Caswell v New York State United Teachers

Holding The court held that a union membership agreement provision requiring the payment of dues until the start of the annual revocation window is not an unenforceable penalty provision. The court affirmed that the plaintiff remained obligated to pay dues until the window period began, rejecting the claim that the provision was grossly disproportionate to actual damages.

The court’s words

It is ADJUDGED and DECLARED that the dues provision in the membership agreement is not an unlawful penalty provision

2026 NY Slip Op 05889, at the official text

A provision which requires, in the event of contractual breach, the payment of a sum of money grossly disproportionate to the amount of actual damages is a penalty and is unenforceable

2026 NY Slip Op 05889, at the official text

It cannot be said that the payment of dues for one year is grossly disproportionate to the amount of actual damages sustained by the Unions as a result of plaintiff's early termination of union membership

2026 NY Slip Op 05889, at the official text