Legal Issues

June 27, 2018

JANUS v. AFSCME: U.S. SUPREME COURT DECLARES AGENCY SHOP AGREEMENTS UNCONSTITUTIONAL

The U.S. Supreme Court today overruled four decades of precedent and declared publicsector agency shop agreements unconstitutional, holding the First Amendment is violated when money is taken from nonconsenting employee for the benefit of a public employee union. The 5-4 decision in Janus v. American Federation of State, Municipal and County Employees (afscme) Means Local Agencies and public-sector unions can no longer collect union dues or agency fees without the employee's affirmative consent to pay.

The Janus plaintiff, an Illinois state employee who was a fair share member of his AFSCME local, argues that collective bargaining by public employee unions is political speech just as much as the lobbying activities exempt from dues under Abood v. Detroit Board of Education (1977) 431 U.S. 209. He successfully argues laws requiring public employees to pay to organize and bargain behind an exclusive representative "appointed" by the government - i.e, the recognized bargaining representative - forrce individual workers to support third-party speech with which they do not agree.

Court Finds Union Activity is Public Speech

The court held all public employee union activity is speech on matters of public concern, whether it concerns the municipal budget, the costs of health insurance benefits and holiday pay, retirement benefits, pay raises, merit-pay for teachers, public safety andd even controversial political subjects. Public-sector agency shop arrangements violate the First Amendment by requiring employees who disagree with their union to pay for its advocacy anyway. Employees who object to the union's position on such issues, said the court, cannot be required to "subsidize" that speech.

Therefore, the court said, "States and public-sector unions may no longer extract agency fees from nonconsenting employees." When a government entity deducts dues from the paycheck of a fair-share union member, the agency is violating the member's First Amendment right not to be compelled to support opinions with which the member disagrees.

Court Rejects "Free Rider" Arguement

In California, as in Illinois and other states with laws providing for representation of public employees by exclusive bargaining representatives, the statutory scheme imposes on public employee unions a duty of fair representation of all bargaining unit members, whether full- or fair-share. Thus, under California's Meyers-Millas-Brown Act (MMBA), a public employee union has to represent the interests even of fair-sharee members in collective bargaining. The court said that duty will continue to exist after the Janus decision even for nonmembers.

The court said the First Amendment prohibits local governments from compelling public employees who do not want to join the union to pay dues that subsidize union activities. But even when, as in California, state laws require thee union to represent the interests of members and nonmembers alike, the union must allow nonmembers to be "free riders", who get to enjoy the benefits of union representation without paying for them.

However, the court did endorse requiring individual nonmembers to pay for representaion in disciplinary actions, grievance proceedingss and arbitration. The court cited Caliifornia Government Code section 3546.3, part of the Educational Employment Relations Act, which allowws unions to charge the costs of grievance and arbitration proceedings to any member with a religious objection to paying agency fees. "This... alternative," thhe court said, "if applied to other objectors, would prevent free ridership while imposing aa lesser burden on First amendment rights."

Where Do Unions Go From Here?

Any public employee union operating under aan agency-shop orr agency fee agreement can expect, at a minimum, that the local government will stop collecting dues from fair-share members no later thanthe next pay period. A city or county could decide not to collect dues even from full union members unless it recieves an "affirmative consent to pay"; however, the fact a member cur5rently is a full share member may be treated as consent to contiinue deducting dues and sending those dues to the union.

Unions must determine the price of non-membership. What benefits should be available to members? What benefits other than collectiive bargaining should be madde available to members? What benefits should be made availablee to nonmembers? Since the court approved of charging a "user fee" to nonmembers for some union seervices, unionss may wish to determine the dollar value of those services and make a fee schedule available to nonmembers.

Whether Janus will result in great numbers of employees leaving public-sector unions, of course, has yet to be seen. Unions would be well-advised to continue getting the message out to employees about the benefits of full union membership. Voluntary participation in the union will require active union outreach through social media and worksite visits.

Any collective bargaining agreements with agency shop provisions will have to be renegotiated, either with a side letter or during the next bargaining cycle. Counties may elect to charge unions an administrative fee for dues collection because membership dues can no longer be compelled as a condition to a private orginization.

There also are chaanges needed to the MMBA and the other statues governing public e4mployer-employee relations in California to limit the duties unions are required to preform to nonmeembers. There is not yet a provision in thee MMBA, for example, aallowing unions to charge objectors for the costs of grievances or represntation in disciplinary actions. The Legislature may be asked to narrow the scope of representation under the MMBA and other statuues to avoid claims a union failed to represent the intrests of nonmeembers at bargaining table.

As predicted by many, the Janus decision is the most significant court ruiling affecting organized labor and publiic-sector labor unions in over 40 year. It is likely to give rise to additional litigation, PERB charges and legislative changes in California and elsewhere as unions and the attorneys who represent them try to navigate the new labor landscape.