Members Only: Why California Public Agencies Should Tread Carefully with Member-Exclusive Benefits

Since the 2018 United States Supreme Court decision in Janus v. AFSCME prohibited public sector labor unions from charging agency fees to non-members, public sector labor unions have sought methods to incentivize union membership. For example, the state legislature recently amended the Meyers Milias Brown Act permitting labor unions who represent public safety officers to charge non-members for the cost of individual representation in a discipline, grievance, arbitration, or administrative hearing.

Another method for incentivizing union membership is to offer certain benefits only to union members, excluding non-members from coverage.

While permissible in certain circumstances, public agencies must be cautious when contributing to the cost of benefits exclusively for union members.

Benefits funded directly from the union’s resources (e.g., a union providing additional insurance, legal assistance, or exclusive benefits from its own funds or paid for by union dues) are generally allowed. Such benefits are voluntary, available through union membership, but not funded by public money. However, if a government agency directly funds or administers benefits exclusively for union members while excluding non-members in the bargaining unit, this can lead to potential legal challenges. For example:

• Employer Interference: A public agency’s paying for a benefit that exclusively goes to union members, and not to non-members, could be considered employer interference under California labor laws. Under the Meyers Milias Brown Act, public agencies are prohibited from interfering with, restraining, or coercing employees in their right to join or not join a union. If a public employer funds a benefit that only union members receive, it could be held to interfere with employee choice by financially incentivizing union membership over non-membership.
• Union Failure of Duty of Fair Representation: Public-sector unions are required to represent all bargaining unit members fairly, in good faith, and without discrimination, regardless of union membership status. If an agency-funded benefit is part of a collective bargaining agreement and applies only to union members, excluding non-members in the same bargaining unit, the union might be violating its duty of fair representation to non-members. In such instance, non-member employees could potentially file an unfair labor practice charge with PERB against the union for failure to fairly represent all employees.
• First Amendment Violation: As Janus v. AFSCME reinforces that public employees cannot be financially coerced into joining a union, exclusive benefits funded by public money could raise constitutional concerns.

The Public Employment Relations Board (PERB) has adopted federal precedent as the public sector test for interference, acknowledging that the act of paying benefits to one group of employees and not another group of employees who are distinguishable only by their participation in concerted activity, can constitute interference. If an employer’s discriminatory conduct is facially or inherently discriminatory, no proof of antiunion motivation is needed and PERB can find an unfair labor practice, even if the employer introduces evidence that the conduct was motivated by business considerations. In those instances, the employer’s conduct will be excused only on proof that it was occasioned by circumstances beyond the employer’s control and that no alternative course of action was available.

On the other hand, if the adverse effect of the discriminatory conduct on employee rights is comparatively slight, the employer can produce evidence of legitimate and substantial business justifications in defense of the conduct, and the burden then shifts to the charging party (the union or an employee) to demonstrate that the employer had a motivation of interference.

Agencies that extend benefits exclusively to union members risk violating state labor law by effectively penalizing non-members and creating an unlawful incentive to join a union. Rather, any benefit funded by public funds should apply equally to all represented employees, regardless of membership status.

For public agencies, the lesson is clear: union membership should not be a prerequisite for workplace benefits. As a general rule, if the agency funds the benefit – even if it payments are made through the union to a third party – all employees represented by the bargaining unit (members and non-members) should be eligible. If the benefit is exclusive to union members, it should be funded by the union itself, not funded by public funds. Like the iconic Members Only jackets of the 1980s, these exclusive perks might seem appealing—but they can quickly go out of style in the eyes of the law.

California Public Agency Labor & Employment Blog

www.lcwlegal.com