A $290 dues fight just settled a bigger question for public employers
A New York teacher quit his union mid-year. He still had to pay.
When the teacher signed his union membership agreement in 2018, the terms were straightforward. Monthly dues would be deducted from his paycheck and sent to his local association. If he ever wanted out, there was one window: August 1 through August 31, once a year. Miss it, and the agreement rolled over automatically.
In March 2024, the teacher sent written notice to New York State United Teachers ending his membership. The local association’s president reminded him of the window. His membership rights were gone, but the dues obligation was not. Under the agreement, he owed through June 2024 - the last payroll period before the revocation window opened.
The school district kept deducting. By June, the teacher had paid $290.16 in post-resignation dues.
He sued in March 2025, arguing the clause was not a genuine liquidated damages provision but an unlawful penalty - a contractual stick to discourage members from leaving rather than to compensate the union for any real loss.
The unions countered with the benefits members received - the right to vote, run for office, participate in internal affairs - and the monthly assessments the local association paid to NYSUT for services and support. The trial court sided with the unions and dismissed the complaint.
On October 9, 2026, the Appellate Division, Fourth Department, unanimously upheld the result, declaring the dues provision valid. Under New York’s Taylor Law, public employees may choose whether to join a union, and dues deduction authorizations remain in force until revoked “in accordance with the terms of the signed authorization.” The teacher had agreed to the annual window. The court found nothing to suggest that requiring dues through the end of the contract year was “grossly disproportionate” to the union’s actual damages from an early departure.
The penalty doctrine asks whether a payment obligation is so out of proportion to actual harm that its real purpose is coercion. The teacher bore the burden of proving the clause crossed that line. At $290.16 over a few months, the court held, it did not.
For HR teams managing unionized public-sector workforces, the practical point is plain: contractual window periods for dues revocation hold up in New York - and employees who resign membership outside that window can still be held to their payment obligations until it opens.
