Appeal from a judgment of the United States District Court for the Western District of New York (Telesca, J.), dismissing claims brought by public-sector employees who, as nonmembers of the union that represents them for collective-bargaining purposes, challenge organizing fees assessed by the union. We conclude that although the union's fee disclosure procedures meet constitutional standards, charging these nonmembers for the organizing expenses at issue violates their First Amendment rights. AFFIRMED IN PART, REVERSED IN PART. Chief Judge Jacobs concurs in the judgment and in the opinion of the Court and files a separate concurring opinion.
The opinion of the court was delivered by: Barringto N D. Par, Ker Circuit Judge
Before: JACOBS, MCLAUGHLIN, B.D. PARKER, Circuit Judges.
Plaintiffs-Appellants David Scheffer, Mary Bergevin, Joseph Stephany, and Laura Swartzenberg are probation officers employed by Monroe County, New York. They work within a collective-bargaining unit represented by the Civil Service Employees Association, Inc. ("CSEA" or "the union"), Local 1000, AFSCME, AFL-CIO. Although they are not union members, they are nonetheless required by New York law to pay a fee to the union for certain union activities that benefit them. The primary issues on this appeal are whether the First Amendment permits charging them their proportionate share of the costs associated with some of the union's organizing activities, and whether CSEA's disclosure of how its expenses are allocated is constitutionally adequate.
The United States District Court for the Western District of New York (Telesca, J.) granted summary judgment to CSEA. Scheffer v. Civil Serv. Employees Ass'n, Local 828, No. 05-cv-6700, 2007 WL 2126286 (W.D.N.Y. July 25, 2007). The court concluded that the organizing activities in question were necessary to preserve and enhance the wages and benefits of existing union- represented employees, and were therefore sufficiently related to collective bargaining to allow the union to charge nonmember employees for them. The district court also concluded that the union's method of calculating and reporting the expenses of local affiliates met constitutional standards. We agree with the district court that the fee calculation and disclosure procedures are constitutional, but we hold that under the First Amendment, plaintiffs-appellants cannot be charged for the organizing expenses involving employees who perform entirely different types of work.
CSEA negotiates with approximately 900 employers across New York State on behalf of over 200,000 employees, mostly state and local government employees. The Monroe County unit is a subdivision of Local 828, which is one of roughly 375 CSEA "locals" in the state. New York has recognized CSEA as the exclusive bargaining representative for employees within the Monroe unit, which includes the appellants. Id. at *1-*2.
Under New York law, when a public employer has certified an exclusive bargaining representative to negotiate on behalf of employees, those employees pay dues to the union through automatic deductions from their paychecks. N.Y. Civ. Serv. Law § 208(1). Employees are not required to join the union. However, under both federal law and New York, a union certified as an exclusive bargaining agent is required to fairly represent all employees in the bargaining unit whether or not they are dues-paying members. Abood v. Detroit Bd. of Educ., 431 U.S. 209, 224 (1977); Civil Serv. Bar Ass'n v. City of N.Y., 474 N.E.2d 587, 590-91 (N.Y. 1984). In light of this responsibility, New York (like many other states) allows public sector unions to collect by automatic deductions an "agency shop fee" in lieu of dues. The New York statute also provides, however, that the union must "refund to any employee demanding the return any part of an agency shop fee deduction which represents the employee's pro rata share of expenditures by the organization in aid of activities or causes of a political or ideological nature only incidentally related to terms and conditions of employment." N.Y. Civ. Serv. Law § 208(3)(a).*fn1 Meanwhile, federal constitutional include the requirement that nonmembers be given notice of the basis for the union's calculation of which expenditures are "chargeable" and "nonchargeable" to objectors, along with the opportunity to register an objection to paying the chargeable portion of the fee. Chi. Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292, 306-07 (1986).
In June 2005, appellants resigned their union membership and objected to paying for various union activities. In so doing, they became part of the roughly nine percent of CSEA employees (approximately 18,700 employees statewide) who are not members of the union but who nonetheless are obligated to pay agency shop fees. The union thereafter sent them annual Agency Shop Notices outlining the union's chargeable and nonchargeable expenses, and quarterly advance rebate checks for the nonchargeable portions of the shop fees.
The notices for 2005-06 and 2006-07 calculated CSEA's chargeable expenses as 78% and 74%, respectively, of full union dues. The notices also indicated that 95% of "organizing" costs were chargeable. The notices described two forms of organizing: (1) organizing within the bargaining unit (e.g., mailing membership brochures to unit members), and (2) organizing non-union workers. As to the second category,*fn2 CSEA's organizing efforts focus on organizing low-wage private-sector employees who perform work similar to that performed by CSEA-represented employees in the developmental disability, food service, and courier industries. CSEA considers these organizing efforts essential to deterring public-sector employers from privatizing or contracting out jobs traditionally held by bargaining-unit members, and to prevent the existence of nonunion competition from depressing wages.
The notices also included an audit of CSEA's percentage allocation between chargeable and nonchargeable expenses. The audit notices reveal that approximately 16% of CSEA's annual budget is spent through distribution of funds to locals and regions, and that CSEA applied to that 16% the same percentage rate of chargeable versus nonchargeable expenses applicable to CSEA's other expenses. CSEA defends this allocation on the basis of a presumption that the local affiliates' percentage of chargeable expenses cannot have been lower than the central union's because a high percentage of local affiliates' expenses is chargeable as compared with the expenses of statewide affiliates.
The appellants sued in district court challenging these arrangements and making two principal arguments: (1) compelling them to pay fees to support organizing activities impermissibly burdened their First Amendment rights; and (2) CSEA's use of the local union presumption (in lieu of independently audited spending reports for each local CSEA affiliate) constituted constitutionally inadequate disclosure.
Appellants offered three major contentions why, under the First Amendment, all organizing costs are categorically nonchargeable to nonmember employees. They first claimed that, like political contributions that strengthen a public-sector union, organizing is too removed from a union's core collective bargaining activities to be considered a part of that function. Secondly, they contended that the connection between organizing and collective bargaining is too tenuous to support the inference that one who does not pay for organizing is a free-rider on the union's efforts to administer the collective agreement. Finally, they contended that because organizing is, at its core, the advocacy of the fundamental ideological commitment to unionism -- i.e., because organizing is the marketing of the union -- charging nonmembers for organizing expenses is an unwarranted burden on First Amendment freedoms. CSEA, in response, took the position that its organizing efforts were merely a natural outgrowth of its chargeable collective bargaining work because it targeted employees whom it needed to unionize in order to deter public-sector employers from privatizing jobs held by bargaining-unit members and from decreasing CSEA-represented employees' wages.
Both parties moved for summary judgment. Applying the test set forth in Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507 (1991), the district court concluded that the union's organizing activities did not violate the First Amendment because those organizing activities were "germane to protecting, through collective bargaining, the wages, benefits and working conditions of bargaining unit members." Scheffer, No. 05-cv-6700, 2007 WL 2126286, at *13. The court also held that use of the local union presumption met First Amendment standards. It reasoned that absolute precision in calculating nonmember fees was not required; that the presumption employed by CSEA appeared, if anything, to undercharge nonmember employees; and that CSEA had adequate safeguards to ensure that local affiliates' percentages of nonchargeable expenses did not exceed those of statewide affiliates. Id. at *15. The district court thus granted summary judgment for CSEA. This appeal followed.*fn3
We review a grant of summary judgment de novo and construe the evidence in the light most favorable to the nonmoving party. Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir. 1999). We will affirm if the record indicates that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Based on the substantial record before us, we find no issues of material fact that require further development, and conclude that (1) plaintiffs-appellants are entitled to summary judgment with respect to their claim that they cannot be charged for the union's costs of organizing private-sector workers in the developmental ...