NATIONAL LABOR RELATIONS BOARD, Petitioner, v. OKLAHOMA FIXTURE COMPANY, Respondent.
No. 01-9516.
United States Court of Appeals, Tenth Circuit.
July 9, 2002.
295 F.3d 1143
Before SEYMOUR, KELLY, Circuit Judges, and WINDER*, District Judge.
Stephen L. Andrew (and D. Kevin Ikenberry, with him on the briefs), Stephen L. Andrew & Associates, Tulsa, OK, for Respondent.
Petitioner National Labor Relations Board (“NLRB” or “Board”) seeks enforcement of its order issued in Oklahoma Fixture Co., 331 N.L.R.B. No. 145 (2000). In that order, the NLRB found that Respondent Oklahoma Fixture Company (“OFC”) violated Sections 8(a)(1) and (5) of the National Labor Relations Act,
The facts in this case are not in dispute. OFC is engaged in the manufacture and installation of retail store fixtures. The United Brotherhood of Carpenters and Joiners of America, Local No. 943 (“Union”), is the exclusive bargaining representative for the “inside unit,” those employees who work at OFC’s Tulsa, Oklahoma facility. The collective bargaining agreеment (“CBA”) in effect during the relevant period contains a union security clause which requires union membership “in good standing” as a condition of employment. II R. Doc. 32 at 4 (CBA Art. 2.1). That clause, however, also provides that “all employees covered by [the CBA] and hired on or after its effective date shall, on the ninety-first (91st) day following the beginning of such employment, become and remain members in good standing in the Union.” Id. The CBA states further that the only way a Union member “in good standing” can lose that status is through “failure to tender periodic dues and initiation fees uniformly required of all members.” Id. (CBA Art. 2.2). Although probationary employees are considered part of the bargaining unit, see id. at 4 (CBA Art. 1.1), probationary employees are excluded from certain benefits of the CBA, including seniority status, resort to grievance procedures, and paid holidays. See id. at 7, 12 (CBA Art. 5.1A, 8.2).
The Union established a “permit fee” to be paid by new inside unit employees (“probationary employees”) during the second and third months of their employment. The permit fee is equal in amount to the monthly dues that members pay to the Union. In 1989, OFC began the practice of deducting permit fees from the paychecks of inside unit employees who had signed checkoff authorization forms and forwarding the fees to the Union. In February 1997, OFC, without notice to the Union, ceased the practice of deducting and remitting the permit fees.
In response, the Union filed an unfair labor practice charge and the Board’s General Counsel subsequently issued a complaint alleging that OFC had violated sections 8(a)(1) and (5) of the Act by unilaterally changing the terms and conditions of employment. After a hearing, the administrative law judge concluded that OFC had engaged in the alleged unfair labor practice and the Board affirmed the judge’s decision.
In opposition to this petition for enforcement, OFC claims, as it did before the administrative law judge and the Board, that the deduction of the permit fees from the probationary employees’ wages and payment over to the Union violates Section 302 of the Act. That section, enacted as part of the 1947 amendments to the Act, ch. 120, 61 Stat. 136, 157 (1947), makes it unlawful for an employer to pay any money “to any labor organization ... which represents ... any of the employees of such employer who are employed in an industry affecting commerce....”
When reviewing an NLRB order, we grant enforcement if we find that the Board correctly interpreted and applied the law. N.L.R.B. v. Greater Kansas City Roofing, 2 F.3d 1047, 1051 (10th Cir. 1993). The Board’s factual findings are conclusive “if supported by substantial evidеnce on the record,”
We think it appropriate to begin by interpreting what constitutes “membership” under the CBA, an interpretation to which we owe no deference to the Board.1 See Litton Fin. Printing Div. v. N.L.R.B., 501 U.S. 190, 202-03 (1991) (“‘Arbitrators and courts are still the principal sources of contract interpretation.’” (quoting N.L.R.B. v. Strong, 393 U.S. 357, 360-61 (1969))); see also Int’l Union of Mine, Mill and Smelter Workers, Local 515 v. Am. Zinc, Lead & Smelting Co., 311 F.2d 656, 659-660 (9th Cir. 1963) (holding that “membership dues” in Section 302(c)(4) included assessments, but remanding because “the meaning of the words ‘Union membership dues’ used in [the collective bargaining agreement] ... is not so clear as to be self-evident”). Under article 2.1 of the CBA, employees do not become “members in good standing” until the ninety-first day following employment.2 “Member in good standing” status requires, under article 2.2 of the CBA, only payment of the “periodic dues and initiation fees required of all members.” Thus, “membership,” as defined in the CBA, contemplates only the minimal requirement of payment of membership dues and reflects the Supreme Court’s statement in N.L.R.B. v. General Motors Corp. that union membership can be a condition of employment only when “whittled down to its financial core.” 373 U.S. 734, 742 (1962). Further, as stated in article 2.1 of the CBA, this minimal membership re-
Despite the fact that employees are not members of the Union until their ninety-first day of employment, the Board claims here, as it did in the decisions below, that the term “membership dues” as used in Section 302(c)(4) of the Act should receive a broad construction. While we agree that a broad construction of “membership dues” for purposes of Section 302(c)(4) “is consistent with the criminal character of the sanctions it embodies,” N.L.R.B. v. Food Fair Stores, Inc., 307 F.2d 3, 12 (3d Cir. 1962), it is still an exception to a general rule. As such, we believe that, under the terms of this CBA and given the unambiguous statutory language, Section 302(c)(4)’s exception is not rooted in the Board’s rule-swallowing interpretation.3
Indeed, the broad construction of the exceptiоn in Section 302(c)(4) originated in a Department of Justice opinion letter that discussed whether “membership dues” included initiation fees and assessments. See Justice Department’s Opinion on Checkoff, 22 L.R.R.M. 46, 47 (1948). That opinion, however, was addressing a question as to whether “membership dues” included assessments where “the union constitution provides that such fees and assessments are included in the term ‘membership dues.’” Id. Further, the opinion noted specifically that the initiation fees and assessments in question were “incidents of membership.” Id. The cases upon which the Board relied in its opinion in this case, and which it relies upon in this petition, all involve circumstances where the additional fees in question were assessed against current members of the union. See, e.g., Schwartz v. Assoc. Musicians, Local 802, 340 F.2d 228, 230 (2d Cir. 1964) (holding that a tax “payable by and collected from all members” was a “membership due” under Section 302(c)(4)); International Union, 311 F.2d at 659 (reversing the district court after determining that “membership dues” includes assessments from employee union members); Food Fair Stores, 307 F.2d at 5 (noting that the assessment was to be paid “by every member”).
The Board repeats several justifications from its decision for treating the permit fees as membership dues, namely: (1) the Union’s permit fee is “similar” to membership dues because the amount is equal to that charged to Union members; (2) the permit fee resembles an initiation fee because it represents an amount the employee must pay the Union prior to becoming a member; and (3) the permit fee is reason-
To begin, the fact that the amount of the permit fee is equivalent to the actual membership dues has no relevance to determining whether the fees constitute “membership dues” under Section 302(c)(4). That the permit fees unintentionally, or even intentionally, bear similarity in dollar amount to membership dues does not overcome the fact that the CBA excludes the probationary employees from any definition of “Union member.” The contention that the permit fees resemble an initiation fee is similarly unavailing, especially in light of the fact that, according to the Union’s “Dues & Permit Structure,” probationary employees must pay an initiation fee after ninety-one days of employment. II R. Doc. 29. Finally, the fact that probationary employees obtain a free ride by receiving the benefits of collective representation without payment does not justify allowing the Union to receive payments in violation of the statute, especially when the probationary employees in this case are excluded from certain benefits. See Quick v. N.L.R.B., 245 F.3d 231, 245 (3d Cir. 2001) (stating that the employee was “permitted to become a ‘free rider’ because of the draftsmanship of [the CBA] not because the NLRB erroneously interpreted that clause....”). Although thе Board’s opinion suggests the permit fees could be reasonably viewed as covering the union’s cost for representing probationary employees, III Doc. 4 at 7, neither party contends, and we have found no indication that the CBA in this case contains an “agency shop” provision or that it provides for an agency or service fee.4 Cf. Grajczyk v. Douglas Aircraft Co., 210 F. Supp. 702, 703-04 (S.D. Cal. 1962).
We view our decision as adhering to Congress’ purpose for enacting Section 302, which included a concern “with corruption of collective bargaining through bribery of employee representatives by employers.” Master Insulators of St. Louis v. Int’l Ass’n of Heat & Frost Insulators, Local No. 1, 925 F.2d 1118, 1121 (8th Cir. 1991); see also Schwartz, 340 F.2d at 233-34 (discussing purposes of Section 302). While we certainly do not suggest that abuse of the funds occurred in this case, “Section 302 is aimed primarily at the prevention of possible abuse and not at providing a remedy for abuse actually perpetrated.” Employing Plasterers’ Ass’n v. Journeymen Plasterers’ Protective and Benevolent Soc’y, Local No. 5, 279 F.2d 92, 97 (7th Cir. 1960). Because we conclude that the remittance of permit fees in this case constitutes a violation of Section 302, OFC’s practice of doing so, even though a long-standing one, cannot be enforced as part of the CBA nor could it become, as the dissent suggests, a valid amendment to the CBA. See Jackson Purchase Rural Elec. Coop. Ass’n v. Local Union 816, 646 F.2d 264, 266 (6th Cir. 1981); see also N.L.R.B. v. BASF Wyandotte Corp., 798 F.2d 849, 853 n. 1 (5th Cir. 1986).
Accordingly, the Board’s petition for enforcement is DENIED.
The majority holds the National Labor Relations Board’s interpretation of membership dues under section 302,
I
Section 302 makes it a crime for money payments to pass between employers and unions1 but provides various exceptions for payments related to legitimate business between those entities. Under one of these exceptions, section 302(c)(4),2 employers may forward payments of “membership dues,” deducted pursuant to employees’ voluntary authorization cards, to the workers’ union.
The employees in this casе are probationary employees in their first 90 days of employment. These employees paid permit fees pursuant to “checkoff”: they voluntarily signed cards authorizing their employer, Oklahoma Fixtures Company, to deduct the amount of the permit fees from their paychecks and forward this amount to the union. The issue in this case is whether Oklahoma Fixtures, by forwarding these employees’ permit fees to their union, engaged in criminal conduct as defined under section 302, or whether forwarding such payments constituted non-criminal conduct under the (c)(4) exception for “membership dues.”
This case has been appealed from the National Labor Relations Board (the Board). In construing “membership dues” under section 302, therefore, we must defer to the Board’s interpretation of that labor statute if the interpretation is “reasonably defensible.” See Holly Farms Corp. v. NLRB, 517 U.S. 392, 409 (1996). The Board determined that the permit fees at issue here are “membership dues” under section 302. Oklahoma Fixture Co., 331 N.L.R.B. 145, 6-7 (2000). It reasoned that the Department of Justice, the Board itself, and numerous courts have consistently interpreted “membership dues” broadly to include initiation fees and other assessments of employees by their unions, as well as agency fees paid by nonmembers. It also determined that the permit fees are similar to dues, and noted that the probationary employees are members of the collective bargaining unit and therefore a legitimate subject of service fees for the union. On this basis, the Board concluded the permit fees are permissible “membership dues” under section 302.
The majority determines that the collective bargaining agreement (CBA) indicates the permit fees are not “membership dues” under section 302. It also holds that “membership dues” as used in section 302 is unambiguous and that this unambiguous meaning excludes these permit fees. Accordingly, it concludes the Board’s interpretation is unreasonable. As explained below, in my judgment the majority mis-
II
The majority begins its analysis of the statutory term “membership dues” by construing the CBA. Not only is the contractual meaning of that term largely irrelevant to our statutory interpretation issue, but in conducting this inquiry the majority also plainly misconstrues the CBA and labor law. The misreading of labor law, in particular, leads the majority to conclude, contrary to case law, that the CBA indicates the permit fees are not membership dues.
Examining what constitute “membership dues” under the CBA is misleading and unnecessary because it is the statute itself, not the CBA, that controls the meaning of “membership dues” under section 302. Similarly, inquiring who is a “member” of the union is also misleading. While the CBA here does determine who is required to be a member of the union, it is not true that only payments by actual union members are “membership dues” under labor statutes as they have been interpreted by the Supreme Court. See NLRB v. General Motors Corp., 373 U.S. 734, 83 S. Ct. 1453 (1963); see also Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 119 S. Ct. 292 (1998). In General Motors, the Court held that agency fees, which are payments by non-members as a service fee to the union for the benefits of representation, constitute “membership dues.” General Motors, 373 U.S. 734. Although the Court was construing section 8(a)(3) of the National Labor Relations Act,
Having incorrectly decided to use the CBA as a basis for statutory interpretation, the majority proceeds to compound the problem by misreading the contract and misapplying labor law to conclude that the permit fees cannot be membership dues within the meaning of section 302. First, the majority states that under the CBA employees do not become union members until 90 days have passed. In fact, although employees are not required (as a condition of employment) to become members until their 91st day, they are not precluded from becoming members before that, as the company conceded at oral argument. The majority also mistakenly states that probationary employees are required to pay the permit fees; however, these fees are voluntary and the company may deduct them only after employees submit voluntary authorization cards to this effect. The majority thus states that probationary employees are required to pay dues and are excluded from being union members, neither of which is cor-
While both section 8(a)(3) and section 302 are labor statutes and both contain the term “dues,” the prescriptions, purpose, and previous interpretations of “dues” in each are not the same. Section 8 is aimed at protecting employees from union and employer coercion. Section 8(a)(3) prohibits compulsory unionism except for permitting CBAs to require employees to compensate unions for repre-
Notes
In contrast, the term “dues” in section 302 has been interpreted broadly for two reasons. First, section 302 is unrelated to any coercive power of the employer or union over employees. As I have pointed out, the statute prohibits payments between employers and unions that do not fall under one of its exceptions. The purpose of the statute is to prevent corruption between unions and employers, not to curb any coercive power of the union over employees because, unlike section 8(a)(3),
Unlike compulsory dues permitted under 8(a)(3), which are involuntary, section 302(c)(4), allowing employers to convey membership dues to unions, relates to the voluntary procedure of checkoff. Because checkoff is permitted only pursuant to voluntary authorization cards, payments from employees may be forwarded only after the employees have agreed not only to have the fees deducted from their paychecks, but also to pay them in the first place. Thus, even if certain fees may not be required under 8(a)(3), they may still be voluntarily made and be a legitimate subject of checkoff under 302(c)(4). See, e.g., American Zinc, 311 F.2d at 659-60 (comparing permissible payments under sections 302(c)(4) and 8(a)(3)). Whether particular payments may be required as membership dues under 8(a)(3) is therefore an entirely separate issue from whether they are a permissible subject of checkoff under 302(c)(4). See, e.g., Food Fair Stores, Inc., 307 F.2d at 12 (construing 8(a)(3) differently from Section 302 “creates no inconsistency with the enforcement of Section 302 for it is completely extrinsic thereto.”); Grajczyk, 210 F. Supp. at 705-06 (holding that checkoff for agency fees does not violate section 302 but noting “[w]hether or not the agreement by which [checkoff for agency fees] was brought about is an unfair labor practice or otherwise unlawful is quite a different question ...”).
The second reason “membership dues” in section 302 is interpreted broadly is because they constitute an exception to a criminal statute. Arroyo, 359 U.S. at 425; Food Fair Stores, Inc., 307 F.2d at 12 (“The broad construction granted in the administration of section 302 by the Department of Justice is consistent with the criminal character of the sanctions it embodies.”). The Third Circuit explained the application of the differences between sections 302 and 8(a)(3) as follows:
In acquiescing in the interpretation of the Department of Justice of Seсtion 302 for the purpose of its administration of that statute in its penal aspects the Board did not bind itself to a similar construction in the administration of Sections 8(a)(3) and 8(b)(2). Two different policies are brought into play, the operative effects of which create no conflict. Section 8(a)(3) prevents a union shop employer from discharging an employee at the request of the union unless he has reason to believe that only failure to pay uniform ‘periodic dues’ or ‘initiation fees’ is the sole cause of his lack of union membership, while Section 302, under the interpretation of the Department of Justice, permits an employer with a valid union security contract to deduct assessments, providing the employee has voluntarily signed an authorization as prescribed in the section. The broad construction granted in the administration of Section 302 by the Department of Justice is consistent with the criminal character of the sanctions it embodiеs. The narrow construction applied by the Board to the enforcement of section 8(a)(3) and 8(b)(2) is consistent with the overall protection afforded by those sections to employees and equally creates no inconsistency with the enforcement of Section 302 for it is completely extrinsic thereto.
Because of the differences between the statutes, the majority’s proposition that the permit fees here cannot be membership dues if they fail to meet, or appear to violate, the 8(a)(3) definition of compulsory membership dues misconstrues both the CBA and section 302. The prescriptions of section 8(a)(3) for limiting compulsory unionism should not be applied to determine whether permit fees give rise to criminal conduct by Oklahoma Fixtures. Accordingly, the majority is in error in concluding that because probationary employees are not required to be members until their 91st day of employment, checkoff for the permit fees must violate section 302.
III
After suggesting the CBA’s definition of member should guide our inquiry, the majority turns to the meaning of “membership dues” under the statute. The majority’s analysis turns on its conclusion that the term “membership dues” is plain and unambiguous. This conclusion is contrary to Supreme Court precedent, every other court that has considered the issue, and common sense. The term used in section 8(a)(3) is actually “periodic dues” paid for “acquiring or maintaining membership” rather than “membership dues” as used in section 302,6 which provides one obvious reason the meaning of “dues” in the two statutes are not interchangeable. See, e.g., Food Fair Stores. Inc., 307 F.2d at 9-16 (construing “periodic dues” under 8(a)(3) to exclude strike assessments). The Supreme Court has stated on more than one occasion that the “dues” in section 8(a)(3) incorporates more than its literal meaning suggests. See Marquez, 525 U.S. at 46 (the statutory language of section 8(a)(3) “incorporates all the refinements that have become associated with that language.... To the extent that these interpretations are not obvious, the relevant provisions of § 8(a)(3) have become terms of art....”); General Motors Corp., 373 U.S. at 742 (“[T]he 1947 amendments [to section 8] not only abolished the closed shop but also made significant alterations in the meaning of ‘membership’ for the purposes of union-security contracts.”). It seems highly unlikely that “dues” in section 8(a)(3) would encompass such non-obvious interpretations and refinements but “dues” in section 302 would not. Indeed, the Ninth Circuit has expressly held that the term “membership dues” in section 302(c)(4) is ambiguous. American Zinc, 311 F.2d at 660.7
The fact that periodic or membership dues have been construed narrowly in 8(a)(3), but broadly as an exception to section 302, or even that the term is construed differently in the two statutes at all, also strongly suggests its meaning is not plain. See Food Fair Stores, Inc., 307
Moreover, if the meaning of “membership dues” is plain, then it seems we must accept its literal meaning. The literal meaning, however, would exclude agency fees, which the Supreme Court has held are covered under section 8(a)(3), General Motors Corp., 373 U.S. 734, and which undoubtedly fall within the section 302(c)(4) exception as well, see Grajczyk, 210 F. Supp. at 705-06. Nor is the company’s argument that agency fees are in fact membership dues, rather than included in “dues” as a matter of statutory construction, convincing in the least. Employees who opt not to join the union and to pay agency fees in lieu of membership dues are not members of the union, they are non-members paying agency feеs so they will not have to become union members to maintain employment. The Supreme Court made this clear in General Motors, where its holding that agency fees are “membership dues” under 8(a)(3) was based on two conclusions: the statute “made significant alterations in the meaning of ‘membership’ for the purposes of union-security contracts,” 373 U.S. at 742; and this meaning incorporated the clear intent of Congress to permit union security agreements under that statute, id.
Similarly, a literal interpretation of “dues” (as opposed to “membership”) would also exclude payments such as strike assessments, since the traditional understanding of “dues” covers only monthly (or other periodic) payments made by members, not additional assessments or fees imposed by the union. See, e.g., Food Fair Stores, Inc., 307 F.2d at 11-16. The majority nevertheless suggests it would include such assessments in the meaning of membership dues, see op. at 1146, when it distinguishes this case from cases upholding other non-periodic assessments because they involve payments by “current members.” See American Zinc, 311 F.2d at 659-60 (upholding strike assessment); Schwartz, 340 F.2d 228 (upholding tax imposed over and above dues). Similarly, while section 8(a)(3) expressly permits initiation fees, section 302 does not; the rationale of a literal interpretation of section 302 would also exclude initiation fees. Thus, the majority’s assertion that the statute is unambiguous is simply inconsistent with the rest of the opinion and the cases it cites.
Not only does the majority incorrectly view the term “membership dues” as unambiguous, its determination of the substance of that plain meaning—and its subsequent conclusion that the Board’s interpretation is unreasonable—is flawed as well. The Board’s interpretation is supported by a much more convincing rationale and easily meets the “reasonableness” standard we are to apply to Board interpretations of labor legislation. See
The majority reasons that permit fees are not comparable to other types of employee payments regarded as the equivalent of membership dues because all other types of payments are made by “current members,” and probationary employees are not union members. As discussed supra, this reasoning would make agency fees illegal under section 302 because non-members paying fees in lieu of membership dues are not “current members,” yet such agency fees are considered “membership dues” under the more narrowly interpreted section 8(a)(3). See General Motors Corp., 373 U.S. at 734.
In contrast, the rationale of cases upholding broader interpretations of section 302 is logical and convincing. In Schwartz, for example, the Second Circuit held that a tax imposed over and above dues falls within section 302. See 340 F.2d at 233-34. In doing so, it reasoned that a narrow construction of section 302(c)(4) is not consistent with the limited purpose of the statute,8 the taxes are similar to dues, it is irrelevant that the taxes were not required as a condition of employment (i.e. whether they were “dues” under 8(a)(3)), and there is no other logical or practical reason the taxes should not be permitted under section 302. Id. Similarly, in American Zinc, the Ninth Circuit held strike assessments are a permissible subject of checkoff under section 302. It noted the consistent position of the Department of Justice and the Board on the meaning of “dues,” which excludes “assessments” from the 8(a)(3) term “dues” but not from section 302, and further noted that interpreting dues in section 302 more broadly than in 8(a)(3) is consistent with the different provisions and purposes of those two statutes. Id. at 659-60.
Relatedly, in Food Fair Stores, the Third Circuit upheld the Board’s consistent position that strike assessments are “dues” under section 8(a)(3) but not under section 302 because the position is “not contrary to any clearly expressed legislative intent and [is] totally reasonable.” Food Fair Stores, Inc., 307 F.2d at 16. Finally, in holding agency fees are legal under section 302(c)(4) even though they do not fall within the literal interpretation of “membership dues,” the court in Grajczyk reasoned that the prohibitions of the statute are directed at the relationship between the еmployer and the union, permitting agency fees is “thoroughly consistent” with the purpose of the statute, and there is no practical difference between agency fees and members’ dues. Grajczyk, 210 F. Supp. at 705-06.
The reasoning of these cases supports my conclusion that these permit fees fall under section 302(c)(4). There is no suggestion these payments are related to union-employer corruption, they resemble dues paid by actual members, and it is consistent with the Board’s long-standing position to so hold. See Holly Farms Corp., 517 U.S. at 405-09 (noting that Board’s interpretation adhered to “longstanding NLRB precedent” in upholding the interpretation as reasonable).
In discerning whether the permit fees are dues under section 302, the majority also holds it is irrelevant whether the per-
Beck indicates the importance the Court has placed specifically on a “union security” purpose for determining whether payments qualify as “dues,” perhaps simply reflecting that “union security” is the core, legitimate purpose of dues themselves. In Beck, the issue was whether unions could spend required agency fees on any activities other than representation activities for the direct benefit of employees in the bargaining unit. In determining whether unions could require agency fees that exceeded what was necessary to fund direct representation activities, the Court made it clear that “dues” has always included at least payments by employees who might otherwise be free riders—payments to compensate the union for its representation. Beck, 487 U.S. at 747-54 (discussing history and purpose of section 8(a)(3)). In other words, while Beck decided that unions could not require employees they represent to pay for activities such as political organizing, it affirmed that dues unquestionably includes fees whose рurpose is union security. Id. General Motors reflects a similar rationale because there the Court interpreted “dues” in section 8(a)(3) to include agency fees based primarily on construing “dues” to reflect Congress’s intent to preserve union security agreements, in spite of finding the term did not literally encom-
The Supreme Court has articulated the legislative goal of preserving union security primarily in construing 8(a)(3), but as Congressional labor policy there is every reason this principle should equally inform the construction of section 302. As the Supreme Court noted in Arroyo, section 302 “was enacted as part of a comprehensive revision of federal labor policy in the light of experience acquired during the years following the passage of the Wagner Act....” 359 U.S. at 425; see also Assoc. Builders & Contractors, 700 F.2d at 1275 (concluding “supplemental dues” were legal “membership dues” under section 302(c)(4) after determining they were spent for a proper purpose under section 8(a)(3)). Indeed, the legislative history of section 302 indicates Congress intended that its policy of preserving union security would also apply to that statute. See Grajczyk, 210 F. Supp. at 705 (history of a defeated amendment to section 302 indicates Congress wanted to permit, not prohibit, service fees under section 302).
Here, probationary employees are a legitimate subject of union security because they are members of the bargaining unit and are covered by the CBA. As noted above, see supra note 5, unions are legally obligated to represent all employees in the bargaining unit, not just those employees who are union members. Union security agreements allow unions to obtain “service fees,” or dues-like compensation, from employees they are obligated to represent but who opt not to join the union. The probationary employees are a legitimate subject of union security because they are members of the bargaining unit, are covered by the CBA, and are owed a duty of fair reprеsentation like other members of the bargaining unit.10 See, e.g., Hodges, 728 F.2d at 414, 417. Thus, the permit fees compensate the union for its representation of the probationary employees. This, in effect, defines membership dues to cover all members of the bargaining unit, rather than just members of the union. This is a rational way to interpret membership dues under section 302 because it is consistent with the inclusion of agency fees and, more generally, encompasses exactly those members of the unit to whom a union owes a duty of fair representation and from whom a union may legitimately collect service fees.
In conclusion, the majority goes against a substantial and well-reasoned legal and administrative tide in holding that the term “membership dues” in section 302 is unambiguous and that the Board’s interpretation is unreasonable. I find these conclusions, and the reasoning supporting them, flawed and unpersuasive. For these reasons, I respectfully dissent.
That these rights and duties apply specifically to probationary employees is well-settled. See, e.g., Hodges, 728 F.2d at 417 (rejecting probationary employee’s argument that his state law wrongful discharge claim is not preempted by Railway Labor Act because he is not a union member; claim is preempted because probationary employee is “subject to the terms and conditions of employment obtained in the agreement, and the collective bargaining agent was obliged to represent him.” (emphasis added)); see also D’Amato, 760 F.2d at 1489 & n. 20 (rejecting as “specious” probationary employee’s claim that he need not exhaust administrative procedures because he is probationary, noting that while such employees are at-will, “‘the right to terminate probationary employees is not unlimited,’” and “probationary employees are members of the Union’s collective bargaining unit to whom the Union owes a duty of fair representation.”) (quoting Standard Oil Co. of California, 38 Lab. Arb. Awards 350, 352 (1962) (emphasis added)); W.W.J. Van Leeuwen v. United States Postal Serv., 628 F.2d 1093 (8th Cir. 1980) (adjudicating duty of fair representation claim by probationary employee against his union despite that probationary employee precluded from grievance and arbitration process); Conrad v. Delta Air Lines, Inc., 494 F.2d 914, 916 (7th Cir. 1974) (collective bargaining agreement limiting probationary employees’ protections from discharge “not arbitrary nor irrational” so union could reject plaintiff’s grievance without violating the duty of fair representation it owed probationary employee).