6.28.18

In Janus v. American Federation of State, County and Municipal Employees, the U.S. Supreme Court changed the legal landscape that has permitted public employee unions in more than 20 states to extract dues or “agency fees” from government employees.

The Court decided, 5-4, that the First Amendment guarantee of free speech prohibited state governments from forcing public sector employees to pay fees even when they did not support the unions' activities. The majority opinion was written by Justice Samuel Alito, joined by Chief Justice John Roberts, and Justices Neil Gorsuch, Anthony Kennedy (who announced his retirement yesterday), and Clarence Thomas.

In more than 20 states, public employees have been required to pay union membership dues or “agency fees” for the purported costs of representation – regardless of whether they favor or oppose the union's activities and goals. Janus involved an Illinois law mandating that state employees represented by unions pay union dues or agency fees. The Court majority found that the activities of public employee unions are inherently political activities and matters of public policy because the government is the employer.

According to the majority, “Under Illinois law, public employees are forced to subsidize a union, even if they choose not to join and strongly object to the positions the union takes in collective bargaining and related activities ... We conclude that this arrangement violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.”

The majority rejected the view that permitting employees to opt out of membership dues or agency fees allows employees to unfairly “free-ride” on dues-paying union members. Justice Alito said that the Petitioner “argues that he is not a free rider on a bus headed for a destination that he wishes to reach but is more like a person shanghaied for an unwanted voyage.” He added that “it is hard to estimate how many billions of dollars have been taken from nonmembers and transferred to public-sector unions in violation of the First Amendment.”

Janus is the third in a series of Supreme Court cases that raised the issue of public sector agency fees. In the 1977 case of Abood v. Detroit Board of Education, the Court ruled that public sector unions could collect agency fees without violating the Constitution, as long as the agency fees were used only to cover expenses directly related to collective bargaining and not for political activity. The Court revisited the issue in 2016, in Friedrichs v. California Teachers Association, and was expected to invalidate compulsory fees. However, the death of Justice Antonin Scalia deprived the Court of the anticipated 5-4 majority vote. Instead, without Justice Scalia, the vote was 4-4, which left in place a lower court decision finding that compulsory fees were permissible.

In advance of the Janus decision, unions had been increasing their efforts to sign on public employees as dues-paying members instead of having to rely on state-compelled agency fees. In addition, some unions filed lawsuits asserting that state laws cannot require unions to represent employees who do not financially support their efforts – in effect, arguing that if employee speech cannot be forced, then neither can a union's. In New York, Gov. Andrew Cuomo (D) signed legislation and issued an Executive Order that he promotes as helping public sector unions in New York avoid the effect of Janus.

Justice Elena Kagan dissented in Janus, and was joined by Justices Stephen Breyer, Ruth Bader Ginsburg, and Sonia Sotomayor. As a result of the majority decision, Justice Kagan asserted, “Public employee unions will lose a secure source of financial support. ... Across the country, the relationships of public employees and employers will alter in both predictable and wholly unexpected ways. Rarely if ever has the Court overruled a decision — let alone one of this import — with so little regard for the usual principles of stare decisis.”

Regardless of how it all plays out, the legal and political landscape has been altered. Public sector unions can no longer count on “secure source” funding to use in their political efforts. The Court's decision could motivate states to enact more “right-to-work” laws. Twenty-eight states are currently “right-to-work.”

The Janus decision is setback to public sector unions, which have political goals that extend far beyond the workplace. It is not clear whether the decision will break the cycle of demands for high wages and benefits in the public sector, as well as inefficient work rules and procedures, which are ultimately paid for by taxpayers and leave some government employers in unsustainable financial status. We may see a wave of lawsuits from public sector employees seeking to recover some of the money they have paid to unions in compulsory dues and fees.

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