Alerts and Updates

Supreme Court Declares Union Fees Charged to Nonmember Public Employees Unconstitutional

July 2, 2018

In a 5-4 decision, the Court held that Abood was wrongly decided and that “States and public-sector unions may no longer extract agency/fair share fees from nonconsenting employees.”

A divided U.S. Supreme Court held that the State of Illinois’ requirement that its public employees pay union fees as a condition of employment violates the First Amendment. This means that government employees who choose not to join the union that represents them now have a constitutional right to opt out of paying all union dues and fees.     

Factual and Legal Background

In Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al., 585 U.S. ___ (2018), the Supreme Court ruled that public sector employees who are not members of a labor union that represents them cannot be forced to pay “agency” or “fair share” fees. 

“Agency/fair share fees” are a percentage of the normal union dues and are collected from employees who decline to join the union. Under Illinois law, and the laws of many other states, government workers covered by a collective bargaining agreement have been required to pay agency/fair share fees as a condition of employment. Plaintiff Mark Janus had worked for the state government in Illinois as a child support specialist since 2007. Over the past decade, he had been required to pay union fees to the American Federation of State, County and Municipal Employees (AFSCME)—even though he refused to join the union, opposed many of the union’s positions on public policy issues, claimed he would be better off without the union’s representation and was never asked if he wanted to be covered by a union contract. The legal basis of Janus’ complaint was that agency/fair share fees are coerced political speech prohibited by the First Amendment. 

Janus reverses a 1977 case, Abood v. Detroit Board of Educ., 431 U.S. 209 (1977), in which the Court had found mandatory union fees to be constitutional. In Abood, the Court ruled that states could allow unions to demand agency fees from public sector employees in order to cover union expenditures, as long as the money was used for representational work, such as collective bargaining and grievance handling, and not for ideological or political activities. The Court defended the agency fee requirement on the basis that it served the state’s interest in “labor peace,” i.e. avoidance of the confusion, conflict and disruption that would occur if the employees were represented by more than one union. In addition to the promotion of labor peace, the Abood Court justified agency fees as a means of preventing “free riders”—nonmembers enjoying the benefits of union representation without shouldering the costs. Unions are required by law to provide the same services to all employees in the bargaining unit, regardless of their union membership. In recent years, Abood has been criticized by the conservatives on the Court and its reversal was widely anticipated.

The Court’s Ruling

In a 5-4 decision, the Court, in an opinion authored by Justice Alito, held that Abood was wrongly decided and that “States and public-sector unions may no longer extract agency/fair share fees from nonconsenting employees.” The Court agreed with Janus’ argument that agency fees are a violation of public workers’ free speech rights: “We have… recognized that a significant impingement on First Amendment rights occurs when public employees are required to provide financial support for a union that takes many positions during collective bargaining that have powerful political and civic consequences.” 

Dissent

The dissent, authored by Justice Kagan, noted that mandatory union fees were a legitimate way for a government to manage its workplaces and help ensure that public employers can bargain with a single employee representative, which promotes stability and minimizes confusion. She wrote that the decision trivializes the principle of legal precedent, and that as a result of the ruling, unions will lose a secure source of financial support, while public sector employees will be prevented from making important choices about workplace governance.

What the Decision Means

Janus will have little, in any, effect on private employers and their employees. Government (public) employers, however, can no longer require their employees who are not union members to pay fees to the union that represents them for the union’s representational services, such as collective bargaining and grievance handling. As a result, union revenue and union membership in the public sector will likely decline, and with it, the political influence that these unions have historically enjoyed.  

To counter the negative effects of Janus, unions in the public sector will likely become much more active in trying to recruit employees to become dues-paying members. Unions may also consider changing their bylaws to permit agency fee payers to vote on contracts and have a voice in union affairs. If they do so, that may have an effect on the private sector, because most unions representing public employees also represent employees in the private sector.   

In anticipation of the Janus decision, several states have passed, or are working on, legislation to make the process of opting out of paying union dues more difficult, if not impossible. For example, the State of Washington has implemented a law mandating the collection of dues from its public employees where the collective bargaining agreement specifically contains an agency fee provision. Washington state is also contemplating a law that would prohibit public employers from informing employees of their right not to pay a union anything, so as to “ensure the neutrality of public employers” with regard to their employees’ collective bargaining rights.

Meanwhile, proposed legislation in Illinois would prevent state agencies from providing bonuses to its employees, but workers who are union members would be exempt from that prohibition. New York and New Jersey have proposed legislation that would limit the time period when workers could opt out of paying union fees. 

It remains to be seen how any such legislation would hold up under a constitutional challenge.

For Further Information

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are in regular contact.

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