Labor Board Bars Unions from Using Non-Member Funds for Lobbying

  • Mar 13, 2019
  • NLRB
  • Zachary A. Alter

The National Labor Relations Board (NLRB) has just decided in United Nurses & Allied Professionals (Kent Hospital) and Jeanette Geary that unions may not use non-member funds for political lobbying efforts. This will likely impact the ability of certain unions to wield political influence.

As a matter of law, labor unions may not require employees to become dues-paying members.  Moreover, they can only collect fees from non-members for the purpose of covering the costs of representing them and bargaining on their behalf.

Background

In 2009, the United Nurses & Allied Professional (UNAP) union used money from its general operating fund to pay for UNAP’s political lobbying. Specifically, UNAP’s lobbying efforts related to seven bills in Vermont and Rhode Island. UNAP deemed these lobbying expenses “representational” and charged non-members for such expenses.

Later in 2009, Jeanette Geary (and several other employees) resigned from the United Nurses & Allied Professional (UNAP) union.  UNAP issued Geary a reduced fee and provided Geary a chart listing chargeable and non-chargeable amounts. UNAP’s lobbying activities were included in the chargeable amounts. Additionally, UNAP told Geary that the expenses were verified by a CPA, but UNAP did not provide verification of the CPA audit. Geary filed an unfair labor practice charge claiming UNAP violated the National Labor Relations Act by (1) charging Geary for UNAP’s lobbying expenses; and (2) failing to provide audit verification.

Lobbying Expenses

The NLRB, citing several U.S. Supreme Court cases, ruled that Section 8(a)(3) of the National Labor Relations Act (NLRA) “authorizes the exaction of only those fees and dues necessary to performing the duties of an exclusive representative of the employees in dealing with the employer on labor management issues.” The NLRB then narrowly defined which expenses may be deemed representational, explaining that lobbying is not representational just because it relates to matters that might be bargained about.  For an activity to be chargeable to non-members, it must be “necessary” to performance of the union’s statutory collective-bargaining obligation, and lobbying does not meet that test.

Audit Verification

The NLRB also concluded that UNAP violated the NLRA by failing to provide audit verification. Unions have a general duty to provide non-members enough information to appropriately object to dues charged to non-members. While courts differ widely in what information unions must provide, the NLRB ruled that a union must “provide audit verification to adequately assure the reliability of the financial information provided to objectors.” Under this test, because UNAP stated—but did not provide proof—that union expenses were verified by a CPA, the NLRB held UNAP violated the law.

Bottom Line

For years, unions have relied on money from both members and non-members to fund lobbying activities. This decision may work to curtail such activities and to require unions to go to greater lengths to prove audit verification.