Supreme Court Agrees to Look Again at Mandatory Agency Shop Fees

Category: Blog Posts
Date: Oct 19, 2017 01:11 PM
Supreme Court Agrees to Look Again at Mandatory Agency Shop Fees

Last month, the U.S. Supreme Court agreed to review Janus v. AFSCME, a case out of Illinois challenging the constitutionality of mandatory agency shop fees for public employees.  Illinois, like California, is one of several states where agency shop arrangements are authorized in the public sector.       

Under an agency shop arrangement, employees within a designated unit who decline union membership must pay a proportionate “fair share” fee to the union for collective bargaining and other activities conducted on their behalf.  However, the Supreme Court has held that unlike union dues, agency shop fees may not be used to express political views, support a political candidate, or otherwise advance an ideological cause unrelated to collective bargaining, as doing so violates First Amendment free speech principles. 

The plaintiffs in Janus assert that an agency shop arrangement likewise infringes on their free speech rights because collective bargaining with a government agency is essentially tantamount to political speech intended to influence policymaking.  The Supreme Court addressed, and rejected, the same argument 40 years ago in Abood v. Detroit Bd. of Ed.  Thus, the plaintiffs in Janus have requested that Abood be overruled.     

This is not the first time the Supreme Court has considered overruling Abood.  The same issue recently arose in the 2016 case of Friedrichs v. California Teachers Assoc.  However, that case resulted in a 4-4 split among the justices at a time when the ninth seat on the Court was vacant following the death of Justice Antonin Scalia.  As a result, Abood remained the law.

Following Friedrichs, public sector unions in California have maintained the ability to impose agency shop fees on non-member employees, consistent with Abood.  Nevertheless, with Justice Neil Gorsuch’s appointment to the Supreme Court, analysts predict that Abood will now be overruled, effectively putting a stop to agency shop arrangements in every state.  If that happens, the impact on revenue and participation rates for public sector unions could be severe.  Non-members may be disinclined to voluntarily pay fees.  Meanwhile, some existing members may choose to leave their union in order to avoid mandatory dues, especially if they see non-members reaping the benefits of union activities without paying for them.  Indeed, in states with so-called “right to work” laws, where employees may decline to pay for union representation, the union participation rate is significantly lower than in other states.   

The Janus case initially arose in 2015, when Illinois Governor Bruce Rauner filed suit in federal district court to halt collection of agency shop fees.  Rauner contended that Illinois law was unconstitutional insofar as it permitted agency shop arrangements.  Although the case was ultimately dismissed because Rauner lacked standing to bring a claim, the district court permitted two union-represented public employees to intervene, including Mark Janus, the lead plaintiff.  Janus’s claim was also denied, however, because the district court lacked authority to overrule Abood.  Only the Supreme Court has the power to set aside its own prior rulings.  Janus then appealed to the U.S. Court of Appeals for the Seventh Circuit, which affirmed, and finally to the U.S. Supreme Court.

The high court will take up the case during this term, with oral argument anticipated in the next few months and a decision by June 2018.  We will continue to monitor the case and provide updates as they become available. 

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