Labor & Employment Law Daily Wrap Up, LABOR—UNIONS, UNION MEMBERS—1st Cir.: Employee gets second chance to establish entitlement to attorney fees, (Dec 4, 2025)

By Ronald Miller, J.D.

The district court did not address the prevailing party issue below or how it might bear on the mootness issue.

The First Circuit remanded a district court’s dismissal of claims brought by an employee against his employer, union, and governor as moot. The appeals court agreed with the employer and the union that the employee’s claims were moot insofar as he sought prospective relief. However, the appeals court did not agree that the employee had waived his “prevailing party” attorney fees theory for arguing that his claims were not moot. Because, the district court did not address the prevailing party issue or how it might bear on the mootness issue, the appeals court remanded to the district court for consideration of this ground for challenging its dismissal (Cruz v. Unión Independiente Auténtica de los Empleados de la Autoridad de Acueductos y Alcantarillados, No. 23-2011 (1st Cir. Dec. 3, 2025)).

In 2017, the employee brought suit under 42 U.S.C. § 1983 against his employer, his union and the governor of Puerto Rico.

Union membership requirement. The Puerto Rico Labor Relations Act (PRLA) allows public employers to enter into “all-union” and “maintenance of membership” bargaining agreements with labor organizations. All-union agreements require all employees to be members of a given labor organization as a condition of employment, and maintenance of membership agreements require employees who are union members at the time a collective bargaining agreement is executed to maintain membership as a condition of continued employment. PRLA further allows employers to “deduct[] any sum of money” from employees’ wages “for the payment of dues to a labor organization when... required by the terms of a collective bargaining contract.”

Consistent with the provisions of the PRLA, the 2011 collective bargaining agreement between the employer and the union makes membership in the union a condition of employment and details the initiation fees and membership dues that the employer must withhold from each employee’s pay and remit to the union.

Resignation from union. The employee became a member of the union when he began his employment with the employer in about 1992. In 2016, he sent letters to both the union and the employer notifying them of his resignation from the union and his objection to continuing to pay union dues that would be used for “political, ideological, and other nonbargaining expenditures.” The employee relied on the Supreme Court’s decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977), which held that a public employer may, consistent with the First Amendment, require employees who are not union members to pay fair-share fees.

In response, the employer and the union—acting pursuant to the CBA and the statute—rejected the employee’s requests to resign and to only pay dues arising from the union’s collective bargaining expenses. Thus, the employer continued deducting the full amount of dues from the employee’s pay and remitting them to the union.

Lawsuit. In the subsequent lawsuit, the employee sought: (1) a declaration that the employer and the union violated his federal constitutional rights; (2) a declaration that the statutory provisions and related provisions of the CBA violated the First Amendment of the U.S. Constitution by allowing public employers to require employees to maintain union membership as a condition of employment and to impose dues payments on employees following their resignation from the union; (3) a permanent injunction against enforcement of those requirements; (4) restitution of and compensatory damages for dues withheld from the employee’s pay since his resignation in 2016, plus interest; (5) nominal damages, plus interest; and (6) costs and attorney fees.

Janus decision. While the employee’s claims were pending, the Supreme Court overruled Abood in its decision in Janus v. AFSCME, Council 31. Thereafter, the district court entered a show-cause order regarding Janus’s impact on the employee’s pending suit. In response, the governor conceded that the statutory provisions in question were unconstitutional under Janus and that the employee was entitled to his requested relief. For their parts, the union and the employer argued that Janus did not resolve the pending claims. The employer further argued that it had accepted the employee’s resignation ceased withholding dues from his pay.

Motion for summary judgment. The employee later filed a motion for summary judgment requesting the amount of dues withheld from his pay following his resignation. Shortly thereafter, the union filed a motion seeking leave to deposit with the court the $525.00 the employee had requested, plus $94.68 in interest and $1.00 in nominal damages.

Days later, the union and the employer each filed a motion in opposition to the employee’s motion for summary judgment. Each asserted that the employee’s requests for prospective relief were moot because the union and the employer had recognized his resignation from the union and ceased collecting union dues from his pay following Janus.

Case declared moot. The district court denied union’s Rule 67 motion because that motion “d[id] not provide for an unconditional deposit as it [wa]s made with a full and explicit reservation of rights, without prejudice to all of UIA’s defenses and claims.” However, it permitted the union to refile an updated check without conditions. When the union did not timely respond, the district court ordered the union to unconditionally tender a check to the employee corresponding to the union fees deducted. Thereafter, the union deposited the funds in question with the court.

Subsequently, the court issued an opinion explaining that all the claims must be dismissed as moot. As to the employee’s claims for prospective declaratory and injunctive relief, the district court concluded that they were moot because there was no longer “a substantial controversy of sufficient immediacy and reality to warrant” such relief and “the challenged measures no longer adversely affect[ed] the plaintiff's primary conduct.”

Following the district court's entry of judgment dismissing the claims as moot, the employee filed a motion to alter and amend the judgment. The district court denied the motion, explaining that the union had “deposited the money that plaintiff requested” in response to the court’s order. This appeal followed.

Appellate ruling. On appeal, the employee asked the court to vacate the district court’s Rule 67 order permitting the union to deposit funds with the court, vacate the court’s dismissal of the case, and direct the district court to grant his motion for summary judgment and enter judgment awarding him declaratory and monetary relief.

The appeals court noted that there was no dispute that the employee’s claims were moot insofar as he sought prospective relief. Moreover, the appeals court disagreed with the employee’s contention that his claims for monetary relief or a declaratory judgment regarding the defendants’ past conduct was not moot.

It is settled law that, on appeal, “the ruling on [a] Rule 59(e) motion merges with the prior determination, so that the reviewing court takes up only one judgment.” Here, the appeals court declined to read the district court’s determination in its ruling on the Rule 59(e) motion that the funds were “[[plaintiff’s]] for the asking” other than as a judgment that he is entitled to the funds. Accordingly, the premise of the employee’s lead argument for challenging the dismissal of his claims as moot was mistaken.

“Prevailing party” attorney fees. Further, the employee contended that neither his claim for monetary relief nor his claim for a declaratory judgment regarding the defendants’ past conduct was moot because, even if the district court’s judgment entitles him to the funds at issue, he may be unable to seek “prevailing party” attorney fees, unless the district court also determines that he is entitled to those funds because his First Amendment rights were violated.

Here, the appeals court did not agree that the employee waived this ground for arguing that his claims are not moot. The employee argued that the district court should not have permitted the union to “misuse... Rule 67 to evade liability and entry of judgment for [the plaintiff],” thereby “depriving him of the opportunity to seek attorneys’ fees.” Though limited, this argument was sufficient to avoid a finding of waiver.

Because the district court did not address the prevailing party issue or how it might bear on the mootness issue, the appeals court remanded to the district court for consideration of this ground for challenging its dismissal of the claims based on their being moot.

The case is No. 23-2011.

Judge: Barron, D.

Attorneys: Matthew B. Gilliam, National Right to Work Legal Defense Foundation, Inc., and Estudio Legal Ferraiuoli, PSC, for Reynaldo Cruz. José-Enrico Valenzuela-Alvarado (Valenzuela-Alvarado) for Unión Independiente Auténtica de los Empleados de la Autoridad de Acueductos y Alcantarillados (UIA). Erika Berrios-Berrios (Schuster) for Puerto Rico Aqueduct & Sewer Authority.

Companies: Unión Independiente Auténtica de los Empleados de la Autoridad de Acueductos y Alcantarillados; Puerto Rico Aqueduct & Sewer Authority

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