Three Observations About Knox v. SEIU

          Even for someone outside the world of legal academics, it was an extraordinarily interesting week at the Supreme Court.  I found two of this week’s decisions particularly intriguing.  The one I will discuss in this post, Knox v. SEIU, signals the Court’s unwillingness to rely on legal fictions to justify state-compelled speech, and it may also signal a willingness to make a deeper commitment to prohibiting involuntary association, as well.  The other, FCC v. Fox Television Stations, Inc., is particularly interest to me because it could have important implications in my principal area of practice (which is about as far removed from broadcast licensing as possible).  But I will save a discussion of that decision for another day during my stint as a temp for the vacationing Mike Greve. 

            First, a little background.   The controversy in Knox arose from an additional assessment by the Service Employees International Union on the wages of California public employees represented by the union.  The assessment was in addition to regular fees, charged to members and non-members alike, related to the union’s role as the employees’ collective bargaining agent.  The regular assessments were made after prior notice and an opportunity to opt out of additional, advocacy-related fees.

          Amounts to be raised by the special assessment were earmarked solely for activities to oppose ballot initiatives and engage in other campaign activities to oppose the legislative agenda of Republican Governor Arnold Schwarzenneger.  The non-member employees were not given notice of the special assessment before the deductions were made, and therefore had no opportunity to express their consent either by opting in or opting out.

          A public sector union may charge members and non-members alike for its expenses as their bargaining agent.  The union can demand contributions for political activities from its members, because it can set the terms and conditions of membership.   Under Teachers v. Hudson, 475 U.S. 292 (1986), the union also may include in its annual fee charged to all represented employees a component representing its anticipated expenses for political activities, provided it gives members of the bargaining unit who are not union members an opportunity to opt out of paying that portion of the annual amount.

          But what if the union decides to top up its political war chest at mid-year?  If the union issues another Hudson notice pertaining to the special assessment , can it make the special assessment apply to the wages of non-members who do not opt out?  In Knox v. SEIU, the Court answered that it cannot.

         1.   The opinion of the Court broadly endorsed the principle that the First Amendment prohibits a private entity from using state authority or apparatus to compel individuals to subsidize the entity’s activities that constitute speech.  As the Court explained, “compulsory subsidies for private speech are subject to exacting First Amendment scrutiny.”  Applying that scrutiny, the Court held that “when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent.”

          Thus, the majority ruled in favor of the public employee plaintiffs on the grounds that their rights under the First Amendment were violated when the special assessment was deducted from their wages without their having opted in to the special assessment.  (An opinion concurring in the judgment written by Justice Sotomayor and joined by Justice Ginsburg expressed the view that notice and a pre-deduction opportunity to “opt out” is sufficient to satisfy the requirements of the First Amendment under the circumstances.)

            Perhaps even more significant than the result in Knox, however, is the reasoning of the five-member majority.  In Hudson, the Court held that public-sector unions can collect fees from nonmembers, including fees that might or certainly would be used for political activities such as lobbying, so long as the unions give the nonmembers an opportunity to “opt out” of paying any money for political purposes.  Justice Alito’s opinion for the Court in this week’s decision holds that an affirmative expression of consent was necessary under the circumstances presented in Knox.

          Importantly, the opinion strongly suggests that the current “opt out” approach for the political activity component of annual assessments may not satisfy the First Amendment’s prior consent requirements under any circumstances.  Justice Alito’s opinion in Knox indicates that in cases such as Hudson, the Court for all intents and purposes may simply have taken it as a given that the absence of an opt-out response was sufficient to treat a constitutional right as waived.  “[T]he opt-out approach appears to have come about more as a historical accident than through the careful application of First Amendment principles.”

          The “historical accident” that troubled the majority may have been merely what the majority perceived as the failure to consider an evidentiary question.  In other words, the majority may have felt that the Court’s prior case law should have decided explicitly whether the absence of receipt of an opt-out form is sufficient evidence of actual consent.  This is a legitimate concern in any instance involving a blanket rule pertaining to indirect evidence, as well as presumptions and allocations of an evidentiary burden.

          However, I am not aware of any authority under the Hudson regime that a non-member can offer evidence as to his or her actual wishes regarding payroll deductions to finance political spending by a union.  If consent-in-fact is not triable under Hudson, the question arises precisely what was the perceived deficiency in pre-Knox case law.  Could it have been a concern that in cases such as Hudson the Court simply by-passed the question of actual consent.  In other words, does the Knox majority think that Hudson relies on a doctrine of “constructive waiver?”  If so, the critique of  pre-Knox cases in this field is based not on the failure of earlier opinions to answer a question “correctly,” or even on the failure of earlier opinions to go about answering a question the “right way,” but the failure to ask the correct question at all.

          2.   Knox is first and foremost a blow for the First Amendment.  However, it is important for several additional reasons.  The first and most pragmatic of these is the decision’s implications for the revenues available to public-sector unions for political activities.  As the majority points out, almost by definition, members of a bargaining unit who have chosen not to become members of the union are unlikely to “opt in” to a proposal allowing the union to extract more money from their paychecks for political purposes.  Thus, Knox and its anticipated progeny easily could result in less advocacy spending by public employees’ unions.  States and municipalities may welcome that result as they are jolted awake by the extent of their unfunded pension obligations and other accrued consequences of their past misgovernment.  Certainly other stakeholders will be grateful.

          Beyond that, Knox could not have been decided at a worse time for public sector unions, still reeling from their decisive defeat in the Wisconsin recall election.   In fact, the northern heartland of the country is no longer the redoubt for unions it once was.  Earlier this year, Indiana decided to become the nation’s twenty-third right-to-work state, something that would have seemed incredible not so long ago.  (Indiana’s decision is being challenged in the courts, and in the interest of full disclosure, I should mention that my Indianapolis colleague Asheesh Agarwal has been retained to file amicus briefs in support of Indiana’s right-to-work law.)

          3.  Moreover, the majority opinion in Knox stresses the important link forged in the Court’s First Amendment case law between the Court’s protection of freedom of speech and freedom of association, on the one hand, and the Court’s role as the guardian-of-last-resort for the political mechanics envisioned by the Constitution.  That role encompasses seeing to it that the “marketplace of ideas” is as robust as the most enthusiastic speaker wants to make it.  However, for at least some of the current Justices, this goal is not merely an end in itself.

          In fact, for some Justices, preserving the political freedoms of the First Amendment has an instrumental value even beyond creating the circumstances under which it is assured that voters have access to a limitless supply of subtly different political orientations to steer by when they vote.  Perhaps most especially for Justice Kennedy, there is an overarching principle of political accountability, essential to the republican form of government, that informs both the structural provisions of the original Constitution (particularly the scheme of dual sovereignty reflected in federalism) and the freedoms of speech and assembly.

          The one case that above all others demonstrates the importance of this concept to Justice Kennedy’s views is Citizens United v. Federal Election Committee(2010), where he wrote for the Court, “Speech is an essential mechanism of democracy, for it is the means to hold officials accountable to the people.”  For that reason, it strikes me as particularly significant that Knox leads off by invoking “the close connection between our Nation’s commitment to self-government and the rights protected by the First Amendment.”  Although the Knox opinion does not cite Citizens United in that context, its importance is, if anything, made more conspicuous by its absence from all but the opinion’s final paragraph.