In Janus v. AFSCME Council 31, 138 S. Ct. 2448 (2018), the United States Supreme Court recently held that legislation requiring public-sector employees in units represented by public-sector unions to pay “fair share fees” (sometimes referred to as “agency fees”) violates the First Amendment because it compels individuals to subsidize the speech of other private parties. Writing for the majority, Justice Samuel Alito stated, “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 [the union].” The immediate impact of Janus is that public-sector employees cannot be required to pay for any union activity without their clear and affirmative consent. This article explores the practical considerations of Janus and provides a framework for public employers to follow prospectively.
Life Before Janus
Janus’s roots date back to the Court’s 1977 decision in Abood v. Detroit Board of Education, 97 S. Ct. 1782 (1977), which evaluated the legality of a Michigan statute permitting unions and public-sector employers to agree to an “agency shop” arrangement. In an agency shop, the union is designated as the exclusive representative of all the unit employees, even those who do not join. Individuals who opt out of membership are still required to pay a service fee to the union. The Abood Court held that the payment of some fee by nonmembers was necessary to maintain labor peace as envisioned by federal labor laws and to avoid the risk of “free riders”—employees receiving the benefit of union protections at the expense of dues-paying members. On the other hand, the Abood Court recognized that the First Amendment prohibits the government from forcing contributions for political purposes. The resulting compromise was the so-called fair share fee—a percentage of union dues calculated by subtracting any portion the union expends on political or ideological activities from what the union allocates toward negotiating terms of employment on behalf of employees. Some viewed this percentage as difficult to quantify, and it left a significant gray area as to what exactly qualified as representation versus political/ideological activities. (Since 1977, the Supreme Court had tiptoed around the continuing validity of Abood. In 2012, in Knox v. SEIU, 132 S. Ct. 2277 (2012), Justice Alito noted in dicta that the constitutional justification for public-sector agency fees was “something of an anomaly.” Two years later, in Harris v. Quinn, 134 S. Ct. 2618 (2014), Justice Alito again criticized Abood.)
The Janus Decision
Mark Janus, a child-support specialist for the Illinois Department of Healthcare and Family Services, refused to join the AFSCME Council because he opposed the union’s public-policy positions as well as its stance toward collective bargaining which, in his view, did not recognize Illinois’ fiscal crises. Nevertheless, as permitted by Abood, the AFSCME Council required Janus to pay a fair share fee to the union—over 70 percent of total membership dues. As a result, Janus filed a complaint to challenge the constitutionality of such fees.
When the case reached the Supreme Court, the majority ruled that the First Amendment protected Janus from being mandated to pay such fees, effectively overruling Abood. The Court explained that Abood was based on the faulty assumption that “designation of a union as the exclusive representative of all the employees in a unit and the exaction of agency fees are inextricably linked[.]” Janus, 138 S. Ct. at 2465. In the end, the majority found fair share fees to be unconstitutional because they compel nonmembers to subsidize private speech on matters of substantial public concern.
Practically, public-sector unions across the country anticipate that a significant number of nonmembers will cease their financial support and that current members may resign their membership to take advantage of newly discovered disposable income. To counteract such defections, unions representing public-sector employees are likely to invest in campaigns designed to educate both members and nonmembers about the value of union representation and the negative implications of a free-rider system. The efficacy of these campaigns in light of Janus is an open question.
Several states with high percentages of union density (especially in the public sector) anticipated the outcome in Janus and proactively adopted legislation. For example, in New York and New Jersey, new legislation gives unions access to new employees’ personal contact information. These states also allow unions the right to meet with new hires during work hours. Further, the New York legislation makes clear that unions cannot be forced to provide full membership benefits to nonmembers. In California, Governor Brown signed Senate Bill 866 regulating how public employers and unions manage membership dues and fees, and how public employers communicate with employees about their rights relating to union membership. Specifically, the California law requires public employers to refer employees with questions or requests concerning fees or dues to the union. It also mandates that dues or fees be deducted from payroll once the union notifies the employer of an employee’s valid authorization.
Other states may consider a more tailored alternative to agency fees, which would prevent free ridership while imposing a lesser burden on First Amendment rights. (See, e.g., Cal. Govt. Code Ann. § 3546.3 (West 2010); cf. Ill. Comp. Stat., ch. 5, § 315/6(g) (2016). These California and Illinois statutes allow public employees with religious objections to opt out of agency fees while permitting the union to charge those employees for particular services.) Such laws could provide that, if an employee with an objection to paying an agency fee “requests the [union] to use the grievance procedure or arbitration procedure on the employee’s behalf, the [union] is authorized to charge the employee for the reasonable cost of using such procedure.” Janus, 138 S. Ct. at 2469, n.6.
The Janus mandate is clear: public-sector unions cannot demand fair share fees, and public-sector employers cannot collect such fees absent clear and affirmative consent. However, the practical impact of Janus raises a myriad of questions that public employers must address now. For example, how should employers communicate the impact of Janus to employees? What type of consent is required to withhold dues or fees from employees? Can a public employer seek indemnity from the union for any claims made by employees as a result of the payroll deductions? Is there a duty to bargain over the impact of Janus? How these questions are answered will vary by locality.
Public employers may wish to affirmatively communicate with employees about the impact of Janus. However, before doing so, public employers should become familiar with recently enacted legislation that may govern such communications. For example, the California law discussed above places restrictions on “mass communications” to employees. Any mass communication sent to employees or applicants concerning their rights to join or support an employee organization, or refrain from joining or supporting an employee organization, require the employer to meet and confer with the union.
In order to prepare for a possible influx of employees seeking to cease financially supporting a union, public employers should also review applicable collective bargaining agreements and dues authorization forms on file. If such authorizations exist, employers may wish to question whether the authorizations are “clear and affirmative” as required by Janus, 138 S. Ct. at 2486. If authorizations are missing, employers may consider reaching out to the union to verify that a valid authorization exists, but again, state statutes may be implicated when an employer seeks to verify dues authorization information. For example, under the new California law, a public employer must rely on the information provided by the union concerning such authorizations. As a counterbalance, California public-sector unions must indemnify the employer for any claims made by employees that payroll deductions were improperly made. Similar indemnity legislation may follow in other states.
Since agency fee provisions are but one part of an overall collective bargaining agreement, public employers must carefully review such agreements for any contract language that requires agency (or service fee) deductions because Janus now renders such language unlawful. This issue is further complicated if the applicable collective bargaining agreement does not contain a severability clause. Additionally, depending upon the jurisdiction, unions may seek to negotiate over the “impact” of Janus. Many states’ public-sector labor laws require “impact bargaining,” referring to negotiations over the impact of management rights decisions on union employees. However, public employers may argue that negotiations are not required because this issue does not directly relate to employees’ terms and conditions of employment but rather is an intra-union matter.
Although the full impact of the Janus decision will play out over the course of years, public employers must grapple with the immediate impact of Janus and resulting legislation today. These practical considerations are intended to serve as a general guide to public employers to minimize disruption in the workplace during the post-Janus transition.