Food and Commercial Workers Local 4 (Safeway, Inc.), (2008)

United Food and Commercial Workers Union, Local 4, affiliated with United Food and Commercial Workers Union (Safeway, Inc.) and Pamela Barrett. Case 19–CB–9660

October 31, 2008

DECISION AND ORDER

By Chairman Schaumber and Member Liebman

On May 20, 2008, Administrative Law Judge James M. Kennedy issued the attached bench decision. The General Counsel filed exceptions and a supporting brief, and the Respondent filed cross-exceptions, a supporting brief, and an answering brief to the General Counsel’s exceptions.

This case involves the application of extant precedent concerning employees who object to paying dues for nonrepresentational activities pursuant to the Supreme Court’s decision in Communications Workers of America v. Beck, 487 U.S. 735 (1988) (Beck), and the sufficiency of the financial information a union must provide to these objectors to satisfy its duty of fair representation under the Board’s decisions in California Saw & Knife Works, 320 NLRB 224 (1995), enfd. 133 F.3d 1012 (7th Cir. 1998), cert. denied sub nom. Strang v. NLRB, 525 U.S. 813 (1998) (California Saw), and Television Artists AFTRA (KGW Radio), 327 NLRB 474 (1999), reconsideration denied 327 NLRB 802 (1999), petition for review dismissed 1999 WL 325508 (D.C. Cir. 1999) (KGW Radio). The judge found that the Respondent satisfied its duty of fair representation by providing the Charging Party, a Beck objector, with sufficiently verified financial information and dismissed the complaint.

The National Labor Relations Board[1] has considered the decision and the record in light of the exceptions and briefs and has decided to adopt the judge’s rulings, findings, and conclusions only to the extent consistent with this Decision and Order.[2] Specifically, we reverse the judge’s finding and conclude that the Respondent violated its duty of fair representation and therefore Section 8(b)(1)(A) by failing to provide the Charging Party with sufficiently verified financial information.

Background

The Respondent represents a unit of retail employees at the Safeway store in Whitefish, Montana. The employees are covered by a collective-bargaining agreement, which contains a union-security clause. Charging Party Pamela Barrett began working at the Whitefish store on April 4, 2007.[3] On May 4, the Respondent notified Barrett of her rights to join or be a financial core member of the Union and, in the latter case, to object to paying union dues for nonrepresentational activities. Subsequently, Barrett notified the Respondent that she did not want to be a union member and that she wanted to pay only the “agency fee.” She also requested a “verified financial disclosure of union expenditures.” On May 11, the Respondent acknowledged Barrett’s request for nonmember status and informed her that her dues would be $31.50 per month, which represented 95 percent of the current member dues rate. As support for this reduction, the Respondent provided Barrett with a 1-page financial statement, listing its chargeable and nonchargeable expenses for the year ending December 31, 2006, and stating its chargeable expense rate for representational activities to be 95 percent of its total expenses. The Respondent also provided Barrett with the International Union’s 2005 audited financial statement, which stated the International’s chargeable expense rate to be 85 percent. The Respondent reiterated this information in a May 16 letter.

In her May 29 response, Barrett asserted that she “was not provided with any information that explains or justifies the calculation of this high agency fee.” She requested that the Respondent provide her with her “procedural rights,” including a verified financial disclosure explaining the basis for the calculation of the “agency fee.” On June 15, the Respondent responded to Barrett, stating that it was a small local union and thus it did not have many nonchargeable expenses. The Respondent directed Barrett to the expenditure information it provided on May 11 and reasserted that her nonmember dues would be $31.50 per month.

On December 14, apparently in an attempt to settle this case, the Respondent sent Barrett a reimbursement check for the difference between the dues she paid from May to December based on the Respondent’s 95-percent chargeable expense rate, and the amount she would have paid if her dues had been calculated using the International Union’s 85-percent chargeable expense rate.[4] In addition, the Respondent acknowledged that when it provided its statement of chargeable expenses on May 11, it did not include a report showing that the figures in the statement were reviewed by an accountant. The Respondent thus provided the “Independent Accountant’s Report,” dated February 19, which stated that an accountant reviewed the expenditure statement, but that the information included in the statement was based solely on the representations of the Respondent’s management. The report further stated that it was “substantially less in scope than an audit” and that the accountant expressed no opinion regarding the financial statement as a whole.

Judge’s Decision

The complaint alleges that the Respondent violated Section 8(b)(1)(A) of the Act by failing to provide Barrett with an adequate explanation of the discrepancy between the International Union’s total amount for chargeable expenses (85 percent) and the Respondent’s total amount for chargeable expenses (95 percent). At the hearing, however, much of the parties’ testimony and arguments focused on whether the expenditure information the Respondent provided to Barrett on May 11, categorizing its expenses and forming the basis for the 95-percent chargeable expense rate, was sufficiently verified pursuant to California Saw and KGW Radio, discussed below.[5] The judge thus did not pass on the complaint allegation and instead addressed the unalleged issue of whether the information provided to Barrett was sufficiently verified. The judge found that the May 11 expenditure information satisfied the Board’s verification requirements. He noted that although the “Independent Accountant’s Report” was based only on materials provided by the Respondent, the report adequately broke down the Respondent’s expenses into chargeable and nonchargeable categories. He thus found that the Respondent did not violate its duty of fair representation and dismissed the complaint.

Analysis

In Beck, the Supreme Court limited the dues and fees a union can collect from objecting nonmember employees under a contractual union-security clause to amounts expended on activities germane to the unions role as collective-bargaining representative. In California Saw, the Board held that a union breaches its duty of fair representation if it fails to inform unit employees of their Beck rights. Supra, 320 NLRB at 233. The Board also held that once an employee objects to paying dues for nonrepresentational activities and seeks a reduction in fees for such activities, the employee must be apprised of the percentage of the reduction, the basis for the calculation, and the right to challenge the unions figures. Id. To ascertain whether the information given objectors satisfies the unions duty of fair representation, the Board assesses whether the information is sufficient to enable the objector to determine whether to challenge the dues-reduction calculations. Id. at 239. In KGW Radio, the Board required...