Insights for the Labor Relations Professional


Supreme Court Decision Strikes Down Mandatory Agency Fee Payments to Public Sector Unions

By Nelson Cary

By Nelson Cary and Eric Leist

Today the U.S. Supreme Court issued a decision in the closely watched case of Janus v. AFSCME.  In a landmark ruling, the Court held that public sector employees cannot be forced to pay mandatory fees to a public sector union if they are not a member of the union.  As discussed in our previous blog post, this case involved a child support specialist in the Illinois Department of Healthcare and Family Services, who is not a member of the American Federation of State, County, and Municipal Employees (AFSCME), but nonetheless was required to pay agency fees to the union as a state employee.  Janus follows the Court’s 4-4 split on this issue back in March 2016 in an opinion issued following the death of Justice Scalia.

The pivotal vote in the 5-4 ruling was Justice Neil Gorsuch, who replaced Justice Scalia.   Justice Gorsuch was widely expected to side with those voting to overturn the law, just as Justice Scalia had been expected to vote in the previous case.  All the other justices voted the same as they did in March 2016.  The Court’s decision overturned a Supreme Court precedent from the 1970s that allowed public unions to collect mandatory fees from all employees, both union members and non-members.

The Court’s primary reasoning was that requiring nonconsenting employees to pay mandatory agency fees violated the First Amendment’s protection against subsidizing the speech of other private speakers. The justifications behind the old precedent, that agency fees promoted an interest in “labor peace” and avoided the risk of free riders, were insufficient.  Agency fees had not been shown to promote labor peace, especially because the federal government and numerous states had laws prohibiting such fees yet still had peaceful public sector labor relations.  Moreover, avoiding the risk of free riders was not a compelling enough reason to merit the violation of individuals’ First Amendment rights.

The Court also considered, and rejected, a number of other arguments.  For example, it found that other case law that denies free speech protection to public employees did not apply in this context.  And, when considering the 1970s decision, the Court found that it was an “anomaly” in the Court’s First Amendment cases and that developments since the decision issued – at a time when public sector unions were only of a recent vintage – had “eroded” its “underpinnings.”

The dissenting justices issued a lengthy and detailed defense of the agency fee requirement at issue.  Among its many arguments, the dissent characterized as the “worse part of today’s opinion” its overruling of the 1970s decision.  The dissent found that the previous framework providing for agency fees had been a workable solution to protect the First Amendment interests of employees.  Those agency fees, the dissent said, struck a permissible balance between distributing the cost of collective bargaining among employees and those same employees’ First Amendment rights to not be forced to pay for unions’ political speech.

For the labor professional, especially those in the public sector, this is a momentous decision.   Many states that allow public sector employees to unionize also have provisions in their codes that required those employees who did not join to pay the so-called agency fee.  Ohio is an example of one of these states.  The Court’s decision means that public sector workers now have a choice as to whether to pay money to a union, and cannot be required to do so.  In that regard, then, the outcome is similar to what Wisconsin did when it passed public sector labor law reforms earlier this decade, permitting public employees there a similar choice.

The long-term impact on the strength of public sector unions, however, is yet to be seen.  They certainly haven’t vanished from Wisconsin, although their membership numbers have taken a beating.  Perhaps informed by the Wisconsin experience, many unions have been preparing for Janus for months, if not years, by attempting to increase their ranks of members – those who have voluntarily agreed to pay membership dues, rather than agency fees, to support the union’s operations.

*Special thanks to Eric Leist, an associate at Vorys, and Amanda Miggo, a summer associate at Vorys, for their respective contributions to this post.

Tags: Courts, agency fees, Abood


Insights for the Labor Relations Professional