Supreme Court Strikes Public-Sector Union Agency Fees

On June 27, 2018, the United States Supreme Court, in Janus v. American Federation of State, County and Municipal Employees, closed out the October 2017 Term by delivering a blow to public-sector unions.  The Court held that states can no longer agree with public-sector unions to force public employees who are not union members to pay so-called “agency” or “fair share” fees because such requirements violate the First Amendment. 

For almost 41 years, courts held that agency-shop clauses in collective bargaining agreements (requiring non-members to pay the union at least a portion of its regular dues for representation) were valid for public-sector employees so long as the union used the fees for collective bargaining, contract administration, grievance adjustment purposes, and other activities “germane to [the union’s] duties as collective bargaining representative.”  Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977).   

In Janus, the Court overruled Abood, putting to rest an issue that had come before the Court three times in the last four years.  In a 5-4 majority opinion authored by Justice Samuel Alito, the Court considered the claim of Petitioner Mark Janus, a state employee represented by the Illinois chapter of AFSCME but not a member of the union.  Janus disagreed with the union in multiple respects, including his opposition to positions that the union took in collective bargaining.  Janus argued that forcing him to pay agency fees compelled his support of those union activities and that this obligation thus violated his First Amendment rights.

Calling Abood “poorly reasoned,” the Court held that forced union fees violate the free speech rights of non-members by compelling them to subsidize private speech on matters of substantial public concern.  “The First Amendment is violated,” Justice Alito wrote, “when money is taken from nonconsenting employees for a public-sector union; employees must choose to support the union before anything is taken from them.”

The Court rejected the union’s contentions that “fair share” fees were necessary to “promote labor peace” and avoid burdening the union with uncompensated representation of “free-riders,” finding that these arguments did not outweigh First Amendment objections and the interests underlying them could be furthered through less onerous means than forced union dues. 

The Court also held that public-sector employees must affirmatively agree to pay union dues, rather than be required to opt out in order to avoid them.  The majority concluded that “neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.” 

Writing in dissent, Justice Elena Kagan argued there is no good reason to overrule Abood, observing that more “than 20 States have statutory schemes built on the decision,” and that “reliance interests do not come any stronger.”  Justice Kagan added that “judicial disruption does not get any greater than what the Court does today.”  Justice Kagan predicted that the majority’s decision “will have large-scale consequences. Public employee unions will lose a secure source of financial support. State and local governments that thought fair-share provisions furthered their interests will need to find new ways of managing their workforces.”

We will provide further guidance in the near future once the ramifications of the Janus decision unfold.  In the meantime, public-sector employers should consider consulting experienced labor counsel regarding the appropriate guidance for employees who wish to learn more about this development.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.