The U.S. Supreme Court ruled Thursday that California's largest state employee union violated the free speech rights of 28,000 so-called "fair-share" nonmembers by coercing them to finance political campaigns in 2005 and 2006.
The 7-2 ruling highlights the strained relationship between Service Employes International Union Local 1000 and its nonmember contributors and could have implications for a key November initiative that would restrict union fundraising.
Even more broadly, the court's decision hints that it's open to reconsidering unions' long-held practice of forcing employees to opt out of giving them money for political activities instead of opting in.
"This is an important victory for the rights of nonmember employees who are forced into union groups and into paying fees," said Patrick Semmens, vice president of the National Right to Work Legal Defense Foundation, a nonprofit that handled the case for the plaintiffs.
In an emailed statement, Local 1000 spokesman Jim Zamora said the union's loss was another in an ongoing "attack on the right of public sector workers to act collectively."
The union didn't respond to specific questions about the court's ruling, including whether it would have to repay any employees.
After the Supreme Court took the case last year, the union offered to refund money to any nonmembers who asked, but it's not clear how many did or how much they received.
The majority decision written by Justice Samuel Alito says only that the case should be returned to the lower court "for further proceedings consistent with this opinion."
The ruling settles a dispute that started seven years ago, when Local 1000 officials issued a temporary "special assessment" on all state employees it represented, regardless of their membership status. The money went to fund campaigns against two anti-union ballot measures backed by then-Gov. Arnold Schwarzenegger and to support pro-labor candidates in 2006.
The courts have always allowed unions to compel nonmembers to pay limited "fair-share" dues to promote "labor peace" among the rank and file, Alito explained, as long as they give the workers a chance to opt out of political contributions.
But Local 1000 violated employees' free speech rights, the court said, when it took the extra fees after it closed its annual window for nonmembers to opt out and didn't offer a second opportunity.
"When a public-sector union imposes a special assessment or dues increase, the union must provide a fresh notice and may not exact any funds from nonmembers without their affirmative consent," Alito said.
The fight could have been avoided, said Sacramento-based labor attorney Tim Yeung.
"SEIU was very aggressive" when it took the money from nonmembers without express permission, he said. "A lot of unions would have asked. I'm surprised SEIU didn't."
Ironically, one of the measures SEIU and other unions raised the extra money to fight in 2005 was Proposition 75, which would have required unions to obtain an employee's consent before charging fees for political purposes.
This year, unions are preparing to spend millions of dollars to fight a November ballot measure that would ban both unions and corporations from contributing directly to candidates, although both could still fund independent expenditure campaigns to support candidates.
The measure would hit labor interests harder, however, because it eliminates their primary method of raising political spending money – payroll-deducted dues.
Corporations, by contrast, raise the bulk of their political funds from top executives and corporate funds.
Semmens said that if the unions were thinking about fighting the initiative with money raised by a special assessment, they'll have to keep the Thursday ruling in mind.
"They can have a special assessment," Semmens said, "but they won't be able to charge nonmembers for it without asking."
Spokesmen for and against the November ballot proposal took away different lessons from the decision.
Jake Suski, speaking for the measure's backers, said the ruling affirmed that workers have the right to choose "to support the political objectives of the union."
The November measure, he said, would ensure that unions raise money that is "proportional to their workers' voluntary support for the political candidates and causes their money will be spent on."
Union coalition spokesman Brian Brokaw said the court's ruling proves there's no need for the paycheck proposition.
"Nonmembers already have the right to opt out," Brokaw said.
Still, Thursday's news was widely viewed as a significant blow to unions that have been under siege ever since Wisconsin Gov. Scott Walker and that state's Republicans stripped state employee unions of nearly all their representative power. Other states also have moved to curb union influence.
Earlier this month, organized labor lost a high-profile bid to recall Walker on the same day voters in San Diego and San Jose embraced local public pension reforms.
Some observers saw in Thursday's ruling the seeds of an invitation to challenge unions' ability to force workers to opt out of political funding.
"An opt-out system creates a risk that the fees paid by nonmembers will be used to further political and ideological ends with which they do not agree," Alito wrote. Although the court has always upheld the practice, he said, its former decisions "approach, if they do not cross, the limit of what the First Amendment can tolerate."
Justices Sonia Sotomayor and Ruth Bader Ginsburg agreed that SEIU should have allowed nonmembers to opt out of the assessment fee, but said the opt-out issue itself was "outside the scope" of the case.
Justice Stephen Breyer wrote the dissenting opinion, joined by Justice Elena Kagan. They worried that the court's majority opinion would be interpreted as a mandate for unions to adopt an opt-in system.
"The debate about public unions' collective bargaining rights is currently intense," Breyer wrote. "The question of how a nonmember indicates a desire not to pay constitutes an important part of this debate. There is no good reason for this court suddenly to enter the debate, much less now to decide that the Constitution resolves it."