## Facts

- A public-school teachers’ union served as the exclusive bargaining representative for Chicago Board of Education educational employees; most employees were union members, but some were not.
- To address nonmembers receiving representation without paying dues, the union and the Board agreed to an agency-shop arrangement requiring nonmembers to pay a “proportionate share” fee deducted from wages.
- The union set the nonmember fee at 95% of member dues, based on the union’s own financial records.
- The union adopted an internal objection process: (1) written objection decided by the union’s executive committee; (2) appeal to the executive board; (3) arbitration, with the arbitrator selected by the union president, and any sustained objection producing future reductions and a rebate.
- Nonmember employees sued, alleging compelled fees risked funding ideological or other nonchargeable activities and that the union’s procedures violated the First Amendment and due process.
- The district court upheld the procedures; the court of appeals found them constitutionally inadequate; the Supreme Court affirmed.

## Issues

1. What procedural safeguards does the Constitution require before a public-sector union may collect compulsory agency fees from nonmembers?
2. Whether internal union review with post-deduction rebates adequately protects nonmembers from compelled subsidization of nonchargeable (including ideological or political) activities.
3. Whether a union’s later voluntary escrow of objectors’ fees cures otherwise deficient procedures.

## Decision

- The Supreme Court unanimously affirmed that the union’s procedure was constitutionally inadequate.
- The Court held that agency-fee collection must be structured to minimize infringement on nonmembers’ First Amendment rights while permitting collection of costs for collective bargaining and contract administration.
- Constitutionally sufficient procedures must include: (1) an adequate explanation of the basis for the fee; (2) a reasonably prompt opportunity to challenge the fee before an impartial decisionmaker; and (3) escrow of amounts reasonably in dispute while challenges are pending.
- The union’s post-deduction objection process, limited disclosure, and lack of prompt impartial decisionmaking did not satisfy these requirements; later escrow alone did not cure the defects.

## Legal Principles

- Compelled support of public-sector union activities implicates the First Amendment; safeguards must be “carefully tailored” to reduce the risk that objectors’ funds will be used for nonchargeable purposes.
- Unions must provide advance, meaningful information sufficient to allow nonmembers to assess the fee’s basis, commonly through financial disclosure distinguishing chargeable and nonchargeable expenditures.
- Objectors must have a reasonably prompt avenue for review by a neutral decisionmaker; procedures dominated by union-controlled bodies are insufficient.
- While disputes are pending, the union must segregate (escrow) the portion of fees reasonably in dispute to prevent temporary compelled funding of potentially impermissible activity.
- Post hoc rebates and internal reconsideration, without adequate notice, neutral review, and escrow, do not provide adequate constitutional protection.

## Conclusion

The Court required public-sector unions collecting agency fees from nonmembers to provide advance notice explaining the fee, a prompt challenge process before a neutral decisionmaker, and escrow of disputed funds, and held the challenged union procedure failed those constitutional safeguards.


Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292 (1986)