On Wednesday, June 27, 2018, the U.S. Supreme Court ruled that public-sector employees who choose not to join the union that represents them cannot be forced to pay "agency fees" to cover the union's costs of representation.  Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al., U.S., No. 16-1466 (June 27, 2018). This decision overturns a 41-year-old precedent that had found such fees to be constitutional.

In many states, public employees are required to become union members and pay union dues.  Employees who do not want to become union members, nevertheless, are required pay a so-called "agency fee" to the union.  The justification for this fee is that the union is legally required to represent all employees in the bargaining unit, not just union members.  The agency fee, which is a percentage of union dues exclusive of expenses related to the union’s political or ideological activities, represents the non-members' "fair share" of the cost of collective bargaining.

Mark Janus, a child-support specialist for the State of Illinois, challenged the agency fee requirement imposed on government workers who decline to join the union.  He argued that this mandatory obligation violated his First Amendment rights because it forced him to support the union’s messaging.  

The Supreme Court, in a 5-4 decision, agreed with Janus and held that mandatory agency fees violate public employees' free speech rights.  Writing for the majority, Justice Samuel Alito stated that the First Amendment's freedom of speech includes the right to refrain from speaking.  Likewise, "[c]ompelled subsidization of private speech seriously impinges on First Amendment rights and cannot be casually allowed," the Justice explained.   This ruling overturned the standard set forth in the Court’s 1977 Abood v. Detroit Board of Education decision, which permitted the imposition of an agency fee to cover collective bargaining costs.  

Justice Alito noted that the Abood decision's justification for upholding the fee requirement, including the promotion of "labor peace" and preventing non-members from enjoying the benefits of union representation without shouldering the costs, were insufficient to interfere with public employees’ First Amendment rights, even when scrutinized under the less stringent rational basis standard.  "This procedure violates the First Amendment and cannot continue," Justice Alito wrote. "Neither an agency fee nor any other payment to the union may be deducted from a non-member’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay."
 
As a result of this decision, unions that represent state and local government workers must now operate under the equivalent of "right-to-work" rules, a limitation already imposed on unions that represent private-sector workers in 28 states and federal employees.  Under right-to-work rules, unions may not impose fees upon non-members even though the law requires those same unions to represent all employees in the bargaining unit regardless of whether they belong to the union.

This decision will have a huge impact on the finances, membership rolls, and activities of public sector unions.  Currently, approximately 34 percent of public employees are unionized, whereas only six percent of private sector employees are represented by a union.  Public employers will need to stop deducting mandatory agency fees from non-member employees unless the employee "affirmatively consents" to the deduction; it is expected that most non-members will refuse to give this consent.  Likewise, there may be current union members who decide to discontinue their membership.  With reduced coffers, unions will need to reevaluate their priorities and expenditures of their limited resources.  In turn, we also expect to see an increase in union organizing activity, both within existing bargaining units to increase membership and among non-organized workers.

The Janus decision is available here.