Blog

On June 20, 2012, the U.S. Supreme Court held that public sector unions must allow non-members an opportunity to opt out of special assessments and unexpected fee increases in the case of Knox v. Service Employees International Union. Specifically, the court held that a union’s failure to give non-members the opportunity to opt out of fee increases infringed upon the non-members’ first amendment rights. The court’s decision stems from its opinion in Teachers v. Hudson, after which unions were required to provide non-members with annual notice of the union’s agency fees through a “Hudson Notice” that identifies the percentage of fees attributable to expenses designed to further the union’s political and social goals. A non-member employee has 30 days from receiving the Hudson Notice to opt out of the full agency fee. If he objects to the fee, he only pays fees attributable to expenses related to the union’s collective bargaining obligations. In 2005, Service Employees International Union (SEIU) sent out its annual Hudson notice, which stated the non-members’ fees at 56.35% of the full agency fees. After the 30 day period to object to the full fees closed, the union increased fees by 25% to further the union’s political objectives in the November 2005 and 2006 elections. SEIU sent out a letter to employees notifying them of the fee increase but failed to allow non-members an opportunity to opt out. After employees complained, the union allowed non-members who previously opted out following the Hudson notice to pay the previously stated non-members fees. Those who did not previously opt out were required to pay the full fee. After the situation went to the Supreme Court, the majority held that the union’s failure to provide non-members the ability to opt out of the fee increase infringed upon the non-members’ First Amendment rights. The court explained that though public sector unions have a First Amendment right to express their views on political and social issues, individuals’ First Amendment rights to not be compelled to subsidize a union’s speech supersedes this. Therefore, a union must provide a new Hudson notice whenever it imposes a special assessment or dues increase and could not charge non-members any fees without their “affirmative consent.”