Full opinion text
OPINION DEBEVOISE, District Judge. I. The Proceedings These two consolidated actions each challenge the constitutionality of provisions of the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A — 1, et seq. (the Act), which permit public employers to withhold and majority union representatives to receive representation fees assessed against employees who are not members of the union. Plaintiffs moved for preliminary injunctive relief; a hearing was held; and this opinion constitutes my findings of fact and conclusions of law. II. The Statute The Act creates a Division of Public Employment Relations within the executive branch, N.J.S.A. 34:13A-5.1, and establishes in that division a New Jersey Public Employment Relations Commission (PERC), N.J.S.A. 34:13A-5.2. PERC is required “to make rules and regulations” and to implement fully all the provisions of this act”. PERC is granted exclusive jurisdiction over unfair practices, N.J.S.A. 34:13A-5.4 c. The Act grants and protects the right to freely join or assist or to refrain from joining or assisting any employee organization, N.J.S.A. 34:13A-5.3, and prohibits restraint of those rights, N.J.S.A. 34:13A-5.4(a)(l) & (b)(1). The Act designates the majority representative the exclusive representative to negotiate the terms and conditions of employment of an employee unit, N.J.S.A. 34:13A-5.3 (¶2). A majority representative of public employees in an appropriate unit shall be entitled to act for and to negotiate agreements covering all employees in the unit and shall be responsible for representing the interest of all such employees without discrimination and without regard to employee organization membership ... In addition, the majority representative and designated representatives of the public employer shall meet at reasonable times and negotiate in good faith with respect to grievances and terms and conditions of employment. When an agreement is reached on the terms and conditions of employment, it shall be embodied in writing and signed by the authorized representatives of the public employer and the. majority representative. Effective July 1, 1980, New Jersey amended the Act to permit public employers and majority, representatives of employees to negotiate contract provisions which would require employees who choose not to join the majority representative to pay a representation fee in lieu of dues. P.L. 1979, c. 477, N.J.S.A. 34:13A-5.5 to 5.9. The purpose of the amendment was to require the non-members to bear a fair share of the expenses incurred in representing their interests during negotiations with their employer. The Sponsor’s Statement to Assembly Bill No. 688, February 9, 1978, expressed this objective as follows: For many years, the ‘New Jersey Employer-Employee Relations Act’ has required that a majority representative of public employees which has negotiated a labor agreement covering such employees to represent the interests of all employees in the bargaining unit, regardless of organizational membership, without discrimination. Non-members of the majority organization, therefore, enjoy virtually equal benefits and protections without sharing in the costs, incurred by collective negotiations, grievance representation, and other services. In the recent May, 1977 decision of the United States Supreme Court (Abood et al. v. Detroit Board of Education et al. [431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 261]) which upheld the constitutional validity of state ‘agency shop’ legislation, the Court pointed to the fact that the tasks of negotiating and administering an agreement are continuing and difficult ones and entail the expenditure of much time and money, often requiring the services of lawyers, expert negotiators, economists, research staff, as well as administrative personnel. In that decision, the Court went on to state that ‘a union shop arrangement has been thought to distribute fairly the cost of these activities among those who benefit, and it counteracts the incentive that employees might otherwise have to become ‘free riders’ — to refuse to contribute to the union while obtaining benefits of union representation that necessarily accrue to all employees’ Many analysts feel that union security agreements such as the agency shop are vital to the stability and sense of responsibility of public sector unions. N.J.S.A. 34:13A-5.5(a) authorizes a majority representative and a public employer to include in a collective agreement a provision requiring all employees in the negotiations unit who are not members of the majority representative to pay the majority representative a representation fee in lieu of dues for services rendered by the majority representative. N.J.S.A. 34:13A-5.5(b) provides that the representation fee “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 benefit-ting only its members, but in no event shall such fee exceed 85% of the regular membership dues, fees and assessments ”. (Emphasis added.) The Act does not define benefits available to or benefitting only the majority representative’s members. However, the Statement of the Assembly Labor Committee to Assembly Bill No. 688, June 19, 1978, referred to the cost of any other benefits available only to members and gave as examples “contributions to charitable or religious organizations or causes; fines, penalties or damages arising from unlawful activities of a bargaining agent; social or recreational activities, costs of educational activities unrelated to collective negotiations, contract administration or lobbying for improved wages and benefits; costs of medical insurance; retirement benefits or other benefit programs; and costs incurred by the bargaining agent to organize employees who are not included in the bargaining unit”. It would appear that in arriving at the representation fee it is not required (although it would be permissible) to deduct from membership dues the employee’s pro rata share of expenditures by the majority representative for political or ideological causes or for lobbying. That subject is covered in N.J.S.A. 34:13A-5.5(c). That section provides that “[a]ny public employee who pays a representation fee . . . shall have the right to demand and receive from the majority representative ... a return of any part of that fee paid by him which represents the employee’s additional pro rata 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”. A payor of a representation fee does not have the right to demand a refund of his pro rata share of “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 employer”. Thus there is potentially a very broad area of lobbying activities for which the funds of non-members can be spent without the right to a refund. This gives rise to one of the areas of controversy in this case. The public employer deducts the representation fee from the paychecks of nonmembers and forwards the deductions to the majority representative. N.J.S.A. 34:13A-5.6. N.J.S.A. 34:13A-5.6 prohibits the deduction of representation fees unless the majority representative has established and maintained a demand and return system which provides pro rata returns as described in N.J.S.A. 34:13A-5.5(c). The majority representative’s demand and return system must include a provision permitting nonmembers to obtain review of the amount returned through full and fair proceedings. The majority representative bears the burden of proof. N.J.S.A. 34:13A-5.6. If dissatisfied with the result of demand and return system proceedings, a representation fee payer may appeal to a three-member board whose members the Governor appoints with the Senate’s advice and consent. N.J.S.A. 34:13A-5.6. One member of this board must be a representative of public employers, one a representative of public employee organizations, and one, the strictly impartial chairman, is the representative of the public interest. Issues in this case include (i) whether any demand and return system can validate a compulsory non-member fee, part of which is used until the time of its return to promote organizations and causes with which the non-member disagrees and (ii) whether, if some forms of demand and return systems are valid, this particular system is invalid because it places such onerous burdens on the non-member seeking a refund. An examination of the facts developed in the consolidated cases now before the Court throws light upon these issues. III. Robinson v. New Jersey Plaintiffs in the Robinson case are thirteen professional employees of defendant Rutgers University. They are not members of defendant Rutgers Council, American Association of University Professors (AAUP), which acts as exclusive representative of the employees in the bargaining unit of which plaintiffs are a part. Defendants in Robinson include the State of New Jersey and its Governor, the Chairman of PERC, Rutgers University and its Board of Governors and various of its officers having labor- relations duties, the Rutgers Council of AAUP and various of its officers, and the National AAUP and its General Secretary. Extensive affidavits have been filed by or on behalf of plaintiffs and defendants and there can be little, if any, dispute as to the facts pertinent to the disposition of the application for a preliminary injunction. AAUP is a national organization of teachers and research scholars in universities and colleges and in professional schools of similar grade. Its governing body is a Council whose members are certain present and past officers, the Chairman of the Collective Bargaining Congress and thirty elected members. The Council establishes membership dues, subject to ratification at the annual meeting of AAUP. Whenever the active members of AAUP in a given institution numbers seven or more, they may become a chapter of AAUP. A chapter may establish local membership dues. According to AAUP’s chief executive officer, “AAUP is not, and has never been, a national labor organization. It does not engage in collective bargaining on behalf of anyone. In 1973, the AAUP Annual Meeting endorsed collective bargaining as a legitimate way to achieve the Association’s goals, and agreed to provide assistance in pursuing collective bargaining to local chapters.” (Spitzberg Aff., ¶¶ 3, 4.) AAUP requires that collective bargaining chapters which collect agency shop fees (representation fees) be required to transmit to the national organization an amount equal to full national dues “or a prorated share based on local assessments” (Spitz-berg Aff., ¶ 7). According to AAUP’s chief executive officer, “[l]ocal chapters of the AAUP engaged in collective bargaining have full responsibility for the negotiation and implementation of their collective bargaining agreements,” but nevertheless “[v]irtually all activities of the AAUP support the efforts of its local chapters engaged in collective bargaining” (Spitzberg Aff., ¶¶ 8, 9). Be that as it may, an examination of the record demonstrates that National AAUP engages in at least some lobbying at the federal and state levels and that significant funds are spent for activities which the Statement of the Assembly Labor Committee to Assembly Bill No. 688, June 19, 1978 gave as examples of benefits available only to members, e.g., costs of educational activities unrelated to collective negotiations and costs incurred to recruit members. There is a Rutgers Council of AAUP Chapters (Rutgers AAUP) serving as the negotiating representative for faculty members and teaching and graduate assistants at Rutgers, The State University. The constituent chapters of the Council are located at Camden, Newark and New Brunswick. An Executive Council has the responsibility to establish dues subject to approval of the membership. In early 1980, after enactment of the amendments to the Act but before the effective date of the amendments (July 1, 1980), Rutgers AAUP sought and obtained from its legal counsel advice as to how it should proceed to take advantage of the new provisions. Counsel advised that it would be proper to negotiate an agreement requiring a representation fee provided the agreement did not become effective before July 1, 1980. As to calculating the representation fee, counsel recommended that first it was necessary to compute all dues and other charges assessed against members, including membership dues in the national organization if such membership was required of all members. Then, counsel advised, two categories of expenses had to be deducted to determine what amount could be charged to non-members: (i) amounts spent in aid of activities or causes of a partisan political or ideological nature only incidentally related to the terms and conditions of employment and (ii) amounts expended for benefits available only to members of the majority representative. Counsel advised that not all expenses for lobbying activities should be excluded from the representation fee: “Other political activities, of a nonpartisan or nonideological nature should, however, be included. As the bill itself notes, chargeable items should include ‘the cost for support of lobbying activities designed to foster public policy goals and 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’ .. . [T]he union should not exclude sums spent on such activities as testimony before legislative finance committees, mailings to citizens seeking support of union demands or other political activities directly related to collective bargaining.” To provide guidance to Rutgers AAUP in determining what constituted member-only benefits counsel listed (with two exceptions) the kinds of expenditures which were set forth in the Assembly Labor Committee Statement referred to above. Counsel noted that the statement had listed among the member-only benefits expenses to administer the contract and for lobbying. However, counsel observed that after the presentation of the Assembly Labor Committee Statement the proposed amendment to the Act had been revised specifically to permit such expenses to be included in the representation fee. Counsel noted that under the statute the representation fee could not exceed 85% of charges to members and then stated: “Experience in other states has demonstrated that an 85% fee is defensible; therefore we suggest that that amount be the established representation fee.” This is a somewhat surprising recommendation. The opinion letter had gone on for several pages to urge meticulous record-keeping and had defined carefully just what expenditures should and should not be included in the representation fee. To then recommend reliance on totally unidentified and unanalyzed “experience in other states” which had proved to be “defensible” seems inconsistent with all the preceding advice. In any event, in the spring of 1980 Rutgers AAUP prepared to negotiate for contract provisions requiring payment of a representation fee. In May, 1980, before such an agreement had been negotiated, the Rutgers AAUP Council adopted a budget for fiscal year 1980-81 based entirely on member revenue. The budget anticipated total revenues of $167,500 from which there was deducted $45,000 representing National AAUP dues, for net revenues for the use of Rutgers AAUP of $122,500. Total expenditures were projected at $125,879. In early June Rutgers AAUP’s Executive Director advised the President and President-Elect that an “expanded” budget should be prepared in anticipation of receipt of additional revenues, in the form of representation fees; that expenditures should be separated so as to identify those benefitting members-only and those benefitting all persons in the bargaining unit, and that a representation fee should be established. In response to the Executive Director’s suggestions committees were appointed to make recommendations as to a revised dues structure and as to a new budget which would reflect the receipt of representation fees. These two committees reported to the Council’s July 30, 1980 meeting. The budget committee anticipated that $157,100 would be received in representation fees (almost doubling the income projected in the May, 1980 budget) and proposed how that amount should be spent. It proposed adding to the May membership-only budget the following: $ 16,000 additional legal expenses; $ 3,750 additional temporary office help; $ 10,950 additional administration expenses; $126,400 additional program expenses. The new programs were to be: Subscriptions $ 600 Grievance support services 26,800 Newsletters and printing 2,500 Released time for AAUP President 8,000 Computer services 2,500 Travel and meetings 2,500 Special programs 1,000 Health and occupational safety study 3,000 Contingency fund 7,000 National services (i.e., payment to National AAUP) 72,500 Total . . . $126,400 The Council adopted the proposed supplemental budget with certain modifications. At the same meeting the Council voted to set the dues for members of Rutgers AAUP at 4% of base salary and non-member representation fees at 85% of member dues (3.4% of non-members’ base salary). The dues were computed after the budget was struck. In the words of the Executive Director: “The dues figure was arrived at only after a computer analysis of all existing salaries in the unit as of spring 1980 and the total salary for the unit, which was later increased by seven percent to reflect July 1, 1980 raises as a result of the negotiated contract. Generally, the Council had attempted to arrive at the lowest fee schedule possible to fund the base — specifically, this amounts to 0.4 percent of salary for members and 85 percent times 0.4 percent (0.34 percent) for non-members.” Although the report of the budget committee lists a few expenditures under the heading “Budget for Members-only Expenditures”, there does not appear to have been any serious analysis of expenses for the purpose of determining what portion constituted expenses for the benefit of members-only or what constituted expenses in aid of political or ideological causes. As to the new item of $72,500 to be paid to National AAUP, the budget committee’s report contains only the explanation that: “The National Service fee is that portion of National member dues and a portion of the non-member fee that National can justify according to the requirements of the New Jersey Statute. For this budget, the amount is estimated as $25.00 per faculty person in the unit.” This was a rather fragile base on which to structure a computation of representation fees. The fragility .of the base is emphasized when one considers that before the adoption of this budget membership in Rutgers AAUP was permitted (in violation of the National’s rules) even though a person did not pay dues to National AAUP. Under the new budget membership in the National organization was made compulsory and Rutgers AAUP paid in a lump sum from its total receipts its members’ National AAUP dues and a portion of the representation fees. The effect of this method of payment, of course, was to increase the base on which representation fees were computed. It is quite apparent that there was no analysis of either the Rutgers AAUP budget or the National AAUP budget along the lines recommended by counsel for Rutgers AAUP to determine the categories of expenditures referred to in the amendment to the Act. Rutgers AAUP proceeded on the assumption that whatever the amount of the expenditures of the local and National AAUP which could not be charged to nonmembers, they were less than 15% of total expenditures. I have no doubt that it would be a major operation to perform the allocations required to insure compliance with the Act. It would require a knowledge of the meaning of the Act; it would require complete knowledge of the functions of each local and National employee and of the purposes of all non-employee related expenditures; it would require allocating all expenditures between the different categories contemplated by the Act. It is not surprising, therefore, that the rule-of-thumb figure of 85% of dues payments (.the statutory maximum) was adopted as the amount of the representation fee for budget purposes. In October, 1980 the Rutgers AAUP Council was advised that Rutgers had agreed to include in the agreement provisions for a representation fee. The provisions read as follows: VI — REPRESENTATION FEE 1. Representation Fee Deduction The parties agree that effective January 1, 1981 all employees in the bargaining unit who do not become members of the Rutgers Council of AAUP Chapters shall have deducted from their salaries and forwarded to the AAUP a representation fee in a manner and in an amount as provided below. 2. Representation Fee Amount At least thirty (30) days before the effective date of the representation fee, or any subsequent modification thereof, the AAUP shall notify the University of the representation fee sum to be deducted from non members’ salaries. Any change in the representation fee shall be made upon written notification to the University. 3. Representation Fee Deductions The representation fee shall be deducted from non-members’ salaries in equal bi-weekly installments. Representation fee deductions from the salaries of all non-member employees shall commence on or after but in no case sooner than the thirtieth (30th) day following the beginning of an employee’s employment in a bargaining-unit position or the tenth (10th) day following re-entry into the bargaining-unit for employees who previously served in bargaining-unit positions and who continued in the employ of the University in a non-bargaining-unit position. For the purpose of this Article, academic-year employees shall be considered to be in continuous employment. If, during the course of the year, the non-member becomes an AAUP member, the University shall cease deducting the representation fee and commence deducting the AAUP dues after written notification by AAUP of the change in status. Conversely, if, during the course of the year, the AAUP member directs the University to cease AAUP dues deductions in a manner appropriate under the terms of the dues check-off agreement, the University shall commence deduction of the representation fee after written notification by the AAUP of the change in status. After deduction, representation fees shall be transmitted to the AAUP in the same manner and in the same time as AAUP dues. 4. Indemnification The AAUP hereby agrees to indemnify, defend, and save harmless the University from any claim, suit or action, or judgments, including reasonable costs of defense which may be brought at law or in equity, or before any administrative agency with regard to or arising from the deduction from the salaries of any employee of any sum of money as a representation fee under the provisions of the Agreement. The contract was ratified by the membership to take effect January 1, 1981. On November 20, 1980 the Council adopted a demand and return system. The system was described in the December, 1980 Rutgers AAUP newsletter: DEMAND AND RETURN SYSTEM The following procedure was adopted by the Executive Council of the Rutgers Council of AAUP Chapters on November 20, 1980 to comply with the requirements of Section 2C of Chapter 477, Laws of 1980. Please retain it for your records. Any person who makes representation fee payments in lieu of dues who objects to the expenditure of any portion of such payments 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 benefits available only to members of the Association shall have the right to dissent from such expenditure. An objector shall file written notice of an objection by certified mail to the Representative Fee Review Committee (“Committee”) care of the Executive Director of the AAUP. Objections to expenditures made in any fiscal year must be raised by October 1st of the following year. Individuals not represented by the AAUP at the beginning of the fiscal year may raise such objections within ninety (90) days of the date such representation commences. An objection may be renewed for each year by written notification as noted above. At least annually, the Association shall cause notice of its Demand and Return system including the dates for notice of objection to be printed in its newsletter. The Executive Director shall promptly submit each objection received to the Committee which shall consider the objection for timeliness of submission and on the merits. The Committee shall be composed of three members of the faculty of Rutgers University chosen by the Executive Council of the Rutgers Council of AAUP Chapters. If the AAUP contests the objection, it shall respond to the objection in writing within 15 working days of its transmittal to the Committee. Upon receipt of the AAUP response, if any, the Committee shall determine if additional information is necessary to complete the record. It may, in its absolute discretion, seek additional information from the objector or the AAUP or hold a fact-finding hearing. When the Committee is satisfied that it has sufficient facts to rule, it shall close the record. The Committee shall rule on the objection within 15 working days of the close of the record and shall notify all parties. The burden of proof shall be placed on the AAUP throughout the proceeding. If the objector is dissatisfied with the decision of the Committee, he or she may appeal to the State Representative Fee Review Board provided for in Chapter 477, Laws of 1980. Representation fees became payable commencing January 1, 1981. Rutgers AAUP’s Executive Director established two budgets, one for what was deemed to be representation expenditures and the other for member-only expenditures. The former category of expenditures was financed entirely from income from non-members matched with 85% of the income from members’ dues. The balance of the members’ contributions went to members-only activities. The Executive Director is of the opinion that there were included in the representation budget only items permissible under the Act. This included “lobbying for legislation affecting terms and conditions of employment of unit members . .. [These lobbying activities] center almost exclusively on such issues as pensions, medical coverage for members and legislation affecting the scope of collective negotiations.” (Walthers Aff., ¶ 17.) Whether there was a proper allocation of expenditures is, of course, a major issue between the parties to this action. Plaintiffs are in disagreement with the representation fee system. One of them, Michael Crew, had been President of the Newark Chapter of AAUP, a member of the Rutgers AAUP Executive Council and a member of the special budget committee. He resigned in December, 1980 to protest use of the representation fee law and requiring non-AAUP members to support lobbying and other activities which they oppose. A number of the plaintiffs pursued the procedures for a return of portions of their representation fees which they believed were being used for improper purposes. The experiences of plaintiff Robinson are typical of the experiences of the others who sought a return of portions of their withheld fees. Robinson received a December 1, 1980 letter from Rutgers AAUP inviting him to join and advising him that in any event he would be required to pay a representation fee of 85% of AAUP dues. On January 13, 1981 Robinson wrote to the Rutgers personnel office objecting to the withholding of the representation fee and on January 14, 1981 he wrote to the AAUP’s Representation Fee Review Committee expressing similar objections and asserting his opinion that less than 5% of the AAUP budget expenditures dealt with contract negotiations. On January 22, 1981 Rutgers AAUP’s Executive Director sent Robinson a form to be submitted to the Fee Review Committee and advised that a filing making a claim with respect to the fiscal year ending June 30, 1981 would be timely until October 1, 1981. The form stated that certain categories of expenditures are subject to return, namely: 1. Payments in aid of activities of a partisan political nature. 2. Payments in aid of causes of a partisan political nature. 3. Payments in aid of activities or causes of an ideological nature only incidentally related to terms and conditions of employment. 4. Payment toward costs of benefits available only to AAUP members. The form then asked that the applicant indicate for which categories of those expenditures he believed AAUP used his representation fees and directed the applicant to “state your reason and/or information base for the charge”. Unbeknownst to Robinson, the Fee Review Committee had just been appointed in January, 1981 and was not to meet until May 7,1981. However, on January 27,1981 he wrote to the Executive Director, with a copy to the Fee Review Committee, stating, in part: I believe you have already received my letter of January 14, 1981 to the Representative Fee Review Committee, care of the Executive Director, as directed by your Reports, Vol. 11, No. 5. I enclose another copy. I believe that that letter is adequate under Chapter 477 to file a claim under Demand and Return. I might add that I do not agree with your claim, implicit in the form you have devised, that the return and demand system is limited to the four kinds of expenditures you note. It is even more clear that the form is also deceptive in suggesting that a non-member must give ‘reasons and/or information basis for the charge.’ Chapter 477 makes it clear that the burden is at all times on majority representative. It is for the AAUP to justify its claim that 85% of union dues are eligible for inclusion under the ‘fair share fee.’ On May 7, 1981 the Fee Review Committee met to consider the various demands filed with it. It accepted Robinson’s January 14, 1981 letter as a proper challenge to the representation fee and so notified him. After deciding which challenges would be accepted for filing the Committee deferred further action until it received the audit of AAUP expenditures for the fiscal year ending June 30, 1981. The audit became available in September, 1981 and the three Fee Review Committee members reviewed it and concluded that it “clearly delineated” expenditures for members-only activities and those for all members of the unit (Hillson Aff., ¶ 13). The Committee’s review could not be completed until information was received from National AAUP as to expenditures of its funds. This was not received until March, 1982, more than a year after Robinson filed his claim and more than eight months after the close of the fiscal year with respect to which his claim was filed. It is not disclosed in the record just what data National AAUP furnished the Fee Review Committee. Whatever the data was, the Chairman of the Committee recites that “Upon review, the Committee was satisfied that no part of the representation fee forwarded to the National had gone for impermissible purposes . . . . ” (Hillson Aff., ¶ 14). By letters dated March 8, 1982 (but sent near the end of the month) the Fee Review Committee advised each claimant that his claim had been rejected. These letters read as follows: Dear Professor: The Representation Fee Review Committee has completed its consideration of your objection to the collection and expenditures of the Representation fee you paid to the Rutgers Council of AAUP Chapters during the period of January 1981 through June 30, 1981. The Committee finds that it must reject your claim against the 1980-81 fiscal year expenditures. An 85% Representation fee is the legal maximum under New Jersey law. Our analysis of the audited local AAUP budget for FY 80-81 (available at the AAUP office — Building 4103 Kilmer 8:30 to 4:30 Monday thru Friday) and National expenditures (see attached letter from Stephen Finner) demonstrates that expenses (both Local and National) accruing to members only are less than 15% of total expenditures. Therefore there is no prorata refund of non-permissable expenditures due you. If you are dissatisfied with this finding, you have the right to appeal to the State Representative Fee Review Board, as provided for in Chapter 477, laws of 1980. Please note that you may file an objection against the collection and expenditures of the current fiscal year (July 1, 1981 to June 30, 1982) until October 1, 1982. Committee Chair The letter from Stephen Finner to which reference was made in the rejection letters purports to recite the percentage of the National AAUP budget which is allocated to various purposes during the applicable period: No expenditure for political or ideological purposes. 18% for academic freedom and tenure activities. 11% for economic status of the profession activities. 18% for collective bargaining development expenses. 16% for conference and Chapter development. 7% for governmental relations. 8% for other Committee activities (e.g., academic governance, status of women in the profession). 2% foij organizing and membership recruitment. 20% for membership accounting, membership services, and association administration. After reciting these percentage allocations Mr. Finner concluded “For your information, National dues were $47 in calendar year 1981. Thus, expenditures for allowable purposes were in excess of representation fees received.” How Mr. Finner arrived at his “thus” and reached this conclusion escapes me, but apparently he satisfied the Rutgers AAUP Fee Review Committee. As the Fee Review Committee’s rejection letters noted, the claimants had a right under the Act to appeal to the three-member Board appointed by the Governor pursuant to N.J.S.A. 34:13A-5.6. None of the AAUP claimants elected to pursue this option and instead instituted this suit. A description of the Board and its workings will be set forth in the next section of this opinion, as certain of the plaintiffs in the Antonacci case did seek relief in that forum. IV. Antonacci v. New Jersey The ten plaintiffs in this case are non-union teachers employed by one or another of the defendant boards of education — West-field, Pascack Valley Regional, Edison Township, Ridgewood, and Township of Ocean. In addition, plaintiffs named as defendants each local education association (of teachers) and its president and the affiliated County education association. Certain superintendents of education and presidents of boards of education were joined as defendants. Also named as defendants were the New Jersey Education Association and its president and the National Education Association and its president. State government defendants consisted of the State of New Jersey and its Governor and James W. Mastriani, Chairman of PERC. As in the Robinson ease, the Antonacci plaintiffs attack the constitutionality of the amendments to the Act permitting the withholding of representation fees from their salaries. While details of the events recited by the plaintiffs in the various school districts may vary, the essential elements of what transpired in each district are the same. The teachers in each of the school districts are represented by the local education associations. Persons who are members of the local association' are automatically members of the county education association, the New Jersey Education Association (NJEA), and the National Education Association (NEA). The dues which members of the local association pay include dues to the local, county, state and national associations. The record establishes that both NEA and NJEA spend substantial sums for national and state candidates for office and for lobbying at the national and state levels. NJEA provides very extensive organizational support services to the local associations, and the uniformity in the forms and procedures which the local associations used in implementing the representation fee provisions of the Act are attributable to the fact that they were prepared or suggested by NJEA. After the adoption of the representation fee amendment the various school boards and the local education associations negotiated and agreed upon representation fee provisions. These provisions required the withholding from salaries of nonassociation members and payment to the association of a sum equal to 85% of members’ dues, initiation fees and assessments. Upon negotiation of such a provision the local association sent letters to non-members inviting them to join the association and explaining that failure to join would result in imposition of the representation fee. The letters of the various local associations were of the same tenor. The one to plaintiff Meveril Jones read, in part: The climate in which we work today is not the best. Attacks on the public schools by the press, by politicians, and by school board associations require us to maintain a maximum effort to protect your rights and to advance your interests. We must spend ever increasing amounts of money to provide proper legal defense for members, to bargain effectively, to process grievances, to lobby for the protection of tenure, pensions, sick leave, and other benefits. In these crucial times we need your support. Under the terms of Public Law 1979, Chapter 477, the Westfield Education Association has negotiated a fair share representation fee to be deducted from the paychecks of all bargaining unit members who do not join the Association by October 15. This representation fee amounts to 85% of our dues or $179.35 to be collected in monthly installments over the life of our contract with the Board of Education. The dues on the basis of which the West-field representation fee was computed amounted to $211 and were distributed as follows: $45 to NEA, $117 to NJEA, $12 to Union County Education Association, and $37 to Westfield Education Association. Non-member teachers in the various school districts objected to the withholding of representation fees, communicating their objections both to the boards of education or superintendents and to the local associations. The grounds for the objections included unwillingness to make payments to state and national organizations espousing social and political causes with which the non-member disagreed and opposition to compulsory unionization as a matter of principle. The various plaintiffs sought to utilize the demand and return systems established in their districts to challenge the 85% fees. Typical of the experiences of each of the plaintiffs are the experiences of John Russell and plaintiffs Richard H. Trexler, A. William Onder, Leon Matelski and Edward Jakubco, who joined with him to seek a refund of payments withheld and paid to the Edison Township Education Association. In December, 1980 the Board of Education had agreed that by December 31st the Association would determine which teachers were to be assessed the representation fee, the Association would establish a demand and return system “through which nonmembers can challenge the amount of the representation fee” and the 1980-81 Agreement would contain a provision obligating the Teacher Association to indemnify and hold the board harmless for liability and costs of suit arising out of actions taken in conformity with the representation fee provisions. By a letter dated December 30, 1980 Russell and the other non-members were invited to join the Association and were informed that the 85% fee would be deducted from the salaries of non-members. On February 25, 1981 Russell wrote to the President of the Edison Township Education Association. He protested the amount of the representation fee, particularly that part going to the county, state and national associations. He asked for copies of the 1980-81 budgets for the local, county, state and national teacher associations. On April 8, 1981 the President of the Edison Township Education Association responded. She expressed disagreement with Russell’s contention that portions of his representation fee could not be paid to the county, state and national associations. She informed him that at the end of the 1980-81 fiscal year he would be able to challenge the absence of a final rebate or the size of a rebate under the Association’s demand and return system. He was informed that at that time “you will be provided with the appropriate information, including any budgets that may be relevant”. His letter was treated as a request for a rebate and he was told it would be processed accordingly. At some time prior to April, 1981, when Russell received the reply to his letter, the Edison Township Education Association had adopted a Demand and Return System (the System) prepared by NJEA for use by all local associations. The same System appears to have been adopted in the other school districts which are defendants in this case. It must be described in some detail. The System defined the “fiscal year” as September 1 through the following August 31. It defined “member only benefits” as “benefits financed through the regular membership dues, fees and assessments available to or benefiting only members of the Association, but does not mean governance meetings which may be attended only by members and other member only activities and functions which are necessary for the operation and institutional maintenance of the Association or the associations with which it is affiliated”. (Emphasis added.) Thus, no portion of the governance or institutional expenses were to be apportioned to political or lobbying activities in which any of the four levels of associations engaged. Evidently all such expenses were to be included in representation fees and to be treated as if they were incurred only for contract negotiation and administration and grievance proceedings from which nonmembers benefited. “Political activity” was also defined, and there was excluded (in line with the Act) “lobbying activities designated to foster policy goals in collective negotiations and contract administration or to secure for the employees represented by the Association advantages in wages, hours and other conditions of employment in addition to those secured through collective negotiations with the boards of education”. The System required that not more than 30 days after the beginning of each fiscal year in which a representation fee is in effect, the Association determine from the budgets of the four levels of associations the “preliminary rebate”. The preliminary rebate was the amount by which expenditures for political activities and member only benefits exceeded the difference between membership dues and representation fees. The System required that not more than 30 days after the end of each fiscal year the Association determine the “final rebate”, making the same computation but using actual expenditures rather than budget allocations. The System created a four-member Regional Review Panel consisting of representatives designated (one each) by the Edison Teachers Association, the Middlesex County Teachers Association, NJEA and NEA. Section II of the System provided that not more than 60 days after the representation fee agreement becomes effective in any fiscal year the Association shall post a notice stating whether there is a preliminary rebate and the steps to be taken by a non-member to request it. Section III states that a non-member may request a rebate by filing a statement with specified information not more than 30 days after he first paid any portion of the representation fee or knew or reasonably should have known of his right to request a rebate. Section IV provides that upon receipt of the request the Association will place any preliminary rebate attributable to the claimant in escrow and advise the claimant that the final rebate to which he is entitled will be sent to him after the end of the fiscal year. Section V of the System specifies that not more than 30 days after the end of the fiscal year the Association shall send to each non-member who requested a rebate a communication indicating whether there is a final rebate and the steps to be taken to challenge the absence or amount of a final rebate. Section VI governs challenges to final rebates or to the absence of a rebate. A non-member must mail his challenge not more than 10 days after he received the notice of final rebate provided for in Section V. The Association must attempt to dispose of the challenge informally, but if that is not successful the claimant may refer the challenge to the Regional Review Panel. He must mail this challenge no later than 10 days after he sent his original challenge to the Association. The System provides, in accordance with the statute, that “the burden of demonstrating that no part of the unrebated representation fee was used for political activity or member only benefits shall be upon the Association”. The Panel is required to render its decision not more than 30 days after the non-member sent his challenge to it. A non-member who is not satisfied with the decision of the Panel may appeal to the three-member board established under the Act. Returning to Russell’s challenge to the representation fee paid to the Edison Township Education Association, the April 8, 1981 letter which he received from the Association’s President advised him, as noted above, that his February 25, 1981 letter would be treated as a request for rebate. The request was treated as being made under Section III of the System, that is to say, a challenge to the amount of the preliminary rebate. The next communication he received was a September 28, 1981 letter from the Association advising him as follows: The Edison Township Education Association having computed its actual expenditures for the 1980-81 fiscal year, finds that it has expended $2.25 (of a total of $10.99 expended by all levels of the Unified Profession, including ETEA, MCEA, NJEA and NEA) per member for member-only benefits and partisan political and ideological activities. This amount is not in excess of the percentage allowable by law and is, therefore, not subject to a rebate. Should you wish to challenge this decision, the attached instructions will provide you with the proper procedures. The September 28th letter was in compliance with Section V of the System, i.e., notification of final rebate. On October 5, 1981 Russell wrote the Association challenging the absence of a final rebate for the 1980-81 school year. He again asked for copies of the final budgets for that year of the four education associations to which his representation fee was paid. He asked for an explanation of the line items. Under Section VI of the System the Association was required to communicate with Russell to seek to dispose of the challenge informally. That was not done and, consequently, on October 15, 1981, the last day permitted under the System, Russell notified the Association that he wished to refer the challenge to the Regional Review Panel. He again asked for copies of the applicable budgets and an explanation of the line items. On October 27, 1981 the President of the Edison Township Education Association advised Russell that she had forwarded his letter “to the appropriate office”. On November 5th she advised Russell that the Regional Review Panel would hear his claim at 7:00 p. m. on November 17, 1981 (a date after the expiration of the 30 days within which the Review Panel was required to render its decision). The hearing was held as scheduled. By letter dated November 18, 1981 the Review Panel advised Russell that it had rejected his challenge and the challenges of Jakubco, Matelski, Onder and Trexler, stating, in part: Pertinent budget material and testimony was presented by the following people for the respective organizations: 1. Aurora Bernard-Salit for the Edison Township Education Association 2. Maria Versocki for the Middlesex County Education Association 3. Cary Pitman for the New Jersey Education Association and National Education Association The challengers argued that: 1. The composition of the panel was unfair. 2. The demand and return system was unlawful. Following the hearing the Regional Review Panel gave full consideration to all of the documents, testimony and arguments presented to it and determined that the total dues required to be paid by each member of Edison Township Education Association for 1980-81 was $248.00 and the per capita cost for member only benefits and partisan political and ideological activities was $11.02 which is less than 15% of the total dues. The panel then concluded that no part of the representation fee required to be paid by nonmembers was used for member only benefits or partisan political or ideological activities. Therefore, there is no final rebate due of any portion of that representation fee. Should you not be satisfied with the above decision of the Regional Review Panel, you may appeal to the Board established pursuant to the statute (34:13A-5.6). It would have been a tour de force if, in one evening, the Regional Review Panel could have made the extraordinarily difficult financial analysis of the 1980-81 expenditures of the four education associations required to determine what portions should be attributable to political and member-only purposes. It heard the testimony of the three persons referred to in the decision letter quoted above, none of whom appear to have had any particular accounting expertise. Six’ very brief documents accompany the decision letter in the record and it seems likely that, with the exception of the first, they were submitted to the Review Panel: (1) The first document was a form evidently prepared by NJEA, designed to specify the dues payable to each of the four levels of education associations and the per capita portion of each portion of dues spent for member-only benefits and political activities. (2) The second document appears to be the 1980-81 expenditures of the Edison Township Education Association, totalling $87,140.34. (3) The third document sets forth the income and expenditures of the Middlesex County Education Association for the period May 1 to June 30, 1980, with the 1979-80 budget figures set forth. (4) The fourth document consists of handwritten notes and figures, the significance of which is not immediately apparent. (5) The fifth document is entitled “New Jersey Education Association Computation of ‘Member Only Services’ and ‘Political Activity of Partisan Nature’ for Period 9/1/80 to 8/31/81”. It shows total expenditures of $12,227,000 by operating categories and shows six items totalling $267,771 as the net cost of member-only services, i.e., 2.19% of total expenditures. Thus, it is stated, of the $117 dues payment, only $2.56 is attributable to member-only benefits. The document further states that “All expenditures for partisan political activity which are incurred have been reimbursed by the NJEA PAC. A total of $1,406 was reimbursed for the period covered.” The document does not appear to disclose what was spent for lobbying either of the kind for which, under the Act, a representation fee may be charged or of the kind for which, under the Act, a representation fee may not be charged. (6) The final document is the NEA’s “Political Activity Rebate Preliminary Estimate 1980-81”. Its full significance cannot be understood from the face of the document, but it states that the amount expended for political activity was $3,561,922 out of total expenditures of $37,059,124, constituting 9.61% of the total. Various adjustments were made which resulted in a computation that political activity accounted for 10.28% of total expenditures, resulting in $4.63 of each member’s dues of $45 going toward political activities. It cannot be ascertained from the document whether any lobbying expenses were included in political activities expenditures, and, if so, what kind of lobbying activities. It does not appear that any member-only expenses were taken into account. An affidavit filed in this case by Mitchell E. Roth, Esquire, a staff attorney in the Office of General Counsel of NEA, describes the procedures NEA follows to compute political activity rebates. It is evident that if it is to be determined whether New Jersey’s representation fee statute has been followed it would be necessary to ascertain the assumptions which were used in determining what items should be included in membership-only and political activity expenses, and it would be necessary for accountants to analyze the books and records of each of the four constituent education associations to determine if the computations had been properly made. Having been unsuccessful before the Regional Review Panel, Russell and his fellow claimants tried to appeal to the statutory Appeals Board. They had considerable difficulty obtaining information as to the whereabouts of this Board. Nevertheless, on December 7, 1981, they addressed a letter to it in care of PERC, notifying it of their wish to appeal. On February 11, 1982 they received a letter from defendant James W. Mastriani, Chairman of PERC, advising that the Appeals Board had not been fully constituted nor had administrative rules been adopted to carry out its responsibilities under the Act. PERC did take one definitive action — it assigned the case a docket number. No further action having been taken by the Appeals Board, Russell and the other plaintiffs filed their complaint in this Court on April 13, 1982. There was considerable delay in establishing the Board of Appeals which, under N.J. 5. A. 34:13A-5.6, was to consist of three members appointed by the Governor with the advice and consent of the Senate. Although the Act became effective July 1, 1980, it was not until December, 1981 that the Governor appointed the third member. The person named as Chairman resigned in February, 1982. However, by May 24, 1982 (after the instant cases had been filed in this Court), the Board had concluded that it would not hear the appeals itself and should refer them to the Office of Administrative Law, pursuant to New Jersey’s Administrative Procedure Act. N.J.S.A. 52:14B-1, et seq. On that date the Board referred two appeals to the Office of Administrative Law for de novo hearing — the appeal filed by Russell, Jakubco, Matelski, Trexler and Onder, and an appeal filed by another plaintiff in this case, Thomas Gay. The persons who appealed to the Board must now anticipate lengthy proceedings of a judicial nature. See Williams v. Red Bank Bd. of Ed., 662 F.2d 1008 (3d Cir. 1981). There will be a full evidentiary hearing before an administrative law judge, who will report his findings and recommendations to the Board of Appeals. The Board will then render a final decision. From that decision, the claimants (or the education associations) will have the right to appeal to the Appellate Division of the Superior Court of New Jersey, N.J.Ct. Rule 2:2-3(a), with the possibility of further review by the New Jersey Supreme Court, N.J.Ct. Rules 2:2-1, 2:12— all this to contest the amount of claimants’ 1980-81 representation fee. Of course, if any claimant believes the defect in computing the fee extends to the 1981-82 fee, or the 1982-83 fee, the tortuous route beginning with an objection to the preliminary rebate pursuant to Section III of the local education association’s Demand and Return System must be resumed for each year. Conclusions of Law The Court has jurisdiction over these actions by virtue of 28 U.S.C. § 1343 to provide remedies for causes of action arising under 42 U.S.C. § 1983. Plaintiffs seek preliminary injunctive relief. This is an equitable remedy and to prevail plaintiffs must show: (i) a reasonable probability of ultimate success on the merits of the litigation, (ii) irreparable harm to the plaintiffs if the injunction is not granted, (iii) the absence of countervailing harm to other interested persons if the injunction is granted, and (iv) the absence of countervailing public interests should the injunction be granted. Kennecott Corp. v. Smith, 637 F.2d 181 (3d Cir. 1981). A. The Merits I turn first to the question whether plaintiffs have shown that they have a reasonable probability of success on the merits. Two questions of constitutional law must be addressed. First, does the provision of N.J.S.A. 34:13A-5.5 c permitting labor organizations to use the representation fees of public employees for 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 violate the First Amendment rights of non-member employees. Second, do the statutory provisions providing for a demand and return system for the recovery of impermissible expenditures of representation fees overcome the substantive and procedural due process challenges to the New Jersey representation fee plan. The resolution of these questions must start with the state of the law as developed in a trilogy of United States Supreme Court cases — Railway Employees’ Dept. v. Hanson, 351 U.S. 225, 76 S.Ct. 714, 100 L.Ed. 1112 (1956); International Assoc, of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961); Abood v. Detroit Board of Education, 431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 261 (1977). The Court recognized an important governmental interest which is advanced by agency shop provisions. The confusion and conflict that could arise if rival teachers’ unions, holding quite different views as to the proper class hours, class sizes, holidays, tenure provisions, and grievance procedures, each sought to obtain the employer’s agreement, are no different in kind from the evils that the exclusivity rule in the Railway Labor Act was designed to avoid.... The desirability of labor peace is no less important in the public sector, nor is the risk of “free riders” any smaller. Abood at 224, 97 S.Ct. at 1793. The existence of the important government interests advanced by the agency shop arrangement supports the impingement upon associational freedom which an agency shop entails. In Abood the Court dealt with a challenge to a collective bargaining agreement provision which required every teacher who had not become a union member within 60 days of hire (or within 60 days of the effective date of the provision) to pay the union a service charge equal to the regular dues required of union members. The Court observed that “insofar as the service charge is used to finance expenditures by the Union for the purposes of collective bargaining, contract administration and grievance adjustment, [the Hanson and Street decisions] appear to require validation of the agency shop agreement before us”, id. pp. 225, 226, 97 S.Ct. pp. 1794, 1795. Under the principles of Hanson, Street and Abood, New Jersey has the unquestioned power to enact legislation permitting collective bargaining agreements to require that public employees in