Supreme Court Dumps Public Sector Union Fees

In a 5-4 decision, the U.S. Supreme Court issued the long-awaited opinion in Janus v. The American Federation of State, County and Municipal Employees Council 31 holding that the First Amendment prevents public sector unions from forcing government employees to pay union dues.  While the decision applies only to public sector workers (and not private sector union employees), the decision will have an immediate impact in states like Minnesota where compulsory dues are required by law.

In 2017, 15.2% of Minnesota workers (or about 411,000) belonged to a union.  Public sector unions account for at least one-third of Minnesota’s total union representation and the state’s largest public unions include: Education Minnesota (70,000 members), AFSCME (56,000 members), and the Minnesota Association of Professional Employees (14,500 members).

Background

Many states, including Minnesota, have passed laws permitting public employees to unionize.  Under these laws, the union may engage in collective bargaining; individual employees may not be represented by another agent or negotiate directly with their employer (i.e., the state).

Individuals who do not wish to join the union can still be required to pay what is generally called an “agency fee,” a percentage of full union dues under a Supreme Court decision called Abood v. Detroit Board of Education, 431 U. S. 209 (1977).  This fee may cover union expenditures attributable to those activities “germane” to the union’s collective-bargaining activities (such as negotiations and grievance processing), but may not cover the union’s political and ideological projects (such as supporting political candidates). The union sets the agency fee annually and then sends nonmembers a notice explaining the basis for the fee and the breakdown of expenditures.

In Minnesota, for example, state law provides that government employees who refuse to join the union can be forced to pay a “fair share fee” of up to 85% of full union dues. While there is a process for challenging the fees assessed by the union, the process is convoluted and cumbersome.

The Supreme Court Decision

In Illinois, state employee Mark Janus objected to the “agency fee” charged by the union representing his colleagues.  The fee was 78.06% of full union dues.  Janus objected to the payment of any union dues because he claimed that fees constituted “coerced political speech” in violation of the First Amendment.

The Supreme Court agreed, overruling its decision in Abood.  The 5-4 majority concluded that “public-sector agency-shop arrangements violate the First Amendment.”  The Court dismissed the union’s “free-rider and “labor peace” arguments, noting that neither were sufficient to overcome the free speech concerns.

Bottom Line

The result of today’s decision is that public sector workers who refuse to join the union can no longer be forced to pay any dues or fees to the union.

In Minnesota, this likely means that any “fair share fee” assessed by a union on a public sector employee violates the First Amendment.  While current public-sector union members would need to resign their membership before their dues obligation could cease, non-members could likely cease paying dues immediately.

Public sector employers that are deducting fair share fees from non-members should seek immediate legal counsel to avoid potential legal liability as continuing to withhold and pay such dues may result in litigation and damages.

We will continue to monitor these developments.