SCHOOL COMMITTEE OF GREENFIELD vs. GREENFIELD EDUCATION ASSOCIATION & others.

LIACOS, J. The School Committee of Greenfield (committee) brought this action against the Greenfield Education Association (association) and two tenured teachers, Shirley Hornketh and Joy Davenport (teachers), seeking a declaratory judgment as to whether it could dismiss the teachers on demand of the association without violating the statutory or constitutional rights of the teachers. A judge of the Superior Court allowed the committee's motion for partial summary judgment and ordered a stay of arbitration of a grievance asserted by the association against the committee and the two teachers. The grievance, brought under a collective bargaining agreement then in force between the association and the committee, sought the dismissal of the teachers for failure to pay an agency service fee required by the agreement. The teachers cross claimed against the association, alleging its internal procedure for the rebate of impermissibly-obtained fees violated their rights pursuant to the First Amendment to the United States Constitution. The trial judge, in addition to granting the committee's motion for summary judgment, denied the association's motion for summary judgment, and reported his decision to the Appeals Court. Mass. R. Civ. P. 64, 365 Mass. 831 (1974). The Appeals Court allowed the Attorney General to intervene in the appeal as a defendant, and we granted the association's motion for direct appellate review. We now affirm, with certain modifications, the orders of the Superior Court judge.

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The material facts are not in dispute. At all relevant times, the committee and the association were parties to a collective bargaining agreement which required teachers who were not association members to pay an agency service fee to the association "commensurate with the cost of collective bargaining and contract administration as determined by the Association," as a condition of continued employment. Public employers are permitted to enter into such agency shop agreements by G. L. c. 150E, Section 12, the text of which is set out in the margin. [Note 1] This agreement also provided

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for the arbitration of all grievances, and defined grievance to include any violation or misinterpretation of the agreement.

The association notified all teachers in September, 1978, that membership dues for the school year would be $158 and the agency service fee would be $153. It requested Hornketh and Davenport, who are not members, to pay the fee in October. They did not pay. In November, the association requested that the committee comply with the agreement by discharging the teachers. In December, the association posted a notice in all school buildings stating that all nonmembers could seek a rebate through the procedures of the Massachusetts Teachers Association and the National Education Association after the entire fee was paid.

Hornketh and Davenport continued to refuse to pay the fee. On April 30, 1979, they were notified by the superintendent of schools that the committee would consider their dismissal on June 19, pursuant to an association request. The committee held a hearing on May 31 at which the teachers stated that they objected to the uses to which the fee would be put, and the association offered to drop its request for dismissal if the fees were paid into an "escrow account" to be administered by it pending a determination by the Labor Relations Commission of the allowable amount of the fee. See 402 Code Mass. Regs. Section 17.05(2) (1978). The teachers refused to pay the fee, but on June 19 the committee voted nevertheless not to dismiss them. The association filed a grievance with the committee, asserting that this vote violated the agreement. The grievance was denied; the association then demanded arbitration, and this action was brought by the committee in Superior Court.

The questions reported by the judge may be reduced to the following: (1) whether this action presents an actual controversy under G. L. c. 231A; (2) whether the stay of arbitration was properly granted; (3) whether this action should have been stayed pending administrative action; (4) whether

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dismissal of these teachers would violate the teachers' tenure act, G. L. c. 71, Sections 41, 42; and (5) the proper construction and constitutionality of G. L. c. 150E, Section 12, as amended.

1. "Actual controversy." This action was brought for declaratory and injunctive relief under G. L. c. 231A, Sections 1, 5. Section 1 authorizes the Superior Court to "make binding declarations of right . . . either before or after a breach or violation . . . in any case in which an actual controversy has arisen."

There can be no doubt that an actual controversy has arisen here. The association allegedly initiated arbitration proceedings, and the committee was placed in the dilemma of either violating what appear to be the plain terms of the collective bargaining agreement or possibly violating the statutory and constitutional rights of the teachers. These circumstances "plainly indicate that unless the matter is adjusted [these] antagonistic claims will almost immediately and inevitably lead to litigation." School Comm. of Cambridge v. Superintendent of Schools of Cambridge, 320 Mass. 516, 518 (1946).

2. Stay of arbitration. The association contends that the trial judge was prohibited from granting a stay of arbitration in this case by G. L. c. 150C, Section 2 (b). Section 2 expresses a preference for arbitrating labor disputes, permitting stays only where there is either no "agreement to arbitrate" or "the claim sought to be arbitrated does not state a controversy covered by the provision for arbitration." The association argues that since its grievance asserted only that the committee violated the agreement by failing to dismiss the teachers, the agreement to arbitrate governed and the stay was improper. The committee argues that the dismissal of teachers involves a nondelegable function of a school committee and hence is not arbitrable. Further, the committee argues that the issues involved in this dispute directly implicate the constitutional and statutory rights of the teachers, and hence the dispute is not arbitrable. The teachers join in this latter argument and add that arbitration is inappropriate because they are not parties to the collective bargaining

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agreement and would have neither a voice in the selection of the arbitrator nor a right to participate in the arbitration proceedings. We need not consider all of these contentions to determine that the judge did not err in ordering a stay of arbitration.

The claim submitted to arbitration primarily concerned the rights and responsibilities of the teachers who, as third parties, would have had no right to participate in the arbitration proceedings. Cf. Norton v. Massachusetts Bay Transp. Auth., 369 Mass. 1 (1975) (employee has no individual right to compel employer to arbitrate grievance absent breach of union's duty of fair representation). The teachers' interests obviously would not be adequately represented by the association, and they had no reason to believe the committee would fully represent them. We hold that a stay of arbitration may be granted where the interests of the employee and the bargaining representative are in direct conflict and it is not clear that the employer would represent the interests of the employee. The mere presence of an arbitration clause in a bargaining agreement does not foreclose the issue. See NLRB v. Brotherhood of Ry., Airline & S.S. Clerks, 498 F.2d 1105, 1109 (5th Cir. 1974) (NLRB properly refused to defer to arbitration where interests of employee and union were in direct conflict and employer could not be expected to undertake protection of employee's interests).

3. Labor Relations Commission jurisdiction. The association contends that its motion for summary judgment on the teachers' cross claim should have been allowed due to the teachers' failure to exhaust available remedies before the commission. [Note 2] This is technically an issue of primary jurisdiction, rather than exhaustion, since there was no pending administrative proceeding when this action was brought,

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but, as we have noted elsewhere, the same concern for the relationship between agencies and the courts underlies both doctrines. Murphy v. Administrator of the Div. of Personnel Administration, 377 Mass. 217, 220-221 (1979).

The doctrine of primary jurisdiction, which counsels a court to stay its hand when the issue in litigation is within the special competence of an agency, "does not apply, however, when the issue in controversy turns on questions of law which have not been committed to agency discretion." Id. at 221. The principal issues here are an alleged statutory bar to dismissal of the teachers despite the terms of the collective bargaining agreement and a constitutional challenge to the procedure by which the permissible agency fee amount is determined. Neither of these questions has been committed to the jurisdiction of the commission. Also, resolving these issues will affect many nonparties, making it appropriate for judicial rather than administrative determination. Cf. East Chop Tennis Club v. Massachusetts Comm'n Against Discrimination, 364 Mass. 444, 450 (1973) (suspension of exhaustion requirement would be warranted where case involves public questions affecting nonparties).

The factual issues that will remain after these questions are answered are technical issues within the expertise and jurisdiction of the commission, and thus should be tried there in the future. General Laws c. 150E, Section 12, as we construe it below, prohibits an employee organization from assessing an agency service fee in excess of an employee's proportional share of collective bargaining, contract administration, and grievance expenses, and any violation of Section 12 is a prohibited labor practice within the jurisdiction of the commission. G. L. c. 150E, Sections 10 (b) (1), 11. Cf. 402 Code Mass. Regs. Section 15.01-15.12 (1978). Accordingly, it will be for the commission to determine, on complaint by a dissenting employee in the future, the amount an employee organization and its affiliates may assess as an agency service fee. [Note 3]

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4. Statutory tenure protection. The teachers and the committee contend that the prohibition against discharge of tenured teachers except for good cause, G. L. c. 71, Section 42, protects them from dismissal for failure to pay the agency service fee. The trial judge has reported this question. We conclude that, in light of our disposition of this case, we need not reach this issue. No decision to discharge the teachers has been taken. The teachers and the committee concede the right of the association to require payment of agency service fees by the teachers under G. L. c. 150E, Section 12. Indeed, the teachers have paid into court, pursuant to an order of the judge, the full amount sought by the association. Thus, the only viable issue here is by what means the allocation of the lawful amount due the association is to be determined.

5. Constitutionality of G. L. c. 150E, Section 12. General Laws c. 150E, Section 12, authorizes negotiation of public sector collective bargaining agreements which may require the payment of an agency fee "as a condition of employment" of a public employee. Such a provision is included in the agreement

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at issue in the case at bar. It is beyond dispute and the teachers concede that they may be forced to pay their proportional share of collective bargaining, contract administration, and grievance adjustment expenses. Also, all parties agree that the teachers may not be forced to support the social, political, or speech activities of the association. See Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977). The association admits that a portion of the agency fee assessed here is used for the latter purposes.

The association argues, however, that G. L. c. 150E, Section 12, requires the teachers to pay the fee to the association and then to exhaust the association's internal rebate procedure before challenging the amount of the fee before another tribunal. The association views the statutory language found in Section 12, "No employee organization shall receive a service fee . . . unless it has established a procedure by which any employee so demanding may obtain a rebate" of the portion of the fee which involves expenditures by the "organization or its affiliates" of monies for political, social, or charitable purposes (described in G. L. c. 150E, Section 12, as amended by St. 1977, c. 903) not only to be in compliance with the mandate of Abood, but also as requiring the teachers to submit to the association rebate procedure as their primary remedy. [Note 4] The teachers assert in opposition

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that the procedure required under the association's view of Section 12 would unduly infringe on the rights guaranteed to them by Abood. They argue that this procedure would infringe on their rights impermissibly in two distinct ways: first, it would deny them due process of law if the initial decision on fee allowability is made by the association, which has an obvious stake in the controversy; and second, it would violate their First Amendment rights if they must first pay the entire amount to the association, allowing it to use the funds in the interim for social, political, and speech activities, and depriving them of the use of the funds for their own expressive activities.

If Section 12 were viewed as requiring resort to the association rebate procedure, it would render the statute constitutionally suspect on First Amendment grounds for reasons we explain below, without an adequate countervailing legislative justification. It is our duty to construe statutes so as to avoid such constitutional difficulties, if reasonable principles of interpretation permit it. Globe Newspaper Co. v. Superior Court, 379 Mass. 846, 853 (1980). Staman v. Assessors of Chatham, 351 Mass. 479, 487 (1966). [Note 5] Where the

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draftsmanship of a statute is faulty or lacks precision, it is our duty to give the statute a reasonable construction. Massachusetts Comm'n Against Discrimination v. Liberty Mut. Ins. Co., 371 Mass. 186, 190 (1976). We presume that in interpreting a statute the Legislature had knowledge of constitutional requirements existing when it enacted or amended the statute. See MacQuarrie v. Balch, 362 Mass. 151, 152 (1972); Lynch v. Commissioner of Educ., 317 Mass. 73, 79-80 (1944).

Section 12 was first enacted in 1973, prior to the Abood decision, by St. 1973, c. 1078, Section 2. The second paragraph of Section 12, apparently setting the agency fee equal to membership dues but disqualifying organizations without rebate procedures from receiving them, was added by amendment in 1977, after the Abood decision. St. 1977, c. 903. This 1977 amendment also removed a requirement that the fee "be proportionately commensurate with the cost of collective bargaining and contract administration." St. 1973, c. 1078, Section 2. The five categories of expenditures listed in Section 12, second par., manifest the Legislature's intent to limit the amount of the agency fee which may be collected from nonmember employees who have expressed their objections to financing those activities. [Note 6]

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Section 12, as amended, clearly requires an employee organization that seeks to collect an agency fee from nonmembers to establish a rebate procedure and make it available to dissenting employees. The statute does not describe the nature of the procedure, nor does it specifically refer to an internal union procedure. The statute does not clearly mandate that the dissenting employee avail himself of that procedure exclusive of all other remedies, nor does it require that the association be given use of the agency fee in the interim. Compare the language of G. L. c. 150E, Section 12, as to the union: "No employee organization shall receive a service fee . . . unless it has established a procedure," and as to the employee: "by which any employee so demanding may obtain a rebate" (emphasis supplied). It is axiomatic in statutory construction that the word "shall" is an imperative and that the word "may" does not impose a mandate but simply authorizes an act. See Johnson v. District Attorney for the N. Dist., 342 Mass. 212, 215 (1961); Turnpike Amusement Park, Inc. v. Licensing Comm'n of Cambridge, 343 Mass. 435, 437 (1962). The obligation of the statute is not with the employee, as the association contends, but solely with the association. The employee may or may not choose to avail himself of this procedure.

We believe our reading of the statute to be consistent with the teaching of Abood. The Supreme Court in Abood noted the possibility that the employees there might voluntarily use the union's internal rebate procedure, rendering further judicial proceedings unnecessary, 431 U.S. at 240 n.41, 242, but specifically refused to rule on the constitutional sufficiency of that remedy. Id. at 242 n.45. Nowhere did the Court state that were such a procedure made available the employee would be bound to use it. [Note 7]

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The Court also emphasized the concern, expressed in Brotherhood of Ry. & S.S. Clerks v. Allen, 373 U.S. 113, 118, 122 (1963), that the procedure for separating permissible from impermissible expenses not place too great a burden on the employees, since it is their constitutional rights that are being diminished. Abood, supra at 239-240 n.40, 241. It was this concern which led the Court in Allen and Abood to require dissenting employees to enter only a general objection to support of the organization's activities, and after such a general objection to place the burden on the organization to justify its expenditures as being within the permitted categories. Id.

There is no constitutional or statutory justification, to which our attention has been directed, for requiring a dissenting employee to resort to the type of internal rebate procedure involved in this case. Such a requirement would undermine the burden that the Supreme Court in Allen and Abood has explicitly placed on the association of justifying the fee it assesses whenever a general objection is entered. This burden is only meaningful if legitimacy is proved before a neutral tribunal and subjected to judicial review. An initial determination by the association, followed by arbitration (before an arbitrator who may or may not be expert in organization expenses and accounting), followed by limited judicial review under G. L. c. 150C, Section 11, are simply insufficient to guarantee that the onus of justification remain at all times on the association.

We find ourselves in substantial agreement with the court in Ball v. Detroit, 84 Mich. App. 383 (1978), which not only

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refused to force dissenting teachers to resort to the internal union procedure in the first instance but also precluded union use of the money pending judicial determination of the permissible amount. Id. at 393-394, 397. We hold, as did the Ball court, that the statutory right of the organization to the permissible amount is outweighed by the potential that the impermissible amounts will be used, even temporarily, in violation of the dissenting teachers' First Amendment rights.

We have considered the cases in other jurisdictions which appear to uphold a requirement that dissenters resort to internal organization rebate procedures. The first of these is an advisory opinion which does not address the issues before us. See Opinion of the Justices, 401 A.2d 135 (Maine 1979). The Justices of the Supreme Judicial Court of Maine were asked to advise the Legislature whether an agency fee of 80% of union dues was valid absent a prior evidentiary hearing. The Justices of the Maine court responded that such a fee would not be invalid, but "the fact the amount of the service fee is fixed by the collective bargaining agreement does not make that amount conclusive upon a nonmember who puts the amount in issue in an appropriate judicial proceeding." Id. at 148. We consider the case of Association of Capital Powerhouse Eng'rs v. State, 89 Wash. 2d 177 (1977), to misconstrue the mandate of Abood. We also note that the statute involved in that decision, Wash. Rev. Code Section 41.06.150, as amended in 1973, is differently phrased and that the Washington court relied on a factual finding that there was a "publicized, `readily accessible' procedure for refund of monies which would otherwise be used for political purposes to which an employee objects." Id. at 188-189. There is no such finding here and, indeed, the rebate procedure here is cumbersome to the extreme. See note 4, supra. But cf. Ball v. Detroit, supra at 396-397 (dissenters must exhaust union procedure in all future challenges after initial judicial assessment).

Mandating resort to the rebate procedure here would produce a further constitutional difficulty because of the requirement

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that the entire fee be paid to the association pending proof of legitimacy. This interim payment, as the teachers contend, not only deprives them of the opportunity to engage in expressive activities with those funds but also forces them to subsidize the objectionable activities of the organization. Justice Stevens wrote a concurring opinion in Abood primarily to warn against any implication that employees could be forced to subsidize, even temporarily, activities they found objectionable. Abood, supra at 244. We agree: the teachers should not be required to suffer an interim constitutional deprivation, while the association is deprived only of funds to which it is entitled by statute and agreement. [Note 8]

We find unpersuasive those cases which uphold a requirement that the fee be paid to the organization pending a determination, judicial or otherwise, of the permissible amount. See White Cloud Educ. Ass'n v. White Cloud Bd. of Educ., 101 Mich. App. 309 (1980); Browne v. Milwaukee Bd. of School Directors, 83 Wis. 2d 316, 335-340 (1978).

The Court's holding in Allen, supra at 119-120, that an injunction against any collection of dues by the union was improperly granted as too damaging to the union is distinguishable. First, Allen involved a remedy for a statutory violation; the Court did not focus on or reach the constitutional issue until some fourteen years later in Abood. Second, the Allen Court did not consider the alternative of requiring dissenting employees to pay the disputed fee into an escrow account. Escrowing the fees ensures that the organization

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will receive the money it is entitled to and substantially reduces the interference with the organization's functions. Id. at 120. It also minimizes the impact on the constitutional rights of the dissenting employee by preventing any compulsory subsidization of objectionable activities. Therefore, dissenting employees may constitutionally be required to pay the disputed fee into a neutral escrow account pending adjudication under Section 12. See Abood, supra at 244 (Stevens, J., concurring).

We conclude that Section 12 does not require dissenting employees to pay the disputed fee to the association, pending adjudication. We construe Section 12 to give the dissenting employee the option of bringing a prohibited practice complaint before the Labor Relations Commission if the employee wishes to challenge the fee amount. The commission may require the employee to pay the disputed fee into an escrow account, but may not require that it be paid to the organization until the commission has determined the permissible fee. Once the employee has brought a complaint, the burden of justifying the fee as permissible must rest on the organization. Abood, supra at 241. The commission should give prompt attention to such complaints in light of the competing interests of dissenting employees and associations of public sector employees. The necessity of protecting the rights of dissenters is not a justification for allowing an association to be "crippled by nonaccess to that portion of the fee which will be used for collective bargaining, contract administration and grievance adjustment." White Cloud Educ. Ass'n v. White Cloud Bd. of Educ., supra at 319. [Note 9]

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This case is remanded to the Superior Court for the entry of a declaration of rights in conformity with this opinion and for modification of the judge's order for deposit of the disputed agency fees by permitting transfer of said fees to the Labor Relations commission for a determination of the amount which may properly be charged.

So ordered.