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Janus v. AFSCME:  Supreme Court Bans Mandatory Union Agency Fees for Public Employees – Could the Pr Janus v. AFSCME:  Supreme Court Bans Mandatory Union Agency Fees for Public Employees – Could the Pr

Janus v. AFSCME: Supreme Court Bans Mandatory Union Agency Fees for Public Employees – Could the Private Sector be Next?

On June 28, the U.S. Supreme Court issued a landmark decision in Janus v. AFSCME, a case concerning whether public employees can be compelled to pay "agency fees"—the portion of union dues and fees that go to a union's representational costs. The decision played out as most labor law commentators expected, with a 5-4 conservative majority finding the mandatory payment of such by public employees violates the First Amendment. When it comes to public employment, this decision means no public employee anywhere in the United States can be forced to pay any sort of dues or fees to a union as a condition of employment. Effectively, Janus institutes a national "right-to-work" law for public employment and requires public employees to affirmatively opt-in to paying agency fees. 

Before Janus, the law of the land for more than 40 years (established in the 1977 Supreme Court case, Abood v. Detroit Bd. Of Ed., which Janus overruled) held that public-sector employees could not be required to pay the portion of union dues and fees that go to a union's expressly political activities, but agency fees could be required. Until Janus, the issue of agency fees had been decided on a state-by-state basis.

In overruling Abood, the majority opinion (penned by Justice Samuel Alito) held there is no clear line between a union's political and non-political representational activities when it comes to public-sector collective bargaining. When a union bargains with a public employer, the majority asserted, subjects of bargaining often have explicit or implicit political ramifications in areas of public concern such as state budgeting, taxation, education, child welfare, health care, and minority rights. Consequently, requiring individual employees to pay agency fees to a union effectively forces them to endorse political positions they find objectionable and is, therefore, a form of government-compelled speech that ordinarily violates the First Amendment. 

The Court ultimately concluded none of the stated government interests in requiring mandatory agency fees—including promoting labor peace and preventing free-riding employees from gaining the benefits of union representation without paying their "fair share"—were sufficiently compelling to justify the imposition on First Amendment rights.

Public employee unions and labor movement supporters consider this decision a major blow to organized labor and, less directly, to the Democratic Party, which traditionally has received considerable financial support from both public- and private-sector unions. While public employee unions will continue to exist, in states that previously allowed mandatory agency fees (which include states with large numbers of public employees such as California, Illinois, and New York), they may be forced to carry out the same representational obligations with significantly diminished resources. Generally, under public employee bargaining laws, unions are the "exclusive bargaining representative" and are required to represent all employees in the bargaining unit, even those who decline to pay dues.

While the impact of Janus on public employee unions is obvious and substantial, it is important to note it did not change the law concerning agency fees in private employment. In the private sector, the National Labor Relations Act expressly leaves the decision of whether to allow such mandatory agency fees to the states. Currently, 28 states have constitutional or statutory "right-to-work" statutes or constitutional provisions in place. 

That doesn’t mean the decision has no implications for private-sector unionization. Many traditionally private-sector unions also represent employee groups in the public sector, meaning the financial impact will be direct in some cases. Additionally, to the extent the Democratic party loses funding as a result of the financial impact of Janus on public-sector unions, the political goals of private-sector unions, which are largely dependent on the efforts of Democratic politicians, could be hampered. 

Finally, it is not inconceivable that a majority conservative Supreme Court—which is likely to be cemented for the foreseeable future with the appointment of retiring Justice Anthony Kennedy's replacement by President Trump—could at some point use the Janus decision as a springboard to deeming the imposition of agency fees in the private sector unconstitutional as well.  While the Janus majority did emphasize the uniquely political nature of public-sector bargaining in finding a First Amendment problem, "right-to-work" supporters are likely to make the case that even in private-sector bargaining, unions are indeed bargaining to advance certain political and ideological interests that employees cannot be compelled to support through the payment of mandatory agency fees. That may seem like a long shot, but it's worth considering that Janus itself overruled precedent that had been in place for more than 40 years. While there have been attempts in Congress to institute a national private sector right-to-work law, given the current makeup of the U.S. Senate, there is no reasonable prospect of such a law passing at the federal level any time soon, so the judicial route may be increasingly appealing to anti-union advocacy groups.

If you have questions about how Janus impacts your workplace, please contact Manolis Boulukos or any other member of Ice Miller LLP's Labor, Employment and Immigration Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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