June 29, 2018 Supreme Court Delivers Major Blow to Public-Sector Unions

On June 27, 2018, the United States Supreme Court issued perhaps the most significant court decision affecting collective bargaining rights in decades.  In a 5-4 decision in Janus v. AFSCME, the high court held that public-sector employees who choose not to join a union cannot be forced to pay so-called “agency” or “fair share” fees.  The Court overruled 41 years of precedent in deciding that requiring public employees to pay these fees violates their First Amendment rights

Analysis

Until now, in 22 states, including California, public employees who declined to join a union at their workplace were not assessed full union dues, but could instead be required to pay an “agency fee” to cover the costs of collective bargaining that would benefit them.  By contrast, in 28 “right-to-work” states, no person can be compelled as a condition of employment to join or to pay dues to a labor union.

The plaintiff here, Mark Janus, an Illinois state worker, challenged the Supreme Court’s 1977 Abood v. Detroit Board of Education decision, which required government workers who opt out of a union to still pay partial dues to cover the union's costs of labor negotiations.  Janus argued 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." 

The Court overturned Abood, holding that requiring public sector employees to pay a union agency fee violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of public concern.  The majority acknowledged that unions “may experience unpleasant transition costs in the short term,” while the dissenting justices expect the decision to have “large-scale consequences” as public unions lose a “secure source of financial support.” 

Public sector employers were instructed by the majority that “Neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.”

California Senate Bill 866

In anticipation of the Supreme Court’s decision, the California Legislature enacted Senate Bill 866, which Governor Brown signed into law on June 27, 2018.  SB 866 was designed to minimize the impact of the Janus decision, by giving public sector unions more control over the dues authorization process.  SB 866 requires the union to notify the employer of the employee’s dues deduction authorization, and requires employers to honor the authorizations provided by the union.  The public employer may not request a copy of the employee authorization from the union unless a dispute arises about the existence or terms.  In addition, if a public employer chooses to send a mass communication to its employees concerning union membership, it must first meet and confer with the union concerning the content of the communication.  If the employer and union do not reach agreement on the content and the employer still chooses to send the mass communication, it must be distributed with a communication of reasonable length provided by the union.

What This Means

The practical result of the Janus decision is that public employers must immediately cease deducting agency fees from non-union employees' pay unless they have affirmative consent to do so.  Janus will likely cause public-sector unions across the country to lose millions of dollars annually.  With less money in their coffers, unions may have more difficulty securing new members, which could lessen organized labor's political impact.  The Janus decision is unlikely to have a direct effect on unionized private-sector employers, because the First Amendment restricts government action, but not private conduct.

This E-Update was authored by Hollis Peterson and Rod Betts.  For more information, please contact Mrs. Peterson, Mr. Betts, or any other Paul, Plevin attorney by calling (619) 237-5200.