Supreme Court Clarifies California Public Sector Unions' Notice Requirements

Like many states, California permits unions to represent public sector employees. But employees may "opt out" of paying dues toward these unions' political activities.To permit the "opt out," the unions must issue what are known as "Hudson" notices at least annually, which advise employees of how much of their dues are spent on collective bargaining and how much on political and other non-representative activity.  The employees can opt-out of paying the fee not that are not allocated to collective bargaining -related activities. Unions are permitted to rely on the prior year's ratio to set the current year's dues.

This system exists because of the First Amendment.  The public sector employer would not be able to force employees to join an organization that  requires financing of viewpoints with which the employee does not agree.

So far so good?  Well,what if the union issues a Hudson notice, and then a few weeks after the "opt out" period, issues a special fees increase after issuing its Hudson notice?  Can it unilaterally do this without a new notice?  That was the issue the Supreme Court confronted in Knox v. SEIU, Local 1000.

The Supreme Court said, "no":

To respect the limits of the First Amendment, the union should have sent out a new notice allowing nonmembers to opt in to the special fee rather than requiring them to opt out. Our cases have tolerated a substantial impingement on First Amendment rights by allowing unions to impose an opt-out requirement at all. Even if this burden can be justified during the collection of regular dues on an annual basis, there is no way to justify the additional burden of imposing yet another opt-out requirement to collect special fees whenever the union desires.

Why?

Public sector unions have the right under the First Amendment to express their views on political and social issues without government interference. . . .But employees who choose not to join a union have the same rights. The First Amendment creates a forum in which all may seek, without hindrance or aid from the State, to move public opinion and achieve their political goals. “First Amendment values [would be] at serious risk if the government [could] compel a particular citizen, or a discrete group of citizens, to pay special subsidies for speech on the side that [the government] favors.” ...  Therefore, when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent.

5 justices joined the majority opinion.  2 justices concurred in the judgment, agreeing the union needs to secure consent from the non-members.  2 justices dissented, and would hold that the union gets to set its non-member contribution rate based on the prior year's expenses, even if the union imposes a special assessment immediately thereafter.

The case is Knox v. SEIU, Local 1000 and the opinion is here.

U.S. Supreme Court on Federal Employees' Access to Court

WARNING - Most of you will not care about this. The Supreme Court held today that a federal government employee covered by the Civil Service Reform Act must bring employment claims before the Merit Systems Protection Board, rather than district court.

The MSPB is the exclusive forum, even if the employee is raising a constitutional law claim, and even if the employee is ineligible for federal employment. 

In this case, Elgin did not register for the draft and was fired because people who do not register are ineligible for federal employment.  He tried to bring a claim at the MSPB, but an ALJ held that MSPB had no jurisdiction over his claims. So, he sued in district court, which denied his claim on the merits.  He then appealed to the First Circuit Court of Appeals, which decided that both the district court and the First Circuit lacked jurisdiction.

The Supreme Court agreed, holding that the MSPB can decide constitutional law issues, and that MSPB rulings are subject to review by the Federal Circuit Court of Appeals and by the Supreme Court.

The case is Elgin v. Dept. of Treasury and the opinion is here. 

Court of Appeal: Breach of Contract Against Employer for Breach of Settlement Confidentiality

Sanchez was a county labor relations manager for San Bernadino County. She became romantically involved with a union official, Erwin. Their respective employers negotiated labor relations memoranda of understanding. At some point, their relationship became known and unacceptable to the county's brass. The County thought a romance between labor negotiators on opposite sides of the table might constitute a conflict of interest. So sensitive! For her part, Sanchez denied the conflict of interest, but admitted the appearance of impropriety. So, the county gave Sanchez the chance to resign with a separation agreement.

The separation agreement contained a strict confidentiality requirement. But immediately after Sanchez resigned, the newspapers picked up on the story and quoted county officials. She sued the county and individual defendants for a variety of claims, including breach of contract. The county successfully "SLAPPED" most of the causes of action. The trial court eventually granted summary judgment on the rest of them. The court dismissed the breach of contract claim because the confidentiality agreement was contrary to the county's legal duty to disclose such facts to the public.

On appeal, the court of appeal reinstated the contract claim. The county's primary argument was that it was bound to disclose Sanchez's affair. After analyzing the various legal theories (including the Public Records Act and the First Amendment), the court said there was a triable issue of fact on the contract claim because the county did not have to disclose the affair to the papers. Had the settlement agreement been disclosed under the Public Records Act, the court might have come down the other way.

The court rejected the county's argument that Sanchez waived the confidentiality agreement by speaking with her parents and showing the agreement to Erwin. The court found it significant that Sanchez did so only after learning of the county's breach.

Regarding the issue of damages, she presented significant evidence it was harder to find a job after the disclosure of the affair to the newspapers. Therefore, the court rejected the county's contention that there were no damages available for the breach of confidentiality.

Typically, employers do not advertise their settlements with employees. So, this case may be an anomaly, particularly in the private sector. But to the extent employers needed motivation to maintain confidentiality, the prospect of a breach of contract claim should provide it. Employers should ensure they honor confidentiality provisions in separation agreements.

The case is Sanchez v. County of San Bernardino and the opinion is here.

California Supreme Court: Public Employee May Be Disciplined for Refusing to Cooperate in Investigation

The California Supreme Court held that a deputy public defender was properly discharged when he refused to answer questions during an internal investigation. He argued that he could not be compelled to answer because he invoked his Fifth Amendment right to refuse to answer questions on the grounds they might incriminate him.

But the investigator, a supervisor attorney at the public defender's office, had informed him that his cooperation in the investigation would not be used against him in criminal proceedings. Was his refusal to testify protected conduct? The court unanimously said "no":

a public employee may be compelled, by threat of job discipline, to answer questions about the employee’s job performance, so long as the employee is not required, on pain of dismissal, to waive the constitutional protection against criminal use of those answers. Here, plaintiff was not ordered to choose between his constitutional rights and his job. On the contrary, he was truthfully told that, in fact, no criminal use could be made of any answers he gave under compulsion by the employer. In the context of a noncriminal public employment investigation, the employer was not further required to seek, obtain, and confer a formal guarantee of immunity before requiring its employee to answer questions related to that investigation.

The case is Spielbauer v. County of Santa Clara and the opinion is here.