But even more is being spent on Proposition 8, which would require dialysis clinics to pay rebates to health insurers as well as a penalty to the state if their revenue topped 115 percent of some but not all their costs of operation.

The measure – sponsored by the Service Employees International Union-United Healthcare Workers – is depicted by the companies which run the clinics as an SEIU attempt to punish them for the union’s inability to unionize clinic workers. They point to the decision to omit certain operational costs from the revenue calculation as a cynical retribution – one that could force many of the state’s 550-plus licensed dialysis clinics to close or reduce hours, hugely inconveniencing the 70,000 state residents who need the machines to clean their blood of toxins because of problems with their kidneys.

A group of clinic operators – led by DaVita and Fresenius Medical Care, the two biggest companies – have provided $110 million to beat the measure. TV ads showing dialysis patients warning their lives would be devastated if Proposition 8 passes have been a constant presence in large California media markets for more than a month.

The SEIU, which has contributed $18.8 million to the Yes on 8 campaign, is being outspent by nearly 6-1 – so far at least. If internal polls show Proposition 8 close to passing, the dialysis companies could afford to spend that much a day until Nov. 6. That’s because they made about a $3 billion profit in California last year, according to an Associated Press report last week.

“We will spend what is necessary to protect patients from this dangerous and irresponsible ballot measure,” No on 8 spokeswoman Kathy Fairbanks told the Associated Press.

SEIU has long history of targeting health industries

In a Los Angeles Times story, SEIU-UHW leader Dave Regan depicted Proposition 8 as an attempt to help dialysis patients deal with a “predatory” industry. “[They] have a terrible business model and they’re gouging patients and insurers,” he said.

Fresenius and DaVita, which was ordered to pay $253.5 million in damages in a June court ruling after two patients’ deaths, have been accused of cutting corners to raise profits.

But dialysis companies say the SEIU’s concerns about how their industry works were nowhere to be heard when the union was trying and failing to get clinic workers to sign up for SEIU representation in contract bargaining.

The Times’ recent coverage notes that since 2012, the SEIU has taken at least initial steps toward 14 local and state ballot measures that targeted California health care industries which push back at attempts to unionize. For example, in 2016, the union pursued a measure to cap the pay of hospital executives.

The $128 million-plus spent so far on Proposition 8 is the most on a state ballot measure since 2002; official California campaign spending records from before then are unavailable, according to the Times.

Gov. Jerry Brown came to an agreement with SEIU 1000, resolving a crisis over negotiations with the public employee union, California’s biggest. The bargain struck came relatively close to Brown’s initial offer, sharpening the ongoing debate over how best to budget for wages, pensions and health care for the state’s government workers. 

“Contract talks began eight months ago, with workers demonstrating for a higher wage increase than Brown offered,” the Sacramento Bee recalled. “In June, the union’s board of directors approved a new stipend for SEIU’s elected leaders, substantially increasing the pay of President Yvonne Walker and three union vice presidents. In August, a dissident group of SEIU members filed a failed petition to recall those leaders. SEIU’s contract expired in July and the union hosted a series of forums where its active members reiterated their request for a higher wage increase than Brown offered. In November, union members authorized a strike over the contract.”

Disruption prevented

SEIU 1000 planned what would have been a high-profile strike with the potential to embarrass the governor. “Union members voted last month to support a one-day strike after leaders said the state had refused to budge from its opening offer on compensation — 12 percent wage increases over four years that the union said would be offset by a 3.5 percent employee contribution to retirees’ health care,” as the Associated Press reported. “The strike that had been planned for Monday threatened to disrupt operations around the state on the same day newly elected lawmakers were to take the oath of office in Sacramento.”

But Brown pushed back forcefully enough to prevent the action from materializing. “Brown’s administration maintained that the strike was an illegal violation of the union’s contract and sought a court order to block it. A Sacramento County judge declined to issue an injunction on Friday,” the wire added. “Hours later, union leaders called off the strike, saying negotiators from both sides felt they had found a pathway forward.”

Alerting employees to the possibility of punishment, the Department of Transportation had issued a blunt memo. “You are permitted to participate in informational picketing if you are doing so on your own time (e.g. before or after work, or if you have been approved for leave),” it read, cautioning that “employees who participate in an illegal job action, may be subject to disciplinary action, which may include time recorded as absence without leave.”

Claiming victory

In his remarks on the agreement, Brown, famous in California politics for protecting his liberal bona fides while consistently curbing enthusiasm on his left for ambitious spending projects, again invoked a spirit of caution and foresight. “The economy is uncertain,” he warned, according to Capital Public Radio. “The revenue stream is not everything we would like, so we do need some prudence. I’ve always said that and we’ve had the seven fat years and we may be coming into the seven lean years, so that dictates how I look at all these things.” SEIU had claimed Sacramento enjoyed more than enough revenue to swell its benefits.

“The deal calls for an 11.5 percent raise over three years starting next July, and a $2,500 signing bonus upon ratification,” the station noted. “But it also requires union members to begin contributing to their retiree health care benefits. The contributions will begin in 2018 and phase in over three years.”

Although the agreement tilted more toward Brown’s baseline than SEIU’s, union officials have presented the outcome as a win. “This is a victory we achieved by thousands of members standing together across the state, taking action in our worksites, and having an unrelenting willingness to strike if it became necessary,” Local 1000 president Yvonne Walker said in a statement, the Bee reported, calling the result “a contract we can all be proud of.”

The proposed initiative, submitted to the state on Friday, would limit compensation packages for executives, administrators and managers at nonprofit hospitals, hospital groups and affiliated medical entities to no more than $450,000 per year. That’s what the U.S. president gets.

 

This looks like a measure SEIU-United Healthcare Workers West dropped 18 months ago when it signed a partnership agreement with the California Hospital Association to settle differences and work on a joint campaign to fix Medi-Cal.

 

That deal also halted SEIU initiatives to regulate hospital prices and the level of charity care nonprofit hospitals provide. In exchange, the union appeared to get better access to hospitals for organizing purposes. Both partners agreed to a code of conduct about labor management relations.

 

Union spokesman Steve Trossman said the partnership agreement and labor management agreement remain in place. He said the union had not decided whether to also revive ballot measures on charity care and pricing.

Tactic ‘does nothing’ to increase hospital access

The filing of the initiative language with the Secretary of State’s Office isn’t necessarily a sign this is a serious proposal, but it’s certainly a serious message going into 2016 that the SEIU will continue to fight its battles through all available avenues. It triggered a sharp reaction from California Hospital Association CEO C. Duane Dauner and CTA Vice President for External Affairs Jan Emerson-Shea:

[The] decision by SEIU-UHW (UHW) to file a harmful ballot measure that will negatively impact the operations of hospitals throughout California is an abuse of the state’s initiative process and violates a May 5, 2014 agreement negotiated between the California Hospital Association (CHA) and UHW. Artificially imposing a cap on compensation will result in a loss of qualified executives and undermine the ability of hospitals to meet the challenges ahead.

 

Since signing the May 5, 2014 agreement, CHA has worked with UHW to address a myriad of issues facing California’s health care delivery system, most specifically the need to improve access to care for low-income children, seniors and the disabled. These efforts have raised the awareness among state lawmakers, stakeholders and the public about the importance of creating a stable source of funding for the Medi-Cal program, which provides coverage to more than 12 million Californians. While progress is being made, much work remains to be done.

 

This is the third time UHW has attempted to use the initiative process to further its organizing agenda. As was the case in 2011-12 and 2013-14, the measure filed today does nothing to fix Medi-Cal or increase access to hospital services.

State SEIU branch also pushing another ballot measure

The SEIU’s California branch has 700,000 members in California and has worked to raise its profile in recent years. Earlier this month, it announced plans to sponsor another 2016 ballot measure that also may be more of a leverage play to goad business interests to cooperate with the Legislature on raising the minimum wage than a serious effort. This is from the East Bay Express:

A coalition of low-wage workers and the Service Employees International Union of California filed a ballot proposition yesterday with the California Attorney General that would raise the statewide minimum wage to $15 by 2020, and adjust it upward each year thereafter at the rate of inflation. It would also mandate that employers provide workers with a minimum of six paid sick days per year.

 

Backers of the initiative said they will begin gathering signatures to put it on the ballot starting in January 2016. If they succeed in gathering the 365,880 necessary signatures, voters could decide on the proposal in the November 2016 presidential election.

This ballot measure is more generous than a rival ballot proposal to raise the minimum wage sponsored by one of the SEIU’s largest member unions, the United Healthcare Workers West. The Sacramento Bee reported earlier this month that the state SEIU may end up working with the hospital union on one measure to avoid confusing voters and wasting union dollars by launching two separate efforts.

Fighting over the spoils

With an election year on the way, Democrats jockeying for power in Sacramento have found themselves in fractious intra-party competitions. “Assembly Speaker Toni Atkins, faulted by some for not controlling her moderate faction, is being forced out of her seat by term limits but doesn’t want to retire, so she is challenging Sen. Marty Block’s bid for a second term in San Diego,” as Dan Walters observed at the Sacramento Bee. “Atkins says Block had promised to retire after one term and cede the Senate seat to her, but he denies it. The stage is thus set for what is likely to be an expensive and nasty duel between two conventionally liberal Democrats.” Another drama has centered around Raul Bocanegra’s establishment-backed effort to wrest back his seat from insurgent Patty Lopez, Walters added.

On budgeting, meanwhile, Gov. Jerry Brown’s unwillingness to capitulate to Democrats’ demands for greater largesse was thrown into a striking new light by the news that California’s balance sheet is $1 billion stronger than projected this fiscal year. “The surplus suggests Brown was indeed conservative during budget negotiations,” according to Capital Public Radio. “The governor insisted on using lower revenue estimates, while legislative Democrats had pushed for some limited additional spending.”

Republicans, whose idea of fiscal discipline tends to go well beyond Brown’s own, see Democrats’ power struggle over spending as a double-edged sword. Giving too much credit or support to Brown would weaken the already anemic state GOP, while undermining him would fuel an insurgency from the Left. But in a telling signal of how Republican officials sought to resolve the dilemma, the party has pointedly withdrawn itself from races where business-friendly or Brown-allied Democrats faced a matchup against more liberal or union-funded challengers. Speculation has built that the pattern could effectively repeat itself in the campaign to replace outgoing U.S. Sen. Barbara Boxer. Thanks to California’s new primary system, “it just may happen that no Republican survives next June’s Top Two primary, letting Harris and Sanchez split the larger Democratic vote and duke it out in the fall,” according to the Californian. “To prevent that, two of the Republicans will have to drop out long before that primary.”

Unions divided

Even without the added pressure of GOP machinations, organized labor, a powerful Democratic constituency, has found itself fractured in the Golden State. California, the state with the most lower-wage employees, has been at the forefront of activists’ successful movement to boost minimum wages in the absence of federal legislation. But now, that effort has been imperiled by its own strength.

“The SEIU mega-local UHW, based in the San Francisco Bay Area, has long been campaigning for a 2016 ballot measure for a $15 minimum and has already gathered the requisite number of signatures to get it on the ballot,” the American Prospect reported, drawing the support of Democrats like Lt. Gov Gavin Newsom and the mayors of party strongholds like Oakland and San Francisco. Yet the dominance of Democrats and labor has produced internal competition. The SEIU California State Council rolled out a measure of its own “that would also raise the minimum to $15 while expanding access to paid sick leave for home-care workers.”

“The competing measures are the latest skirmish in the running battle between the UHW leaders and the leaders of the national union, joined by other state SEIU honchos, over questions of SEIU’s strategy and structure,” the Prospect noted. “The skirmish has higher-wage advocates worried that two competing measures will diminish state voters’ considerable support (68 percent in the Field Poll) for a $15 minimum wage, so much so that both measures could go down to defeat.”

Assembly Bill 525, introduced by Assemblyman Chris Holden, D-Pasadena, would make it harder for franchisors to in effect fire franchisees — the owner/operators of fast food franchise locations. “A franchisor,” as the legislation put it, “would need to prove the franchisee had failed to ‘substantially comply with the franchise agreement after being given notice of at least 60 days in advance and a reasonable opportunity to cure the failure.'”

According to Holden, himself a former franchise owner, “the one-sided nature of a franchise relationship quickly becomes apparent after signing these documents. Right now it’s easy for a company to get rid of a franchisee whether they’ve done anything wrong or not. These small business owners invest substantial time and money into the enterprise and deserve to be protected.”

Advancing union strategy

In an unusual paradox, however, the Assembly’s push to portray the legislation as a boon to small business owners has been strengthened by labor unions, which have been banking on winning key advantages of their own.

“The measure has received significant support from the Service Employees International Union (SEIU), and with good reason,” Al Jazeera America observed. “By altering the relationship between franchisors and franchisees, AB525 could indirectly bolster labor’s efforts to organize fast food workers by constraining the ability of franchisors to intervene in franchises.”

In fact, the SEIU’s support for AB525 has coalesced as part of its broader ambition to unionize fast food workers and secure a $15 minimum wage throughout California and, eventually, the nation at large.

As the Wall Street Journal reported, the SEIU “filed a petition with the Federal Trade Commission to investigate what the labor group claims are abusive practices on the part of major franchise companies including McDonald’s Corp. and 7-Eleven Inc. The union alleges that large franchisers have failed to disclose pertinent financial information to prospective franchisees and have terminated franchises without cause, among other things.”

What’s more, the union recently debuted a new website intended to foster “a national network of fast-food franchisees who want stronger protections for their businesses,” as the Associated Press reported. “The push has the potential to create more unrest within the ranks for companies like McDonald’s, which already are dealing with ongoing demonstrations calling for higher pay and a union for workers.” Those demonstrations picked up momentum in the wake of a failed bid among Congressional Democrats to raise the federally mandated minimum wage. 

Because franchisees, and not franchisors, typically set wages for their employees, they have made a promising target for labor activists.

Fast food fractures

Franchisors have fired back with claims that franchisee relations are so healthy that new regulations are unnecessary. “The International Franchise Association, which represents franchisors like McDonald’s, Subway and Wendy’s, said in a statement that franchisees indicate ‘incredibly high satisfaction rates,'” according to the AP. “It noted that data from the Federal Trade Commission shows franchisees renew their contracts at ‘an extremely high rate.'”

Taken in isolation however, the picture has become cloudier at McDonald’s — long seen as the bellwether in its industry. “The fast-food chain is at odds with some of the estimated 3,000 men and women who operate most of its 14,350 restaurants in the U.S.,” Bloomberg has noted. “A recent survey by Mark Kalinowski, an analyst at Janney Capital Markets, found that acrimony between the restaurant operators and McDonald’s corporate leaders is as high as it’s been in the 12 years the firm has polled franchise owners.”

Top brass at McDonald’s have faced a perfect storm of changing market conditions, according to Bloomberg. “Stung by falling profits, franchisees grouse that McDonald’s headquarters is out of touch with the realities of running restaurants in today’s fiercely competitive market. They also accuse the company of ignoring their concerns on everything from bloated menus to ever-more-costly kitchen equipment to wages for counter workers.” With analysts predicting a swift shift in fast food restaurants toward fully automated ordering and checkout, unions likely faced a narrow window to successfully organize workers before many of their jobs were simply phased out.

Urged to intervene in a hot-blooded dispute over the fate of six beleaguered Catholic hospitals, Harris approved their sale to Prime Healthcare Services. But she attached a stringent list of conditions designed to satisfy the Service Employees International Union and other Prime critics.

The decision sparked its own wave of criticism, plunging the sale itself into doubt. And Harris has so far declined to comment.

Among other demands, Harris’ solution would require several key changes well in excess of what Prime had originally agreed to. KPCC reported that, to acquire the hospitals, Prime will have to ensure Medi-Cal and Medicare participation guarantees for all outstanding pensions and — most critically — a “10-year commitment for emergency services at some of the hospitals.”

According to the Los Angeles Times, “The hospitals would be required to provide abortion and other reproductive health services that the Daughters of Charity would not” because they are an order of Catholic nuns.

Harris’s measures come on the heels of a lengthy process involving several consultants’ reports, six public meetings and 14,000 comments delivered to her office, according to the San Jose Mercury News. As the San Francisco Chronicle noted, the Attorney General’s office is required to authorize conversions from non-profit to for-profit status.

In an effort to save the hospitals from closure without offending workers’ groups, she turned to the report’s recommendation of a laundry list of conditions — some 70 pages of them. Prime unsuccessfully pressed the Attorney General’s office to ease from some of the consultants’ recommendations, reported the Mercury News. In its original deal with the hospital chain, for instance, Prime accepted specified commitments that terminated after five years, not 10.

Hospital politics

The nonprofit chain of six hospitals, which includes the St. Vincent Medical Center in the heart of Los Angeles, has long been in need of a buyer. But the hospitals found themselves at the epicenter of a political conflict, implicating not only health care but race, class and the economy.

As the Times reported, the lack of a deal put at stake some 7,600 jobs that have been delivering care to lower-income neighborhoods in Los Angeles.

It was a golden opportunity for Prime, which was willing to make unusual concessions in order to forge the deal. “In October, Prime Healthcare agreed to pay about $843 million in cash and assumed debt to acquire the six hospitals,” the Times noted. “A key part of the agreement was Prime Healthcare’s promise to assume $300 million of liability for the pensions of 17,000 current and former Daughters of Charity employees.”

On the other hand, Prime has developed a reputation in Southern California for swiftly acquiring a big portfolio of hospitals, thanks to a strategy of turning around struggling institutions by whipping their cost structures into shape. For labor unions and their allies, that was a problem.

SEIU’s United Health Workers West, which backed Harris’ decision, has suspected Prime of planning to cut not only costs but jobs and services. Adding to the climate of acrimony, a San Bernardino Superior Court Judge recently found that Prime violated a court order by “needlessly admitting emergency room patients into its Chino hospital,” according to KPCC.

An uncertain prognosis

While unions may be placated for the moment, Harris has yet to score a clean political victory. Prime’s executives have not lost the ability to walk away from the negotiating table. And after a weekend spent looking at options, the Times reported, they have not yet made a decision:

“‘We hope to have a decision within a week,’ said Dr. Kavitha Reddy Bhatia, vice president of clinical transformation for Prime Healthcare and daughter of the company’s founder, Dr. Prem Reddy.”

Hospital executives haven’t finished scrutinizing Harris’ proposal either.

The sooner they press Prime for an answer, the sooner they will discover whether they will face what Harris has strained to prevent — Chapter 11 bankruptcy.

On the day before Christmas, the U.S. Department of Labor issued its weekly report on new unemployment claims. While 45 states reported declines, California was one of five states to report an increase.

California claims rose by 11,794. To put that figure into perspective, it was more than 2,500 percent higher than that of Massachusetts, the state with the second-biggest increase in weekly jobless claims.

The reality is the California job market is still not where it should be as the state enters the sixth year of its recovery from the Great Recession.

Below potential

In September, the UCLA Anderson Forecast issued a report in which it declared “the state remains below its potential in output and employment.” Jerry Nickelsburg, Anderson’s chief economist, estimated California was “about 1 million jobs shy” of where it would be were its economic recovery not so “painfully plodding.”

This week’s Department of Labor report on jobless claims provides a clue as to why California’s job creation is not nearly as robust as it should be; and why its 7.2 percent unemployment rate is tied for second-highest among the 50 states. It reported, “Layoffs in the service industry.”

Indeed, the restaurant industry, California’s second-largest private employer, has been besieged in 2014 by the Service Employees International Union, which has orchestrated fast-food “strikes” in cities throughout the state, demanding owners of such restaurants as McDonald’s, KFC and Taco Bell pay their workers $15 an hour, $6 more than the state minimum wage.

On another front, the state’s hotel industry, which generates $7.6 billion a year in state and local tax revenues, faces growing calls by groups like the Los Angeles Alliance for a New Economy to pay workers a so-called “living wage.” LAANE actually was successful this past October, when it mau-maued L.A.’s  City Council and Mayor Eric Garcetti to approve an ordinance mandating an hourly wage of $15.37 for hotels with 300 rooms or more.

Both SEIU and LAANE contend that increasing by as much as 66 percent the wages of lower-skilled, less-educated fast-food and hotel workers will have no effect whatsoever on employment within those service industries.

In fact, a paper published this month by the National Bureau of Economic Research suggests the SEIU’s so-called Fight for 15 campaign will prove disastrous to the very workers it is supposed to uplift.

In their rigorously researched paper, co-authors Jeffrey Clemens and Michael Wither, UC San Diego economics professors, found “increases in the minimum wage significantly reduced the employment of low-skilled workers” and “significantly reduced the likelihood that low-skilled workers rose to what we characterize as lower middle class earnings.”

Extreme minimum wage increase

Similarly, a study this past June authored by John W. O’Neill, director of Penn State University’s School of Hospitality Management, concluded L.A.’s “extreme minimum wage increase” will result in job losses for 1,207 hotel food and beverage workers, as well as 187 housekeepers.

O’Neill also estimated a negative economic impact on California’s largest city of $255.4 million a year, not only from the job losses, but from reduced guest room revenues, reduced food and beverage revenue and lower hotel occupancy taxes, among other costs to the L.A. economy.

The layoffs in California’s service industry confirmed the U.S. Labor Department’s weekly report on unemployment claims may very well be a harbinger of things to come in 2015.

…. use the case, Harris v. Quinn, to strike down laws in 26 states requiring teachers, police officers, firefighters and other public-sector employees to pay dues to the unions that negotiate contracts on their behalf, even if the workers don’t want to become union members. …

How bad could the Supreme Court decision be for unions? Consider that in the two years after [Wisconsin Gov. Scott] Walker ended compulsory union membership in his state, the American Federation of Teachers lost 65 percent of its statewide members and the National Education Association shrank by 19 percent. Other public-sector unions also took big hits, with revenue plunging by 40 percent or more.

Instead, the ruling was limited in scope, per AP:

WASHINGTON (AP) — The Supreme Court dealt a blow to public sector unions Monday, ruling that thousands of home health care workers in Illinois cannot be required to pay fees that help cover the union’s costs of collective bargaining.

In a 5-4 split along ideological lines, the justices said the practice violates the First Amendment rights of nonmembers who disagree with the positions that unions take.

But if this wasn’t the bombshell that some expected, it still could have major impact in California, where 400,000 state-paid in-home care workers are represented by the SEIU. This month, they’ve been celebrating a huge victory. The state budget for the fiscal year starting Tuesday for the first time allows them to receive overtime.

But we can expect efforts prompted by today’s Supreme Court ruling to get these workers to opt in to union coverage. These efforts could well succeed. As the Wisconsin numbers cited by Politico show, a lot of union-represented workers don’t much like unions.

          — Former Assembly Speaker Jesse ‘Big Daddy’ Unruh

The California Teachers Association has poured more than $150 million into state politics in the past decade – most of it going to Democratic candidates and liberal ballot measures. That kind of spending makes the 325,000-member CTA one of the greatest political forces in state history.

But a lawsuit filed by a group of teachers threatens to turn off the CTA’s political funding spigot: the automatic deduction of dues from paychecks for political purposes.

The suit, Friedrichs vs. California Teachers Association, is on behalf of the Christian Educators Association International and 10 teachers who have quit the teachers union and disagree with the CTA’s politics. They seek to stop the CTA from automatically collecting union dues.

Forced to ‘opt out’

Currently, their only recourse is to opt out every year by applying for a rebate of the portion of their dues used for political purposes. The portion’s percentage is determined by the union.

That has led to an over-reach into the wallets of those nonmembers who do not want to contribute to political spending, according to the Supreme Court in a similar case last year, Knox vs. Serv. Emps. Int’l Union, Local 1000.

In what could be precursor of Friedrichs, the court ruled 7-2 in Knox in favor of a group of California teachers who wanted to opt out of a special dues hike to fight Propositions 75 and 76 on the 2005 ballot.

Proposition 75 would have required unions to receive employee consent before charging fees for political purposes. Proposition 76 would have limited state spending, and allowed the governor to reduce government-employee compensation in certain circumstances.

Both propositions lost after opponents spent $10 million, nearly half of it from the CTA.

Republicans get stiffed

Although the CTA has deep pockets for Democrats and liberal causes, the union is quite stingy when it comes to Republican candidates, according to followthemoney.org.

From 2003-12, the CTA gave $15.7 million to Democratic candidates, but only $92,700 to Republicans. The California Democratic Party received $11.4 million from the CTA from 2004-12, while the California Republican Party got just $20,000, which it received in 2004.

Receiving more than $50,000 each were Insurance Commissioner Dave Jones, Gov. Jerry Brown, state Sen. Jim Beall, state Treasurer Bill Lockyer, state Sen. Mark Leno, former state treasurer Phil Angelides, former Assembly speaker Cruz Bustamante, Sen. Loni Hancock and School Superintendent Tom Torlakson.

But the CTA truly flexes its political muscles with ballot measures, which have received more than $135 million from the union from 2003-12. The union spent more than $33 million in 2012 alone.

Most of it, $21.3 million, went to the Alliance For a Better California 2012, which defeated Proposition 32. That measure would have prohibited unions from using payroll deductions for political purposes. CTA’s contribution was nearly $15 million more than the next highest contributor for the measure.

The CTA also donated $10.2 million last year to Californians To Protect Schools, Universities & Public Safety, which helped pass the Proposition 30 tax hike. Again the CTA gave more than twice as much as the nearest contributor for the measure.

In 2005 the CTA donated $20.3 million to Alliance For A Better California Yes On Propositions 79 & 80, although neither measure had anything to do with education. Proposition 79 would have provided prescription drug discounts for low-income residents. Proposition 80 would have required increased renewable energy resource procurement by 2010.

Despite the CTA’s $20.3 million, both measures failed.

District Court rules in favor of CTA

CTA’s large donation days could be over if the Friedrichs lawsuit is successful, forcing the CTA (and other public employee unions) to stop automatically deducting paychecks for political purposes.

The suit recently took either a step backward or a step forward in the judicial process, depending on which side you’re on. On Dec. 5 U.S. District Court Judge Josephine L. Staton ruled against the teachers, based on Supreme Court precedents allowing the current opt-out system.

CTA President Dean Vogel celebrated the lawsuit’s dismissal in a statement:

“It’s always satisfying when the courts side with working people and the rights of their unions to protect and defend them. On a daily basis, CTA works tirelessly to represent all educators – members and non-members alike. Because non-members benefit from this work to ensure they have quality teaching and learning conditions, the U.S. Supreme Court has repeatedly ruled it is only fair that they contribute toward these expenses. The Supreme Court has held these fees to be fair, constitutional and proper.

“It’s gratifying to see that this court has ruled that these fair share fees are lawful and entirely constitutional. We are confident that this attempt by forces to use the courts to gravely diminish the voices of CTA and other unions will not succeed if appealed, as we expect this case will be.”

The litigation is now headed to the Ninth Circuit Court of Appeal. That was the goal of the Center for Individual Rights, which is representing the teachers, in requesting Staton’s ruling against their complaint.

CIR President Terry Pell issued the following statement:

“With today’s decision, the ten California teacher plaintiffs we’re representing will be able to continue their efforts in obtaining the relief they are entitled to from the forced collection of union dues. These fees do nothing but cause ongoing and irreparable injury to their First Amendment rights.

“California’s ‘closed shop’ law is an egregious violation of one’s First Amendment rights because it forces all public school teachers to financially support highly controversial, political and ideological causes that often run contrary to their political and policy beliefs….

“With this case now one step closer to reaching the United States Supreme Court, our goal is to restore the constitutional right of millions of teachers to be able to decide for themselves whether to join and financially support a union.”

Supreme Court may welcome anti-CTA suit

Based on the reasoning and arguments in last year’s court ruling in Knox vs. SEIU, the court’s conservative justices and swing voter Anthony Kennedy appear interested in taking on a case like Friedrichs and perhaps ruling in favor of the teachers and against CTA.

The majority opinion in the Knox case, written by Samuel Alito (with citations omitted), asserts that constitutional rights are at stake:

“A close connection exists between this Nation’s commitment to self-government and the rights protected by the First Amendment, which creates ‘an open marketplace’ in which differing ideas about political, economic, and social issues can compete freely for public acceptance without improper government interference.

“The government may not prohibit the dissemination of ideas it disfavors, nor compel the endorsement of ideas that it approves. And the ability of like-minded individuals to associate for the purpose of expressing commonly held views may not be curtailed.

“Close­ly related to compelled speech and compelled association is compelled funding of the speech of private speakers or groups. Compulsory subsidies for private speech are thus subject to exacting First Amendment scrutiny and cannot be sustained unless, first, there is a comprehensive regulatory scheme involving a ‘mandated association’ among those who are required to pay the subsidy and, second, compulsory fees are levied only insofar as they are a ‘necessary incident’ of the ‘larger regulatory purpose which justified the required association.’”

Also from the Knox ruling:

“When a State establishes an ‘agency shop’ that exacts compulsory union fees as a condition of public employment, ‘[t]he dissenting employee is forced to support financially an organization with whose principles and demands he may disagree.’ This form of compelled speech and association imposes a ‘significant impingement on First Amendment rights.’ The justification for permitting a union to collect fees from nonmembers – to prevent them from free-riding on the union’s efforts – is an anomaly.

“Similarly, requiring objecting nonmembers to opt out of paying the nonchargeable portion of union dues – rather than exempting them unless they opt in – represents a remarkable boon for unions, creating a risk that the fees nonmembers pay will be used to further political and ideological ends with which they do not agree.”

Afoul of the First Amendment

The court majority in Knox also criticized the SEIU’s treatment of those wanting to opt out, saying it “ran afoul of the First Amendment.”

The union claimed that those wanting to opt out still had to give up 56.35 percent of the amount taken from their pay for chargeable expenses, even though all of the dues money was slated for fighting those propositions.

“[T]he SEIU’s understanding of the breadth of chargeable expenses is so expansive that it is hard to place much re­liance on its statistics,” wrote Alito. “[E]ven a full refund would not undo the First Amendment violations, since the First Amendment does not permit a union to ex­tract a loan from unwilling nonmembers even if the money is later paid back in full.”

Sonia Sotomayor and Ruth Bader Ginsburg joined the majority in the vote, but are reluctant to change the status quo.

“[T]he majority strongly hints that this line may not long endure,” Sotomayor wrote. “To cast serious doubt on longstanding precedent is a step we historically take only with the greatest caution and reticence.”

Stephen Breyer’s dissent noted that the dues opt-out process goes back to the court’s ruling in 1986 in Chicago Teachers Union vs. Hudson:

“For the last 25 years unions and employers across the Nation have relied upon this Court’s statements in Hudson in developing administratively workable systems that (1) allow unions to pay the costs of fulfilling their representational obligations to both members and non­members alike, while (2) simultaneously protecting the causes not germane to [the union’s] duties as collective ­bargaining agent.

“Even were the underlying facts different, I can find no constitutional basis for charging an objecting nonmember less than the 56 percent that the preceding year’s audit showed was appropriate.”

The one thing that all sides agree on is that the fight is far from over.

Breyer wrote that the majority’s opinion in Knox could be read to apply not just to the specific special dues hike by SEIU, “but to ordinary yearly fee charges as well. At least, its opinion can be so read. And that fact virtually guarantees that the opinion will play a central role in an ongoing, intense political debate.”

He certainly was right that the political debate is intense, and will continue.

So plainly the union is capable of anything. Here’s the latest from Bloomberg’s Megan McArdle:

“The Service Employees International Union is sponsoring ballot initiatives in California and Oregon that would cap executive pay at hospitals and limit how much customers can be charged. But what does this have to do with the workers? you will ask. The answer is nothing, directly. Instead, the ballot initiatives are bargaining chips. If the hospitals will ‘work with’ the union, the SEIU will back off the ballot initiatives, which threaten hospital profits.

“There are all sorts of reasons not to like unions, or any other group, that use the initiative process this way. There’s no theoretical limit to the terrible initiatives one could come up with, and then drop, in exchange for firms ‘working with us.’ They don’t even have to be initiatives with a high chance of passage, just things that you can force the other side to spend money opposing — at which point, it might be less bother just to give you what you want.”

McArdle doesn’t mention the SEIU’s goal in hassling hospital executives. The SEIU wants hospitals to make it easier for the union to organize in medical-care facilities where employees are now represented by other unions or don’t have unions.

McArdle, who lives in D.C., thinks this tactic reflects a desperation born of failure. That’s not how it looks from the California perspective. The SEIU’s recklessness instead appears born of confidence that the union can get away with it. From Jerry Brown and Kamala Harris to the many other lower-level California Democrats the SEIU helped elect, the agency has little to fear.

And its leaders are not troubled by having a conscience — so expect SEIU tactics to only get more extreme.