Labor & Employment Law Daily Wrap Up, LABOR—UNIONS, MEMBERS—9th Cir.: Union member’s constitutional challenge to withholding of union dues fails, (Jan 23, 2025)

By Ronald Miller, J.D.

The employee failed to meet the state actor requirement, such that dismissal of his Section 1983 claims against the union was appropriate.

The Ninth Circuit affirmed a district court’s grant of a motion to dismiss brought by union and state officials against an employee’s claim that they deprived him of his First and Fourteenth Amendment rights by diverting money out of his paycheck to the union. The appeals court, in an unpublished decision, ruled that the employee’s challenge was to the union’s refusal to let him leave, which was a dispute over the terms of union membership. Accordingly, the ‘source of the alleged constitutional harm’ was not a state statute or policy but the private agreement between the union and the employee. Thus, the union cannot be described as a state actor for purposes of Section 1983 (Klee v. Operating Engineers, Local 501, No. 23-3304 (9th Cir. Jan. 21, 2025, unpublished)).

Appellate review. The employee filed suit against the union and state controller and Attorney General, arguing that they deprived him of his First and Fourteenth Amendment rights by diverting money out of his paycheck and to the union. A district court dismissed the employee’s case in its entirety. On appeal, the Ninth Circuit limited its review to the dispositive in the employee’s opening brief: (1) whether the Union acted under color of state law; (2) whether he may recover nominal damages from the state officials; and (3) whether he may recover prospective relief from the state officials for an ongoing constitutional violation.

The employee’s claims against the union were brought under 42 U.S.C. § 1983. Section 1983 provides a cause of action against those who deprive others of federal rights while acting “under color of state law.” To establish that a private actor acted under color of state law, the Ninth Circuit employs a two-prong inquiry comprised of “the state policy requirement” and “the state actor requirement.”

State policy requirement. First, the state policy requirement asks, “whether the claimed constitutional deprivation resulted from the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible.” However, the employee’s arguments at this step were foreclosed by recent precedent, Wright v. SEIU, 48 F.4th 1112 (9th Cir. 2022). The appeals court explained in Wright that the state statutory scheme “does not create a ‘right or privilege’ in [the union] to direct the State’s deductions of union dues.”

Under California law, the State Controller makes deductions at the request of the union but must first get certification from the union that those individuals whose paychecks are to be deducted authorized the deductions. If the State Controller determines that the Union has failed to comply with statutes or regulations for deductions, she must refuse to deduct.

Here, the employee challenges the union’s refusal to let him leave, which is a dispute over the terms of union membership. “Thus, the ‘source of the alleged constitutional harm’ is not a state statute or policy but the particular private agreement between the union and Employees.” Section 1983 provides no remedy for such disputes. Accordingly, the employee could not meet the state policy requirement.

State actor requirement. Second, the state actor requirement determines “whether the party charged with the deprivation could be described in all fairness as a state actor.” This requirement can be met by succeeding in at least one of four tests. In this instance, the employee argued that he met two tests: joint action and governmental nexus. However, the appeals court found that his arguments as to each were foreclosed by recent precedent.

In Wright, the Ninth Circuit found that the State “did not ‘affirm, authorize, encourage, or facilitate unconstitutional conduct’ by processing dues deductions” and therefore could not be a joint actor.

Turning to the governmental nexus test, the employer was required to establish that the State “has exercised coercive power or has provided such significant encouragement, either overt or covert, that the choice must in law be deemed to be that of the State.” Here, the appeals court found no factual allegations arising to the requisite coercion or encouragement supporting a governmental nexus to the union’s alleged constitutional violations. Thus, the employee failed to meet the state actor requirement and dismissal of his § 1983 claims against the Union was appropriate.

The case is No. 23-3304.

Judge: Per curiam.

Attorneys: Timothy R. Snowball (Freedom Foundation) for Terry Klee. David P. Myers (The Myers Law Group) for International Union of Operating Engineers, Local 501.

Companies: International Union of Operating Engineers, Local 501

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