Legal Alert

Supreme Court Axes Mandatory Agency Fees for Public Sector Employees

June 27, 2018
The U.S. Supreme Court today released its long-awaited decision in Janus v. AFSCME, signaling the demise of compulsory union fees for public employees. In its 5-4 decision authored by Justice Samuel Alito, and joined by Chief Justice John Roberts, along with Justices Anthony Kennedy, Clarence Thomas, and Neil Gorsuch, the Court found that requiring public employees to provide financial support to the unions that represent them violates the employees' rights under the First Amendment, even if unions cannot use those fees to support their political activities. As a result, public employees will no longer pay any fees to unions unless they affirmatively elect to do so and cannot face negative consequences if they decline.

The Court overruled the 41-year-old decision in Abood v. Detroit Bd. of Ed., 431 U. S. 209(1977), which had authorized such mandatory fees, declaring that the state's extraction of agency fees from non-consenting public-sector employees violates the First Amendment by "forcing free and independent individuals to endorse ideas they find objectionable." The Court rejected Abood's claim that the fees serve the legitimate government interest in promoting labor peace, noting that there was no evidence of widespread labor disruption in the 28 so-called right-to-work states and the federal government, which already prohibit compulsory agency fees.

The Court also found that claims that agency fees are necessary to avoid the risk of free-riders did not rise to the level of a compelling state interest sufficient to overcome employees' First Amendment protections.

Of note, the Court focused on the nature of union speech—through representation of employees and regarding public employers—which it found covered critically important public matters such as the "State's budget crisis, taxes, and collective bargaining issues related to education, child welfare, health care, and minority rights." As a result, the Court found that the state should have a compelling interest, lacking here, in forcing employees to provide financial support for that speech through agency fees, distinguishing such cases as Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U. S. 563 (1968), which the Court found focused solely on speech on private matters. Finally, the Court found that public employers could not discriminate against employees—through collective bargaining terms or otherwise—who chose not to support the unions, as that would be prohibited animus towards a group that takes a disfavored position.

Of practical importance to both unions and public employers, the Court held, "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 Court went on to state that the consent must be freely given and shown by clear and convincing evidence, since the consent acts as a waiver of employees' First Amendment rights.

Justice Elena Kagan's dissenting opinion, joined by Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor, lamented the upset of the balance provided by Abood between public employees' First Amendment rights and government entities' interests in regulating that expression in aid of managing its workforce to effectively provide public services and the use of the First Amendment as a sword used to cut down the role of unions, rather than what the dissenting Justices consider its intended purpose: to protect democratic governance—including the role of public-sector unions. The dissenters also warned of the erosion of stare decisis principles in overruling Abood, asserting that few court decisions have led to greater reliance. The dissent cited laws passed by at least 20 states and thousands of covered collective bargaining agreements that will be impacted, asserting that this could "bring down" entire contracts that lack separability provisions.

In light of this ruling:

  • Public employers should immediately stop collecting any fees for unions from employees unless they have affirmative written consent or face suit.

  • No coercion, such as threat of termination, can be used to persuade any public employee to consent to the payment of agency fees, and public employers cannot impose negative consequences or less-favorable provisions on employees for refusing to be union members.

  • Changes may occur in unions' duties to non-members through either legislation or litigation. States may allow unions to represent only members, or allow unions to charge non-members for services like grievance representation, or further limit the services the unions have to provide to non-members. Litigation by unions that could limit obligations is already pending and more is likely.

  • The decision could influence federal, state, and local efforts to pass more "right-to-work" laws, which currently prohibit mandatory agency fees in the public and private sector in 28 states.

  • The decision could also lead to litigation regarding what types of compelled payments violate the First Amendment, including over the state's ability to use resident tax dollars to defend right-to-work ordinances or make investment in companies that support lobbying and political activities objectionable to members.
Attorneys in Ballard Spahr's Labor and Employment Group routinely assist and counsel public sector employers about labor issues, including collective bargaining, and employment issues regarding civil rights and constitutional changes.

Copyright © 2018 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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