DO UNION ATTORNEY FEES VIOLATE NONMEMBERS’ CONSTITUTIONAL RIGHTS?

Labor unions are breathing a sigh of relief now that Justice Scalia chose an ultra-rightwing meeting of animal killers to steal the spotlight by following the groups’ prey to another place.  He looked like a sure vote to uphold a claim by the Christian Educators Association that it violates California public school teachers’ Constitutional rights to force them to pay any union dues, even reduced dues. They claimed that one way or another their dues enable a union to spend more money on lobbying causes and election campaigns that the teachers might oppose as individuals. It occurs to us that there just might be the same problem with attorney fees collected by federal sector unions. Here is how we reach that conclusion.To begin, we admit that we are worried about the state of salaried union attorney fees in general.  Unions have historically been easy targets of mean-spirited reformers when they get greedy, e.g., they get folks paid for time they never worked or wildly overpaid in comparison to the market. We see too many signs that is occurring with attorney fees paid salaried union attorneys. Not long ago we wrote about how under the formula used to compensate Washington, DC union attorneys they can now get $800.00 an hour even though the union’s total cost of compensating them is about $150.00 an hour. We have also noticed cases of salaried union attorneys walking away with a half-million dollar in fees for winning essentially the same grievance in front of four different arbitrators. Call us old fashion, but that is precisely the type of behavior that is likely to draw public scorn. So, we want to encourage unions to rethink their attorney fee practices before a bunch of attorneys undermine an otherwise important benefit for all federal employees.

The Christian Educators’ case is known as the Friedrichs case, for short, and at its core rests atop employees not wanting the money they are forced to pay a union to be used even indirectly to support its political activity.  The dues they pay are already reduced from what full members pay to ensure they are only compensating the union for collective bargaining services—not political activity.  But the Christians claim that even that reduced dues money frees up funds the union would otherwise devote to collective bargaining activity to be used for political activity. There was enough of a legitimate Constitutional claim there that the federal district court judge and a U.S. Court of Appeals agreed to rush the case right to the Supreme Court without the delay of issuing decisions themselves. That was not a good sign for the unions winning the case.

It is not unusual for federal sector unions to win attorney fees in grievances covering large groups of employees that include non-members. For example, assume an agency has improperly delayed the career ladder promotions of every employee for the last two years and the union wins an arbitration case entitling each of them to some amount of back pay.  The union attorney would typically get attorney fees that include a specific number of hours of work on the individual claim of each nonmember.  Let’s assume that there were 100 employees covered by the grievance and the union attorney charged two hours reviewing each person’s claim at an hourly rate of $700.00.  That would likely generate an attorney fee award of $140.000.00.  If one half of the 100 employees are nonmembers, and many of them had no idea the union even filed the case on their behalf, one could argue that those nonmembers just provided the union about $70,000.00. The money typically does not go directly into the general fund, but a segregated fund for “legal services.” But, it easily can be moved to the general fund to pay attorney salaries that otherwise would have to be paid out of the general fund. It does not take a genius to see that the union would then have money available to divert into an election campaign or lobbying for some political issue one or even most of the nonmembers strongly oppose.

In other words, federal sector unions can use nonmembers to generate attorney fees without even asking the employees for permission to do so. We have no problem with the union choosing to stand up for the nonmember without that employee’s permission nor winning back pay for her. That is what exclusive recognition is about—and she can always turn down the money or donate it. But we would not be surprised if there is some federally-employed “Christians” out there who objects to her personal entitlement to back pay being used without her permission to generate funds for the union’s political activity. That is especially likely given that those funds do not come from the federal employee as is the case of the California Christians but the federal treasury. It only takes one person upset with unions in general or who holds a grudge against her particular union to get a case like this rolling. And that is why we are so worried for unions and the employees who rely on the attorney fee benefit when they are hurt by some improper government action.

Unfortunately, the easiest solution might be the toughest for unions to implement. They could voluntarily restrain themselves by not charging hourly fees that are three or more times the union’s actual hourly compensation costs for the attorney.  They could also restrain themselves when charging hours to a case.  Suppose a salaried union attorney wins a group grievance on behalf of 100 employees based on a threshold technical mistake the agency made. Does he really have to charge for all the hours he spent reviewing each employee’s files when those details never played a role in the decision?  Another solution is that agencies negotiate restraints on salaried union attorney claims via contract negotiations. If the union in our example above involving 100 grievants limited itself even to two times the actual hourly compensation costs of the attorney and did not charge for the time spent reviewing nonmember’s claims, its fees would have been around $35,000.00.  That should still be good news for the union. We recognize that unions want to gather and hang on to every dime they can, but we also know they sometimes do so based on a very short-sighted view of what is fair, wise, or likely to generate payback from some disgruntled federal employee—Christian or otherwise. It does not take too much creativity to imagine a Congressional committee calling the union’s general counsel to a hearing to explain how they have allowed this money to be used or even to disclose a financial report. Sitting beside her is likely to be the union president who will soon be asked to explain how the money transferred from the legal services fund was used.

P.S. The California Christians behind the Friedrich case are not just looking for a free ride from the union, but their case is being funded by The Center for Individual Rights, a Washington, DC outfit seemingly eager to fund anyone who with an arguable claim that will reduce union clout.

P.P.S.  Oddly to all us non-lawyers, this would not be a problem if the union allowed the staff attorneys to keep the money and they voluntarily donated it to the union’s political action fund or directly to some candidate’s campaign.  In fact, that could boost the political clout of the money for the union.  Nor would the problem exist if the union hired private attorneys who were not on salary.