BILL ANALYSIS Ó
AB 1179
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 1179 (Mansoor) - As Amended: April 25, 2011
SUBJECT : Labor organizations: union dues: political activities
SUMMARY : Enacts the California Voluntary Contributions Act to
place limitations on expenditures for political activities made
by labor organizations. Specifically, this bill :
1)Provides that a labor organization may make expenditures for
political activities only if the labor organization
establishes a separate fund from which to make those
expenditures and complies with all of the following:
a) In soliciting contributions to the fund from a member,
the labor organization shall inform the member that
expenditures from the fun will be for political activities,
that contributions are voluntary, and that the member has a
right to refuse to contribute without fear of reprisal or
loss of membership in the organization.
b) The labor organization does not use union dues for
political activities, transfer union dues to the fund, or
intermingle union dues in any way with moneys in the fund.
c) The labor organization pays the costs of administering
the fund using fund contributions and not union dues.
d) The labor organization ensures that each contribution to
the fund is voluntary and is made by the member and not
made by the employer of the member.
2)Places the burden on the labor organization to show that it
has complied with these requirements.
3)Specifies that a labor organization may use union dues to
lobby or communicate directly with its own members regarding
political candidates, ballot measures, and other political
issues.
FISCAL EFFECT : Unknown
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COMMENTS : According to the author, this bill will bar payroll
deductions from employees being used for union political
purposes.
Background on Union Security Agreements and the Use of Union
Dues for Political Purposes
Under current California law, employers make a variety of
payroll deductions from their employees' wages, including
deductions for Social Security, income taxes, medical plans and
charitable contributions. The Labor Code also requires
employers to notify employees at the time of payment of wages
regarding the amount of compensation and any deductions
therefrom.
Many employees in California are represented by labor
organizations and pay union dues or similar fees for
representation to the union. Under many collective bargaining
agreements, such dues or fees are automatically deducted by the
employer from employee wages and forwarded directly to the labor
organization.
Section 8(a)(3) of the National Labor Relations Act (NLRA)
allows employers and unions to enter into union-security
agreements requiring all employees in a particular bargaining
unit to become "members" after a 30-day period following hire.
However, in a 1963 decision, the Supreme Court held that the
term "member" requires only the payment of periodic dues and
fees as opposed to full membership in the union. NLRB v.
General Motors Corporation, 373 U.S. 734 (1963). Since the
court noted that "the membership that is required has been
whittled down to its financial core," individuals choosing that
approach are often referred to as "financial core members."
This has also been termed an "agency shop" arrangement.
Therefore, under current law, no employee is required to become
a member of a union in order to maintain a job, but all
employees subject to a union security clause can be required to
pay union dues and fees to defray the costs of representation.
In Communication Workers of America v. Beck, 487 U.S. 735
(1988), the Supreme Court held that the section of the NLRA that
allows employers and unions to enter into union security
agreements does not "permit a union, over the objections of
dues-paying nonmember employees, to expend funds so collected
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Ýpursuant to a union security clause] on activities unrelated to
collective bargaining, contract administration or grievance
adjustment." Thus, federal labor law does not permit a union to
spend funds from dues-paying non-union employees on certain
activities unrelated to collective bargaining when those
employees object to such expenditures. At issue in Beck was the
specific use of dues for political purposes.
In Lehnert v. Ferris Faculty Association, 500 U.S. 507 (1991),
the Supreme Court articulated a test for determining whether a
particular expenditure of union funds may be charged to
nonmember employees. Chargeable uses must (1) be germane to
collective bargaining activities, (2) be justified by
governmental interest in the maintenance of labor peace and the
prevention of "free riders" who benefit from the union's
collective bargaining activities without contributing to the
costs of such activities; and (3) not add significantly to the
burdening of free speech rights.
The Lehnert decision also expanded the scope of the Beck
holdings to include public sector employees so that such
employees may not be compelled to subsidize political or
ideological activities of public employee unions.
Under Beck and subsequent cases, a union has several general
obligations to ensure that employee's Beck rights are protected.
First, the union must provide notice to nonmember employees of
their Beck rights. Second, the union must refrain from charging
objectors for nonrepresentational expenses. Finally, the union
must provide objectors with a financial disclosure and establish
procedures for objectors to challenge the accuracy of the
union's disclosure.
Therefore, applicable federal labor law establishes a mechanism
whereby employees covered under union security agreements can
become "financial core" nonmembers and therefore avoid having to
pay that portion of their dues or fees for purposes unrelated to
collective bargaining.
The Federal Election Campaign Act of 1971
The Labor Management Relations Act of 1947 prohibited many forms
of labor union contributions to federal election campaigns. The
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Federal Election Campaign Act of 1971, as amended (FECA),
generally continued this broad prohibition of labor union
activities and funds in federal elections. However, the FECA
provided for three broad exemptions to this general prohibition
of labor union political activities in federal elections: (1)
communications by a labor organization directed at its members
or their families on any subject: (2) non-partisan voter
registration and get-out-the-vote activities by a labor
organization which are directed to its members or their
families: and (3) the establishment and administration of a
political action committee or separate segregated fund (commonly
known as a PAC or SSF) for the purpose of the solicitation of
contributions to such fund for political purposes. Generally,
any other type of political activity by labor unions in federal
elections would be prohibited under the FECA, and labor union
contributions and expenditures concerning federal elections
outside these exceptions would be prohibited.
In a 1972 Supreme Court decision, the Court concluded that a
legitimate labor union political fund must be separate from the
labor union in that there must be a strict segregation of the
political fund's monies from the union's dues and assessments.
The Court noted that, while the former law, which prohibited
labor organizations from making contributions or expenditures
connected with a federal election, might be interpreted to
prohibit the use of union funds to establish and maintain a
union political fund for the purposes of soliciting and making
political contributions in federal campaigns, the provision of
the Federal Election Campaign Act of 1971 allowing labor unions
to establish separate segregated funds or political action
committees impliedly repealed that former law.
No similar prohibition currently exists under California
election law.
The Citizens United Decision
On January 21, 2010, the United States Supreme Court issued a
decision that had significant impacts on federal campaign
finance law. Citizens United v. Federal Election Commission,
130 S.Ct. 876 (2010).
That case resulted from a dispute over whether the nonprofit
corporation Citizens United could air a film critical of Hillary
Clinton (Hillary: The Movie), and whether the group could
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advertise the film in broadcast ads. At issue were portions of
the 2002 Bipartisan Campaign Reform Act (commonly known as the
McCain-Feingold Act) that prohibited all corporations and unions
from broadcasting "electioneering communications. An
"electioneering communication" was defined in McCain-Feingold as
a broadcast, cable, or satellite communication that mentioned a
candidate within 60 days of a general election or thirty days of
a primary.
The Court held that the law's prohibition of all independent
expenditures by corporations and unions was invalid and could
not be applied to spending such as that in Hillary: The Movie.
Justice Kennedy, who wrote the majority opinion, stated: "If the
First Amendment has any force, it prohibits Congress from fining
or jailing citizens, or associations of citizens, for simply
engaging in political speech."
The Campaign Legal Center has described the Court's holding as
follows:
"In Citizens United v. FEC, the Supreme Court struck down
the decades-old federal ban on independent expenditures by
corporations (and unions) to influence federal elections.
The Court reasoned that the First Amendment does not permit
laws to discriminate between corporations and individuals
when it comes to electoral spending that is independent of
candidates and political parties. However, the federal ban
on direct corporate and union contributions to candidates
and parties was not considered and remains in effect.
Citizens United allows corporations and unions to spend
their treasury funds on advertisements expressly advocating
the election or defeat of a candidate for the first time in
over 60 years. A corporation or union can either spend
directly on such express advocacy or it can give to an
outside group, such as one of the tax-exempt vehicles
described in the sections below.
The practical impact of this decision is a vast change in
the magnitude of the political money available - the
difference between a corporate political action committee
("PAC") spending perhaps hundreds of thousands dollars
voluntary donated by corporate employees and a corporation
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spending millions out of its multi-billion treasury."
Following the decision, it was reported that laws in 24 states
were directly or indirectly called into question by the ruling.
"The states that explicitly prohibit independent expenditures by
unions and corporations will be most affected by the ruling.
The decision, however, has consequences for all states, since
they are now effectively prohibited from adopting restrictions
on corporate and union spending on political campaigns."<1>
As discussed below, opponents to this measure argue that its
limitations on union political expenditures run afoul of the
recent holding in Citizens United.
California Proposition 226 (1998)
Proposition 226 of 1998 would have, among other things, required
employers to obtain a signed authorization from employees on an
annual basis in order to deduct money from an employee's wages
to be used for political campaign activities. The measure also
would have required that, in order for a labor organization to
use a portion of the dues or fees it collects for political
campaign activities, the union must obtain a signed form from
the employee each year authorizing the use of the money for
those activities.
Proposition 226 was defeated by the voters in the June 2, 1998
primary election.
California Proposition 75 (2005)
Proposition 75 of 2005 would have prohibited the use by public
employee labor organizations of dues or fees for political
contributions except with the prior consent of individual
---------------------------
<1> Urbina, Ian. "24 States' Laws Open to Attack After Campaign
Finance Ruling." New York Times (January 23, 2010).
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employees annually on a specific written form.
Proposition 75 was defeated by the voters in the November 8,
2005 special statewide election.
ARGUMENTS IN SUPPORT :
The author states the following in support of this bill:
"Certain employees who are forced to join and be represented
by unions are forced to pay
mandatory dues. These dues are often automatically deducted by
the employer from the workers' wages and sent to the union.
Unions can use these dues for political activities without the
opinion of the employee on where and how the funds should be
spent.
ÝThis bill] fixes this problem by barring payroll deductions
from these employees to be used for union political
activities. A union members' ability to make political
donations without payroll deductions will not be affected."
The National Right to Work Committee, writing in support of this
bill, states, "By requiring union bosses to collect funding
directly from their membership, you will free taxpayers and
local governments across California from having to finance what
is nothing more than a union boss perk."
ARGUMENTS IN OPPOSITION :
Opponents argue that this bill unconstitutionally interferes
with the right of contract and the right to free speech, and is
preempted by the National Labor Relations Act, which already
comprehensively regulates protection of employees who do not
wish their union dues to be used for political purposes.
In addition, opponents contend that this bill is unnecessary.
No worker can be forced to fund a union's political program.
Under current law, union members choose whether to join a union,
they set their own dues, elect their own leaders and vote on how
and where their money is to be spent. Those who disagree with
their union's political activity can, and do, choose not to
belong to the union.
Finally, opponents state the following:
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"We believe enactment of this bill would violate the First
Amendment of the United States Constitution. Last term,
the United States Supreme Court, in Citizens United v.
Federal Election Commission, held that the First Amendment
prohibits the government from restricting corporations,
nonprofit groups and unions that choose to spend their
regular treasury funds for independent public
communications that "expressly advocate" the election or
defeat of particular federal candidates. Even before
Citizens United, California allowed unlimited corporate,
nonprofit, and union treasury spending on general/public
express advocacy and other electoral speech in state and
local elections. Citizens United invalidated other states'
restrictions on express advocacy. ÝThis bill] seeks to
restrict union spending on express advocacy of political
candidates, political parties, and ballot measures by
outlawing employees' voluntarily authorized deductions of
union dues if the dues are spent on political activities.
ÝThis bill's] restriction would clearly violate the First
Amendment, and the courts therefore would invalidate it as
unconstitutional if it were to be passed."
RELATED AND PRIOR LEGISLATION :
AB 860 (Jones) of 2011 would prohibit corporations and labor
unions, including public employee labor unions, from making
contributions to candidates for elective office or entities, as
specified, that would use contributions to fund a candidate or
controlled committee. The bill also would prohibit a
corporation, labor union, including a public employee labor
union, government contractor, or government employer from
deducting from an employee's compensation money to be used for
political purposes. AB 860 is currently pending in the Assembly
Committee on Elections and Redistricting.
AB 2349 (Maze) of 2006 would have required a labor organization
that is required to file a report of its income and expenditures
with a government agency to post on its Web site either a copy
of the report filed with the government agency or a link to the
report on the Web site of the government agency. AB 2349 failed
passage in the Assembly Committee on Labor and Employment.
AB 2052 (Haynes) of 2004 would have, among other things,
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required employers to notify employees when deductions are made
from their paychecks to be used for political purposes. AB 2052
failed passage in the Assembly Committee on Labor and
Employment.
AB 674 (Leonard) of 1997 would have, among other things,
prohibited an employer from withholding any amount from an
employee's wages or salary for the purpose of making campaign
contributions, except pursuant to a signed written request. AB
674 was referred to the Assembly Committee on Elections and
Redistricting, but was never heard.
AB 1347 (Kaloogian) of 1997 would have required a labor
organization to disclose, in writing, to its members before the
dues or other fees for membership are required to be paid, the
actual amount it spends on political activities. AB 1347 was
referred to the Assembly Committee on Public Employees,
Retirement and Social Security, but was never heard.
AB 1401 (House) of 1995 would have prohibited a school district
from deducting any portion of the dues from any classified
employees to support political activities of the labor
organization. AB 1401 was held on the Assembly Inactive File.
REGISTERED SUPPORT / OPPOSITION :
Support
Associated Builders and Contractors of California
National Right to Work Committee
Opposition
American Federation of State, County and Municipal Employees
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Official Court Reporters Association
California Professional Firefighters
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California School Employees Association
California Teamsters Public Affairs Council
Engineers and Scientists of California
International Longshore and Warehouse Union
Orange County Employees Association
Professional and Technical Engineers, Local 21
Service Employees International Union
UNITE HERE!
United Food and Commercial Workers - Western States Conference
United Nurses Association of California/Union of Health Care
Professionals
United Transportation Union
Utility Workers Union of America, Local 132
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091