Knox v. Service Employees International Union, Local 1000

California allowed public-sector employees in a bargaining unit to create an agency shop in which all employees were represented by a union. Employees in the bargaining unit were not required to join the union but were required to pay fees related to collective bargaining. The agency-shop arrangement was meant to acknowledge that all employees in a bargaining unit, regardless of union membership, benefited from the union’s collective bargaining. In Teachers v. Hudson, 475 U.S. 292 (1986), the United States Supreme Court held that public-sector unions could not require nonmembers to pay fees that would go toward political or ideological purposes. Hudson also provided procedural requirements that public-sector unions must follow, including notifying nonmembers of the breakdown of union fees so the nonmembers could opt out of fees that were not related to collective bargaining. In June 2005, the Service Employees International Union (the union) (defendant) sent out a notice explaining that approximately 56 percent of its annual fees would go toward collective bargaining. Nonmembers had 30 days to opt out of fees that were not related to collective bargaining. In July, after the 30-day opt-out period had expired, the union increased its fees by 25 percent. The fee increase was meant to raise additional money for the union to oppose two ballot initiatives that would have limited the power of public-sector unions. Nonmembers who had opted out of non-collective-bargaining fees were only required to pay 56 percent of the fee increase. Dianne Knox (plaintiff) filed a class-action lawsuit on behalf of nonmembers of the union arguing that the fee increase violated the First Amendment by requiring nonmembers to pay for political activities without the opportunity to object or opt out. The district court granted summary judgment in favor of Knox, finding that the fees would go toward political activities that the nonmembers should not have been required to fund. The court of appeals reversed the district court, and Knox appealed.