Over the last two decades, the Supreme Court has twice considered the legal implications of "agency shops," that is, a workplace in which all employees, whether union members or not, are required to pay union dues. First, in Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977), the Court held that, while non-union employees in an agency shop may be required to bear their share of a union's collective bargaining costs, the First Amendment prohibits the use of their dues on political advertisements and other speech with which the non-union employees may disagree. Second, in Chicago Teachers Unions Local No. 1 v. Hudson, 475 U.S. 292 (1986), the Supreme Court developed concrete guidelines for implementing this prohibition on forced speech including the requirement that unions enjoying an agency shop arrangement offer a neutral decision maker to resolve any disputes over the calculation of collective bargaining expenses.
In this case, the Supreme Court will consider whether non-union employees can be forced to exhaust their remedies under procedures adopted in compliance with Hudson. The union here adopted an arbitrator as its neutral decision maker, and, when non-union employees refused to submit a challenge to the union's calculation of its collective bargaining costs before filing suit in federal court, the union claimed that the employees' challenge was barred by their failure to exhaust administrative remedies. Noting that the employees had never agreed to the arbitration procedure, the D.C. Circuit rejected the union's claim. The four other courts of appeals to consider this question were split evenly over its resolution.
The Supreme Court affirmed the D.C. Circuit on May 26, 1998, by a vote of 7-2. Justice Ginsburg's opinion held that, unless they agree to the procedure, agency-fee objectors may not be required to exhaust an arbitration remedy before bringing their claims in federal court."