Supreme Court Finds Union Assessment Without Proper Notice Illegal

The U.S. Supreme Court held that the Service Employees International Union (SEIU) acted unlawfully when it imposed a mid-year special assessment for political purposes against California state employees without issuing a new notice of union expenditures as required by law. Knox v. Service Employees International Union, Local 1000 (2012).

The term “agency shop” describes a work environment in which a union acts as an agent for all employees, regardless of their union membership. Under an agency-shop arrangement, even employees who do not join the union must pay annual fees to the union. These fees cover the nonpolitical union services related to running the union. Previous case law requires a union operating as an agency shop to provide an annual notice to nonmembers in order to collect this annual fee and any dues increases or special assessments. The notice gives nonmembers a specified period of time to object to full dues payment and to inform the union that the nonmember wants only to pay the annual fee. 

In June 2005, the SEIU issued the required notice to public-sector employees covered under an agency shop arrangement. That notice stated that the fee was subject to increase without further notice. Shortly after the time period to object to full dues payment expired, the SEIU informed its members of a temporary 25 percent increase in fees and a temporary elimination of the monthly dues cap. The increase was to fund the union’s effort to oppose special elections called for by Gov. Arnold Schwarzenegger.

Many of the nonunion employees objected to this increase and sued claiming that they should not have to pay any part of the union’s political expenditures or that that they should have been given another opportunity to elect to pay the annual fee rather than the full dues payment.