Financial Core - Origin

Origin

Under the National Labor Relations Act (Sec. 8 (a) (3)) an employer and a labor organization may agree to condition employment upon membership in the union. The 1963 ruling limited the burdens of membership upon which employment may be conditioned to the payment of initiation fees and monthly dues. In the words of the court, "Membership as a condition of employment is whittled down to its financial core." Or, in other words, "If an employee in a union shop unit refuses to respect any union-imposed obligations other than the duty to pay dues and fees, and membership in the union is therefore denied or terminated, the condition of membership for 8 (a) (3) purposes is nevertheless satisfied and the employee may not be discharged for nonmembership even though he is not a formal member."

In 1988, the Supreme Court again addressed the financial core issue in Communications Workers of America v. Beck. The question this time was whether an employee who is not a formal member in the sense above, but rather a financial core member, can be required to pay full union dues and fees, if those fees are used for purposes beyond collective bargaining, contract administration, or grievance adjustment (so-called collective bargaining activities). The court ruled in a 5 to 3 decision, with Justice William Brennan writing for the majority, that the financial core obligation does not include "the obligation to support union activities beyond those germane to collective bargaining, contract administration, and grievance adjustment."