Reference no: EM131281030

[Hyo Choi Lim is employed by a subsidiary of Universal Studios. Local 399's collective bargaining agreement includes a union security clause. Union security clauses require all employees to become members of the union within a certain period of time after being hired. Lim notified the union that he was asserting his rights as a Beck objector. Under that decision, employees who work under collective bargaining agreements with union security clauses can refuse to join the union as long as they agree to pay their fair share of representational expenses.

The union conceded Lim's right to refuse to join the union under Beck, but informed him that his fair share of representational expenses would be 99.6 percent of dues owed by union members. Lim challenged the union's decision to use "liquidated damages" obtained in the sum of $26,705 from arbitration awards payable to the union to fund nonrepresentational expenses such as political and charitable donations. From the Board's determination that the union had violated the NLRA, it appealed to the Court of Appeals to enforce its order.] PREGERSON, C. J....

In Communications Workers of America v. Beck, the Supreme Court held that "§ 8(a)(3) permits an employer and a union to enter into an agreement requiring all employees to become union members as a condition of continued employment, but the ‘membership' that may be so required has been ‘whittled down to its financial core.'"... Beck held that § 8(a) (3) "authorizes the exaction of only those fees and dues necessary to ‘performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues.'"...

The fees and dues exacted for performing representational duties are sometimes called "fair share" fees, because they represent the fair and reasonable cost of providing representational services to each employee represented by the union, whether such employee is a Beck objector or full-fledged union member. Beck objectors are thus not required to pay for expenses that are not germane to representation, such as political or charitable donations.... ... The "liquidated damages" in this case were derived from arbitration that had been funded partially by Beck objectors like Lim.

Therefore, the Board held that the union could not offset these "liquidated damages" from its nonrepresentational expenses. The Board's interpretation is rational and consistent with the Act. Whenever a union's representational expenses generate secondary income-be it interest and dividend income in Chevron Chemical Co. or "liquidated damages" in this case-the union could use those funds for representational expenses, which would in turn lower the dues required of full union members and Beck objectors alike. Therefore, in choosing to spend the secondary income on political and charitable contributions rather than on representational expenses, the union is essentially increasing the dues required of Beck objectors in order to pay for these contributions. That is exactly what the Supreme Court prohibited in Beck. [Order enforced. Granted.]

Case Questions

1 Supreme Court's Beck decision.

2. What did the Court find wrong with the union spending funds, which it had lawfully been awarded in arbitration proceedings, on political candidates supportive of union ideals and on charitable contributions for the good of the community.