Paso Robles Public Educators (Andrus, et al.) (PERB 1589E)

STATE OF CALIFORNIA
PUBLIC EMPLOYMENT RELATIONS BOARD
DANIEL H. ANDRUS,
Charging Party,
v.
PASO ROBLES PUBLIC EDUCATORS,
Respondent.
Case No. LA-CO-1119-E
EUGENE JAMES MILLER, III, ET AL.,
Charging Party,
V.
PASO ROBLES PUBLIC EDUCATORS,
Respondent.
Case No. LA-CO-1122-E
PERB Decision No.
	1589
January
	22,
	2004
JOHN C. METTIER,
Charging Party,
V.
PASO ROBLES PUBLIC EDUCATORS,
Respondent.
Case No. LA-CO-1124-E
CLARK A. KERR,
Charging Party,
V.
PASO ROBLES PUBLIC EDUCATORS,
Respondent.
Case No. LA-CO-1125-E

BRIAN THOMAS KERR,
Charging Party,
V.
PASO ROBLES PUBLIC EDUCATORS,
Respondent.
Case No. LA-CO-1126-E
Appearances: Daniel H. Andrus for himself and for Eugene James Miller, III, et al., John C.
Mettier, Clark A. Kerr and Brian Thomas Kerr; Lawrence Rosenzweig, Attorney, for Paso
Robles Public Educators.
Before Baker, Whitehead and Neima, Members.
DECISION
BAKER, Member: These consolidated cases come before the Public Employment
Relations (PERB or Board) on exceptions filed by five individual public school employees
Daniel H. Andrus, Eugene James Miller, III, et al., John C. Mettier, Clark A. Kerr, Brian
Thomas Kerr (Charging Parties) to the proposed decision
of
an administrative law judge (ALJ).
Charging Parties alleged that the Paso Robles Public Educators (PRPE) violated the
Educational Employment Relations Act (EERA)1
by collecting agency fees from them without
complying with PERB Regulation 329922. The proposed decision found in favor
of
PRPE and
dismissed the unfair practice charges.
1EERA is codified at Government Code section 3540 et seq. Unless otherwise noted,
all statutory reference herein are to the Government Code.
2PERB regulations are codified at California Code of Regulations, title 8, section 31001
et seq.
2

After reviewing the entire record, including the proposed decision, Charging Parties'
exceptions, and PRPE' s response, the Board reverses the ALJ' s proposed decision.
BACKGROUND
Charging Parties are public school employees under the BERA. PRPE is an employee
organization under BERA and is the exclusive representative
of
a unit including Charging
Parties. Charging Parties allege that beginning in September 2002, PRPE collected
agency fees from them without providing each
of
them the notice required by PERB
Regulation 32992. That regulation states in full:
(a) Each nonmember who will be required to pay an agency fee
shall annually receive written notice from the exclusive
representative of:
(1) The amount
of
the agency fee which is to be expressed as a
percentage
of
the annual dues per member based upon the
chargeable expenditures identified in the notice;
(2) The basis for the calculation
of
the agency fee; and
(3) A procedure for appealing all or any part
of
the agency fee.
(b) All such calculations shall be made on the basis
of
an
independent audit that shall be made available to the nonmember.
(c) Such written notice shall be sent/distributed to the
nonmember either:
(1) At least 30 days prior to collection
of
the agency fee, after
which the exclusive representative shall place those fees subject
to objection in escrow, pursuant to Section 32995
of
these
regulations; or
(2) Concurrent with the initial agency fee collection, provided
however, that all agency fees so noticed shall be held in escrow in
toto until all objectors are identified. Thereafter, only the agency
fees for agency fee objectors shall be held in escrow, pursuant to
Section 32995 of these regulations.
3

The notice required by this regulation is frequently called a Hudson notice, after the Supreme
Court's decision in Chicago Teachers Union, Local No. 1
v.
Hudson (1986) 475 U.S. 292, 106
S.Ct. 1066 [121 LRRM 2793] (Hudson).
The essential facts surrounding Charging Parties' allegations are not in dispute. In
September 2001, PRPE gave notice that it was exercising its right under EERA section 3546(a)
to collect agency fees. 	PRPE began collecting agency fees in October 2001. 3 The amount
collected in October, November, and December 2001, was equal to PRPE's dues which were
$64.00.
In November 2001, PRPE sent out its first Hudson notice. This notice included an
independent auditor's report, dated October 27, 2001, on PRPE's expenses for the fiscal year
ending August 31, 2001. The notice gave employees thirty days to request a rebate and
reduction
of
their agency fees in the amount
of
34.48 percent, which had been determined to be
the percentage
of
non-chargeable expenses. The notice also gave employees thirty days to
challenge the determination
of
non-chargeable expenses, with their agency fees to be held in
escrow until the challenges were resolved by arbitration.
Some Charging Parties did request a rebate and reduction, and as a result their agency
fees were reduced by 34.48 percent to $41.93. Some Charging Parties also challenged the
determination
of
non-chargeable expenses, and as a result their agency fees were eventually
further reduced to $19.20. Charging Parties did not, however, file an unfair practice charge
concerning the timing
of
the November 2001 Hudson notices.
3Agency fees were collected from one employee in September 2001, but they were
refunded.
4

In
September, October, and November 2002, PRPE again collected agency fees from its
unit members. In September 2002, PRPE issued a memo setting out the following guidelines:
1.	
All current and new PRPE members will pay the full
amount
of
dues. (Last year's
amount+
2%)
2. 	All current and new agency fee payers will pay full
amount
of
dues. (Last year's amount only)
3. 	All current and new reduced fee payers will
pay
the
reduced fee. 	(Last year's reduced amount only)
4. 	The following list
of
10 challengers will pay a new
reduced fee amount
of
$19.20 tenthly.
A. Dan Andrus
B. Sue Apkarian
C. Arthur G. Cook
D. Gail Dennis
E. A. Elaine
Devaul
F. Clark A. Kerr
G. Brian T. Kerr
H. Nathaniel William Maas
I. Eugene James Miller III
J. John C. Mettier
5. 	All new hires who are not union members have no
deductions at this time, but we will notify you about their
correct deduction amount later.
It is undisputed that PRPE did not provide its unit members with another Hudson notice
when it collected agency fees from September to November 2002. PRPE's position
at
hearing
was that new notices were not necessary, because the December 2001 Hudson notice
was
still
in effect. PRPE emphasizes that although member dues increased by two (2) percent, agency
fees did not increase in 2002. Meanwhile, new hires, who would not have received
the
December 2001 Hudson notice, did not have to pay any agency fees.
In December 2002 (specifically, on December 17, 2002), PRPE sent out its second
Hudson notice. This notice included an independent auditor's report, dated November 23,
5

2002, on PRPE's expenses for the fiscal year ending August 31, 2002. The auditor testified at
hearing that he could not have completed the report earlier because he needed to receive
confirmation from the California Teachers Association (CTA) and the National Education
Association (NEA), whose fiscal years had also ended August 31, 2002,
of
dues paid by PRPE
to CTA and NEA.4
The December 2002 Hudson notice gave employees 30 days (specifically, until
January 19, 2003) to request a rebate and reduction
of
their agency fees (in the amount
of
29.04 percent) and also to challenge the determination
of
non-chargeable expenses. Some
Charging Parties did request a rebate and reduction, and as a result their agency fees were
adjusted to $46.32, effective February 2003. Some Charging Parties also challenged the
determination
of
non-chargeable expenses. At the time
of
hearing, an arbitration
of
these
challenges was pending.
ALJ'S PROPOSED DECISION
The issue before the ALJ was whether PRPE collected agency fees in September,
October, and November 2002, without providing the required Hudson notice. The ALJ began
by noting that PERB Regulation 32992(c) requires Hudson notices to be sent "[ c]oncurrent
with the initial agency fee collection." (PERB Reg. 32992(c).) There appears to be little doubt
that PRPE failed to comply with that requirement in 2001. However, Charging Parties did not
file an unfair practice charge over the initial collection
of
agency fees for 2001; such a charge
is now untimely. Accordingly, the sole issue before the ALJ was the timing
of
the 2002
Hudson notices.
4PRPE is affiliated with CTA and NEA and also with the California Federation
of
Teachers (CFT) and the American Federation of Teachers (AFT). Most of PRPE's expenses
consist of dues or taxes paid to CTA, NEA, CFT and AFT.
6

The ALJ concluded that the issue turned on the language
of
PERB Regulation
32992(a), which provides that:
Each nonmember who will be required to pay an agency fee shall
annually receive [a Hudson notice]. 	[Emphasis added.]
Relying on Black's dictionary, the ALJ concluded that "annually" must be interpreted literally
to mean "every
12
months". Since the initial Hudson notice was sent in December 2001,
PRPE was not required to send another notice until December 2002. The ALJ rejected
Charging Parties' reliance on PERB Regulation 32992( c) by concluding that, PERB
Regulation 32992(c) does not specifically require that there be a new Hudson notice no later
than concurrent with each school year's initial agency fee collection.
If
such a requirement
had been intended, it presumably would have been specified.
Based on this reasoning, the ALJ held that PRPE met its obligation to send out a
Hudson notice "annually" when it sent a notice in December 2002. The ALJ therefore
concluded that PRPE did not improperly collect agency fees in September, October, and
November, 2002, and dismissed the charges.
CHARGING PARTIES' EXCEPTIONS
In its exceptions, Charging Parties proffer two arguments. First, Charging Parties argue
that the ALJ relied on an old edition of Black's Law Dictionary. According to Charging
Parties, the newer edition does not specify that "annually" means every 12 months, but rather
"in annual order or succession." Second, Charging Parties assert that since PRPE's first
Hudson notice in 2001 was late, it cannot be used as the beginning point for determining when
the 2002 notices must be sent. In other words, Charging Parties argue that the 2002 notices
should be measured from when the 2001 notices were legally required, not from when the 2001
notices were actually sent.
7

PRPE'S RESPONSE
PRPE responds by emphasizing the vagueness
of
PERB Regulation 32992. According
to PRPE, that regulation lacks any specificity as to when a Hudson notice must be sent other
than to require them annually. Thus, PERB should broadly interpret that regulation, argues
PRPE.
DISCUSSION
Constitutional Requirements
of
Hudson
In Hudson, the United States Supreme Court considered the constitutionality
of
a
union's collection
of
agency shop fees. 	In that case, the Chicago Teachers Union implemented
the collection
of
agency fees and created a system whereby employees could subsequently
object or challenge the fees and receive a rebate. The court struck down the union's collection
system finding that a rebate system which allowed even the temporary use
of
money for
activities that violate nonmembers' rights was unconstitutional. The court held that any
agency fee collection system must meet three requirements: (1) it must provide for the
objection or challenge
of
agency fees before their collection; (2) provide nonmembers with
adequate information about the basis for the agency fee; and (3) provide for a reasonably
prompt decision regarding any challenge by an impartial decision-maker. 	(Hudson, at p. 310.)
After Hudson, PERB enacted a set
of
regulations to comply with these requirements. 	(PERB
Reg. 32990 et seq.)
8

Hudson Notice Must be Provided Prior to the Collection
of
Agency Fees
In the proposed decision, the ALJ focused almost exclusively on the term "annually" in
PERB Regulation 32992(a). In doing so, the ALJ ignored subsection (c)(l). 	On its face, the
Board finds that subsection (c)(l) modifies the requirement in subsection (a) that Hudson
notices be provided annually. Specifically, (c)(l) requires that Hudson notices be provided 30
days prior to the collection
of
agency fees. 5 (PERB Reg. 32992(c)(l).) Thus, reading the
provisions
of
PERB Regulation 32992 in conformity with each other, it is plain that Hudson
notices must be provided every year at least 30 days prior to the collection
of
the agency fee.
Such an interpretation is not only in conformity with the Hudson decision, but required
by
it.
Indeed, the Hudson decision states:
Basic considerations
of
fairness, as well as concern for the First
Amendment rights at stake, also dictate that the potential
objectors be given sufficient information to gauge the propriety
of
the union's fee. Leaving the nonunion employees in the dark
about the source
of
the figure for the agency fee - and requiring
them to object in order to receive information - does not
adequately protect the careful distinctions drawn in Abood.
The Board has interpreted the language above to require that enough information be provided
to potential agency fee objectors to make an "intelligent objection." (San Ramon Valley
Education Association, CTA/NEA (Abbot and Cameron) (1990) PERB Decision No. 802
(San Ramon).) More importantly, the Board has held that such information must be provided
to potential agency fee objectors with the initial notice
of
collection. (San Ramon.) Although
the facts in San Ramon arose prior to the promulgation
of
PERB Regulation 32992, the
holdings in San Ramon are entirely consistent with the regulation.
5The only exception is for the initial collection of agency fees where the Hudson notice
may be provided concurrently. (PERB Reg. 32992(c)(2).)
9

The ALJ' s proposed decision essentially sanctions the implementation
of
a rebate
system. Under the proposed decision, PRPE would be able to collect agency fees beginning in
September
of
each year even though it did not provide a Hudson notice until December.
Nonmembers are thus relegated to seeking a rebate
of
fees paid from September through
December. Such a system is exactly the kind ofrebate system the court found unconstitutional
in Hudson.
Here, it is undisputed that PRPE began collecting agency fees in September for the
2002-2003 year. However, it did not provide a Hudson notice for the 2002-2003 year until
December. Under PERB Regulation 32992 and the Hudson decision, PRPE's collection
of
agency fees prior to the provision
of
a Hudson notice was improper.
Notice	PRPE Cannot Rely on its 2001-2002 Hudson
PRPE argues that
if
a Hudson notice is required prior to the collection
of
fees, then
PERB should deem its December 2001 Hudson notice applicable to its collection
of
fees from
September through November 2002. This contention must be rejected. The December 2001
Hudson notice was based on an audit
of
the 2000-2001 year. The notice explicitly stated that it
applied for the 2001-2002 year. Nothing in the December 2001 Hudson notice informed
employees that it would also serve as a basis for determining the agency fee for 2002-2003.
PERB Regulation 32992(a)(2) requires that nonmembers be informed
of
the basis for the
calculation
of
agency fees. 	Such notice is required by the Hudson decision. Without such
notice, employees would be unable to effectively challenge the calculation
of
an agency fee.
Here, Charging Parties were not informed that the December 2001 Hudson notice
would also serve as a basis for calculating agency fees in 2002-2003. To the contrary,
Charging Parties were informed in the December 2001 notice that it only applied for the 2001-
10

2002 year.
	PRPE's
attempt to use the December 2001 Hudson notice to justify its collection
of
agency fees in September through November 2002 thus contravenes PERB Regulation 32992
and the Hudson decision.
Accordingly, the Board finds that PRPE violated PERB Regulation 32992 when
it
collected agency fees from September to November 2002 without providing the required
Hudson notice.
REMEDY
In the present case, it has been found that PRPE failed to provide the notice required by
PERB Regulation 32992 prior to the collection
of
agency fees. PRPE's actions interfered with
the right
of
nonmembers to refrain from participation in the activities
of
the exclusive
representative in violation
of
EERA section 3543.6(b ). Accordingly, the Board finds
that
it is
proper to order PRPE to return to Charging Parties any amounts, with interest, that were
collected from them from September 2002 to December 17, 2002, when PRPE provided the
required Hudson notice. Additionally, PRPE is prohibited from further collecting agency fees
without complying with PERB Regulation 32992 as discussed herein.
ORDER
Based on the foregoing findings
of
fact, conclusions oflaw, and the entire record in this
case, it is found that the Paso Robles Educators Association (PRPE) violated the Educational
Employment Relations Act (EERA), Government Code section 3543.6(b), by failing to provide
the notice required by PERB Regulation 32992 prior to the collection
of
agency fees.
Pursuant to EERA section 3541.S(c), it is hereby ORDERED that PRPE, its
administrators and representatives shall:
11

A. 	CEASE AND DESIST FROM:
1.	
Interfering with the rights
of
individual employees
by
failing to provide
the notice required
by
PERB Regulation 32992 prior to the collection
of
agency fees.
B. 	TAKE THE FOLLOWING AFFIRMATIVE ACTIONS DESIGNED TO
EFFECTUATE THE POLICIES OF EERA:
1.	
Return to Daniel H. Andrus, Eugene James Miller, III, et al., John C.
Mettier, Clark A. Kerr, Brian Thomas Kerr (Charging Parties) any amounts, with interest,
that were collected from them from September 2002, to PRPE's compliance with PERB
Regulation 32992 on December 17, 2002. Interest shall be calculated at the rate
of
seven
(7) percent per annum.
2. 	Within ten (10) workdays following the date this decision is no longer
subject to appeal, post at all locations where notices are customarily posted, copies
of
the
notice attached hereto as an Appendix.
3. 	Written notification
of
the actions taken to comply with this Order shall
be made to the San Francisco Regional Director
of
the Public Employment Relations
Board
in
accordance with the director's instructions. Continue to report, in writing, to the regional
director thereafter as directed. All reports to the regional director shall be concurrently served
on Charging Parties.
Members Whitehead and Neima joined in this Decision.
12

APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
An Agency
of
the State
of
California
After a hearing in Unfair Practice Case Nos. LA-CO-1119-E, et al., Daniel H. Andrus,
et al.
v.
Paso Robles Public Educators in which all parties had the right to participate,
it
has
been found that the Paso Robles Public Educators (PRPE) violated the Educational
Employment Relations Act (BERA), Government Code section 3543.6(b),
by
failing to provide
the notice required
by
PERB Regulation 32992 prior to the collection
of
agency fees.
As a result
of
this conduct, we have been ordered to post this Notice and we will:
A. 	CEASE AND DESIST FROM:
1. 	Interfering with the rights
of
individual employees
by
failing to provide
the notice required
by
PERB Regulation 32992 prior to the collection
of
agency fees.
B. 	TAKE THE FOLLOWING AFFIRMATIVE ACTIONS DESIGNED
TO
EFFECTUATE THE POLICIES OF BERA:
Return to Daniel H. Andrus, Eugene James Miller, III, et al., John C.
Mettier, Clark
1.
A. Kerr, Brian Thomas Kerr any amounts, with interest, that were collected
from them from September 2002, to PRPE's compliance with PERB Regulation 32992
on
December 17, 2002. Interest shall be calculated at the rate
of
seven (7) percent per annum.
PASO ROBLES PUBLIC EDUCATORS	Dated:
By:
--------------
Authorized Agent
THIS IS AN OFFICIAL NOTICE. IT MUST REMAIN POSTED FOR AT LEAST THIRTY
(30) CONSECUTIVE WORKDAYS FROM THE DATE OF POSTING AND MUST NOT BE
REDUCED IN SIZE, DEFACED, ALTERED OR COVERED WITH ANY OTHER
MATERIAL.