In its 5-4 decision in Janus v. AFSCME Council 31, the U.S. Supreme Court held that public employees can no longer be compelled to pay "agency fees" to unions they refuse to join.
Overturning decades-old precedent, the Court held that agency fee arrangements – which require public employees to become union members and pay union dues or, alternatively, pay so-called agency or fair share fees to cover the cost of collective bargaining – are unconstitutional under the First Amendment. The Court held that mandatory fees violate the free speech rights of public workers who disagree with the union's political positions.
"It is hard to estimate how many billions of dollars have been taken from non-members and transferred to public sector unions in violation of the First Amendment," Justice Samuel Alito wrote for the majority. He concluded that the agency fee arrangement "violates the First Amendment and cannot continue." Accordingly, as of Wednesday, "[n]either an agency fee nor any other payment to the union may be deducted from a non-member's wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay."
The Janus decision overturns a 1977 case, Abood v. Detroit Board of Education. In that case, the Court ruled against a group of Detroit public school teachers who argued that they should not be required to pay fees to a union they did not belong to. The Abood decision prohibited public sector unions from using fair share fees to fund their political and ideological projects, but found that unions could use those fees to support collective bargaining efforts and administrative work. The rationale was that if workers could opt out of any payments, they would have an incentive to become "free riders," reaping the benefit of union representation without paying for it.
Mark Janus, a public sector employee in Illinois, refused to join AFSCME because he opposed many of the union's public policy positions. Though he chose not to join the union, Janus was nonetheless required under Illinois law to pay the union more than $500 per year in agency fees. Janus argued that the mandatory fees violated his First Amendment right to freedom of speech, and the Court agreed.
The Court held that forcing public employees to pay agency fees as a condition of their employment is a violation of free speech rights. That is because public unions are inherently political. In the public sector, the "line" between spending on politics versus collective bargaining "has proved to be impossible to draw with precision," Alito wrote, as both are directed at the government. The Court concluded that agency fees violate the First Amendment because they require non-members to subsidize union speech, even if they disagree with the message. The Court also ruled that avoiding the risk of "free riders" is not a compelling state interest and free rider arguments "are generally insufficient to overcome First Amendment objections."
To comply with Janus, and to avoid liability for unauthorized payroll deductions, public employers must immediately stop collecting agency fees from employees who have decided not to join a union. Moving forward, according to the Court, employees must "clearly and affirmatively" consent to pay the union before any fees are taken from their paychecks. That signifies that all public employees – not just non-member, agency fee payers – must affirmatively opt in to paying any type of union fee, rather than being required to opt out.
What Can Public Employers Expect in a Post-Janus World?
The Janus decision could mean fewer workers joining public unions and paying dues. This impact will be most pronounced in the 22 states that, until now, have allowed agency fees. The other 28 states have passed right-to-work laws prohibiting contracts that require employees to join or support a union.
To retain their current membership levels, unions may seek more direct access to public sector employees, particularly new hires who are still deciding whether or not to join the union. In the coming months, employers can also expect unions to be more adversarial and generate labor disputes as they attempt to prove their worth to employees. As Columbus partner Dan Guttman told the Society for Human Resource Management (SHRM), "The decision means unions must drive a better value proposition to keep current members and attract new ones."
Another impact of the decision is that public unions may seek to aggressively bargain provisions making it more difficult for employees to opt out of union membership, bargain into labor contracts the ability to collect via payroll deductions "a la carte" service fees (such as grievance processing and arbitration fees), and generally dissuade employees from exercising the free speech rights restored by Janus.
Given the anticipated response by labor unions, public employers should not be lulled into believing that no action is necessary to protect employees' rights under Janus. In addition to immediately ceasing all agency fee deductions for non-members, employers should work in collaboration with labor counsel to ensure that all public employees (members and non-members alike) have the opportunity to make a straightforward, non-coerced decision on whether or not to be a union member. Employers should, for example:
- Carefully review any contractual provisions touching on the issues raised in Janus, such as "maintenance of membership" provisions that restrict when union members can enter or exit the union and any wage deduction provisions.
- Assess the extent of their obligation to meet and confer with affected unions over any changes in payroll practices.
- Consider communicating with employees about the impact of Janus on agency/fair share fees (while being careful to avoid issues of "direct dealing" and other potential unfair labor practices).
The particular approach taken, however, should be assessed on a case-by-case basis and take into consideration the practical and political concerns of each agency.
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