Chicago Teachers Union v. Hudson

The Chicago Teachers Union (the union) (defendant) was the exclusive collective-bargaining representative for employees of the board of education (the board). Most bargaining-unit employees were union members. The remaining minority of employees received the benefit of the union’s collective bargaining but did not pay for it, creating a free-rider problem. In 1981, the union negotiated with the board to include a new clause in the labor contract under which the board would deduct “proportionate share payments” from paychecks of nonmembers for union expenditures relating to collective bargaining and contract administration (allowed purposes). The union determined that 95 percent of its annual expenditures were for allowed purposes using the following methodology: the union identified its annual expenditures that were not related to collective bargaining and contract administration (disallowed purposes), divided that amount by the union’s income for the year, arrived at a figure of 4.6 percent, and rounded up to 5 percent. The board began deducting from nonmembers’ paychecks an amount equal to 95 percent of union members’ dues, which came out to $16.48 per month for teachers. Neither the union nor the board provided financial information regarding the union’s expenditures for allowed purposes to nonmembers so that the nonmembers could verify the accuracy of the payroll deduction. The union allowed nonmembers to object to the payroll deduction, but only after the amount was already deducted, and the objection was reviewed by the union’s executive committee and a union-selected arbitrator. Four nonmembers objected to the payroll deduction and eventually filed suit against the union. The Supreme Court was called on to decide the propriety of the union’s procedure in imposing fees on nonmembers.