In June 1988, the United States Supreme Court handed down a decision that could potentially cripple organized labor in the 1990s. In Harry E. Beck v. Communications Workers of America, the Court declared that unions did not have the right to require payment of union dues in excess of collective bargaining costs for a small group of workers who were not actual union members. Deciding the Beck case based on individual rights. (Shailor, 2008)
First Amendment rights and the section of National Labor Relations Act permitting employer and exclusive bargaining representative to enter into an agreement requiring all employees in the bargaining unit to pay periodic union dues and initiation fees as a condition of continued employment, whether or not employees otherwise wish to become union members, does not also permit union, over objections of dues paying nonmember employees, to expend funds so collected on activities unrelated to collective bargaining activities. (Stratton, 2000).
Unions continued to employ informal, politically driven methods of administration through the prosperous times following World War II. Paradoxically, one of the main objectives of unions has been to formalize and standardize personnel practices through written contracts covering their members, but such policies have remained informal and inconsistent for their own staffs (Heckscher 1988). Not until the 1980s, a period in which the labor movement suffered unprecedented losses in membership and bargaining power, did a few unions begin to consider adopting a systematic approach to administration. (Stratton, 2000)
Unions have had a history of actively supporting political causes advocated by their local and national leadership. Many workers who had a conscientious objection to the political or ideological causes advo cated by the union were compelled to financially support them. Until Beck, nonmember workers who are part of a collective bargaining unit had no recourse if they objected to union supported causes. The 1990 Roesser, 1990 Kidwell, and 1991 Lehnert lower court decisions significantly expanded the scope of the Beck ruling. Unions now cannot require dues in excess of collective bargaining costs for all union workers, whether in the private or public sector. The financial implications of this decision are far reaching. (Jarley, 2001)
If unions cannot legally collect all of its dues revenue, which has been largely used for political purposes, then union funding for political activities will be severely constrained.
These decisions continue to erode the power of organized labor
Since the Labor Management Relations Act of 1947 (TaftHartley), the general trend of the United States Government has been towards the reduction of power held by organized labor. As a Fortune Magazine editorial stated: "The long, slow disintegration of American unionism may be coming to an end. In the years ahead, we could be looking at a quite rapid disintegration." Through Beck and subsequent judicial decisions, a weakness has been exposed in the union's basic financial structure and its ability to fund political activities. Previous attacks on union power had used the legislative process. Since 1959, the courts have taken the lead in defining labor management relations. In the late 1700s and early 1800s, working life in this country was a very dismal, dangerous existence. Companies were built around the use and exploitation of human capital, oblivious to abusing a man, woman, or child. In the 1890s, the excessive use of child labor became widely known. In 1894, the social activist Mother Jones wrote from the textile mills of Cottondale, Alabama, where children were often chained to workbenches and punished viciously: "I saw the children tiny babies of six years old with faces of sixty and working an eight hour shift for 10 cents a day." Working conditions were also very dangerous. In the West Virginia and Pennsylvania coal mines, methane gas explosions and cave-ins injured and killed thousands. In the factories, workers were often severely injured or killed when using poorly designed machines. Company owners had complete control of the work place requiring employees to live in company owned houses, shop in company stores, use company doctors and attend company schools. Employees paid for these services with company printed script which prevented them from spending their wages outside of the company town. Unfortunately, company owners abused their power so completely that worker revolt was inevitable. (Jarley, 2001)
As a way of forcing company owners to improve the facilities and job sites, workers began to organize and fight back. Unions grew larger and strikes became the ultimate battle weapon for change. Slow but halting progress was made to improve conditions. A series of legislative and judicial victories for labor culminated with the 1935 passage of the National Labor
Relations Act (Wagner Act), which was the most wide ranging pro-labor legislation ever passed to date and clearly gave unions the upper hand in their struggle against company owners. The Wagner Act prohibited management from interfering with organizing activities, set out union election procedures and required management to bargain collectively with a duly elected union.
In the 1940s, union leadership adopted a more aggressive stance in pursuing workers demands, prompting the passage of the 1947 Taft-Hartley Act. (Stratton, 2000)
During the 1950s, organized crime infiltrated several large unions
In 1959, Congress passed the Labor Management Reporting and Disclosure Act (Landrum-Griffin) which banned convicted felons from holding union offices and forced unions to fully disclose all financial activities. Part of the legal basis for the Beck decision is the financial disclosure requirements for unions spelled out in Landrum-Griffin. By the 1960s, unions had essentially won the war for better working conditions, higher wages, and union security. In order to justify their continued existence, unions had to find a new cause to champion. The unions chose to enter the political arena by providing financial support to candidates and political causes via Political Action Committees. This move was met with mixed support from the membership. (Stratton, 2000)
In addition, public support began to erode as well with unions being viewed as greedy and extreme in their demands, especially in light of global competition from low wage, nonunion workers around the world. Unions, like society in general, failed to embrace minorities and paid the penalty in declining membership. Today, unions represent less than 20 percent of the U.S. workers, and it is projected that membership will continue to decline as unions offer only one benefit—that of being a deterrent against a return of abusive management practices.'* Beck strikes a forceful blow to organized labor, continuing in the direction initiated by the passage of Taft-Hartley in 1947. (Stratton, 2000)
The Wagner Act of 1935 specifies that a union, acting as the exclusive bargaining agent for a bargaining unit, may negotiate a security clause in their collective bargaining agreement with an employer.
Under a union security clause, all workers who are represented by an exclusive bargaining agent have only two options.
They must either become members of the union at the end of their probationary period or pay representation fees to the union. The first case is considered a union shop and the latter case is an agency shop. (Clark; Gilbert, Solomon 2005)
The purpose of the security clause is to protect the unions against free riders.
Free riders are defined as workers who receive the benefits of collective bargaining without paying their fair share of the collective bargaining costs. Under exclusive representation, the union must represent all workers in the bargaining unit, so it is only equitable that all workers share the cost. Union security is the heart of Beck.
"The term 'fixed union dues' refers to moneys exacted from workers who are not voluntary union shop members but who, under either a union shop or agency shop, must pay money to a union as a condition of continued employment." According to the Wagner Act, workers that do not pay periodic union dues can be terminated.
Under the 1935 Wagner Act, employers have a duty to bargain in good faith with the representatives of the bargaining unit.
In addition, Wagner stipulates that wages, benefits, conditions of employment, and the union security clause are mandatory subjects in labor negotiations. (Shailor, 2008)
To bargain in good faith, both sides must attempt to resolve differences and seek agreement covering the mandatory issues. The Wagner Act requires bargaining on union security.
Congress has tried twice to pass legislation that would reinforce the Beck decision. Both attempts were amendments to the Federal Election Campaign Act of 1971. FECA would apply to both unions and business, and both have commonly made soft money contributions to politicians that would be illegal if equivalent cash was contributed directly to the campaign. Soft money contributions usually take the form of union paid staff and union funded activities on behalf of favored candidates. Under Beck, these would be considered as activities that might require a refund of dues to dissenting members. However, even stricter financial reporting requirements would fail to show a large part of this soft money that moves from unions to politicians. As much as $355 million may have been spent by unions in this way during the 1988 campaigns. In comparison, political actions committees contributed a total of about $160 million. Congress has failed to agree on legislation to either support or undermine Beck. It appears that unions no longer have the political power to get the Beck decision overturned through legislative action. Anti-union activists do not have sufficient power to force strict Beck enforcement or pass stronger legislation. The ability of organized labor to influence politics will depend on its ability to raise funds from its union members. (Clark; Gilbert, Solomon 2005)
Management, in accepting the security clause in negotiations, demonstrates its good faith without increasing expenses to support union activities. In most collective agreements, dues are deducted from employees' paychecks via worker authorized wage check-off procedures and are not paid by management. (Wilensky, 1996)
Therefore, it costs management nothing to agree to a security or a dues check-off clause, and it provides the unions a guaranteed source of dues income to finance their operations.
In the early 1980s, Harry Beck was a technician who did not join the union in a Communication Workers of America union shop. According to the CWA bargaining agreement "all represented employees, including those who do not wish to become union members, must pay the union agency fees in amounts equal to the periodic dues paid by union members."
Beck, a strong opponent of gun control, became upset when his dues were used to support politicians advocating it. He filed suit against the union and in its 1988 decision the Supreme Court held that unions could not use union dues collected from nonmembers for political purposes. (Clark; Gilbert, Solomon 2005)
The union is now required to make an adjustment in the objecting nonmember's dues to reflect the portion of total union expenditures going for political, ideological, and related purposes.
The Supreme Court viewed the use of nonmember dues for political purposes as an infringement of Beck's First Amendment rights that forced him to support financially a political view that he opposed. In the 1961 Machinists v. Street case, the Court said that the Railway
Labor Act does not permit a union, over the objections of its nonmembers, to expend compelled agency fees on political causes." During the Beck trial, it was disclosed that only 21 percent of CWA's dues could be allocated to collective bargaining activities and the remaining percent promoted political causes advocated by the CWA. The Supreme Court ordered the reimbursement to Beck of the dues in excess of collective bargaining, contract administration, and grievance resolution costs and ruled that nonmembers only have to pay the portion of union dues that goes to negotiating or administering the agreement. (Wilensky, 1996)
The USWA has changed how it funds political activism within the union
Until 1988, the old system required dues for its funding and centralized all decisions and support for candidates at the national level. Now, the new system stresses local participation and voluntary contributions.
As a result of Beck and subsequent decisions, individual freedoms accorded all citizens under the U.S. Constitution are not to be impaired by political activities funded by compulsory dues collected in the work place. Beck reaffirms the supremacy of individual rights over the collective rights of the union. (Weil, 2000)
To date the NLRB has done little to address the issues raised in the Beck case. Ironically, it has been slow to move under a generally pro-management Bush Administration from 1988 to 1992. With a Democratic President, it is unlikely during the next four years that the NLRB will be more aggressive in enforcing the Beck decision. Workers will have to rely on the judicial system to help them enforce their Beck rights. By embracing the Beck decision, workers can enjoy additional political freedoms and larger paychecks because they will not have to pay dues to fund union political activities. With significantly lower dues revenue available, unions will be forced to curtail much of their political activities. However, with less involvement in the political process and lower revenues to fund its operations, workers may notice the reduced influence of the unions when their next contract is negotiated. (Wilensky, 1996)
The loss of the ability to collect dues for political activities means that potentially
80 percent of union dues revenue could cease to exist. Accountability to the membership has always been a weakness of union management. Now, it is becoming a subject of intense review. The financial reporting requirements necessary to comply with Beck could be so expensive that unions may find it more economical to sacrifice the union security clause to avoid the financial disclosure requirements. Senior level union management may be willing to sacrifice union security to protect their privileged positions rather than determining what actions are in the best interests of the membership. (Weil, 2000)
In the near term, the Beck ruling helps business by forcing union management to comply with Beck requirements and to communicate to its membership the full extent of its political activities. In addition, companies can expand their influence over workers and fill the void left from the union's declining influence. In the long term, management benefits most from Beck because organized labor will not have the financial resources to influence the political process as it did prior to Beck. Reducing or eliminating labor's financial stranglehold on politicians will give management the upper hand as future labor legislation is introduced. (Clark; Gilbert, Solomon 2005)