Massachusetts Court Holds Unions Must Conduct Audits

In a resounding victory for workers rights, a requirement that unions provide audited financial statements to nonmembers before demanding payment of agency fees was upheld by the Mass. Supreme Judicial Court in a Jul. 15 ruling. The unanimous ruling rejected the arguments of three Mass. Teachers Ass’n affiliates that small unions should be excused from the financial burden of conducting independent audits. “We see no basis for modifying the United States Supreme Court’s express requirement that a union must accompany any demand for agency fees with an independently audited verification of its major expenses,” the opinion by Justice Neil L. Lynch stated.

The case involved the Fairhaven Edu. Ass’n — which had an annual income of $29,000 and represented 185 employees, of whom seven were nonmembers — the Bridgewater Edu. Ass’n — which had an annual income of $17,900 and represented 116 employees including two nonmembers — and the Wareham Edu. Ass’n — which had an annual income of $9,400 and represented 205 employees including one nonmember. Allegedly, the cost of local union audits ranged from $2,230 to $4,105. The local portion of fees the unions were seeking to obtain from each nonmember was $45 or less.

An audit of union expenditures “provides significantly more verification and reliability” than a compilation or review conducted by an accountant, the court held. It is also the type of procedure contemplated by the Supreme Court in its 1986 decision: Chicago Teachers Union v. Hudson. Hudson didn’t include a small union exemption. [BNA 7/20/99]