HR Management & Compliance

Supreme Court tackles case posing threat to public-sector unions

Employers—especially public-sector employers—are eagerly awaiting the outcome of a case going to the U.S. Supreme Court that may deal a blow to unions’ ability to collect dues.

On September 28, the Court announced that it will hear Janus v. American Federation of State, County, and Municipal Employees (AFSCME), Counsel 31. The case, out of Illinois, challenges the union’s right to collect what’s known as “fair share” or “agency” fees from employees who don’t belong to the union and are covered under union-negotiated contracts.

With the addition of conservative Justice Neil M. Gorsuch to the Court earlier this year, many expect a union defeat.

The new case “recycles the arguments” made last term in Friedrichs v. California Teachers Association, says Jeffrey Sloan, a contributor to California Employment Law Letter and attorney with Renne Sloan Holtzman Sakai LLP in San Francisco. That case, decided after the death of Justice Antonin Scalia and before Gorsuch’s confirmation to the Court, ended in a 4-4 ruling.

Rebecca Friedrichs, a public school teacher, maintained that she shouldn’t have to pay fees to a union she didn’t belong to or want to support. She sought to overturn a 1977 Supreme Court ruling, Abood v. Detroit Board of Education. In that decision, the Court ruled that unions could collect from nonmembers the portion of dues used to cover the costs of negotiating contracts that covered all public employees. Employees who were not in the union wouldn’t have to pay the portion of dues used for political purposes.

Like Friedrichs, the Janus case argues that requiring public-sector employees to pay union fees violates their First Amendment rights by requiring them to subsidize political speech by the union, Sloan says. The Janus case argues that nonmembers shouldn’t have to pay the “fair share” fees because even issues covered in the contract negotiations are fundamentally political.

In ruling in Janus, the U.S. 7th Circuit Court of Appeals explained that it didn’t have the power to overrule Abood. The Abood decision was made by a more liberal Supreme Court, Sloan says, and the goal of Janus is to invalidate Abood.

Impact of ruling

A successful argument in Janus would be a major blow to unions representing public-sector employees. “If Abood is discarded, only public employees who voluntarily join the union in their workplace will be required to pay union dues,” Sloan says. “The unions that will be least affected are those that have deep roots in representing certain professions—police, fire, and skilled trades, to name a few.”

Unions representing “miscellaneous” employees—particularly the AFSCME and the Service Employees International Union (SEIU)—would likely lose a significant source of funding, Sloan says. The losses could include funding for election campaigns of union-friendly candidates and funding for electoral measures intended to benefit unions and union members. “If the funding losses are substantial, [unions’] ability to fund representational and organizing activities will be reduced commensurately,” he says.

Unions representing private-sector workers also could feel the impact of the Supreme Court’s decision in Janus. “An adverse decision might cause unions to focus more on organizing private-sector workers, who do not enjoy the same First Amendment protections,” Sloan says. “We can certainly expect more organizing activity in the nonprofit sector, where unions have made significant inroads in the past 10 years or so.”

Regarding how the Court may rule, Sloan says unions dodged a bullet in Friedrichs last year since Scalia likely would have cast the fifth vote to invalidate agency fees. Sloan says Gorsuch is “a very conservative ‘originalist’ cut from the same mold as Justice Scalia,” and he’s expected to cast the fifth vote against Abood.

Steven L. Brenneman,  an editor of Illinois Employment Law Letter and attorney with Fox, Swibel, Levin & Carroll, LLP in Chicago, agrees that the addition of Gorsuch increases the likelihood that Abood will be overturned.

“Many expected the Supreme Court to overturn Abood when it heard the Friedrichs case, only to be disappointed with a 4-4 decision after the death of Justice Scalia,” Brenneman says. “Now that the Supreme Court has agreed to hear the Janus case, with Justice Gorsuch now on the Court, expectations again are high that Abood will be overruled, which would end the practice of public-sector unions collecting ‘fair share’ fees from nonmembers. Such a ruling would have broad ramifications for government workers in Illinois and across the country.”

Union preparations for decision

Sloan says he sees unions preparing for an adverse decision in Janus. “In my experience, there [has been] in recent times a higher level of contentiousness in many public-sector workplaces,” he says. “We’ve seen this in bargaining, in organizing activities, and in connection with labor/management disputes that would, in another time, be handled more cooperatively.”

“I trace this phenomenon to a union strategy of showing strength to employees, in order both to recruit new members and to convince present members that they should maintain their membership,” Sloan says.

Sloan points to “union-friendly California” and says the SEIU and the AFSCME convinced the California Legislature to enact AB 52, which requires public employers to give unions access to orientation sessions for new employees. “In addition to showing the pervasive impact of campaign contributions on governmental policy, this showed great foresight and creativity in anticipation of Janus,” he says.