The panel took a critical stance on the NLRB's March 2019 ruling that unions, including the United Nurses and Allied Professionals union at the center of the case, can't charge lobbying expenses to the so-called Beck objectors — workers in a unionized setting who opt not to join the union.
The union argues that the U.S. Supreme Court has held that lobbying expenses for private-sector unions are chargeable to Beck objectors if the lobbying is germane to its collective bargaining.
Circuit Judge William J. Kayatta Jr. offered a hypothetical situation to NLRB attorney Milakshmi V. Rajapakse: A hospital and a nurses union are negotiating a new contract, and the union demands the ability for nurses over 60 years old to decline to work with coronavirus patients because of the higher mortality rates for older people.
The hospital says no, and then tries to get the state legislature to pass a bill mandating that all nurses must work with coronavirus patients, Judge Kayatta said. How could the union recover its expenses if it chose to lobby to kill that bill?
"Are you saying in that situation, the nurses union would not be able to go up and parry the lobbying activity?" Judge Kayatta asked.
Rajapakse responded that the lobbying expenses could not be charged to the dues of the nonmember objector.
"Are you saying it is not germane to collective bargaining activity?" Kayatta asked.
Rajapakse said, "The point is, simply, it may be the union's view that it's in the best interest of employees to lobby for this legislation, but there may be objecting employees in the unit who don't want to pay for that because they don't agree."
Circuit Judge Bruce M. Selya interjected: "If they don't have to pay for it — if it's not germane — you're recreating the free rider problem. … You've made them free riders, and that's the basic evil that the rule is trying to prohibit."
Rajapakse told the court that lobbying falls under the category of something unions do for the benefit of all employees. Still, it's not a normal part of the representation of workers, she said.
"Collective bargaining is fundamentally dealing with the employer," she said, allowing that certain social activities and holding conventions to elect officers are sufficiently related to collective bargaining and can be charged to objectors. "It's not dealing with a third party, the government, in legislation."
The case in front of the First Circuit started in 2009 when hospital worker Jeanette Geary filed an unfair labor practice charge with the NLRB after invoking her rights to decline paying fees covering her union's political work.
The NLRB Office of the General Counsel took her case, and an administrative law judge ruled in 2011 that the union fairly used objectors' fees for its lobbying work on three bills, but illegally used her fees to fund political work related to four other bills.
The board's decision in March 2019 overturned the administrative law judge. It said that under the U.S. Supreme Court's 1988 ruling in Communications Workers of America v. Beck, unions could not use dues from non-members for anything unrelated to a union's core representational duties of collective bargaining, contract administration and grievance adjustment.
Attorney Christopher Callaci, of the United Nurses & Allied Professionals union, said Supreme Court precedent has always held that charging lobbying expenses to union objectors must be considered on a case-by-case basis. The agency's blanket rule runs afoul of that, Callaci said.
Judge Kayatta asked, "Why can't the NLRB say we need a bright-line test here … rather than getting into potential litigation about those unusual cases where it's arguable it might have something to do with bargaining?"
Callaci responded that some of the union's lobbying involved campaigns that directly linked to collective bargaining agreements and should be chargeable to objectors, including one contract that required a hospital to pay more in wages to nurses if a particular bill passed.
"If that is the determining factor, that opens up a loophole big enough to drive a Mack truck through," Judge Selya responded. "The non-member is powerless to influence what the union and employer represent in the collective bargaining agreement."
Kayatta asked Callaci whether a union could charge non-members for lobbying to raise the minimum wage, which arguably could help boost members' pay. He said he couldn't say whether it would pass the same test he advocates for his union.
Judge Selya turned to Rajapakse with another hypothetical: A nurses union seeks to bargain directly with a manufacturer of surgical masks because of concerns that the hospital is providing too little equipment to its members.
"Wouldn't those expenses — even though they involved the union talking with mask manufacturers, not with the employer — wouldn't they be a chargeable offense?" he asked.
Rajapakse answered, "I couldn't say for certain, your honor."
Judge Selya said he was concerned with the agency's view because "there may be some lobbying activities that are so directly related to the interest of members, the same interests that are involved in collective bargaining activities."
Circuit Judges William J. Kayatta Jr. and Bruce M. Selya retired U.S. Supreme Court Justice David Souter, sitting by designation, sat on the panel for the First Circuit.
United Nurses & Allied Professionals is represented in-house by Christopher Callaci.
The NLRB is represented in-house by Milakshmi V. Rajapakse.
Geary is represented by Glenn M. Taubman of the National Right to Work Legal Defense Foundation.
The cases are United Nurses & Allied Professionals (Kent Hospital) v. National Labor Relations Board, case numbers 19-1490 and 19-1602, in the U.S. Court of Appeals for the First Circuit.
--Additional reporting by Matthew Santoni and Adam Lidgett. Editing by Peter Rozovsky.
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