A federal appeals court has ruled that nonmembers of the Civil Service Employees Association (CSEA) cannot be required to pay for the union’s efforts to organize private-sector employees.

The decision, if upheld on appeal, is a setback in a campaign by public employee unions to curb “contracting out” by state and local governments.

Of the 200,000 public employees CSEA represents statewide, approximately 9 percent (about 18,700) are nonmembers. They are required to pay agency shop fees to the union. (Under state law, these workers are not required to contribute to political campaign activities of the union.)

In its June 28 decision, the U.S. Court of Appeals for the Second Circuit overturned a lower court decision when it ruled “charging these nonmembers for the organizing expenses at issue violates their First Amendment rights.” However, court agreed with the lower court that CSEA had properly disclosed its organizing costs.

The union argued that organizing private-sector workers falls within its collective bargaining interests. It said subsequent increases in private-sector salaries and benefits would deter government employers from privatizing services, thus protecting jobs of government employees. The court notes:

Facts undisputed by the parties indicate that public-sector employers in New York have attempted to shift jobs held by CSEA employees in the developmental disability, food service, and courier fields to nonunion employees. For example, private-sector employees in the developmental disability field receive an average of $15,000 less in wages and benefits annually than CSEA labor, and the State has therefore directed growth in that industry towards less expensive nonunion labor.

The case, was brought by three Monroe County probation employees, who pay agency shop fees to CSEA. The court questions how probation officers would benefit from organizing workers in unrelated fields.

…the fact that this organizing is germane to CSEA’s collective bargaining activities does not resolve the issue of whether these particular plaintiffs can properly be charged for it. It is clear to us that as probation officers, they derive little meaningful benefit from the unionization of workers in the developmental disability, food service, and courier industries, and therefore present no free-rider problem by not paying the costs of this organizing.

Originally Published: NY Public Payroll Watch, July 19, 2010