Our review of union LM-2 reports also has important implications for those workers who elect to pay an agency fee and exercise their rights under Beck to have their union membership dues limited to the pro-rata portion of the costs of representation. Under the typical Beck analysis, unions are given an allowance for overhead and administrative costs. We have shown that the LM-2 rules allow unions to apportion costs that are typically considered "overhead" to representation so long as they support representation work, and we have also demonstrated the tendency of some unions to categorize some likely political costs as representation.
If anything, our estimates of union spending on representation are likely to be high. As described earlier in this report, courts that have examined union spending have found significantly lower spending on representation. This is most likely due to the limitations of the LM-2 form and the absence of any independent verification of many items. A diligent court will have far greater access to union records than is provided for by the LM-2 form.
The amounts we have calculated based on LM-2 reports are probably a more than adequate estimate of union representation costs, including an appropriate amount for overhead and administrative support. If so, dues collected from Beck objectors should be limited to the percentage indicated on their LM-2 form unless a union can demonstrate that its actual needs for staff and materials to support representation are greater.
Following such a rule, the typical reduction for Beck objectors represented by affiliates of the National Education Association in Michigan would increase from the current 20 to 33 percent to around 70 percent. Those unions most focused on representation only spent 55 percent of their total expenditures on representation. Based on that, the minimum dues reduction to which Beck objectors are generally entitled would be 45 percent. Public-interest law foundations with an interest in promoting worker rights should consider litigation that builds on the Beck decision and establishes that in the absence of other evidence, Beck objectors should be entitled to a dues refund based on the percentage of union spending devoted to representation as indicated on its LM-2 forms.