BY:Michael I. Rudell
(Originally published in the Entertainment Law column in the New York Law Journal, November 27, 1998.)
A union security clause requires employees to become members of a union as a condition of employment. Section 8(a)(iii) of the National Labor Relations Act (the “NLRA”) is the statutory authorization for such a clause. The United States Supreme Court recently held that the Screen Actors Guild (“SAG”) did not breach its duty of fair representation merely by negotiating a union security clause that tracks the language of section 8(a)(iii).1
The dispute that gave rise to the decision arose when Naomi Marquez, a part-time actress, successfully auditioned for a one-line role in an episode of a television series “Medicine Ball” produced by Lakeside Productions. In 1994, Lakeside had signed a collective bargaining agreement with SAG, making SAG the exclusive bargaining agent for performers that Lakeside hired for its productions. This agreement contained a union security clause providing that any performer who worked under the agreement must be a member in good standing of SAG.
The clause also provided that “the foregoing [section,] requiring as a condition of employment membership in the Union, shall not apply until on or after the 30th day following the beginning of such employment or the effective date of this Agreement, whichever is the later; the Union and the Producers interpret this sentence to mean that membership in the Union cannot be required of any performer by a Producer as a condition of employment until thirty (30) days after his first employment as a performer in the motion picture industry…The Producer shall not be held to have violated this paragraph if it employs a performer who is not a member of the Union in good standing…if the Producer has reasonable grounds for believing that membership in the Union was denied to such performer or such performer’s membership in the Union was terminated for reasons other than the failure of the performer to tender the periodic dues and the initiation fee uniformly required as a condition of acquiring or retaining membership in the Union… .”
Marquez accepted the role and the casting director of Lakeside, in accordance with its collective bargaining agreement, called SAG to verify that Marquez met the requirements of the union security clause. Because Marquez previously had worked in the motion picture industry for more than thirty days, the union security clause was triggered and she was required to pay the union fees before she could begin working for Lakeside. Marquez understood from the casting director that she had to pay SAG before she could commence her services. (There is some dispute whether the SAG representative told the casting director that Marquez had to “join” or had to “pay” the union.) Upon calling SAG’s local office, Marquez learned that the fee she would have to pay to join the union would be approximately $500.
Over the next few days, Marquez attempted to negotiate an agreement with SAG that would allow her to pay the union fee after she received payment from Lakeside for her services. When these negotiations failed to produce an acceptable compromise and Marquez had not paid the required fee by the day before her part was to be filmed, Lakeside hired a different actress to fill the part. Thereafter, SAG faxed a letter to Lakeside stating that it had no objection to Marquez’ working in the production, but it was too late and filming proceeded with a replacement actress.
Marquez sued Lakeside and SAG, alleging that SAG had breached the duty of fair representation by negotiating and enforcing a union security clause with two basic flaws. First, the clause required union “membership” and the payment of full fees and dues when those terms could not legally be enforced under NLRB v. General Motors Corp.2 and Communications Workers v. Beck.3The former case interpreted section 8(a)(iii) to mean that the only “membership” that a union can require is the payment of fees and dues, and the latter held that section 8(a)(iii) allows unions to collect and expend funds over the objection of non-members only to the extent they are used for collective bargaining, contract administration and grievance adjustment activities.
Marquez argued that the collective bargaining agreement should have contained language in addition to the statutory language informing her of her right not to join the union and of her right under Beck to pay only for the union’s representational activities.
The second flaw alleged by Marquez is that the union security clause contains a term that interprets the thirty-day grace period provision to begin running with any employment in the industry. According to Marquez, this interpretation contravenes the express language of section 8(a)(iii) which requires that employees be given a thirty day grace period from the beginning of “such employment.” She interprets “such employment” to require a new grace period with each employment relationship.
In addition to the above claims, Marquez alleged that SAG had violated the duty of fair representation by failing to notify her truthfully about her rights under the NLRA as defined in the Beck and General Motors cases.
On the two issues before the Court, the District Court held that SAG had not breached its duty of fair representation merely by negotiating a union security clause that tracks the language of the NLRA and that it did not have jurisdiction over the challenge by Marquez to the grace period provision.
The Court of Appeals affirmed and the Supreme Court granted certiorari to resolve the conflict over the facial validity of a union security clause that tracks the language of section 8(a)(iii) and to clarify the standards for defining the primary jurisdiction of the NLRB.
In its discussion, the Court describes the issue it is deciding as a narrow one; does a union breach its duty of fair representation merely by negotiating a union security clause that tracks the language of section 8(a)(iii)? The Court states that it is not deciding whether SAG illegally enforced the union security clause to require Marquez to become a member of the union, or to require her to pay for dues for non-collective bargaining activities. It notes that Marquez’s complaint includes a claim that SAG breached its duty of fair representation by enforcing the clause illegally, but that claim is not before the Court. The Court of Appeals held that there were factual disputes that precluded the grant of summary judgment on this issue and that claim was remanded to the District Court for further proceedings.
Second, the Court indicates that it is not deciding whether SAG breached its duty of fair representation by failing to adequately notify Marquez of her rights under the Beck and General Motors cases. The NLRB has held that unions have an obligation to notify employees of such rights and it is currently in the process of defining the content of the notification right to give guidance to unions about what they must do to notify employees of their rights under these cases. The instant suit alleges that SAG failed to notify her of these rights, but that claim, too, is not before the Court. The Court of Appeals remanded that claim to the District Court for reconsideration.
With this background, the Court states that the question it is resolving comes into sharper focus. It notes that there is no disagreement about the substance of the obligations of the unions. If a union negotiates a union security clause, it must notify workers that they may satisfy the membership requirement by paying fees to support the union’s representational activities and it must enforce the clause in conformity with this notification. The only question presented by this case is whether the union breaches the duty of fair representation merely by negotiating a union security clause that uses the statutory language without expressly explaining, in the agreement, the refinements introduced in the General Motors and Beck decisions. Thus, Marquez’ claim is that even if the union has an exemplary notification procedure and even if the union enforces the union security clause in perfect conformity with federal law, the mere negotiation of a union security clause that tracks the language of the NLRA breaches the duty of fair representation.
This duty is breached when the conduct of a union toward a member of the bargaining unit is arbitrary, discriminatory or in bad faith. Because Marquez does not argue that the negotiation by SAG of the union security clause was discriminatory, the Court only considers whether SAG’s conduct was arbitrary or in bad faith.
After discussing relevant case law, the Court concludes that a union’s conduct can be classified as arbitrary only when it is without a rational basis or explanation. Under this standard, the negotiation by SAG of a union security clause with language derived from the NLRA section authorizing such a clause is far from arbitrary. The Court rejects Marquez’ argument that it is irrational to negotiate a clause that cannot be enforced as written by noting that the clause can be enforced as written, because by tracking the statutory language, the clause incorporates all of the refinements that have become associated with that language. It notes that the relevant provisions of section 8(a)(iii) have become terms of art; the words and phrasing of that section now encompass the rights that the Court announced in the General Motors and Beck cases – the right of an employee not to “join” the union (except by paying fees and dues) and the right of an employee to pay for only representational activities.
Marquez’ argument that the union security clause breached the duty of fair representation because it was done in bad faith is based on her contention that the union had no reason to use the statutory language except to mislead employees about their rights under the Beck and General Motors cases. The Court rejects this argument, indicating that first, there appears to be no intention to mislead workers and second, that because the statutory language which the Court has said incorporates all of the refinements associated with the language, is a shorthand description of workers’ legal rights and therefore might be used by the union precisely because it incorporates all of the refinements contained in the General Motors and Beck decisions. The decision states that with respect to the latter point, if it were to conclude otherwise, it would require unions (and all other contract drafters) to spell out all of the intricacies of every term used in a contract, thereby causing them to become massive and unwieldy treatises without any discernable benefit from the increased size.
Accordingly, the union’s conduct in negotiating a union security clause that tracks the statutory language can not be said to be either arbitrary or in bad faith and the Court of Appeals correctly rejected Marquez’ argument that, by negotiating this clause, the union breached its duty of fair representation.
The decision next examines the refusal of the Court of Appeals to exercise jurisdiction over Marquez’ challenge to the thirty-day grace period provision of the union security clause. The Court notes that Marquez is on solid ground to argue that if her challenge to the grace period provision is a duty of fair representation claim, the lower courts erred in refusing to exercise jurisdiction over that claim. However, as noted in the Beck case, employees may not circumvent the primary jurisdiction of the NLRB simply by casting statutory claims as violations of the union’s duty of fair representation. When a plaintiff’s only claim is that the union violated the NLRA, the plaintiff cannot avoid the jurisdiction of the NRLB by characterizing this alleged statutory violation as a breach of the duty of fair representation.
Here, Marquez’ challenge to the SAG grace period provision falls squarely within the primary jurisdiction of the NRLB. Her claim is that SAG employed a term in the collective bargaining agreement that was inconsistent with the NLRA. This allegation, although framed by the recitation that this act breached the duty of fair representation, is at best a claim that SAG’s conduct violated section 8(a)(iii). Such a claim is an issue for resolution by the NRLB and the Court affirms the decision of the Court of Appeals in this regard.
1 Marquez v. The Screen Actors Guild, Inc., et al., Supreme Court of the United States, No. 97-1056 (November 3, 1998).
2 373 U.S. 734(1963).
3 487 U.S. 735(1988).