Labor & Employment Law Daily Union unlawfully coerced employees in demanding full dues from ‘core’ members
Tuesday, June 19, 2018

Union unlawfully coerced employees in demanding full dues from ‘core’ members

By Lorene D. Park, J.D.

A union’s letters demanding payment of full membership dues from employees it knew had opted for “core” membership instead, and simultaneously initiating the wage-garnishment process to collect full dues, would reasonably tend to “coerce or restrain” the employees in the exercise of their NLRA Section 7 right to limit their association with the union, concluded the D.C. Circuit, finding no rational basis for the NLRB’s conclusion otherwise and vacating the Board’s decision (Tamosiunas v. NLRB, June 15, 2018, Millett, P.).

Section 7 protects right to abstain from unionization. Section 7 not only protects workers’ right to collectively bargain through representatives of their choice, it also protects “the right to abstain from unionization.” Thus, both employers and unions are prohibited from engaging in behavior designed to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed” in Section 7, including the right to abstain from union membership.

Union participation as “core” versus “full” member. There are exceptions, and relevant here, employers can require union participation “as a condition of employment,” assuming the union meets statutory requirements. If union membership is a condition of employment, employees can choose between being full members or “core” financial members, the latter of which pay a reduced annual fee to cover their share of the representative work benefitting all employees.

The petitioners in this case worked in hospitality at Hyatt Regency Hotel, where hospitality workers had been represented by “Unite Here!” Local 5 since at least 2006. The applicable collective bargaining agreement included a union security clause, which required Hyatt employees to be either full or core members of Local 5 as a condition of continued employment. The petitioners objected to union membership and participated only as “core” members.

Petitioners broke rank between CBAs. When the CBA terminated on June 30, 2010, so did the union security clause, so employees were free to abandon union membership as they pleased. The petitioners waited two years and then broke rank, informing Local 5 in writing that they would no longer allow Hyatt to remit their core fees to the union. They added, however, that should Local 5 “secure a compulsory dues contract” in the future, they would recommence payment of “reduced fair share amount for financial core members.” The union secured just such an agreement in August 2013, complete with a union security clause.

Union garnishes full membership dues. In October, the union sent letters asking the petitioners to rejoin as full members. The letters indicated Local 5 knew they had asked to pay only core fees but encouraged them to reconsider. Though the petitioners chose core membership, each received a billing letter demanding payment of full membership dues. That same day, the union informed Hyatt it would submit a billing report and asked Hyatt to garnish unpaid fees from paychecks in the upcoming pay period. Hyatt complied and deducted the maximum amount from the petitioners’ paychecks. Hyatt soon learned of the error and promptly sent a letter assuring that it would credit upcoming paychecks for the amount improperly deducted. Local 5 remained silent.

NLRB proceedings. The petitioners filed unfair labor practice (ULP) charges with the NLRB, claiming the union’s demand for full union dues and garnishment of wages represented an effort both to restrain them from exercising their Section 7 right not to join the union in full and to coerce them not to exercise that right. An administrative law judge concluded that because the dues letter did not threaten the petitioners beyond suspension of union membership, there was no unlawful coercion. The ALJ didn’t address whether the letters “restrained” the employee’s exercise of Section 7 rights, framing the issue in terms of threats and coercion alone.

A divided panel of the Board agreed, noting that the statutory language also referred to conduct that “restrains” employees but finding the “use of different terminology” did not affect the analysis. The Board found that the “only objectively reasonable view of the letter, in context, was that it was mistakenly directed” at the objecting employees. Dissenting, Member McFerran asserted that “To be told that you are delinquent in paying a bill” and that “steps to collect will be taken, obviously has a reasonable tendency to coerce payment,” which she found was the point of the union’s letter “on its face.”

Dues letter was coercive. Vacating the Board’s decision, the D.C. Circuit found the Board’s decision legally unsupportable. It is not just heavy-handed threats or sanctions that constitute unfair labor practices under the NLRA, said the court, “Section 8’s protective cloak sweeps far more broadly, proscribing any action by an employer or union that ‘has a reasonable tendency’ to coerce or restrain employees in the exercise of their Section 7 rights.” And under Board precedent, whether a communication is restraining or coercive turns on “whether the words could reasonably be construed as coercive,” even if that is not the only reasonable construction.

Against this backdrop, “the Board’s decision in this case makes no sense,” said the court. Each dues letter read very much like a payment demand for full membership dues, including an individual accounting of the amount purportedly outstanding and then stating the employee “must” come current with the dues. In the appellate court’s view, “If the employee retained any lingering hope of choice in the matter, the letter disabused her of it by advising that failure to pay would result in the garnishment of her wages.” And that was “no idle threat, either,” since Hyatt extracted dues from the next paycheck at the union’s urging. The employees’ only effective choice, said the court, was: “We can do this the easy way, or we can do this the hard way.”

Union wasn’t simply mistaken. The appeals court also took issue with the Board’s conclusion that the Local aimed to extract full membership dues “by mistake.” Finding the Board’s rationale “woefully short,” the appeals court noted that just five months earlier, Local 5 had solicited the same employees to switch from core to full membership. Tellingly, the union never claimed that its letter was a mistake and it never apologized for it.

The Board was also wrong, in the court’s view, in finding that the dues letter didn’t warn of adverse consequence beyond suspension of union membership—that conclusion plainly ignored the impact of the threat of wage garnishment on many employees who rely on weekly income to make ends meet. In sum, the Board provided no rational basis for finding the dues letter and garnishment did not “reasonably tend to restrain or coerce employees” in the exercise of their Section 7 right not to pay full union member dues.

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