<P> The duty likewise does not apply for the most part to unions' internal affairs, such as their right to discipline employees for violation of the union's own rules or union officers' handling of union funds, which are regulated instead by the Labor Management Reporting and Disclosure Act . The courts have, on the other hand, applied the same principles that govern the duty of fair representation to union members' suits to enforce union constitutions . </P> <P> Generally the courts have taken a deferential approach to reviewing unions' decisions challenged as a breach of their duty of fair representation . Recognizing that the collective bargaining process typically requires compromises, which may favor some workers at the expense of others, the courts have held that a union only breaches its duty if it acts arbitrarily, in bad faith or discriminatorily . Practical considerations have also led the courts to refuse to second - guess unions' decisions: if a court or jury could substitute its judgment as to whether a particular grievance had merit, then unions could not function, since their decisions would rarely be final in any practical sense . Accordingly, the courts have refused to overturn union decisions as arbitrary so long as they were based on a reasoned decision by the union, even if the court might believe that this decision was wrong . </P> <P> In recent years the courts and the National Labor Relations Board have applied the duty of fair representation to regulate the manner in which unions enforce the union security provisions of a collective bargaining agreement . Unlike the standard applied to unions' decisions concerning grievance handling and collective bargaining negotiations, the courts and the Board have regulated this area very extensively . They have specified the types of expenses that a union can include in the fees that it charges employees who choose not to join the union but are required to pay dues under an agency shop or union shop clause, the accounting procedures used to calculate those amounts, the procedures which the union and employees must follow if an individual worker objects to paying the full amount of dues or challenges the union's calculation of the lesser amount that non-members can be required to pay, and the procedures that the union must follow before it can force the employer to fire an employee for non-payment of dues . Even stricter standards are applied to unions covered by the Railway Labor Act and to unions of governmental employees on constitutional grounds . </P> <P> The NLRB applies a similarly strict standard in reviewing unions' enforcement of exclusive hiring halls, i.e., those in which the employer is bound, by contract, to hire only employees referred to it by the union . The NLRB requires unions to establish clear procedures and to follow those procedures in order to minimize the likelihood that the union would use a hiring hall procedure to exclude non-members or those out of favour with the union from the workplace . On the other hand, the NLRB applies the more deferential standard applied to union decisions generally in the case of non-exclusive hiring halls, i.e., those in which the union has the power to refer applicants for employment but the employer may also hire employees "off the street"; in those cases the union is barred from acting arbitrarily, in bad faith or discriminatorily . </P>

The result of a public-sector union breaching its duty of fair representation may be a(n)