Supreme Court Deals Major Setback to Public Unions

The 5-4 decision -- that employees can opt out of paying fees to unions that represent them -- could invalidate laws in more than 20 states and significantly weaken unions across the country.
by | June 27, 2018
Supporters of Illinois government employee Mark Janus gathered at the Supreme Court in February. (AP/Jacquelyn Martin)

Last updated at 12:37 p.m. ET

The U.S. Supreme Court dealt public-sector labor unions a potentially crippling blow Wednesday, as a narrow majority struck down a key feature of collective bargaining arrangements due to free speech concerns.

The 5-4 decision in the case from Illinois, Janus v. AFSCME, centered on whether government workers who don’t want to belong to the unions that represent them should still have to pay for services they provide, such as contract negotiations or arbitration. On Wednesday, the high court ruled that those so-called “agency” or “fair-share” fees violated the First Amendment.

“The state may require that a union serve as [an] exclusive bargaining agent for its employees,” Justice Samuel Alito wrote for the court’s majority. “We simply draw the line at allowing the government to go further still and require all employees to support the union irrespective of whether they share its views.”

Unions denounced the decision.

“We are extremely disappointed the Supreme Court has taken the side of the powerful few, but we’re more determined than ever to keep our union strong, standing up for public services and the working people who provide them,” said AFSCME Council 31, one of the largest unions representing Illinois state workers, in a statement.

The court’s ruling overturns a 1977 decision in the case of Abood v. Detroit Board of Education, which allowed for unions to collect agency fees. Alito said the 41-year-old decision was flawed for several reasons.

For example, he said, the court in the earlier case didn’t scrutinize the claims that the fees were necessary to keep labor peace in public workplaces. It was specifically worried that unions would compete with each other for members, causing rivalries within the workplace. The court also wanted to avoid situations where government agencies would have to have separate contracts with two or more labor unions that represented different groups of employees.

But the court “cited no evidence that the pandemonium it imagined would result if agency fees were not allowed, and it is now clear that Abood's fears were unfounded,” Alito wrote.

Union advocates worry that if allowed, too many public workers will opt of paying union fees, potentially leading to lost union clout, worse working conditions and employee protests.

Alito attempted to allay those concerns, pointing to the federal government, where unions can be elected to represent all employees, but federal law doesn't let them collect agency fees. Under that arrangement, 27 percent of federal employees are union members.

“Likewise, millions of public employees in the 28 states that have laws generally prohibiting agency fees are represented by unions that serve as the exclusive representatives of all the employees. Whatever may have been the case 41 years ago when Abood was handed down, it is now undeniable that ‘labor peace’ can readily be achieved through means significantly less restrictive of associational freedoms, than the assessment of agency fees,” Alito wrote for the majority.

The conservative majority also implicitly faulted public employee unions for higher spending by state and local governments.

“It is also significant that the court decided Abood against a very different legal and economic backdrop,” he wrote. “Public-sector unionism was a relatively new phenomenon in 1977. The first state to permit collective bargaining by government employees was Wisconsin in 1959. Since then, public-sector union membership has come to surpass private-sector union membership, even though there are nearly four times as many total private-sector employees as public-sector employees. This ascendance of public-sector unions has been marked by a parallel increase in public spending … Not all that increase can be attributed to public-sector unions, of course, but the mounting costs of public-employee wages, benefits and pensions undoubtedly played a substantial role."

Alito pointed to Illinois state government, which employs Mark Janus, the plaintiff in the case. The state has $129 billion in unfunded pension liabilities, “as a result," Alito claimed, "of generous public-employee retirement packages.” (That contradicts the conclusions of the Illinois legislature's fiscal analysts, though. When looking at the $87 billion in additional unfunded liabilities the state incurred between 1985 and 2012, the Illinois Commission on Government Forecasting and Accountability concluded that only $8 billion -- or less than a tenth of the overall funding shortfall -- came from benefit increases.)

The Supreme Court majority also said unsustainable collective bargaining agreements have been blamed for many municipal bankruptcies, citing a filing from Michigan and 18 other states that claimed that union-bargained benefits played a role in the bankruptcies of Detroit; Stockton, Calif.; and San Bernadino, Calif.

“These developments, and the political debate over public spending and debt they have spurred, have given collective-bargaining issues a political valence that Abood did not fully appreciate,“ Alito wrote.

The four liberal members of the high court, though, argued that the court should have kept its “fundamentally sound” precedent.

“Rarely if ever has the court overruled a decision -- let alone one of this import -- with so little regard for the usual principles of stare decisis,” wrote Justice Elena Kagan, referring to the legal principle that courts should defer to earlier precendents. “There are no special justifications for reversing Abood. It has proved workable. No recent developments have eroded its underpinnings. And it is deeply entrenched, in both the law and the real world. More than 20 states have statutory schemes built on the decision. Those laws underpin thousands of ongoing contracts involving millions of employees."

Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined Kagan in her dissent.

 

Past Cases

This is the third time in the last five years that the court has heard a case that raised the issue of whether agency fees violated the First Amendment.

The Supreme Court previously heard a different case from Illinois, called Harris v. Quinn, dealing with almost the exact same issue. But the judges resolved that case in 2014 without tackling the issue of agency fees head-on because the plaintiffs in that case were only “partial public employees.” The second time, the court split 4-4 after the death of Justice Antonin Scalia.

After Justice Neil Gorsuch joined the court last year, most legal observers expected the Supreme Court to overturn Abood and declare the agency fees unconstitutional.

Although conservatives on the Supreme Court have long been interested in agency fees, this particular case got its start when Illinois Gov. Bruce Rauner took office in 2015. He immediately made weakening public-employee unions a central piece of his agenda.

One of the things he tried to do was to prevent unions of state employees from collecting agency fees. That gambit ultimately failed in lower courts. The governor was dismissed from the lawsuit long ago, but it continued through the courts with Janus as the plaintiff.

Rauner has continued to follow the case. He attended oral arguments in February, and this week he extended a trip to Washington for two days in anticipation of the court’s decision.

“For decades, Illinois workers have been forced to pay partial union dues against their will,” Rauner said. “The practice infringed on the constitutional rights of public-sector workers who were asked to give up their First Amendment rights as a condition of employment. This decision fairly reinstates those rights.”

His office said the state would immediately stop withholding agency fees from the paychecks of non-union state workers. It also said state workers “would be given an opportunity to modify their union status,” and noted that an average union member who works for the state pays about $900 a year in dues.