Harik v. California Teachers Ass'n

298 F.3d 863, 2002 WL 1766654
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 1, 2002
DocketNos. 01-15590, 01-15688 and 01-15705
StatusPublished
Cited by6 cases

This text of 298 F.3d 863 (Harik v. California Teachers Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harik v. California Teachers Ass'n, 298 F.3d 863, 2002 WL 1766654 (9th Cir. 2002).

Opinion

SCHROEDER, Chief Judge.

The most significant issue we must decide in these consolidated appeals is what financial information unions must provide to non-members, in an agency shop, in order to support the amount of the agency fee. See Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986). We specifically address whether the statement of the union’s expenditures benefitting all members of the bargaining unit and hence chargeable to non-members must always be an audited statement. The district court held that it must be audited. The smallest of the defendant unions in this case, the Dinuba Teachers Association (DTA), challenges that ruling, contending that unaudited statements signed under penalty of perjury, coupled with an opportunity to examine the union’s checkbook, suffice.

We hold that, while a formal audit is not required, the union must provide a statement of its chargeable and nonchargeable expenses, together with an independent verification that the expenses were actually incurred. We reverse the district court to the extent that its ruling is inconsistent with our holding. We also reverse the district court’s ruling that the school superintendents are liable for any deficiencies in the union’s Hudson notice, because under the law of this circuit the employer is not responsible for ensuring the accuracy of the Hudson notice before deducting agency fees from nonmembers’ pay. See Foster v. Mahdesian, 268 F.3d 689, 694 (9th Cir.2001). We otherwise affirm.

[867]*867I. Facts and Procedural History

Plaintiffs are non-union-member teachers in eight California school districts that have entered into agency fee agreements with the local teachers’ unions. Under the agency fee agreements, the school districts deduct “agency fees” from the pay of any non-union-member employee within the bargaining unit represented by the local union and remit those fees to the local union. Those fees compensate the union for its efforts on behalf of all employees in the bargaining unit for activities such as collective bargaining, contract administration, and grievance adjustment. Those fees are known as “chargeable expenditures.” See Ellis v. Ry. Clerks, 466 U.S. 435, 437, 104 S.Ct. 1883, 80 L.Ed.2d 428 (1984) (approving the collection of such fees from non-members). The union may not, however, charge nonmembers fees to pay for those union activities “not sufficiently related to collective bargaining to justify their being imposed on dissenters,” such as member-only services and political activities. Id. at 447, 104 S.Ct. 1883. These are known as “non-chargeable expenditures”. Id.

Plaintiffs brought an action in federal • court against the superintendents of their school districts, their respective local unions, and the California Teachers Association (CTA) alleging that the process by which the agency fees were deducted from their paychecks violated the standards enunciated by the Supreme Court in Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986). In Hudson, the Supreme Court addressed the procedures that unions must follow in informing nonmembers about the agency fees and in responding to their objections to the calculation of the fees. The Court held that the union must provide adequate information about its expenses and a means to challenge their validity. The union must give non-members “an adequate explanation of the basis for the fee, a reasonably prompt opportunity to challenge the amount of the fee before an impartial decisionmaker, and an escrow for the amounts reasonably in dispute while such challenges are pending.” Id. at 310, 106 S.Ct. 1066. Plaintiffs in this case contended that the local unions failed to provide an adequate explanation of their fees because they did not provide nonmembers with audited financial statements. Plaintiffs also challenged CTA’s notice of arbitration procedures, as well as the procedures themselves, on the ground that the unions rely on inadequate evidence of.their chargeable expenditures in fee arbitrations. Plaintiffs sought certification of plaintiff classes on the audit and arbitration procedure issues, certification of a statewide plaintiff class on the arbitration notice issue, and certification of defendant classes of all California school districts and all local unions.

The district court certified plaintiff classes for each of the school districts in which the named plaintiffs were employed, but refused to certify a statewide plaintiff class to challenge the adequacy of the Hudson notice and refused to certify any defendant classes. The district court entered summary judgment in the plaintiffs’ favor on the audit issue, and it entered summary judgment in the defendants’ favor on the arbitration notice and procedure challenges.

Plaintiffs appeal the. grant of summary judgment to the defendants on the arbitration issues, as well as the district court’s refusal to certify the statewide plaintiff class or any defendant classes. The school superintendent defendants cross-appeal, challenging the district court’s certification of the plaintiff classes and the court’s holding that the school superintendents are liable for notice violations committed by [868]*868the local unions. The union defendants also cross-appeal, challenging the district court’s certification of the plaintiff classes and the court’s ruling that even the smallest local union, DTA, must provide audited financial statements.

We reverse the district court’s grant of summary judgment to plaintiffs as to DTA, insofar as the district court required DTA to provide more than an independent verification that its claimed expenses were actually incurred. We reverse the district court’s ruling that the school superintendents were liable for any deficiencies in the union’s Hudson notice, because the school superintendents were not responsible for ensuring that the union had complied with Hudson before deducting agency fees from plaintiffs’ pay. See Foster, 268 F.3d at 694. Otherwise, we affirm.

II. Whether All Locals Must Provide Audited Statements

At the beginning of each school year, each feepayer teacher represented by a CTA-affiliated local receives a notice on CTA letterhead explaining the purpose of agency fees and the manner in which the unions calculate those fees. Attached to the CTA notice are audited financial statements for the national union and CTA, and some type of financial disclosure for the particular local union representing the recipient teacher’s bargaining unit. Under a policy adopted by CTA in 1986, shortly after the Hudson decision, if the local union’s total estimated annual revenue from member dues and agency fees is $100,000 or more, then the local union’s financial disclosure must be in the form of a financial statement audited 10829 by an outside CPA. If the local union’s estimated annual revenue is less than $100,000 but at least $50,000, then the financial disclosure can be simply reviewed by an outside CPA or audited by CTA’s staff auditors.

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Douglas Harik Kyle Staples Roxanna Escalante Nance Contreras Patricia Guthrie Raymond Richardson Karen Chavez Kim Sheffield v. California Teachers Association Franklin McKinley Education Association South San Francisco Teachers Association Los Angeles County Education Association Saddleback Valley Education Association Dinuba Teachers Association William in His Official Capacity, Superintendent, Board of Education, Yuba City Unified School District Larry in His Capacity as Superintendent, Franklin McKinley Elementary School District Richard Rigg, in His Capacity as Superintendent, South San Francisco Unified School District Donald in His Capacity as Superintendent, Los Angeles County Office of Education Peter in His Capacity as Superintendent, Saddleback Valley Unified School District Libia in Her Official Capacity as Superintendent, Board of Education, Chula Vista Elementary School District, Dr. Stan in His Official Capacity as Superintendent, Board of Education, Dinuba Unified School District George in His Official Capacity as Superintendent, Chino Valley Unified School District, Dr. Chula Vista Education Association Association of Chino, Douglas Harik Kyle Staples Roxanna Escalante Nance Contreras Patricia Guthrie Raymond Richardson Karen Chavez Kim Sheffield v. California Teachers Association Franklin McKinley Education Association South San Francisco Teachers Association Los Angeles County Education Association Saddleback Valley Education Association Dinuba Teachers Association Chula Vista Education Association Association of Chino Yuba City Unified Education Association, and William in His Official Capacity, Superintendent, Board of Education, Yuba City Unified School District Larry in His Capacity as Superintendent, Franklin McKinley Elementary School District Richard Rigg, in His Capacity as Superintendent, South San Francisco Unified School District Donald in His Capacity as Superintendent, Los Angeles County Office of Education Peter in His Capacity as Superintendent, Saddleback Valley Unified School District Libia in Her Official Capacity as Superintendent, Board of Education, Chula Vista Elementary School District, Dr. Stan in His Official Capacity as Superintendent, Board of Education, Dinuba Unified School District George in His Official Capacity as Superintendent, Chino Valley Unified School District, Dr., Douglas Harik Kyle Staples Roxanna Escalante Nance Contreras Patricia Guthrie Raymond Richardson Karen Chavez Kim Sheffield v. California Teachers Association Franklin McKinley Education Association South San Francisco Teachers Association Los Angeles County Education Association Saddleback Valley Education Association Dinuba Teachers Association Chula Vista Education Association Association of Chino, and William in His Official Capacity, Superintendent, Board of Education, Yuba City Unified School District Larry in His Capacity as Superintendent, Franklin McKinley Elementary School District Richard Rigg, in His Capacity as Superintendent, South San Francisco Unified School District Donald in His Capacity as Superintendent, Los Angeles County Office of Education Peter in His Capacity as Superintendent, Saddleback Valley Unified School District Libia in Her Official Capacity as Superintendent, Board of Education, Chula Vista Elementary School District, Dr. Stan in His Official Capacity as Superintendent, Board of Education, Dinuba Unified School District George in His Official Capacity as Superintendent, Chino Valley Unified School District, Dr.
298 F.3d 863 (Ninth Circuit, 2002)

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298 F.3d 863, 2002 WL 1766654, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harik-v-california-teachers-assn-ca9-2002.