U.S. Supreme Court Ruling May Allow Public Sector Employees to Opt Out of Union Dues

Dan Swedlow | Summit Law GroupSCOTUS Update 
By Dan Swedlow 

In 2018, the U.S. Supreme Court will be deciding a case that is widely expected to have the single biggest impact on the labor movement of any decision made in decades. The case, called Janus v. AFSCME, will likely result in a ruling that allows all public sector employees to opt out of paying union dues. Unions depend entirely on dues, having no other source of income. Without dues money flowing in, unions will not be able to support staffing levels and business representatives, organizers, lawyers, office staff and other labor professionals will be out of a job. 

The Janus case is actually “Round Two” for an argument that was first brought to the Court last year in a case called Friedrichs v. California Teachers AssociationFriedrichs was argued to the full court of nine Justices, but Justice Antonin Scalia died before a ruling was issued. The remaining Justices split 4-4, which left in place a court of appeals ruling that continued to permit agency fee requirements in public sector CBAs. Justice Scalia has now been replaced by Trump nominee Neil Gorsuch, and experts agree that he is even more likely than Scalia to side with the plaintiff’s argument that required agency fees are unconstitutional. 

So what is the Janus case about? Mark Janus is an Illinois State employee who is arguing that he should not have to pay anything to the union that represents the bargaining unit in his workplace. As here in Washington and many other states, employees in Illinois who take jobs in organized workplaces must join the union or, in the case of those who have a religious or moral objection to unions, must at least pay for the cost of collective bargaining and contract administration. This is because of a 40-year-old Supreme Court case called Abood v. Detroit Board of Education. In Abood, the Court held that public employees in unionized workplaces who choose not to be members of the union must pay “fair share” or “agency” fees to help cover the costs of negotiating and administering collective bargaining agreements. Unions allocate the vast majority of dues income to contract negotiations and administration, primarily in the form of union staff salaries. Because unions must fairly represent all the workers in a particular bargaining unit, even those who do not join the union, the Abood Court held that it was only reasonable that the non-member employees contribute their fair share. Otherwise, reasoned the Court, they would be “free-riders” benefiting from the wages, benefits and working conditions achieved through collective bargaining, but without paying for the union’s effort to gain those benefits.

The portion of union dues that is not allocated to contract negotiations and administration is typically spent on political activities such as supporting candidates and initiatives. Non-member employees do not have to pay that portion of the dues because it would violate their First Amendment right to free speech if they were compelled, by virtue of mandatory financial support to their union, to support political causes or candidates that they do not personally support.

Mr. Janus is arguing that he should not have to pay any union dues at all, including the fair share fees. His argument, in a nutshell, is that all collective bargaining with a public employer is inherently political activity, and compulsory union dues are therefore a violation of his First Amendment right not to support political positions with which he disagrees. When a union bargains with a public employer over wages, benefits and working conditions, it is taking a position regarding the allocation of the public budget. Elected officials are the ultimate decision makers and the taxpayers are footing the bill. That sort of collective bargaining, argues Mr. Janus, is an inherently political activity. Five of the nine Supreme Court Justices are expected to agree with Mr. Janus. If they do, the Court will overrule Abood and fair share fees will be no more. The impact could be immediate and extensive. If, as Court-watchers expect, public sector employees are given the right to stop paying union dues regardless of contract language stating otherwise, a substantial number of those employees will almost certainly take advantage of that opportunity. The loss of income from employees opting out of dues payments could be extensive and, for some unions, devastating.

Unions that are active in the public sector are closely watching this case, and many are planning for the worst. One interesting point to watch if the ruling comes as expected is whether there will be successful follow-on litigation by the unions challenging the rule that they must represent all bargaining unit members, even if many of those members choose to become “free-riders.” Another point to watch will be the efforts of public sector unions to “market” their services in hopes that employees will choose to continue paying dues even if they can no longer be required to do so. A decision in the case is expected by June.

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