Union Fees and the National Association of Realtors

by Victor Lund on February 16, 2016

There is a lot more at stake at the voting polls this year than who will govern our nation. The President will appoint and the Senate will confirm the replacement of the Supreme Court Justice Scalia. Moreover, Justice Ruth Bader Ginsburg is now 82 and is also quite frail. The candidates will be evaluated by the Department of Justice and they will appear before hearings of the Senate Judiciary Committee.

Teachers Union case

One of the cases that may be material to real estate is the case of the Teachers Union. In the LA School district, they charge teachers $685 per year for dues. If you are a non-union teacher you pay $550. In early February, the Teacher’s Union voted to raise the dues to $1000. Rebecca Friedrichs, and elementary Unionschool teacher in Orange County, and nine other plaintiffs opted not to join their union, but were required to pay the $550. Friedrichs is challenging those fees, arguing that they force her to support an organization whose views she disagrees with – violating her right to freedom of speech. Moreover, Friedrichs complains about a policy of forcing non-union teachers to opt-out or automatically be enrolled in the Teachers Union. Friedrichs would prefer an opt-in policy.

The justification for Friedrichs paying the $550 is based upon so-called fair-share fees because they benefit from representation in contract negotiations that determined salaries and benefits. These fees cannot be used to support Political activities. Scalia considered non-union folks like Friedrichs to be “free riders.”

This case is about limiting the flow of money to unions. We have had similar cases in both Florida and California that allows licensed real estate agents to opt-out of joining the National Association of REALTORS®. In both circumstances, there is little distinction between the part of dues used to pay for services versus the portion of dues that are allocated to political and ancillary services.

The real estate difference

In real estate, separating the fees for services like MLS largely solved this. However, it has long been a policy of State Associations of REALTORS® to provide forms as a member benefit of the association. Now the National Association of REALTORS® is doing the same. By tying the forms access, RPR, AMP, and other services to the Association fees, they further solidify the so-called fair-share fees of Association of Realtor membership.

Union membership has diminished over the last few decades from about 28% of workers down to 11%. This has not happened to the National Association of REALTORS®. In 2015, 98% of all real estate transactions were performed by a REALTOR® according to NAR. I do not know how many licensed “free riders” there are in our industry, but they do not seem to be transacting very much. The National Association of REALTORS®is doing a splendid job at providing value to Realtors and being an exemplary advocate for rights of homeownership in America. Unlike the Teachers Union, NAR is delivering services that justify the “fair-share” fees to duck the purview of the courts.

 

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