In both scenarios, the subjects of legally dictated association cannot be required to pay fees beyond those germane to the important state interests justifying the forced association. In the case of bar associations, objecting members cannot be forced to pay dues beyond those necessary to educate and maintain discipline of the legal profession. In the case of closed-shop union agreements, objecting non-union workers cannot be forced to pay dues beyond those related to collective bargaining. Although some may argue that compelled association is itself perverse, what is truly obscene is the process for objecting to unconstitutionally compelled speech. The logical course would be to have objectors pay the actual costs of activities related to organizational purposes justifying the forced association and nothing more. But the logical course is not the actual course. The current regime mandates that objectors pay for all activities, including political and ideological activities unrelated to the core functions, and then go to war with the organization to get a refund of the misused dues. It is left to the individual to battle with the organization, be it a union or bar association, over what percentage of funds were spent on core acivities versus unrelated political and ideological activities. It is well documented that this process often subjects individuals to lengthy litigation and large legal bills, as well as harassment and intimidation. There is no shortage of cases where it takes objectors 2, 3, or even 5 years to get an accurate refund. Frankly, the process is so burdensome that it amounts to little more than punishment for people simply trying to protect their civil rights. So today we will look at what can be done to improve the process by which citizens vindicate their First Amendment right to be free from compelled speech. Having made clear what the constitutional doctrine of compelled speech covers, let me take a moment to make clear what it does not cover. First, it does not encompass what is referred to as "voluntary unionism." In the 21 so-called right-to-work States, the law gives workers at unionized job sites a choice between joining the union and not joining the union. Those who don't join pay no dues or fees while continuing their employment. Thus, there is no issue of unconstitutionally compelled speech. Although association with the union in so-called right-to-work States may not, in fact, be truly voluntary because of coercion and intimidation, as Senator Nickles has forcefully-and, in my opinion, persuasively-argued, the absence of State action compelling the association prevents this from being unconstitutionally compelled speech. That does not mean that we should not address such coercion and intimidation through measures such as paycheck protection. It just means that it is not an issue of constitutional dimensions. The same is true of membership organizations such as the Sierra Club and the NRA. Individuals join and pay dues to these organizations voluntarily, not as a result of a legal mandate. If they don't like what the group is doing, they are free to cease their financial support and disassociate at any time. And those who disassociate do not lose their jobs. This is also the case with corporate shareholders. The law never compels people to associate with a corporation by purchasing stock in a public company. And history proves that shareholders are perfectly free to disassociate with the corporation that does things they find abhorrent or repugnant, whether it is investing in South Africa during apartheid or utilizing labor in nations that do not respect workers' rights. Let me make clear that today's hearing is not aimed at union bashing. I do not desire to silence organized labor's voice in the political arena. In fact, I have been one of the most aggressive people protecting it. To the extent unions utilize voluntarily contributed dues to push their issues and back their candidates, I think they do the Nation a great service. Unions enhance the quality of our democracy by registering voters and educating union members and other citizens about issues-just as groups like the NRA, the Sierra Club, and the ACLU do. And if measures that silence union issue advocacy are ever enacted into law, I will race the AFL-CIO to the courthouse door to challenge these speech suppression schemes as violations of the First Amendment. Today, I am concerned not with unions spending to promote their agenda, which I wholeheartedly think they have a right to, but rather the extent to which fees paid by non-union members who disagree with labor's political and ideological agenda are used to subsidize this agenda. Aside from meaningful paycheck protection, the best way I can think of to protect workers from being forced to subsidize political speech with which they disagree is to ensure that they get an annual report of the ideological and political causes unions are supporting with their dues and fees. In that vein, I plan to introduce the Worker Information and Empowerment Act to make it easier for workers to determine if they want to continue subsidizing the union's non-bargaining-related activities or whether they want to seek a refund. Let me be clear, this is not reporting to the pulic at large, but only reporting to those people whose funds are being controlled and spent by the unions. A full, honest, and easy to comprehend accounting of union expenditures will empower all work ers. Let me say that it is my hope that today instead of posturing and cynically trying to confuse and avoid discussion of the constitutionally significant civil rights issue of compelled speech with distractions about voluntary unionism, membership organizations, and corporate shareholders, we can have a meaningful discussion about the problem of unconstitutionally compelled speech and ways to provide meaningful protections and redress for victims of compelled speech. For even the most naive and deluded cannot honestly assert that the current patina of protections against compelled speech is a workable and reasonable way to protect the First Amendment. Now, having said that, let me now proceed to the panel in the following order: we will take Mr. Fortney first, Mr. Gold second, and Professor Troy third. Particularly since we got started late, we will put the full written statements in the record, and if you could confine your oral statements to 5 or so minutes, that would give us maximum time for questions. So, Mr. Fortney, would you lead off, please? Senator SCHUMER. Mr. Chairman? The CHAIRMAN. Yes, Senator Schumer? Senator SCHUMER. Have there been some other of our colleagues here on our side? The CHAIRMAN. Yes, Senator Cochran came and that is why we were able to get started, and I wanted Senator SCHUMER. May I make brief opening remarks? The CHAIRMAN. Yes, go right ahead. Senator SCHUMER. Let me say first I want to thank you for holding the hearing, and I understand your positions on these issues. To me, I would like to say two things. First of all, I think that what we are talking about here will do two things. It will be unfair to the working men and women of America, and it will kill campaign finance reform, neither things that I would support very much. It just to me defies logic to say, well, a labor union can't represent its the leaders of a labor union can't represent their duly elected, their employees, their members and have to go and get everybody to approve something, but the shareholders of a corporation are perfectly allowed. I mean, if this-I probably would disagree in both cases, but it certainly seems to me to be sort of biased to say we should do this for labor unions and not do it for corporations. The CHAIRMAN. But if we did it for corporations, would you support the measure? Senator SCHUMER. I am not sure I would, but at least I think it would be fair. I am not sure. I am not saying I wouldn't. I might. I might and I might not. But I haven't had to think that through because you have made it easy for us. The CHAIRMAN. You were not here earlier. Today's hearing is only about non-union members, but go ahead. We are only talking about non-union members today. Senator SCHUMER. Okay. Well, in any case, I think that the whole idea of focusing on, quote, making things more democratic in the union area and not in the corporation area doesn't make sense. And the other thing I would say is we all know until there is either a Republican President, Republican House, and Republican Senate, that this kills campaign finance reform. We all know that. And I understand and very much appreciate your views, Mr. Chairman. I think they are heartfelt and you proved your consistency when you voted against the constitutional amendment on flag burning. So I don't begrudge your position at all. I respect it. But I disagree with it, and I think we do need campaign finance reform very, very badly. And you don't have to-you can have lived in Washington and read a newspaper once or twice to know that all of this is a poison pill. So I appreciate the hearing but disagree with both the substance and the effect ofwhere the hearing's goals would lead us. And thank you for that. The CHAIRMAN. Thank you, Senator Schumer. Senator SCHUMER. And I would ask unanimous consent my statement could be The CHAIRMAN. Your statement will be made part of the record. [The prepared statement of Senator Schumer follows:] PREPARED STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR FROM THE STATE OF NEW YORK Thank you Mr. Chairman and greetings to all of our panelists, especially Larry Gold of the AFL-CIO. I would like to start out by saying that I support the efforts made by the AFLCIO, UAW, International Association of Machinists, United Steel Workers of America, and the many other organizations that speak out on behalf of its membership. This year, we have tried to address issues including the minimum wage, ergonomics, Medicaid, Social Security and the Patient's Bill of Rights to bring about substantive reform in areas that affect working men and women throughout this country. Unfortunately, it was the same anti-labor and anti-worker mentality that caused this body to pass a poor substitute for minimum wage, continued efforts to postpone ergonomics standards, competing proposals on Medicaid and Social Security that have yet to address the issue of how the surplus should be directed, and the passage of a Patient's Bill of Wrong. This is ridiculous. Every day, we have lobbyists representing the interests of corporations and PACS, groups who contribute eleven times the amount of money to support and oppose legislative and electoral matters. I don't see any hearings being held to address PACS or contributions by the National Rifle Association, whose lobbying efforts have proved all too successful this year in particular. What message are we sending? Today this committee is tackling the poison pill that threatens real Campaign Finance Reform. There is no need for further paycheck protection. Instead certain members of this body wish to tie the hands of labor's role in the political process while corporations and political action committees continue to wield enormous power over the system. As Larry Gold will mention, there is already a federal law that accords non members represented by unions the option of withholding their financial support for activities beyond those directly related to collective bargaining and contract administration. In addition, 21 states allow nonmembers to pay nothing for the unions obligations to represent them with the same vigor with which it represents its own members. This statute amounts to all of the paycheck protection that is needed. There is no need for further paycheck protection, in fact, I agree that such legislation would amount to Paycheck Deception. The CHAIRMAN. This is really not a debate between Senator Schumer and myself, but it is interesting to note that Senator Schumer is saying, in effect, that campaign finance reform must be as he defines it or it is not campaign finance reform, which is, of course he is certainly entitled to his views, but there are different attitudes about what amounts to reform, which is why we have this debate annually and have had for many, many years. Senator SCHUMER. Mr. Chairman, all I would say, if you would be kind enough to yield, I am not saying it has to be defined my way. I am just making, I think, a statement of fact that no one would dispute two statements of fact. One is that if these provisions were put in the bill, they would be vetoed and not be overridden. The CHAIRMAN. Right. Senator SCHUMER. And, two, you would not be saddened by that result. The CHAIRMAN. No, I would not be saddened by that result if the form of campaign finance is as it has been on the floor of the Senate in recent years, but I am encouraged that the Senator from New York indicates some willingness to consider my kind of campaign finance reform if the provisions related to workers and shareholders are equalized. So I think that may be a way that we can begin a discussion. But rather than have a debate between myself and the Senator from New York, which will occur on the floor of the Senate, I assure you all, let's proceed, Mr. Fortney, with your testimony. STATEMENTS OF A PANEL CONSISTING OF DAVID S. FORTNEY, WASHINGTON, DC; LAURENCE E. GOLD, ASSOCIATE GENERAL COUNSEL, AFL-CIO, WASHINGTON, DC; AND LEO TROY, PROFESSOR OF ECONOMICS, RUTGERS UNIVERSITY, NEWARK, NJ Mr. FORTNEY. Thank you. Good morning, Mr. Chairman and Senator Schumer. It is a privilege to be here today, and I just would like to note that my comments express my personal views and not those of my law firm or any clients that we represent. In the time available, I want to try to very briefly address three substantive areas, and, Mr. Chairman, they will build upon some of the points that you included in your introductory statement. The CHAIRMAN. Could you pull the mike a little closer? Mr. FORTNEY. Yes. First, I want to flesh out a little more some of the legal standards governing what is compelled political speech. Second, I want to turn briefly to the substantive area in which the compelled political speech doctrine has been applied, and that is primarily the Supreme Court's decision in the Beck case that people are generally familiar with, but we will talk about that. And then, finally, I do want to touch briefly on the pending bill in the Senate, S. 1593, the so-called McCain-Feingold bill, which purports to codify Beck, and in my view falls short of that mark. I want to discuss that in a little bit of detail. First, what are we talking about? What is compelled speech? In this context, the touchstone is compulsory, unknowing payments to support views or beliefs with which a person disagrees. It is a simple concept. It is one that the Court has recognized. It has First Amendment ramifications as well as is grounded in the statutory law under the National Labor Relations Act. As you, Mr. Chairman, pointed out in your initial statement, it is different than voluntary associations, whether it be in the National Rifle Association, the National Organization of Women, where you pay voluntary dues and you can withdraw if you want. Similarly, if you own stock and you disagree with the corporation's investment strategies or other actions, you simply sell your stock. In the case that we are speaking of, 29 States, there is an issue involving compulsory payment of either dues or, if you elect to be a non-member, what are called agency fees. And the question is: How are those fees used? How are people apprised of what the fees are being used for? And what are their options in that regard? Now, the underlying issue involves a labor law question involving union security clauses. Union security clauses are authorized under the Federal labor law, and as, Mr. Chairman, you pointed out in your initial statement, the States are permitted, if they so choose, to prohibit union security clauses. There are currently 21 States that prohibit them, so what we are focusing on are the 29 States that permit union security clauses. Under a union security clause arrangement, unions are permitted to negotiate a provision as part of a collective bargaining |