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International Union of Operating Engineers, Stationary Engineers - Local 39

2018 - 2019 Local 39 Memorandum of Understanding:  Article 24: Agency Shop Service Fee

International Union of Operating Engineers, Stationary Engineers - Local 39

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24.1 Union – Fair and Equal Representation

It is recognized that the Union must provide fair and equal representation to all employees in all represented classes without regard to Union membership or non-membership.

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24.2 Agency Shop – Service Fee

As a condition of employment, all represented employees must be members or service fee payers of the Union. If any employee does not voluntarily make application for membership or service fee status within forty-five (45) days of the effective date of this section or within forty-five (45) days of beginning work, whichever is later, the County shall enroll the employee as a service fee payer automatically and by default. The County shall deduct the service fee from the employee’s paycheck. Payroll deductions shall be made bi-weekly. However, the initial deduction for any employee shall not begin unless either a voluntary authorization for deduction of Union dues or a service fee has been properly executed or the 45-day application period for considering voluntary enrollment has expired. Changes in the amount of the monthly membership dues must be delivered to the ACTTC, Payroll Division, at least thirty (30) calendar days prior to the last pay day of the calendar month prior to the change becoming effective.

All sums deducted by the County shall be remitted to the Union at an address given to the County by the Union, by the tenth (10) calendar day following the pay period when the deductions were made, together with a list of names and the amount deducted for each employee for whom a deduction was made. The County will also notify the Union of the name of each employee who revokes his “Voluntary Authorization for Deduction of Union Dues.” This does not apply to “Special Assessments or penalties” levied by the Union that are over and above the regular paid dues.

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24.3 Agency Shop – Religious Exemption

Any employee who is a member of a religious organization whose traditional tenets or teachings include objections to joining or financially supporting employee organizations shall not be required to join or financially support the Union. Such employee(s) shall execute a written declaration that the employee is a member of a bona fide religion, body or sect which holds a conscientious objection to joining or financially supporting any public employee organization as a condition of employment. Such employee(s) shall pay, in lieu of a service fee a sum equal to such fee to a non-religious, non-labor charitable fund(s) exempt from taxation, chosen by the employee from those charities listed with the charitable federations that participate in the County’s combined fund drive.

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24.4 Agency Shop – Separation From Unit – Exception

The provisions of Section 24.2 above shall not apply during periods of separation from the eligible bargaining unit by any employee otherwise subject to that Article but shall reapply to such employee following the first full pay period following the return of the employee to the bargaining unit. The term “separation” includes layoffs, transfer out of the covered bargaining units by request, promotion, demotion, reclassification or for any other lawful reason, and leaves of absence of a duration of more than one (1) full pay period, whether paid or unpaid and for any reason, including disability.

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24.5 Agency Shop – Chargeable Costs

To the extent authorized by law, the costs of its collective bargaining activities shall be considered by the Union when making a determination of the amount of the agency shop service fee authorized by this Article. Examples of chargeable costs include but are not limited to (1) expenditures for labor contract negotiations (e.g., the fees and expenses of the Union representative and staff support, including research of and preparation for negotiating matters within the scope of representation); and (2) expenditures for administration of contracts (e.g., meetings and discussions with management concerning grievances under the contracts, meetings with employees as part of grievance resolutions, and costs of representatives for arbitrations and staff support including research and preparation).

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24.6 Agency Shop – Non-Chargeable Costs

Currently, the following activities are not included in the calculation or determination of the agency shop service fee:

  1. Lobbying or other political activity except as authorized by law;
  2. Payments to affiliates, except for chargeable costs as authorized by law;
  3. Social activities except as authorized by law;
  4. Charitable and philanthropic activities;
  5. Insurance and other benefit programs except as authorized by law; and
  6. Any cost that, by law, cannot be included in an agency shop service fee.

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    24.7 Agency Shop – Advance Reduction of Service Fee

    The amount of the service fee shall be equal to the regular dues, assessments or fees established by the Union, less $1.00 per month.

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    24.8 Agency Shop – Notice of Service Fee

    All enrolled service fee payers shall receive annual written notice sent by certified mail from the Union, which includes legally adequate audited information concerning the breakdown of “chargeable” and “non-chargeable” expenses, a reasonably prompt opportunity as provided below to challenge the amount of the fee before an impartial decision-maker, and an escrow shall be set up by the Union for the amounts reasonably in dispute while such challenges are pending. Specifically, such notice shall, at a minimum, include:

    1. An accounting report prepared, signed and verified by an independent auditor, who is a certified public accountant, for the overall purpose of providing an itemization of the expenditures of the Union in detail necessary for an employee reasonably to be able to determine what the Union spends on both chargeable items and non-chargeable items, and consider whether expenses designated as chargeable are related to the Union’s collective bargaining functions. However, this requirement can be met without requiring or allowing non-members or the County to become the Union’s auditors. The accounting will utilize data from the prior fiscal year. At a minimum, this accounting report must:
      1. State the amount of the agency shop service fee and provide an overview of how the accounting reports were translated into calculation of this fee;
      2. Disclose the Union’s major categories of expenses, including employee compensation, specifying the actual expenditures within each category and the amount spent in each expenditure for chargeable items and non-chargeable items; each major category and the allocations of expenditures therein for chargeable and non-chargeable expenses must be verified by the Auditor;
      3. Disclose what percentage of total Union expenditures is allocable to chargeable items and what percentage is allocable to non-chargeable items;
      4. State the total sum of money the Union pays affiliates and demonstrate what percentage of such money is used for chargeable and what percentage is used for non-chargeable activities;
      5. Disclose what percentage of regular membership dues is allocable to chargeable items and what percentage is allocable to non-chargeable items and, consequently, what percentage of dues will be collected as the agency shop service fee;
      6. Explain the methodology used in producing this accounting report. 

      To enable the independent auditor to prepare the accounting report, the Union shall provide the auditor access to all records reasonably necessary for such a preparation, including a record of the employee’s activities in sufficient detail to enable the auditor to make the necessary determinations of chargeable or non-chargeable. In the event that payments are made to any other organization, the auditor shall be provided access either to such organizations’ records or relevant audited financial statements when reasonably necessary to prepare the above accounting.
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    3. Instructions on filing a challenge to the amount of the agency shop service fee with the Union, which, at a minimum, shall provide as follows:
      1. Non-members who wish to challenge collection of the agency shop service fee because the amount identified allegedly contains expenditures for non-chargeable activities must file an objection letter with the Union within thirty (30) calendar days of receipt of notice (notice shall be rebuttably presumed to have been received no later than five (5) calendar days after it is postmarked).  A non-member may file a letter by presenting it to the Union business office in person or by certified mail, return receipt requested.  The non-member shall provide a copy of the letter to the County’s Director of Labor Relations within three (3) calendar days of its filing with the Union;
      2. The letter shall be signed by the challenger or the challenger’s agent under penalty of perjury and must state with specificity the particular expenditures being challenged, and the grounds for such challenge. The letter must contain the name and mailing address of the challenger;
      3. During the pendency of the challenge, the amount of the agency shop service fee reasonably in dispute shall be placed in an escrow account established by the Union;
      4. Within thirty (30) calendar days after receipt, the Union shall schedule a date for arbitration, which shall be conducted in accordance with procedures established by American Arbitration Association. Pending the commencement of arbitration, the Union and the challenger may, by mutual agreement, attempt to resolve the dispute informally;
      5. The arbitrator shall be selected in accordance with the procedures of the American Arbitration Association;
      6. The Union shall have the burden of proving that the fee amount complies with this Article and applicable law; and
      7. The costs of the arbitrator and court reporter, if any, shall be borne entirely by the Union. The challenging employee shall be responsible for his/her costs including but not limited to attorney fees and copies of the court reporter’s original transcript.

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    24.9 Agency Shop – Non-Discrimination

    No employee shall be discriminated against or harassed on the basis of his or her status as a non-Union member or a non-Union agency shop service fee payer.  Reasonable communication regarding the Union and/or Union membership shall not be considered discrimination or harassment under this Article.

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    24.10 Agency Shop – Service Fee – Part-Time Employees

    The financial obligations of employees who work less than full-time are subject to the agency shop service fee provisions of Section 24.2 above.  The agency shop service fee shall be set on a pro-rata basis expressed as a percentage of salary.

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    24.11 Agency Shop – Notice of New Employees

    The following provisions will apply regarding notice of new employees:

    1. The County shall provide the Union with the names and addresses of new employees each pay period.
    2. Union Stewards shall be authorized to receive the names and addresses of new employees each pay period from the departmental payroll clerk.
    3. The names and addresses provided the Union shall be kept confidential.

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    24.12 Agency Shop – Indemnification

    The Union shall defend, indemnify, hold harmless, release and save the County, its agents and employees, from and against any and all claims, demands, suits, orders, judgments, expenses or other forms of liability arising out of or in connection with this Article and/or any action taken or not taken by the County and/or the Union under this Article, including, but not limited to, the collection and procedures for collection of agency shop service fees and the amount of such fees. This Section shall be in addition to any other remedy available to the County under this contract or provision of law.

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    24.13 Agency Shop – Rescission of Provision

    The implementation of the provisions of this Article shall not prohibit or restrict an election to rescind this provision as provided by Government Code Section 3502.5.  This agency shop provision may be rescinded pursuant to Government Code Section 3502.5 or its successor provision.

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    24.14 Agency Shop – Recordkeeping and Reporting

    The Union shall comply with the financial record-keeping and reporting requirements of Government Code Section 3502.5(d) or its successor provision.

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    24.15 Agency Shop – Violation of Article 24

    If a court finds the implementation of this Article in violation of constitutional law, the Union shall have sixty (60) days to comply with the Court’s order or the County may thereafter cancel Article 24.  In the interim, all collections of agency shop service fees by way of payroll deductions by the County shall be suspended, except as allowed by the Court.  Also except as allowed by the Court, no unpaid agency shop fee that would otherwise have been due during the time such violation existed may be collected retroactively after the violation was corrected.

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    24.16 Agency Shop – Non-Arbitrability of

    Except as provided below, Article 24 shall be grievable and arbitrable under Article 26 of this agreement.

    The following are not grievable nor arbitrable under this agreement:

    1. The adequacy of the Union’s notice required by Section 24.8 above; and/or
    2. Other issues bearing on the constitutionality of the Union’s collection of an agency shop service fee as prescribed by the courts.

    Disputes regarding the amount of the agency shop service fee shall be arbitrable under this memorandum but only pursuant to Section 24.8 above.

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