Union Can Use Dues for Politics: Court

Published July 1, 2006

A federal court decision handed down in early May threatens only a limited scope of paycheck protection legislation, a labor law analyst said. The decision upset a Utah state law restricting union member payroll deductions of money to be used for political purposes. The Utah attorney general filed an appeal on June 1.

Michael Reitz, director of the Evergreen Freedom Foundation’s Labor Policy Center, said while U.S. District Court Judge Tena Campbell’s May 3 ruling has disappointed reformers, its effects have been overstated.

In the ruling, the Utah Education Association (UEA) won its claim against the state to overturn the portion of the five-year-old Voluntary Contributions Act (VCA) that prohibited local governments from making political payroll deductions.

Separating Monies

The decision did not affect the VCA requirements that unions keep their political funds in a separate political committee and get a member’s permission before collecting dues for political activities.

“States could still pass laws that require individual union members to make voluntary authorizations before having political money taken out,” Reitz said.

In 2001, then-state Rep. Chad Bennion (R-Murray) sponsored the VCA as an attempt to keep state and local government agencies out of the business of setting employees’ money aside to be used by unions for partisan political action.

Refusing to Contribute

Reitz said when the VCA was enacted “over 90 percent of Utah Education Association members refused to contribute a single dollar for politics.” The Salt Lake Tribune reported on May 4 that the fund balance of UEA’s political action committee (PAC) declined from $640,000 in 2001 to less than $300,000 in 2005.

UEA and its labor allies challenged the law in state courts. To settle the complaint, legislative amendments clarified that unions could communicate to members about politics and could use general dues funds to administer the PACs and to support nonpartisan “ballot issues.”

In 2004, union officials challenged the modified legislation in federal court. They said the action was taken in defense against an active “anti-public education” legislative agenda.

“Many legislators were angry UEA had effectively blocked their efforts to ‘privatize’ public education through a system of vouchers and tax credits,” union officials wrote in an undated public memorandum. “They contemplated silencing UEA by cutting off members’ voluntary contributions to the UEA PAC by taking away payroll deductions.”

Competing Arguments

Assistant Utah Attorney General Thomas Roberts said the state’s defense of the VCA centered on the argument that the law remedied the problem of union attempts “to utilize the property of public subdivisions for private purposes.”

Campbell dismissed this argument, writing in her ruling, “the State offers no evidence to support its position that public employers have given preferential treatment to labor organizations.”

Campbell rejected the attorney general’s argument that school districts operate under state legislative control and therefore are not subject to “strict scrutiny” in free speech cases. She also ruled the legislature had no reason to outlaw the practice because “the State incurs no expense as a result of the payroll deductions.”

Picking and Choosing Recipients

UEA general counsel Michael McCoy lauded the decision. He said the VCA’s prohibition of political payroll deductions unfairly targeted the teachers union and that other states should avoid the same course.

“The decision means legislatures cannot pick and choose who will receive state-sponsored benefits and who will not,” McCoy said. “The state cannot discriminate.”

Reitz disagreed.

“The Voluntary Contributions Act leveled the playing field by requiring unions to collect political contributions one person at a time just like any other entity,” Reitz said. “Apparently, the Utah Education Association believes the state should do its dirty work collecting political funds.”

Choosing to Appeal

On June 1, Utah Attorney General Mark Shurtleff (R) appealed the district court’s ruling to the United States 10th Circuit Court of Appeals. Roberts said the attorney general’s office weighed the effects of setting precedent and its chances of success before meeting the June 3 deadline.

Defending the VCA has cost the state of Utah more than $1 million. UEA officials described the funds spent in the state-level court challenge as “money taken from books, supplies, and other schools expenses.”

Leaders of the teachers union expressed confidence they would have continued legal success.

“I suspect we will prevail at the 10th Circuit Court of Appeals,” McCoy said.

Heading to Supreme Court?

Shurtleff has followed a parallel case in a neighboring state. In November 2005, a federal judge struck down the portion of Idaho’s 2003 Voluntary Contributions Act that prohibited local governments from collecting political payroll deductions.

The successful complaint was brought by several Idaho labor unions and has been appealed to the 9th U.S. Circuit Court of Appeals.

Reitz said different appellate rulings on the parallel cases could trigger the intervention of the United States Supreme Court to settle the paycheck protection question.

In spite of the twin defeats at the circuit court level, Reitz said he believes the states have strong cases to win on appeal. Numerous federal precedents say unions have no rights to the public payroll system, he said.

Ben DeGrow ([email protected]) is a policy analyst for the Independence Institute, a free market think tank in Golden, Colorado.