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Backgrounder

September 9, 2015

Jane Ladley and Chris Meier v. Pennsylvania State Education Association, et al.

EXECUTIVE SUMMARY

The Fairness Center represents schoolteachers Jane Ladley and Chris Meier, the targets of an illegal public union scheme to funnel money to the union’s favorite private charities.

Jane recently retired after teaching for 24 years, most recently at Penn London Elementary School in Chester County, Pennsylvania.  Chris has taught AP Economics and AP History courses at Penn Manor High School in Lancaster County, Pennsylvania for the last 10 years. Neither Jane nor Chris are members of the Pennsylvania State Education Association (PSEA), and neither Jane nor Chris have paid a fee for its representation—which they do not want. But recently, the PSEA secured, in separate agreements with their respective  school districts, the contractual authority to extract nonmember fees from teachers like Jane and Chris. Jane and Chris objected to payment of the fees on religious grounds.

As religious objectors to union membership and to payment of union fees, Jane and Chris are entitled to certain legal protections, including the opportunity to redirect their fee—otherwise owed to the union—to a charitable organization. For this purpose, both Jane and Chris selected IRS-approved charities; Jane selected a local educational organization, and Chris selected a national charity providing free legal advice and representation to teachers like Chris. Under the law, their money is automatically withheld and deposited into a separate account while the PSEA processes the selection.

Now, the PSEA is telling Jane and Chris that it has a “policy” against allowing religious objectors to send their money to the charities Jane and Chris selected. According to the PSEA, Jane’s educational charity was too “political,” and Chris’s charity was a “conflict of interest” because it represented teachers in separate, unrelated lawsuits against the PSEA.

Unfortunately, the PSEA’s legal department is also using a loophole in the law to ensure that Jane and Chris have no voice in this matter. The statute protecting religious objectors from having to pay dues or fees to the union requires that the charity selected by the objector be “agreed upon” by the union. But the law does not institute a procedure or deadline for reaching agreement with the union.

The PSEA is content to watch Jane’s and Chris’s money automatically accrue in an interest-bearing escrow account while it waits for them to give in.

Jane and Chris are filing suit in Lancaster County to expose the policy, to ask that the court declare the PSEA’s internal policy illegal, and to stop the PSEA from using the policy to indefinitely hold Jane’s and Chris’s money.

THE PROBLEM

The PSEA has an internal, unwritten “policy” that restricts religious objectors’ ability to direct their funds to a substitute charity.  The PSEA’s internal policy is arbitrary, narrows the scope of protections enacted by the Pennsylvania Legislature, and operates to fund only those private charities favored by the PSEA.

Jane and Chris are religious objectors to union membership and to payment of nonmember “fair share” fees. Their status as “bona fide” religious objectors is not an issue—the PSEA already accepted Jane’s and Chris’s required letter of verification.

Under the state law protecting religious objectors, Jane and Chris will not be required to pay the fair share fee, but they are required to “pay the equivalent of the fair share fee to a nonreligious charity agreed upon by the nonmember and the [union].”1 The PSEA withdrew these funds from Jane’s and Chris’s paychecks and placed them in an interest-bearing escrow account, pending Jane’s and Chris’s designation of a charity.

Jane

Initially, Jane asked the PSEA to send her money to a scholarship fund for high school seniors interested in studying the U.S. Constitution. The scholarship fund was sponsored by an admittedly political organization.

Unbeknownst to Jane, the PSEA has an internal “policy” under which any charity that the PSEA labels “political” will be rejected out of hand.  On that basis, the PSEA rejected Jane’s choice of charity.  Despite Jane’s sincere desire to contribute to the scholarship fund, she chose an alternate charity, the Constitutional Organization of Liberty (“COOL”), providing educational materials on the Constitution and America’s history. The PSEA refused to respond to Jane’s proposed solution.

Jane retired earlier this year, but her money—which should go to a charity—is still sitting in escrow, awaiting action by the PSEA.

Chris

Chris asked the PSEA to send his money to a national charity that provides free legal advice and representation specific to public sector employees, called the National Right to Work Legal Defense Foundation (the “Foundation”). The Foundation exists to protect teachers like Chris from public union abuses and has, under that mission, provided free legal services to teachers against the PSEA. The Foundation’s clients have succeeded in uncovering such abuse within the PSEA.2

The PSEA refused Chris’s selection on the basis that the Foundation provided legal representation to teachers who sued the PSEA.  According to the PSEA, allowing Chris to fund the Foundationwould be a “conflict of interest” for the PSEA. In other words, the PSEA disagrees with the Foundation.

Implications

The PSEA’s internal policy is problematic for at least five reasons:

  1. The PSEA’s internal policy is arbitrary. The PSEA’s reasons for rejecting these charities are inconsistent and evidence as misunderstanding of the law.  First, despite the “policy” against “political” charities, the PSEA has agreed to send religious objector funds to other charities that engage in substantial political activities. Second, the PSEA’s supposed “conflict of interest” with Chris’s charity involved no clash of interests on the PSEA’s part—the funds and the charitable “interest” belongs to Chris and does not require the PSEA to abandon its primary mission. The union’s policy is based on shifting and compromised logic.
  2. The PSEA’s internal policy is inconsistent with the protections enacted by the Legislature. The union “policy” unconstitutionally discriminates based on a charity’s political views or activities.  At the very least, the law envisions that the parties discuss the objector’s choice of charity and the unique features of particular charities. The PSEA’s actions demonstrate that, at the heart of this dispute, the PSEA simply does not approve of the message the charities are sending—precisely the reason for the statutory protections.
  3. The PSEA’s internal policy takes advantage of a legal loophole.  The law requires that the funds at issue be placed into an escrow account, but the law does not articulate a process for achieving mutual agreement between the union and the religious objector.  As a result, the PSEA may refuse to agree on a substitute charity for as long as it wants, without consequence.
  4. The PSEA’s internal policy unnecessarily restricts a teacher’s right to choose an eligible charity.  The PSEA is telling teachers—teachers who have declined to join the union and owe nothing to the union—that they cannot send their money to a charity eligible to receive those funds under the law.
  5. The PSEA’s internal policy withholds charitable contributions  from eligible charities.  The money at issue should go to a charity.  But the PSEA is content to leave the money in an escrow account until the nonmember agrees to the union’s choice of a private charity.

THE LAW

In 1988, the Pennsylvania Legislature enacted “agency shop” provisions applicable to state and school employees.3 The measure, known as Act 84,4 allowed public sector unions to bargain for agreements that require—as a condition of employment—either union membership or payment of a nonmember “fair share” fee. Portions of the law were found unconstitutional following a class action lawsuit filed by nonunion employees.5

Statutory Protections for Religious Objectors

As a protective countermeasure to agency shop, the same 1988 law included several protections for nonmembers:

  1. Nonmembers receive an annual notice of the fair share fee amount, with “sufficient information to gauge the propriety of the fee”;6
  2. Nonmembers who object to the propriety of the fair share fee amount are entitled to impartial, binding arbitration and other procedural devices;7 and
  3. Nonmembers have the right to object to fair share fees “for bona fide religious grounds” and to have their funds go to a nonreligious charity.8 For religious objections, an amount equivalent to the fair share fee is automatically deducted from the objector’s paycheck and sent to the charity.

This case involves the third protection, namely, the right to direct funds to a nonreligious charity. The statute protecting religious objectors provides just two qualifications for the charity selected by the nonmember—it must be “nonreligious” and a “charity.”

Analogous statutory protections in federal and other states’ laws are distinguishable. One Washington Public Employment Relations Commission decision9 addressed a similar situation10 and lends limited support. In that case, the Commission determined that a religious objector was entitled to a charity of her choice as long as it was “nonreligious” and a “charity,” the sole statutory limitations.

Statutory Procedure

After the union “approves” a religious objector’s verification of religious reasons, the religious objector is no longer obligated to pay dues or a fee to the union.  At that point, the union and the religious objector must “agree upon” the substitute charity. However, unlike many other statutes governing labor relations, the law does not describe the means by which the nonmember and the union come to terms or resolve an impasse.  There is also no deadline by which the union must “agree” with the religious objector.

Theoretically, a religious objector’s money can sit in escrow forever. Until agreement is reached, the automatically drafted funds are placed into an interest-bearing escrow account.11

Constitutional Issues

Courts have not addressed the issues raised in this case. Although cases have explored the First Amendment issues surrounding bona fide religious objections, those cases have little to do with this case because the PSEA has already “approved” the objections lodged by Jane and Chris.

It is clear, however, that public sector unions are treated in this context as “state actors,” meaning that certain actions taken by a public sector union can abridge one’s constitutional rights as if the union were a government agency or official.  It is also clear that the government cannot prevent or compel contributions to certain charities or political causes without violating the First Amendment.

Of course, the law surrounding public sector unionization is, as the U.S. Supreme Court calls it, an “anomaly” when it comes to the First Amendment.  However, we argue that many of these cases authorizing certain violations of the First Amendment are inapplicable to this case, where the violation at issue has to do with funding outside charities rather than the union itself.

CASE LOGISTICS

Plaintiffs

The plaintiffs are:

  • Jane Ladley, a recently retired schoolteacher, last served as a Response to Intervention and Instruction (RTII) teacher. As an RTII teacher, Jane dealt with children who have displayed potential learning problems. She instructed children over a short period of time in an effort to assess their needs and address learning problems. Finally, Jane evaluated the children’s needs and recommends a solution including, potentially, a referral to special education.
  • Chris Meier is a veteran schoolteacher teaching Advanced Placement courses in Economics and History. He previously coached the high school’s track and field team and led successful high school academic competition teams. He has served the district by developing curriculum for new courses and continues to take graduate courses at nearby Millersville University.

Defendants

The defendants are:

  • The Pennsylvania State Education Association (PSEA), an affiliate of the National Education Association (NEA). The PSEA is as the largest education employee organization in the state. According to the PSEA’s 2013-2014 resolutions,12 it is committed to the following principles:

B-3 ACADEMIC, PERSONAL, AND PROFESSIONAL FREEDOM

The Association believes that academic, personal, and professional freedom is essential to the well-being of the teaching profession. Academic freedom includes the right of the teacher and learner to present, discuss, and explore controversial and divergent points of view in an atmosphere conducive to the quest for knowledge and truth. . . .

. . . .

Personal freedom includes all of those rights that American citizens enjoy under the U.S. Constitution, regardless of occupation. Educators should not be penalized personally or professionally for exercising their constitutional rights.

Professional freedom includes the right of educators to advocate their professional points of view and to evaluate and criticize the policies and actions of the local school entity in which they are employed without fear of reprisal.

. . . .

B-11 POLITICAL ACTION

The Association reaffirms the constitutional right and obligation of all education employees, individually and/or collectively, to participate in all aspects of the democratic political process and encourages all education employees, to actively do so. The Association must resist any efforts to deny or suppress the exercise of those rights. The Association should assist local associations in bringing action against any policymaking board which abrogates the political rights of education employees. Provisions should be made to enable education employees to serve in any public office without personal loss and/or curtailment of annual increments, tenure, retirement, fringe benefits, or seniority rights.

The Association endorses PSEA-PACE, the PSEA political action committee, and strongly urges members and friends of education to support it through individual involvement and contributions.

The Association opposes legislation that would uniformly impose expenditure limits without regard to PAC size. (80,87,95,07,09)

  • The Avon Grove Education Association (AGEA) and Penn Manor Education Association (PMEA), the local unions affiliated with the PSEA. Jane and Chris raise an additional point, that the law requires locals to be the only point of contact for religious objectors. If Jane and Chris are correct on this point, the AGEA and the PMEA will need the opportunity to defend, if they desire, the basic argument as to the legality of the PSEA’s policy.

Court

Lancaster County Court of Common Pleas

Judge

Judge James P. Cullen

Relief sought

Jane and Chris are asking the Court to issue a declaratory judgment clarifying that, under title 71, Pennsylvania Statutes, section 575(h), the union cannot maintain its arbitrary “policy” restricting religious objectors’ choice of a substitute on the basis that the charity is, in the union’s view, “political” or a so-called “conflict of interest.” Jane will also seek injunctive relief to enforce the Court’s ruling.

Date filed

September 18, 2014

THE LEGAL TEAM

Jane and Chris are represented by David R. Osborne.  David is General Counsel of the Fairness Center, where he advises on Board activities and legal strategy. Before joining the Fairness Center, Osborne litigated on behalf of healthcare providers and conducted organizational and lobbying efforts for a national trade association. He previously worked as a judicial clerk to a Florida Supreme Court justice and served as official staff to a Member of Congress. Osborne graduated from the Florida State University College of Law.


1 71 P.S. § 575(h).

2 See, e.g., Otto v. PSEA-NEA, 330 F.3d 125 (3d Cir. 2003) (holding that the PSEA’s local affiliates must obtain independent audits of their finances).

3 Russell E. Eschleman, Jr., “Casey Signs ‘Agency Shop’ Measure into Law,” PHILADELPHIA INQUIRER, July 14, 1988, available at http://articles.philly.com/1988-07-14/news/26237264_1_agency-shop-large-unions-public-employee-unions.

4 P.L. 493, No. 84, § 2 (Pa. S.B. 291 (Reg. Sess. 1987-88)), codified at 71 P.S. § 575.

5 Hohe v. Casey, 956 F.2d 399 (3d Cir. 1992). The nonunion employee class was jointly represented by National Right to Work Legal Defense Foundation and a Harrisburg law firm, Beckley & Madden.

6 In full, title 71, Pennsylvania Statutes, section 575(d), provides:

As a precondition to the collection of fair share fees, the exclusive representative shall establish and maintain a full  and fair procedure,  consistent with constitutional  requirements, that provides nonmembers, by way of annual notice, with sufficient information to gauge the propriety of the fee and that responds to challenges by nonmembers to the amount of the fee.  The procedure shallprovide for an impartial hearing before an arbitrator to resolve disputes regarding the amount of the chargeable fee. A public employer shall not refuse to carry out its obligations under subsection (c) on the grounds that the exclusive representative has not satisfied its obligation under this subsection.

7 Section 575(g) requires:

When a challenge is made under subsection (e)(1), such challenge shall be resolved along with all similar challenges by an impartial arbitrator, paid for by the exclusive representative, and selected by the American Arbitration Association, or the Federal Mediation and Conciliation Service, pursuant to the Rules for Impartial Determination of Union Fees promulgated by the American Arbitration Association. The decision of the impartial arbitrator shall be final and binding.

8 Section 575(h) requires:

(h) When a challenge is made under subsection (e)(2), the objector shall provide the exclusive representative with verification that the challenge is based on bona fide religious grounds. If the exclusive representative accepts the verification, the challenging nonmember shall pay the equivalent of the fair share fee to a nonreligious charity agreed upon by the nonmember and the exclusive representative. If the exclusive representative rejects the verification because it is not based on bona fide religious grounds, the challenging nonmember may challenge that determination within forty (40) days from receipt of notification.

9 In re Wiggs, Decision No. 9959-A – EDUC, Case No. 20711-N-06-0053 (Wash. Pub. Relations Comm’n 2008), available at http://www.perc.wa.gov/databases/ulp/09959-A.htm.

10 Importantly, the Washington statute at issue did not include the terms “agreed upon.” Jane will argue that those terms are merely procedural in nature and do not alter the substance of her ability to select a charity.

11 71 P.S. § 575(i).

12 Available at http://www.psea.org/uploadedFiles/AboutPSEA/PSEAResolutions.pdf