Indianapolis Local Loses Dues Case on Appeal

In an important victory for workers’ rights, the Ind. Court of Appeals ruled Aug. 5 an union contract’s “fair share” provision requiring non-union-member teachers to pay agency fees to the Indianapolis Edu. Ass’n in an amount equal to members’ union dues violates the nonmembers’ First Amendment rights.  Despite the fact that the provision allowed refunds of the proportion of fees spent on political and ideological activities and the fees paid by objecting nonmembers were held in escrow, the court held that IEA failed to prove that its collection procedures were carefully tailored to minimize infringement of First Amendment rights.

“Collection of full membership dues with a later refund creates the risk that those funds will be used for purposes other than collective bargaining and results in a loan to the Association of money to which it is not entitled,”  stated Judge William I. Garrard. He rejected IEA’s argument that the escrow provision avoided constitutional violations saying that by requiring collection of fees equal to full membership dues, “the Teachers are deprived of the use of funds that the Association is not entitled to collect in the first instance.”

The contract between IEA and the Indianapolis school board for the 1993-94 school year forced teachers who chose not to join the union to pay the “fair share” fee to IEA and its affiliates — the Ind. State Teachers Ass’n and the Nat. Edu. Ass’n — that was equal to membership dues.  The board capitulated and each nonmember was forced to submit a payroll deduction form to transmit deducted amount directly to IEA. The contract said that “[p]persons who refuse to sign an authorization form or who revoke an executed form have a continuing enforceable obligation to pay the fair share fee directly to the Association.”  It also provided that the fees of nonmembers who filed a legal challenge would be held in escrow pending final resolution of the claims. An arbitrator determined that nonmembers’ fair share fee for the 1993-94 school year was $418.92. IEA then sued the nonmembers who refused to pay the fee.

Although the nonmembers in the suit never actually paid any fees, Garrard decided that the contract term stating that nonmembers have “a continuing and enforceable obligation to pay” constituted a sufficient violation of their First Amendment rights to merit summary judgment in their favor. Note that Ind. law now prohibits “fair share” provisions in all contracts executed after Jul. 1, 1995. [BNA 8/16/99]