had, I gather.

0 [Generallaughter.]

From your point of view.

Michael E. Merrill:

–The point is–

0 [Generallaughter.]

–that he is swept up financially and ideologically if he is forced to pay for union organizing activity, whether it be a rate or straight out organizing.

Thank you very much.

Warren E. Burger:

Thank you gentlemen.

The case is submitted.