Suit Could Cost Cali Union $100 Million

Workers seek back dues

Members of the SEIU hold a rally
Members of the SEIU hold a rally / Getty Images
July 11, 2018

One of California's largest labor unions is at the center of a lawsuit that could cost it $100 million in the wake of a Supreme Court ruling overturning forced unionism in the public sector.

In June, the Supreme Court ruled in Janus v. AFSCME that government unions are inherently political and policies forcing workers to pay dues or partial fees to cover collective bargaining violated their First Amendment rights. Government agency workers are looking to recover the money they paid to the California state chapter of Service Employees International Union as a condition of employment. The class action suit, Hamidid v. SEIU Local 1000, could force the union to refund money taken from 40,000 workers dating back to 2012.

The case was filed by the National Right to Work Legal Defense Foundation prior to the Janus decision. The foundation, which also brought the Janus case before the Supreme Court, is now looking to move forward with the suit and recover wages for those workers. They are now asking the justices to move beyond ending future coerced unionism and make labor organizations pay back the money taken from unwilling members.

"The union fees seized from the wages of these public employees include a substantial political, ideological, and other nonbargaining component, e.g., expenses for candidate endorsements," the suit says. It further demands the union provide "Plaintiffs compensatory damages for the injuries sustained as a result of Defendants’ unlawful interference with and deprivation of their constitutional and civil rights including, but not limited to, the amount of agency fees improperly deducted from their wages, nominal damages, and such other amounts as principles of justice and compensation warrant," as well as attorney fees.

The union declined to comment on the suit.

SEIU Local 1000 is a major player in California politics. It spent more than $8.8 million on political activities and lobbying in 2017, about half of the money it collected from represented workers through their local unions, according to its most recent federal labor filing. The union spent only $345,621 "on behalf of individual members" over that time—less than 2 percent of the $17.8 million it collected from employees.

The foundation brought the suit to the Supreme Court in the hopes of recovering more than just money for the affected California workers. It also seeks an end to "opt-out" unionism, in which employees are automatically enrolled in the union unless they issue a formal withdrawal. A January brief filed to the Supreme Court argues that public sector agencies should instead abide by an opt-in system, in which workers voluntarily join the union.

"Does it violate the First Amendment for state law to presume that an individual consents to subsidizing non-chargeable speech by the group he is compelled to fund (an 'opt-out' rule), as opposed to an 'opt-in' rule whereby he must affirmatively consent to subsidizing such speech?" the Supreme Court filing says.

This is not the only class action suit to be filed in the wake of Janus. Several states have already received multiple lawsuits brought by labor watchdogs seeking to recover forced dues payments. Foundation president Mark Mix said such suits are necessary to check union attempts to preserve their cash flow by working around the Janus decision. He praised the Court for ruling in favor of individual workers who object to making union payments.

"Around the country, the effect of the Janus decision is just starting to be felt," Mix said in a statement. "Thanks to this landmark ruling, tens of thousands of California government employees are now a step closer to finally receiving recompense for years of being forced to hand over their hard-earned money to an SEIU union they choose not to join."