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Supreme Court Declares Public Sector Fair Share Fees Unconstitutional

June 27, 2018

By Trevor R. Caldwell, J. Chris Duckworth & Daniel L. Rowan

In one of the most significant labor cases in decades, the U.S. Supreme Court ruled this morning that requiring public sector employees to pay “fair share” or “agency” fees to a union as a condition of employment violates their rights under the First Amendment of the U.S. Constitution. The Court’s decision in Janus v. American Federation of State, County, and Municipal Employees, Council 31 (AFSCME) takes effect immediately and invalidates any provision of a collective bargaining agreement that requires public sector employers to deduct fair share fees from non-union employees.
 
Background
 
Public employees cannot be compelled to join a union or pay union membership dues as a condition of employment. However, many states, including Oregon and Washington, have enacted public sector collective bargaining statutes that allow employers and unions to enter into agreements requiring all employees within a bargaining unit to pay a fee—known as a “fair share” or “agency” fee—toward the union’s costs related to collective bargaining. In a 1977 case, Abood v. Detroit Board of Education, the U.S. Supreme Court held that such fair share agreements are constitutional.
 
The plaintiff in the Janus case is a child support specialist employed by the state of Illinois. Janus challenged the obligation to pay fair share fees on the grounds that such fees violate his First Amendment rights. He argued that compelled fair share fees violate his constitutional rights because they require him to subsidize the union during collective bargaining with a government employer, which is essentially a form of lobbying.
 
The Supreme Court’s Decision
 
In today’s decision, the Supreme Court agreed with Janus, concluding that compelling fair share fees does in fact violate the First Amendment rights of public sector employees. In overruling Abood, the Court found that the two justifications for fair share fees—labor peace and preventing free riders—did not constitute compelling state interests sufficient to abridge certain employees’ First Amendment rights. As the Court put it, “in simple terms, the First Amendment does not permit the government to compel a person to pay for another party’s speech just because the government thinks that the speech furthers the interest of the person who does not want to pay.”
 
Although employees can no longer be compelled to pay fair share fees, the Court affirmed the union’s status as the exclusive representative of all employees in the bargaining unit it represents. It also noted that unions will continue to have a duty of fair representation to employees in the bargaining unit, regardless of whether the employee is a dues paying union member. However, the Court left open the possibility that unions differentiate in the nature of representation provided to members and non-members in certain settings.
 
Because compelled fair share fees violate the First Amendment, the Court declared that “neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay." The Court noted that “clear and compelling” evidence is required to show that a public employee has affirmatively chosen to pay dues or fees to the union. The Court did not offer any examples or further explanation of what evidence is sufficient to meet this standard.
 
What this Decision Means for Public Sector Employers
 
Today’s Supreme Court ruling takes effect immediately. Most public sector employers now need to take prompt and decisive action to ensure compliance. First and foremost, employers should identify which employees are fair share fee payers and take the steps necessary to cease automatic deductions for these employees. This may require contacting the union to obtain an accurate list of all non-members paying fair share fees. 
 
Additionally, public sector employers should review the language in their current collective bargaining agreement(s), paying special attention to the union security clause, indemnity clause, and savings clause. A portion of the language in most union security clauses is now invalid or unlawful under the Janus decision, which could trigger certain obligations under a savings clause. The final step is to communicate with unions about how you intend to comply with the Supreme Court’s ruling that fair share payments are unconstitutional.
 
Bullard Law has provided counsel to countless employers regarding their duties and responsibilities after significant changes in the law. If we can provide advice and guidance on how to proceed after today’s monumental shift in public sector labor law, please contact a member of our Labor Practice Group.
 
Content ©2018, Bullard Law. All Rights Reserved.
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