Agency Shop

An agency shop is defined as a place of employment where workers are required to pay union dues regardless of whether they are union members. In the school environment, a union and a school board enter into agency shop agreements when employees who decline union membership but are still part of collective bargaining units are required to pay union “service fees.” The entry reviews court rulings on when such fees may be required and for what they may be used.

In the 1977 case of Abood v. Detroit Board of Education, the U.S. Supreme Court upheld the legal permissibility of agency shop service fees for nonunion employees. The Court held that agency shop fees did not violate the First Amendment rights of nonunion employees. In Abood, the Court ruled that a government employer and union may reach an agreement requiring employees to pay an agency service fee encompassing the costs of collective bargaining, contract administration, and grievance adjustment. However, Abood clarified that objecting nonunion employees have a constitutional right to withhold payment of any agency service fees that support political and ideological causes. In other words, the Court explained that objecting nonunion school employees can be compelled to [Page 34]pay only those expenses directly related to collective bargaining. Mandatory agency service fees may not be used by unions to subsidize ideological or political causes or perspectives. Based on Abood, all public employees have a constitutional right to prevent a union from spending part or all of their required agency service fees on political contributions or costs associated with the advancement of political views that are unrelated to the union's duties as an exclusive bargaining representative.

School boards that negotiate contracts requiring employees to pay union representation fees are acting within their own discretion to force employees to join unions and are therefore legally liable for any failure to protect the rights of objecting employees. Under Abood, employees must be given the clear choice of joining the union and paying full dues or, as an alternative, paying only a service fee to cover the direct costs associated with collective bargaining. Contracts that fail to give school employees this choice violate the employees' constitutional rights.

In another U.S. Supreme Court case, Chicago Teachers Union, Local No. 1 v. Hudson, which was decided nine years after Abood, the justices held that specific and proper procedures must be in place to protect agency service fees from being improperly used by unions. Basically, Hudson reinforces Abood. In Hudson, the Court found further that unions must hold disputed agency service fee money in escrow while resolving worker disputes before an impartial decision maker. The Court considered it essential for unions to provide adequate information concerning the portion of financial cost charged specifically for collective bargaining to employees who object to agency service fee payments.

In yet a third U.S. Supreme Court case, Lehnen v. Ferris Faculty Association, the Court attempted to provide even greater clarity concerning union activities that may not be supported by agency service fees. In Lehnen, the Court discovered that up to 90% of the National Education Association (NEA) and local union fees were being charged to objecting nonunion faculty members and being spent on union activities unrelated to collective bargaining. Lehnen again upheld the legal principle that objecting nonunion school employees cannot be compelled to pay for a union's lobbying, organizing, public relations, or any other activities not directly related to collective bargaining representation.

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