H.E. NO. 86-50

STATE OF NEW JERSEY

BEFORE A HEARING EXAMINER OF THE

PUBLIC EMPLOYMENT RELATIONS COMMISSION

In the Matter of

DISTRICT 65, UAW, AFL-CIO and

COUNTY OF CUMBERLAND, OFFICE

ON AGING,

Respondent,

-and-	Docket No. CI-85-70-l53

EMILY BACON, Et Al,

Charging Party.

Appearances:

For the Respondent

Ira Katz, Esq., for the UAW

Ivan Sherman, Esq., for the County

For the Charging Party

John C. Scully, Esq.

HEARING EXAMINER'S RECOMMENDED

REPORT AND DECISION

An Unfair Practice Charge was filed with the Public Employment Relations Commission ("Commission") on October 12, 1984, by Emily Bacon and numerous other employees employed by the County of Cumberland, Office on Aging ("Charging Parties") alleging that District 65, UAW ("District 65") and the County of Cumberland, Office on Aging ("County") engaged in unfair practices within the meaning of the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:l3A-1 et seq. ("Act"). The Charging Party alleged that the County violated §§5.3, 5.4(a)(1) and (3), and §§5.5 through 5.9,

inclusive. The Charging Parties allege that District 65 violated §5.3, 5.4(b)(1) and §5.5 through 5.9, inclusive.1/

1/	N.J.S.A. 34:13A-5.3 states, in part:

Except as hereinafter provided, public employees shall have, and shall be protected in the exercise of, the right, freely and without fear of penalty or reprisal, to form, join and assist any employee organization or to refrain from any such activity;....

N.J.S.A. 34:13A-5.4 states, in relevant part:

(a) Public employers, their representatives or agents are prohibited from: (1) Interfering with, restraining or coercing employees in the exercise of the rights guaranteed to them by this act; (2) Dominating or interfering with the formation, existence or administration of any employee organization; (3) Discriminating in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage employees in the exercise of the rights guaranteed to them by this act.

(b) Employee organizations, their representativs or agents are prohibited from: (1) Interfering with, restraining or coercing employees in the exercise of the rights guaranteed to them by this act.

N.J.S.A. 34:13A-5.5 states:

a. Notwithstanding any other provisions of law to the contrary, the majority representative and the public employer of public employees in an appropriate unit shall, where requested by the majority representative, negotiate concerning the subject of requiring the payment by all non-member employees in the unit to the majority representative of a representation fee in lieu of dues for services rendered by the majority representative. Where agreement is reached it shall be embodied in writing and signed by the authorized representatives of the public employer and the majority representative.

b.	The representation fee in lieu of dues shall be in an amount equivalent to the regular membership dues, initiation fees and assessments charged by the majority representative to its own members less the cost of benefits

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The Director of Unfair Practices issued a Complaint and Notice of Hearing on June 5, 1985. The County filed its Answer on

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financed through the dues, fees and assessments and available to or benefitting only its members, but in no event shall such fee exceed 85% of the regular membership dues, fees and assessments.

c.	Any public employee who pays a representation fee in lieu of dues shall have the right to demand and receive from the majority representative, under proceedings established and maintained in accordance with section 3 of this act, a return of any part of that fee paid by him which represents the employee's additional pro rate share of expenditures by the majority representative that is either in aid of activities or causes of a partisan political or ideological nature only incidentally related to the terms and conditions of employment or applied toward the cost of any other benefits available only to members of the majority representative. The pro rata share subject to refund shall not reflect, however, the costs of support of lobbying activities designed to foster policy goals in collective negotiations and contract administration or to secure for the employees represented advantages in wages, hours, and other conditions of employment in addition to those secured through collective negotiations with the public employer.

N.J.S.A. 34:13A-5.6 states, in relevant part:

Where a negotiated agreement is reached, pursuant to section 2 of this act [Section 34:13A-5.5], a majority representative of public employees in an appropriate unit shall be entitled to a representation fee in lieu of dues by payroll deduction from the wages or salaries of the employees in such unit who are not members of a majority representative; provided, however, that membership in the majority representative is available to all employees in the unit on an equal basis and that the representation fee in lieu of dues shall be available only to a majority representative that has established and maintained a demand and return system which provides pro rata returns as described in section 2(c). The demand and return system shall include a provision by which persons who pay a

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June 13, 1985, denying that it had committed any unfair practice. Having been granted an extension of time in which to file, District

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representation fee in lieu of dues may obtain review of the amount returned through full and fair proceedings placing the burden of proof on the majority representative. Such proceedings shall provide for an appeal to a board consisting of three members to be appointed by the Governor, by and with the advice and consent of the Senate.... Nothing herein shall be deemed to require any employee to become a member of the majority representative.

N.J.S.A. 34:13A-5.7 states:

Any action engaged in by a public employer, its representatives or agents, or by an employee organization, its representatives or agents, which discriminates between non-members who pay the said representation fee and members with regard to the payment of such fee other than as allowed under this act, shall be treated as an unfair practice within the meaning of subsection 1(a) or subsection 1(b) of this act.

N.J.S.A. 34:13A-5.8 states:

Payment of the representation fee in lieu of dues shall be made to the majority representative during the term of the collective negotiation agreement affecting such non-member employees and during the period, if any, between successive agreement so providing, on or after, but in no case sooner than the thirtieth day following the beginning of an employee's employment in a position included in the appropriate negotiations unit, and the tenth day following reentry into the appropriate unit for employees who previously served in a position included in the appropriate unit who continued in the employ of the public employer in an excluded position and individuals being reemployed in such unit from a reemployment list. For the purposes of this section, individuals employed on a 10-month basis or who are reappointed from year to year shall be considered to be in continuous employment.

N.J.S.A. 34:13A-5.9 states:

The commission may promulgate rules or regulations to effectuate the purposes of this act.

65 submitted its Answer on June 28, 1985, wherein it denied the commission of any unfair practices. The parties agreed that the relevant facts in this matter were not in dispute. Consequently, the parties entered into a stipulation of facts and no hearing was conducted. A briefing schedule was established. Charging Parties submitted a memorandum of law on August 24, 1985 and a reply brief on October 15, 1985. The County submitted a legal memorandum on September 23, 1985 and a reply letter brief on November 7, 1985. District 65 submitted a brief on October 2, 1985 and a reply brief on November 14, 1985. Charging Parties and District 65 submitted documents in support of their respective positions.

An Unfair Practice Charge having been filed with the Commission, a question concerning alleged violations of the Act, as amended, exists, and after consideration of the briefs and reply briefs, this matter is appropriately before the Commission by its designated Hearing Examiner for determination.

Upon the entire record I make the following:

FINDINGS OF FACT

1.	The County of Cumberland is a public employer within the meaning of the Act, and is subject to its provisions.

2.	District 65, UAW, AFL-CIO, is a public employee representative within the meaning of the Act, and is subject to its provisions.

3.	Emily Bacon and other employees employed by the County of Cumberland, Office on Aging, are public employees within the meaning of the Act, and are subject to its provisions.

4.	The parties have entered into the following stipulation of facts:

(a)	The collective bargaining agreement between the County of Cumberland and District 65, UAW required all members of the bargaining unit, including the Charging Parties, to either join the union or pay an agency fee to the union equal to 85% of union dues commencing October, 1980 through December, 1982. The successor collective bargaining agreement covering a period of January 1, 1983 through December 31, 1985, requires the County of Cumberland to deduct and escrow agency fees, equal to 85% of union dues from non-union members of the bargaining unit. The 1983-1985 collective bargaining agreement made the final disposition of the agency fee money subject to arbitration between the County of Cumberland and District 65, UAW.

(b)	The official records of the County of Cumberland concerning the dates of when Charging Parties became employees of the County or terminated their employment are accurate.

(c)	By letter to the PERC dated April 12, 1984 District 65, UAW established a demand and return system. A copy of an explanation of the mechanics of that system is attached [to the brief] as Exhibit A. [omitted from decision]

(d)	The only notice the County and/or District 65, UAW gave of the agency fee deduction, the amount of the deduction or the demand and return system was through the dissemination of Exhibit A and through dissemination to some of the Charging Parties of copies of the 1980-1982 collective bargaining agreement between the County and District 65, UAW....2/

2/	In a letter dated November 6, 1985, the County stated that it agreed to the stipulation of facts with the exception of stipulation (b). The County states that "all...employees were and continue to be paid by check with a stub which sets forth deductions from gross pay. Stubs would...indicate a deduction for union dues and/or agency fee deductions."

(e)	Prior to April 24, 1984 the County or District 65, UAW did not disseminate any information about the demand and return system.

ANALYSIS

Issue I: The District 65 Demand and Return System

N.J.S.A. 34:13A-5.6 states in relevant part that:

...a majority representative of public employees...shall be entitled to a representation fee in lieu of dues...; provided,...that...the representation fee in lieu of dues shall be available only to a majority representative that has established and maintained a demand and return system....

Charging Parties assert numerous arguments in its claim that District 65's demand and return system is either non-existant or sufficiently flawed so as to render it invalid. Charging Parties argue that the establishment of a demand and return system by a majority representative is a prerequisite to the imposition of a representation fee. Charging Parties contend that in the absence of an established demand and return system, it is an unfair practice for the majority representative to seek the implementation of representation fee deductions. Charging Parties also take the position that the demand and return system adopted by District 65 passes neither statutory nor constitutional muster.3/ Charging Parties argue that the demand and return system promulgated by

3/	The Commission has determined that the courts have jurisdiction to resolve constitutional challenges to the representation fee statute. In re Boonton Board of Education and Judith M. Kramer, P.E.R.C. No. 84-3, 9 NJPER 472, 478 (¶14199 1983). Accordingly, Charging Parties constitutional challenges are not addressed in this report.

District 65 in April, 1984, violates the standard set forth by the New Jersey Supreme Court in In re Board of Education of the Town of Boonton, 99 N.J. 523 (1985) (hereinafter "Boonton"). Charging Parties contend that District 65's demand and return system requires an 85% fee payment and fails to compute the annual fee charged to nonmember employees on the basis of the union's actual expenditures during the preceeding year as required by Boonton. Charging Parties assert that District 65's demand and return system amounts to a "pure rebate" system under which District 65 "has total discretion as to the use of nonmembers' funds until the refund is made...", Charging Parties Brief at 5-6, and which has been rejected by our Supreme Court in Boonton. Charging Parties also contest the adequacy of District 65's escrow arrangements. Charging Parties challenge the validity of District 65's demand and return system on the basis that it is overly complicated and, thereby, acts to inhibit nonmember employees' use of the system.

District 65 argues that the demand and return system effective April 12, 1984, is in substantial conformance with the dictates of Boonton. District 65 points out that "...although the demand and return system in place from April 12, 1984, did not on its face provide for the escrow of an objector's fee payments, that system was applied so as to provide an even more protective escrow arrangement." District 65 Brief at 7. "The current contract has required that [agency fees deducted since January 1, 1983]...be held by the employer in escrow." District 65 Brief at 2. Thus, District

65 concludes that in conformance with Boonton, its demand and return system, as applied, precludes the possibility that an objecting employee will be forced to grant an involuntary loan to the union. Accordingly, the demand and return system does not amount to a "pure rebate" system. District 65 also argues that its demand and return system properly requires agency fee payers to pay the full 85% of regular membership dues, fees and assessments, and it does not have to provide a mechanism for the deduction of a lesser percentage on the basis of the previous years allowable expenses. District 65 asserts that the statute, on its face, entitles it to collect the representation fee at 85%, and "[r]equiring an advance reduction would often unduly 'restrict the Union's ability to require every employee to contribute to the cost of collective bargaining activities.'" District 65 Brief at 12.

District 65 contends that the method by which objections are filed under its demand and return system is not overly complicated. District 65 argues that a fixed one month period (January) each year is long enough to allow any interested employees to file an objection. Further, limiting the objection period to January allows the union to assign staff which can devote special attention to representation fee objections and reduces the administrative burden on the union by allowing it to handle all objections at once. District 65 points out that by requiring the employee to send his/her objection by registered or certified mail to the union's secretary-treasurer and a copy to the union's

regional office, ensures that all objections are properly processed and avoids disputes with regard to whether a particular objection was filed.

The District 65 demand and return system established in April, 1984, reads as follows:

Any non-member who pays a representation fee in lieu of dues shall have the right to object to the expenditure of a portion of the non-member's fee for activities or causes of a partisan political or ideological nature that are only incidentally related to terms and conditions of employment; or for benefits available only to members of the union. The approximate proportion of dues spent for such purposes shall be determined by the District 65 Executive Committee, subject to approval of said General Council. The non-member may perfect the objection by individually notifying the Secretary-Treasurer of the objection by registered or certified mail to 13 Astor Place, New York, NY; and by sending a copy to the union's regional office at 455 Green Street, Woodbridge, NJ; provided, however, that such objection shall be timely only during the month of January following the end of the fiscal year to which the non-member is objecting. The written objection must include the name and address of the non-member, the name of the non-member's employer, and the non-member's job title and department.

Within a reasonable time after receipt of the objection, the Secretary-Treasurer shall send, to non-members who have made an objection, the refund to which the non-member is entitled, if any, along with an explanation of how that amount was determined. If an objecting non-member is dissatisfied with the approximate proportional allocation made by the District 65 Executive Committee, or the disposition of the objection by the Secretary-Treasurer, the non-member may appeal directly to the full General Council within 30 days of receiving notice of the disposition of the non-member's objection by sending the appeal to the Secretary-Treasurer by registered or certified mail.

If an objecting non-member is dissatisfied with the disposition of the non-member's objection by the

General Council, the non-member may appeal, within 30 days of receiving notice of the General Council's disposition of the non-member's objection, directly to the full International Executive Board of the UAW. All such appeals, and all subsequent internal union appeals, shall be governed by Article 33 of the Constitution of the International Union. The non-member must effect the appeal by sending the appeal in writing to the International Union President and by sending a copy of the appeal to the Secretary-Treasurer of District 65, UAW. The appeal should set forth that the non-member is objecting to the expenditure by District 65, UAW, of a portion of the non-member's fee for activities or causes of a partisan political or ideological nature that are only incidentally related to terms and conditions of employment; or for benefits available only to members of the union. The appeal should include any and all information available in support of the appeal.

The decision of the International Executive Board shall be appealable to the Public Review Board or the Convention Appeals Committee at the option of the non-member. Regardless of which alternative the appellant decides to utilize, the appellant must take the appeal within thirty (30) days of notification of the International Executive Board's decision, (unless such time is extended by the International Union President, where, in the President's opinion, justice will be served by such an extension), by serving a notice of appeal upon and filing a written statement of the appellant's reasons for appeal with the International President.

The non-member may appeal to the board appointed by the governor of New Jersey pursuant to NJSA 34:13A-5.6 within 30 days of receiving the determination of the Public Review board or the Convention Appeals Committee; or between the sixth and the eighth month after the filing of the non-member's objection with the Secretary-Treasurer of District 65, UAW.

During this process, the union shall at all times have the burden of proving that its determination was correct.

Thus, under the demand and return system, in order for the appeal to be timely, the nonmember must file his/her objection only during the

month of January following the end of the fiscal year in which the nonmember objects to an expenditure. The nonmember objector then proceeds through a five step appeal process ending at the Appeal Board established pursuant to N.J.S.A. 34:13A-5.6 (hereinafter "Appeal Board"). Where an appeal reaches step 3 (the International Executive Board) or step 4 (the Public Review Board or the Convention Appeals Committee) the appeal is governed by Article 33 of the International Constitution. Since the objector is a nonmember, he/she is not likely to have a copy of the International's constitution. The procedure does not provide for a mechanism by which the objector would receive a copy of either the constitution or Article 33. Article 33 sets forth a lengthy and confusing recitation of procedural gymnastics. Notwithstanding the dictates of step 1 through 4 of the demand and return system, step 5 provides that an objector may proceed to the Appeal Board between the sixth and eighth month after the filing of an objection at step 1.4/

The facts in this case are similar to those in In re Board of Education of the Town of Boonton and Judith M. Kramer, P.E.R.C. No. 84-3, 9 NJPER 472 (¶14199 1983), aff'd as modified 99 N.J. 523 (1985). In Boonton, the charging party (Kramer) raised numerous challenges to the institution of a representation fee negotiated

4/	It has not been determined whether a union's demand and return system may determine the timeliness of an Appeal Board filing.

between the Boonton Board of Education (hereinafter the "Board") and Boonton Education Association/NJEA (hereinafter "Association"). The following are the relevant facts in Boonton. The Board and the Association concluded negotiations for a successor agreement covering the period July 1, 1981 through June 30, 1983. That agreement provided for the deduction of a representation fee from nonmember employees' pay. Boonton, 9 NJPER at 474. On or about September 22, 1981, the Association posted a Notice of Rebate Procedures on various bulletin boards. On September 30, 1981, the Association adopted a "Local Association Demand and Return System." On or about October 1, 1981, the Association posted copies of its demand and return system in the same places it posted the Notice of Rebate Procedures. Id. at 475. Kramer did not personally receive a copy of the demand and return system from the Association. Id. at 480.

In Boonton, the Commission held that:

...the majority representative has an affirmative obligation to notify personally all non-members paying representation fees of their rights under a demand and return system and the procedures for invoking these rights. Id.

The Commission also held that:

The statutory rights afforded by N.J.S.A. 34:13A-5.6 may be meaningless if an affected non-member never learns in the first place of those rights and the applicable procedures. The burden on the majority representative of personally notifying each non-member of such rights and procedures is minimal compared to the amount of representation fees paid by each non-member and is outweighed by the risk that non-members will not learn of their rights in the absence of personal notification. Id.

Thus, in Boonton, the Commission concluded that the Association violated subsections 5.4(b)(1) and 5.6 when it failed to personally notify employees of their rights under the demand and return system and the procedures for obtaining a rebate. Id.

In this case, the collective agreement between the County and District 65 provided for a representation fee equal to 85% of union dues to be deducted from nonmember employees' pay commencing October 1980. The agency fee was continued in the successor agreement covering the period of January 1, 1983 through December 31, 1985. District 65 established a demand and return system on April 12, 1984, but did not disseminate it to employees until April 24, 1984. Thus, while nonmember employees were having agency fees deducted from their wages since October 1980, they were not personally notified of the District 65 demand and return system until April 24, 1984. In accordance with the holding in Boonton, District 65's failure to personally notify nonmember employees of their rights under the demand and return system and the procedures for obtaining a rebate until after representation fees were deducted from employees' pay constitutes a violation of sections 5.4(b)(1) and 5.6 of the Act.

I will now discuss whether District 65's demand and return system "established" on April 12, 1984, is structurally sound under the current standards as enunciated by the Commission and the courts.

In Boonton, the Commission stated that:

N.J.S.A. 34:13A-[5.6] authorizes the collection and expenditure of representation fees pursuant to a written agreement, but only provided certain conditions are met: (1) membership in the majority representative is available to all employees in the unit on an equal basis; and (2) the majority representative has established and maintained a demand and return system which allows a non-member to obtain a review of the amount of his representation fee through fair and full proceedings placing the burden of proof on the majority representative and culminating in an appeal to the tripartite Appeal Board. Id. at 478.

Failure to comply with either condition constitutes an unfair practice. Id.

The New Jersey Supreme Court struck down a demand and return system which incorporated a "pure rebate" system as part of the majority representative's rebate process. The Court defined a "pure rebate" system as one whereby "...the union would have total discretion as to the use of nonmember funds until the refund is made." Boonton, 99 N.J. at 550. Citing Ellis v. Railway Clerks, 466 U.S. 435, 104 S. Ct. 1883 (1984), the New Jersey Supreme Court said:

By exacting and using full dues, then refunding months later the portion that it was not allowed to exact in the first place, the union effectively charges the employees for activities that are outside the scope of the statutory authorization. The cost to the employees is, of course, much less than if the money was never returned, but this is a difference of degree only. The harm would be reduced were the union to pay interest on the amount refunded, but respondents did not do so. Even then the union obtains an involuntary loan for purposes to which the employee objects.

The only justification for this union borrowing would be administrative convenience. But there are readily available alternatives, such as advance

reduction of dues and/or interest-bearing escrow accounts, that place only the slightest additional burden, if any, on the Union. Given the existence of acceptable alternatives, the union cannot be allowed to commit dissenters' funds to improper uses even temporarily. A rebate scheme reduces but does not eliminate the statutory violation. Boonton, 99 N.J. at 549, quoting Ellis, 466 U.S. at 444, 104 S. Ct. at 1890.

The design of District 65's demand and return system distributed in April 1984, amounts to a "pure rebate" system. District 65's demand and return system prohibits an objector from filing an objection until after the close of the fiscal year.5/ The demand and return system contains no provision for placing the objector's representation fee in escrow. Accordingly, pursuant to the terms of its demand and return system, District 65 has unrestricted use of the objector's agency fees collected during the course of the year.

District 65 admits that the April 1984 demand and return system does not, on its face, provide for the escrow of objectors' representation fee payments. However, District 65 points out that, in fact, all representation fees paid by nonmembers have been held in escrow since January 1, 1983. District 65 contends that the demand and return system, as applied, complies with Boonton, since the fees collected were place in escrow, and it did not even temporarily use or have access to any representation fees collected

5/	District 65's demand and return system states that an objection shall only be filed "... during the month of January following the end of the fiscal year..." District 65 Demand and Return System, supra., para. 1.

from nonmembers. Consequently, District 65 asserts that there is no danger that objectors have been or will be required to contribute to causes or programs for which they have the right to withhold support. District 65 Brief pp. 7-9.

While all of the representation fees collected from nonmembers have been held in escrow since January 1, 1983, it is clear from District 65's brief and from Stipulation of Fact (a) that the escrow was established pursuant to the terms of the collective agreement between the County and District 65 rather than the demand and return system. In accordance with the agreement, Article 26, Checkoff, the disposition of the representation fees is subject to the outcome of an arbitration proceeding. There is no provision in the agreement, or elsewhere, for the escrow of fees collected from objectors if the arbitrator orders the funds released to District 65. The basic deficiencies contained in District 65's demand and return system are not cured merely by the fact that representation fees, almost fortuitiously, were held in escrow pursuant to a provision in the collective agreement. The demand and return system remains deficient since its basic design is that of a pure rebate system and, as such, does not pass muster under Boonton.

District 65's demand and return system is flawed in other respects as well. Charging Parties contend that the demand and return system is defective in that it provides only for the deduction of 85% of membership dues, fees and assessments. Charging Parties assert that the demand and return system must be struck down

because it does not provide for a reduction of the percentage of the representation fee deducted from a nonmember's pay based on the prior year's allowable expenditures.

District 65 argues that the statute, on its face, entitles the union to collect 85% of the regular membership dues, fees and assessments. District 65 also contends that the Appeal Board has exclusive jurisdiction over challenges to the propriety of union expenditures. Thus, the Commission has no authority to require a reduction in the 85% representation fee, since that would breach the jurisdictional boundary between the Commission and the Appeal Board. Additionally, citing In re Woodbridge Twp. Board of Education, P.E.R.C. No. 81-131, 7 NJPER 330 (¶12147 1981), District 65 takes the position that the Commission has held that a majority representative is entitled to collect the full 85% representation fee.

N.J.S.A. 34:13A-5.5(b) states the following:

The representation fee in lieu of dues shall be in an amount equivalent to the regular membership dues, initiation fees and assessments charged by the majority representative to its own members less the cost of benefits financed through the dues, fees and assessments and available to or benefiting only its members, but in no event shall such fee exceed 85% of the regular membership dues, fees and assessments.

The Boonton Court stated:

In our view, the legislative intent requires that the annual representation fee charged to nonmembers be calculated in a manner designed to avoid the use of nonmembers' money for unauthorized purposes.

* * *

...[W]e construe the statutorily mandated demand-and-return system to require that the majority representative compute the annual representation fee charged to nonmembers on the basis of the union's actual expenditures during the prior year. In calculating the fee, the majority representative must take into account the ratio that prohibited expenditures have to total union expenditures in its previous year's budget. This will require the computation of the current year's representation fee for nonmembers to exclude that percentage of the union's prior year's budget attributable to expenses that the law prohibits the union to charge to nonmembers. Boonton, 99 N.J. at 550-551. (emphasis added).

The Court went on to explain in a footnote that:

...the maximum nonmember representation fee for the current year would be an amount equal to membership dues reduced by the percentage of impermissible expenditures in the prior year's budget. In no event may the nonmember fee exceed 85% of the dues charged to members. N.J.S.A. 34:13A-5.5(b). Id. at 551, n. 5.

Thus, in very clear terms, the Supreme Court held that in the succeeding year a majority representative cannot collect a representation fee which is greater than its allowable expenditures, even if that amount is less than 85% of regular membership dues, fees and assessments. Moreover, the statutory language in subsection 5.5(b) cited supra, states: "...in no event shall such [representation] fees exceed 85 percent...." (emphasis added); it does not say that the fee shall be 85% of dues, fees and assessments. Consequently, pursuant to the statute as construed by the New Jersey Supreme Court, in order to be structurally sound, a demand and return system must allow for the computation of the representation fee at a rate reflective of the preceding year's allowable expenditures; a rate which may be less than 85% of

membership dues, fees and assessments. District 65's demand and return system is structurally defective since it only provides for the collection of the representation fee at the rate of 85%.

Charging Parties take the position that any reduction from the 85% based on the preceding year's allowable expenditures must be applied to all nonmembers, not just objectors. I disagree for the following reasons.

The Boonton Court said that "... dissenting employees cannot constitutionally be compelled to bear the cost of political expenditures unrelated to collective bargaining." Id. at 543. The Court went on to state the following:

We do not hold that a union cannot constitutionally spend funds for the expression of political views, on behalf of political candidates, or toward the advancement of other ideological causes not germane to its duties as collective-bargaining representative. Rather, the constitution requires only that such expenditures be financed from charges, dues or assessments paid by employees who do not object to advancing those ideas and who are not coerced into doing so against their will by the threat of loss governmental employment. Id., quoting Abood v. Detroit Board of Education, 431 U.S. 209, 235-236 (1977).

In International Association of Machinists v. Street, 367 U.S. 740 (1961), the U.S. Supreme Court said that an objector's "grievance stems from the spending of their funds for purposes not authorized...in the face of their objection...." Id. at 771. The Court went on to indicate that:

...dissent is not to be presumed -- it must affirmatively be made known to the union by the dissenting employee. The union receiving money exacted from the employees under a union-shop

agreement should not in fairness be subjected to sanctions in favor or an employee who makes no complaint of the use of his money for such activities. Id. at 744.

The Boonton and Machinists Courts stress the fact that a majority representative may expend money on ideological issues only incidentally related to terms and conditions of employment. However, such expenditures must not be made from funds collected from employees who inform their majority representative that they object to the expenditure of their money for matters unrelated to collective negotiations. Thus, there is no restriction on the manner in which money collected from nonmembers is legitimately expended. A restriction arises only after employees have informed the majority representative of their objection to having their money spent on matters unrelated to terms and conditions of employment. Abood, supra. Accord, Chicago Teachers Union v. Hudson, U.S. , 54 USLW 4231 (1986). Accordingly, a demand and return system which requires a reduction of the percentage of the representation fee based on the prior year's allowable expenditures only for objectors, rather than all nonmembers, is structurally sound and valid.

District 65 contends that the question of whether it may collect representation fees at a rate other than 85% is outside the Commission's jurisdiction and properly belongs to the Appeal Board. The Commission's analysis of this issue was stated in Boonton and affirmed by the New Jersey Supreme Court. Boonton, 99 N.J. at 535. In its decision, the Commission said:

We believe we have unfair practice jurisdiction under N.J.S.A. 34:13A-5.4(a)(1) and (b)(1) to determine whether the statutory and structural conditions for deduction of representation fees are in place and under N.J.S.A. 34:13A-5.7 and 5.4(a)(1) and (b)(1) to determine whether prohibited discrimination has occurred with regard to the payment of a representation fee. We believe the Appeal Board has jurisdiction to review the amount of any representation fee refund determination and the fairness and fullness of any particular representation fee proceeding leading to that refund determination. Boonton, 9 NJPER at 478.

As discussed previously in this report, the New Jersey Supreme Court has construed the statute to require the majority representative to establish a demand and return system that computes the annual representation fee charged to objectors on the basis of the union's actual allowable expenditures during the preceding year. This is a structural requirement and review of a demand and return system in order to determine if it complies with such requirement falls under the Commission's jurisdiction. The determination of whether a demand and return system complies with the requirement, merely involves a review of the system in order to ascertain whether the majority representative has established a mechanism to use the prior year's percentage. The determination of which expenses are appropriately payable by objectors falls within the Appeal Board's jurisdiction.

District 65 also argues that its entitlement to the full 85% of dues has been determined by the Commission in In re Woodbridge Twp. Board of Education, supra. One of the issues adjudicated in Woodbridge was whether the percentage amount of the

representation fee is mandatorily negotiable. After citing N.J.S.A. 34:13A-5.5(b), the Commission stated that:

The application of the equation contained in the [statutory] language appears to mandate the amount of the agency shop fee that the majority representative is entitled to collect, if it can successfully negotiate for such a provision. Id. at 331.

District 65 misconstrues Woodbridge when it argues that the Commission held that the representation fee shall only equal 85% of dues, fees and assessments. Rather, Woodbridge stands for the proposition that the percentage of dues which a majority representative may collect as a representation fee has been pre-empted by the statutory equation set forth in N.J.S.A. 34:13A-5.5(b) and, as such, is non-negotiable. The statutory equasion allows for the collection of a fee not to exceed 85% of dues. Therefore, while the percentage is not negotiable, the actual allowable amount of fee collectable will vary on the basis of the operative factors in the equation. Thus, applying Boonton, the New Jersey Supreme Court has construed the statute to require that the calculation of the representation fee reflect only the allowable amount collected during the prior year; an amount which may be less than 85%.

District 65's demand and return system is defective because it is too complex. The Boonton Court stated:

The demand-and-return system itself...must provide an uncomplicated, efficient, and readily accessible process for contesting the representation fee. Such process must contain no features or conditions that could in any manner inhibit or restrain a non-member employee from utilizing it. Boonton, 99 N.J. at 551-552.

A review of District 65's demand and return system, set forth above, demonstrates that the system is anything but uncomplicated, efficient and readily accessible. The system calls for 4 internal steps, the last 2 of which are governed by an extremely technical and complicated article (Article 33) of the union's constitution. While there is no evidence to indicate that District 65 intended Article 33 to inhibit an employees' access to or use of the demand and return system, the practical impact of the system distributed in April 1984 serves to discourage employees considering whether to proceed under it.

The demand and return system provides that an objector may not proceed to the Appeal Board until 6 to 8 months after the filing of an objection. Additionally, the system does not establish any time frame by which the union must respond to the objector at each step. In Chicago Teachers Union, supra, a recent U.S. Supreme Court decision, the Court struck down the Chicago Teachers Union's demand and return system because, inter alia, "...it did not provide for a reasonably prompt decision by an impartial decisionmaker."6/54

6/	Under the facts of Chicago Teachers Union, the demand and return system did not provide for an impartial decisionmaker. The Chicago Teachers Union system ended in arbitration but the arbitrator was unilaterally selected by the union. Our Act and the District 65 demand and return system provide for an impartial decisionmaker; the Appeal Board. However, in order to pass muster under this particular portion of Chicago Teachers Union, a demand and return system must not only include an impartial decisionmaker, but also a reasonably prompt decision. District 65's demand and return system does not result in a reasonably prompt decision.

USLW at 4235. District 65's demand and return system cannot be considered reasonably prompt or efficient. Consequently, District 65's demand and return system is structurally defective in this regard.

Under District 65's demand and return system, nonmembers wishing to file objections may only do so during the month of January. The fiscal year runs from January through December 31. Thus, nonmembers must wait until January of the next fiscal year in order to file objections for the preceding year. This requirement must be struck down for two reasons. First, since District 65's demand and return system makes no provision for any sort of escrow account, holding objectors' money for the entire year, plus the time required for the demand and return system to run its course would, in effect, constitute an impermissible involuntary loan to the union. Boonton, 99 N.J. at 550.

Second, a limitation on the period in which a nonmember may file an objection prevents the demand and return system from being a "readily accessible process for contesting the representation fee." Id. at 551. Upon discovery that the union is expending or plans to expend money in support of ideological or political views unrelated to terms and conditions of employment, the nonmember should not be prevented from immediately making his/her objection known to the majority representative. See Abood, 431 U.S. at 244 (Stevens, J., concurring).

In Chicago Teachers Union, supra, the U.S. Supreme Court found the union's demand and return system inadequate because it failed to provide nonmembers with sufficient information about the basis on which the nonmember's representation fee was calculated. The Court pointed out that:

Instead of identifying the expenditures for collective bargaining and contract administration that had been provided for the benefit of non-members as well as members - and for which non-members as well as members can fairly be charged a fee - the Union identified the amount that it admittedly had expended for purposes that did not benefit dissenting non-members. An acknowledgement that non-members would not be required to pay any part of 5% of the Union's total annual expenditures was not an adequate disclosure of the reasons why they were required to pay their share of 95%. 54 USLW at 4235.

District 65's demand and return system is similarly inadequate in that it also fails to make adequate disclosure of its expenditures related to collective negotiations. Thus, District 65's procedure requires nonmembers to object in order to receive information regarding the union's expenditures. This procedure has been rejected by the Chicago Teachers Union Court and, accordingly, is not acceptable here. District 65's demand and return system must incorporate a means by which nonmembers are personally informed of the nature of the expenditures which comprise the representation fee.

In its brief dated September 30, 1984, District 65 points out that it has modified the demand and return system it established in April 1984.7/

7/	District 65's modified demand and return system is set fort in its entirety below:

1. Objections to fee -- Any non-member who pays a representation fee in lieu of dues shall have the right to object to the expenditure of a portion of the non-member's fee for activities or causes of a partisan political or ideological nature that are only incidentally related to terms and conditions of employment; or for benefits available only to members of the union. The approximate proportion of dues spent for such purposes shall be determined by the District 65 Executive Committee, subject to approval of the General Council. The non-member may perfect the objection by individually notifying the Secretary-Treasurer of the objection by registered or certified mail to 13 Astor Place, New York, NY; and by sending a copy to the union's regional office at 455 Green Street, Woodbridge, NJ; provided, however, that such objection shall be timely only during the month of January of the fiscal year to which the non-member is objecting; also provided that non-members may file objections for fiscal year 1985 during the month of January, 1986. The written objection must included [sic] the name and address of the non-member, the name of the non-member's job title and department.

2. Escrow and portion of fee -- Upon receipt of the objection, 100% of the non-member's fee for the year in question will be kept in an escrow account with interest accruing until a return is paid to the non-member by the union and/or any proceeding challenging the amount so returned is completed.

3. Transmission of refund -- Within a reasonable time after the end of the fiscal year, the objection, the Secretary-Treasurer shall send, to non-members who have made an objection for that fiscal year, the refund to which the non-member is entitled, if any, along with an explanation of how that amount was determined.

4. Appeal of amount of refund to General Council -- If an objecting non-member is dissatisfied with the approximate proportional allocation made by the District 65 Executive Committee, or the disposition of the objection by the Secretary-Treasurer, the non-member may appeal directly to the full General Council within 30 days of receiving notice of the disposition of the non-member's

Footnote Continued on Next Page

The affidavit of Cleveland Robinson, Secretary Treasurer of District 65, executed on September 30, 1985, states that the modified demand and return system will be disseminated within 30 days from the date of execution of the affidavit. District 65 argues that its modified demand and return system, by design and as applied, cures any defect which may have existed in its earlier system. Consequently, District 65 asserts that since Charging Parties suffered no harm under the old system and the modified system complies with the Courts decision in Boonton, no unfair practice has occurred.

The modified demand and return system provides that representation fee payers file their objections only during the month of January of the fiscal year in which the nonmember is objecting. The modified system requires 100% of the fee collected from an objector to be placed in an interest bearing escrow account until any return due to the objector is paid and any proceedings concerning the adequacy of the return have been concluded. Lastly,

7/	Footnote Continued From Previous Page

objection by sending the appeal to the Secretary-Treasurer by registered or certified mail.

5. Appeal to PERC Appeal Board -- The non-member may appeal to the board appointed by the governor of New Jersey pursuant to NJSA 34:13A-5.6 within 30 days of receiving the determination of the General Council; or between the sixth and eighth month after the filing of the non-member's objection with the Secretary-Treasurer or District 665, UAW.

6. Burden of proof -- During this process, the union shall at all times have the burden of proving that its determination was correct.

the appeal procedure for challenging the propriety of the union's expenditures has been limited to only one step -- an appeal to District 65's General Council -- before proceeding to the Appeal Board.

When compared with the demand and return system established in April 1984, District 65's modified system sets forth certain important changes. The modified system is uncomplicated and it escrows 100% of the representation fee collected from an objector. 8/ These changes comply with the requirements of Boonton.

However, the modified demand and return system continues to contain a number of the same defects identified and discussed

8/	The Charging Parties argue that the escrow arrangements in District 65's modified demand and return system are inadequate because they are not participants in such arrangements. There is no evidence which indicates that District 65 cannot establish a proper escrow arrangement whereby objector's funds are held pending final disposition. The escrow agent is legally obligated "...to retain the money...until the performance of a condition or the happening of an event at which time the money ...[is] to be delivered in accordance with the terms of the [escrow] agreement." Colegrove v. Behrle, 63 N.J. Super 356, 365 (App. Div. 1960). The employees are protected under the union's obligation to disclose relevant information pertaining to the collection and use of the representation fee. Chicago Teachers Union, supra. Thus, it would be appropriate for the union to provide employees with information regarding the identity of escrow agent and details of the escrow arrangement. Inadequacies in the escrow arrangements may be addressed through the filing of an unfair practice charge contending that notwithstanding the facial adequacy, the system is being improperly administered and, therefore, not "maintained" pursuant to the Act's dictates. See, Boonton, 9 NJPER at 483, n. 31.

previously in this report. Specifically, the modified demand and return system makes no provision for the collection of a representation fee calculated on the basis of the previous year's allowable expenditures which may result in a collection rate of less than 85% of regular membership dues, fees and assessments.

The modified system limits nonmembers to filing objections only during a one month period. This limitation is contrary to the Boonton Court's pronouncement that the demand and return system provide a readily accessible process for contesting the representation fee. The filing limitation prevents a nonmember from filing objections after January in a circumstance where he/she discovers that the union has made or intends to make a contribution in support of a cause only incidentally related to terms and conditions of employment and to which he/she disagrees. Nor does the filing limitation take into account the hiring of additional employees during the course of the year. Under District 65's modified demand and return system new employees could be precluded from filing an objection for up to 11 months -- a situation which would result in forcing these employees to grant an involuntary loan to the union for purposes to which they object.

Finally, District 65's modified demand and return system is defective because it does not provide for the requisite disclosure of expenditures made for collective negotiations and contract administration.

Under subsection 5.6 of the Act, the collection of a representation fee is available to a majority representative if it has established and maintained a demand and return system. Since neither the April 12, 1984 demand and return system nor the modified system pass examination under the Act, I find that District 65 did not and does not have a valid demand and return system in effect. Accordingly, by collecting a representation fee without having first established a valid demand and return system, District 65 has violated sections 5.6 and 5.4(b)(1) of the Act.

Issue 2: Whether the County of Cumberland has violated the Act?

The Charging Parties argue that the County violated the Act when it deducted representation fees from nonmember employees' pay. Charging Parties allege that the County deducted representation fees without knowledge of the existence of a legally valid demand and return system. Charging Parties also contend that continuing to deduct representation fees from nonmembers' pay under a defective demand and return system constitutes an unfair practice. Charging Parties assert that the County has a statutorily imposed responsibility to deduct representation fees only when a valid demand and return system is in place.

The County takes the position that it has not committed an unfair practice. The County contends that an employer is not responsible for having to determine the nature and validity of the majority representatives demand and return system. The County

argues that the burden of ensuring an adequate demand and return system is on the majority representative and the employer may presume the adequacy of the system.

In the County's Answer to the Complaint, it stated the following:

[The County] is without knowledge as to whether the demand and return system for non-member New Jersey representation fee payers existed prior to a deduction as required.

County further is without knowledge as to whether Respondent Union gave proper notice of existence of a demand and return system at any time during the period covered by these charges.

Respondent County of Cumberland denies having any knowledge that the Union used its monies deducted from the Charging Parties for political and ideological purposes as well as purposes not connected to the majority representative's duties. Respondent County of Cumberland verily believed that there was a demand and return system in existence as required by law and in accordance with law.

For the reasons stated below, I find that the County has not committed an unfair practice by failing to seek information regarding (1) the content of the demand and return system, and (2) the distribution of the system and notice to employees. However, the County has violated the Act by failing to inquire into whether District 65 had established a demand and return system prior to deducting representation fees from nonmembers' wages and by failing to view evidence of the existence of the system.

In In re Woodbridge Township Bd/Ed, supra. the Commission said that "...the Legislature intended that public employers not become embroiled in disputes between majority representatives and

the employees they represent as to the amounts to be paid as membership dues or representation fees in lieu of dues." 7 NJPER at 331. See also, In re Township of Hamilton, P.E.R.C. No. 82-121, 8 NJPER 370 (¶13169 1982). The Commission went on to state that in Red Bank H.S. Bd/Ed., 78 NJ 127, 142, 4 NJPER 364 (¶4167 1978) "...the Supreme Court noted that the Legislature has assigned P.E.R.C., not the employers, responsibility for preventing unlawful conduct by a majority representative against the employees it represents." Woodbridge Twp. B/E, 7 NJPER at 331, n. 3. Of course, with respect to issues involving the propriety of representation fee deductions, employees are further protected by their right to appeal to the neutral Appeal Board pursuant to §5.6 of the Act.

Applying Commission and Court precedent to this case, I find that the employer does not bear the responsibility to ensure the validity of the demand and return system. The demand and return system should be considered solely as a matter of internal union concern. Indeed, additional support for this concept is found in §5.6 of the Act where it states that "...the representation fee...shall be available only to a majority representative that has established and maintained a demand and return system...." (emphasis added). It is noteworthy that the statute does not provide for the employer to play any role in that process. Moreover, it were otherwise, the employer and the majority representative would find themselves having to negotiate a mutually acceptable demand and return system. For an employee organization representing employees

included in different units throughout the State and having a state-wide or national demand and return system, the burden of possibly having to negotiate changes in its demand and return system for each unit, and having to administer each of the systems, outweighs any benefit derived from conducting negotiations on the topic. Further, there is no assurance that the rights of nonmember employees will be protected to any greater degree by subjecting the demand and return system to negotiations. There is no indication that an employer is in any better position to identify defects in a demand and return system than is the union. Since I find the demand and return system to be solely a matter of internal union concern, the employer is not required to inquire into or approve the content and design of the system. Thus, the employer cannot be found to have violated the Act in the event the system is later found to be defective.9/

Likewise, the majority representative, not the employer, bears the responsibility for distributing the demand and return system to nonmembers employees. As previously discussed in this report, Boonton imposes the obligation on the majority

9/	In this finding, I am assuming good faith on the part of an employee organization to create a valid and viable demand and return system. I am not considering a circumstance where it becomes evident upon only a cursory review that the majority representative's demand and return system amounts to a sham or blatantly disregards employee rights. There is not even the slightest hint of the existence of such a circumstance in this case.

representative to personally serve upon each nonmember a copy of the demand and return system.

Section 5.6 of the Act authorizes the employer to collect through payroll deductions a representation fee, provided the majority representative has established and maintained a demand and return system. In its Answer, the County admits not knowing whether a demand and return system existed prior to deducting representation fees, not knowing whether the majority representative properly notified employees of the existence of a system, and not knowing whether representation fees collected by the majority representative were used for political and ideological purposes not connected to collective negotiations. However, the County asserts that it believed that there was a demand and return system in existence.10/ While the County is not responsible for knowing whether the majority representative gave nonmembers proper notice of the system,11/ nor the manner in which the union expends such funds, under the Act the County must know that a demand and return system exists before it may collect fees through payroll

10/	I accept the County's assertion that it believed District 65 had a demand return system in existence as true. No stipulation of fact bore on this question. Charging Parties did not show that the County did not, in fact, "believe" that a demand and return system existed at the time it deducted representation fees.

11/	This is not to say that the majority representative and the employer may not negotiate with regard to the procedures by which notice of the demand and return system will be made to nonmember employees.

deductions. This knowledges must derive from something more than a mere belief that a system exists. The employer must ascertain that the majority representative has established a demand and return system. The employer obtains this knowledge through direct observation of the Union's demand and return system. The County failed to take any affirmative steps to ascertain whether District 65 established a demand and return system. The County never observed District 65's demand and return system before it began making representation fee deductions from nonmember employees' pay. This omission by the County violates §§5.4(a)(1) and 5.6 of the Act.

Issue 3: Remedy

Charging Parties take the position that, in addition to cease and desist orders and the posting of notices, they are entitled to the return of all representation fees collected by the Respondents since the initiation of representation fee deductions in October 1980. Charging Parties argue that since they were not aware of District 65's demand and return system until it was disseminated on April 24, 1985, they also did not know that District 65 had not established a demand and return system prior to that date. Charging Parties contend that Respondents' failure to give proper notice that (1) a representation fee would be deducted, (2) that the Charging Parties had a right to challenge the fee and (3) that a demand and return system did not exist, prevented them from having any knowledge that an unfair practice was being committed until the April 24, 1984 dissemination of the demand and return system.

Charging Parties conclude that "[t]he actions of the Respondents by concealing from Charging Parties their rights under the statute prevented charging parties from filing a charge and the six month statute of limitation should be tolled until [April 24, 1984]." Charging Party brief at 12.

The County takes the position that it has no obligation to repay any fees deducted from nonmember employees' pay since, with the exception of any funds held in escrow, all money collected has been paid over to District 65 in accordance with the provisions of the collective agreement. The County expresses no position regarding whether the unfair practice charge is timely.

District 65 argues that the Commission's remedial authority in terms of a monetary award extends only so far as to make whole employees who suffer from the consequences of unfair practices. District 65 points out that a monetary remedy is "...designed to restore, so far as possible, the status quo that would have obtained but for the wrongful act." Galloway Twp. Bd of Ed v. Galloway Twp. Assn. of Ed. Sect'y, 78 NJ 1, ll (1978). District 65 argues that a monetary award which exceeds actual losses is punitive, not merely a "make-whole" remedy.

District 65 argues that the only harm which an employee may have suffered from an inadequate demand and return system is that the employee may have lacked access to a technically legal mechanism by which a refund of the returnable portion of the representation fee would be made. The lack of such mechanism is fully remedied by

the implementation of a demand and return system meeting all legal requirements. In any event, District 65 argues that it should be permitted to retain that portion of the representation fee spent on allowable activities. Therefore, the maximum harm suffered by any employee is equal to the amount of money refundable for objectionable activities. Any greater refund ordered by the Commission exceeds the amount needed to make employees whole and, thus, would be punitive and beyond the Commission's remedial authority. Moreover, the Commission cannot order a monetary remedy because it does not have the authority to determine the amount of objectionable expenditures, if any, since that falls within the jurisdiction of the Appeal Board.

District 65 also argues that the Charge filed in this matter is untimely with respect to any allegation which occurred more than six months prior to the date on which it was filed. District 65 contends that Charging Parties were not "prevented" from filing their charge, consequently, the six month period of limitation should not toll.

The Commission and the Courts have repeatedly held that in cases where the Act has been violated, aggrieved employees may properly be awarded back pay as a make-whole remedy. In re Galloway Twp Bd/Ed, supra. See also, In re Collingswood Bd/Ed., P.E.R.C. No. 86-50, 11 NJPER 694 (¶16240 1985); In re Ocean County Sheriff, H.E. No. 86-13, 11 NJPER 651 (¶16229 1985); In re Willingboro Bd/Ed., H.E. No. 86-8, 11 NJPER 597 (¶16213 1985), aff'd. P.E.R.C. No.

86-76, 12 NJPER 32 (¶17012 1985); In re State of New Jersey (Ramapo State College), P.E.R.C. No. 86-28, 11 NJPER 580 (¶16202 1985); Mantua Street and Roads Dept., P.E.R.C. No. 84-151, 10 NJPER 433 (¶15194 1984); In re Cherry Hill Bd/Ed, H.E. No. 84-50, 10 NJPER 216 (¶15111 1984), aff'd. P.E.R.C. No. 85-68, 11 NJPER 44 (¶16024 1984); In re Bergen County, P.E.R.C. No.84-2, 9 NJPER 451 (¶14196 1983); and In re Camden County, P.E.R.C. No. 83-113, 9 NJPER 156 (¶14074 1983). Since I have found that the Act has been violated, a back pay award making employees whole is appropriate.

District 65 argues that if it is found to have violated the Act, the back pay remedy should be limited to the return of only that portion of the representation fee collected from nonmember employees which constitute objectionable expenditures. However, District 65's proposed cure does not take into account the nature of the violation. The violation was caused by the collection of representation fees prior to the establishment of a legally valid demand and return system. District 65 has no right to collect any representation fees until it has established and disseminated a valid demand and return system. Accordingly, return to the status quo ante requires the return of all representation fees collected from Charging Parties during the time period cognizable under the Charge.

This brings me to a discussion of the timeliness of the charge.

Section 5.4(c) of the Act states that

...no complaint shall issue based upon any unfair practice occurring more than 6 months prior to the filing of the charge unless the person aggrieved thereby was prevented from filing such charge in which event the 6 months period shall be computed from the day he was no longer prevented.

Charging Parties cite Kaczmarek v. New Jersey Turnpike Authority, 77 N.J. 329 (1978) for the proposition that the six month filing limitation may be tolled when a party is otherwise prevented from filing its unfair practice charge. In Kaczmarek, supra, the charging party initially filed a timely action with the New Jersey Superior Court. Subsequently, it was determined that the Superior Court lacked jurisdiction over the matter and dismissed the action. At this point, it was several months beyond the six month statute of limitation under the Act. The Supreme Court stated that in determining whether a charging party is "prevented" within the meaning of the Act from filing a timely charge, equitable considerations should be applied. The Supreme Court has indicated that in determining whether a charging party has been prevented from filing a charge, it is appropriate to "inquire into all relevant considerations bearing upon the fairness of imposing the statute of limitations." Id. at 340. The Court, following the U.S. Supreme Court in Burnett v. N.Y. Cent. R.R., 380 U.S. 424 (1965), found that employees may be "prevented" from filing a timely charge provided they did not "sleep on their rights." Kaczmarek, 77 N.J. at 340-341.

In this case, representation fee deductions began in October 1980 pursuant to the terms of the collective agreement. At

least some of the Charging Parties were notified that a representation fee deduction would be made, the amount of the deduction and the requirement of the existence of a demand and return system through dissemination of copies of the 1980-1982 agreement. All of the nonmember employees were notified of the representation fee deduction and amount of deduction through receipt of their pay stubs. Therefore, October 1980, the time when representation fees first were deducted prior to the establishment of a valid demand and return system, is the operative date to begin running the six month statute of limitation.12/ Therefore, Charging Parties had six months to investigate the representation fee deduction, determine the proper parameters for its implementation and ascertain the proper manner by which it may be challenged. Nonetheless, Charging Parties waited until October 1984, to file their charge. This course of conduct hardly demonstrates the sort of diligence on the part of Charging Parties which statutes of limitation are intended to ensure. Id. at 341. Charging Parties must do more than merely raise the allegation that because they did not know that it was

12/	In a letter dated November 6, 1985, the County takes exception to Stipulation of Fact #4. The County points out that employees were and continue to be paid by check, attached to which is a stub setting forth deductions from gross pay. Thus, employees were apprised of a representation fee deduction when they reviewed their pay stubs. Neither Charging Parties nor District 65 contends that employees were not notified of the fee deduction by the check stub. Accordingly, it is reasonable to credit the County's statement that, from the outset, the stubs showed the representation fee deduction.

necessary to establish a demand and return system they were prevented from filing their charge in a timely manner. Accordingly, I find that Charging Parties' failure to have filed a charge within six months from the date that representation fees were first deducted (October 1980) shows that they slept on their rights, and, thus, were not "prevented" from filing their charge so as to toll the running of the statute of limitation.

However, I have found that District 65's current and previous demand and return systems are not legally valid. Consequently, continuing to deduct representation fees constitutes continuing violations of the Act. See, In re State of New Jersey (Kean College), H.E. No. 84-54, 10 NJPER 74 (¶16036 1985). As such, the charge, when filed, is timely. However, any remedy must be confined to the six month period prior to the filing of the charge. See, Local Lodge 1424 v. NLRB (Bryan Mfg. Co.), 362 U.S. 411, 45 LRRM 3212 (1960).

I make the following:

CONCLUSIONS OF LAW

(1) The County of Cumberland violated sections 5.6 and 5.4(a)(1) of the Act when it deducted representation fees from Charging Parties' wages without first having ascertained whether District 65 established a demand and return system.

(2) District 65, U.A.W., violated sections 5.6 and 5.4(b)(1) of the Act when it collected representation fees from Charging Parties wages prior to the establishment of a legally valid demand and return system.

(3) Charging Parties did not prove, by a preponderance of the evidence, that District 65 or the County violated the other sections of the Act as alleged in their charge. Consequently, I recommend that these aspects of the Complaint be dismissed.

RECOMMENDED ORDER

I recommend that the Commission ORDER the following:

A. Respondents County of Cumberland and District 65 U.A.W., cease and desist from:

1. Interfering with, restraining or coercing the Charging Parties in the exercise of the rights guaranteed to them by the Act by deducting representation fees prior to the establishment of a legally valid demand and return system.

2. Failing to comply with the requirements of §5.6 of the Act.

B. That Respondent County of Cumberland take the following affirmative action:

1. Post in all places where notices to employees are customarily posted, copies of the attached notice marked as Appendix "A". Copies of such notice on forms to be provided by the Commission, shall be posted immediately upon receipt thereof and, after being signed by Respondent County's authorized representative, shall be maintained by it for at least sixty (60) consecutive days. Reasonable steps shall be taken to ensure that such notices are not altered, defaced or covered by other materials.

2. Notify the Chairman of the Commission within twenty (20) days of receipt what steps the County has taken to comply with this Order.

C. That Respondent District 65, U.A.W., take the following affirmative action:

1. Refund to the Charging Parties13/ all of their representation fees14/ collected or held in escrow since April 12, 1984, together with simple interest computed at the rate of 12% per annum up to and including January 1, 1986, and at the simple interest rate of 9.5% per annum commencing January 2, 1986 until the date of payment.

2. Post in all places where notices to employees are customarily posted, copies of the attached notice marked as Appendix "B." Copies of such notice on forms to be provided by the Commission, shall be posted immediately upon receipt thereof and, after being signed by Respondent District 65's authorized representative, shall be maintained by it for at least sixty (60) consecutive days. Reasonable steps shall be taken to ensure that such notices are not altered, defaced or covered by other materials.

13/	In correspondence dated January 27, 1986, Counsel for the Charging Parties advised me and Respondents that Patricia Fleetwood wished to withdraw as party to the Charge. Ms. Fleetwoods request if hereby granted.

14/	The remedy I have fashioned applies only to the Charging Parties. The question of whether, under the circumstances presented in this case, the representation fees collected from all nonmember employees should be refunded is a policy question which I reserve for the Commission to resolve.

3. Notify the Chairman of the Commission within twenty (20) days of receipt what steps District 65 has taken to comply with this Order.

Stuart Reichman

Hearing Examiner

DATED: April 11, 1986

Trenton, New Jersey