In a 5-4 decision, the United States Supreme Court in Janus v. American Federation of State, County, and Municipal Employees, Council 31 et al., held that non-union members cannot be compelled to pay agency fees to the union, delivering a blow to public sector unions.  In doing so, the Court overruled Abood v. Detroit Board of Education, a 41 year old decision.

Janus involved a dispute between an Illinois state employee, Mark Janus, and a union about whether the union was permitted to collect agency fees from him, even though Janus chose not to join the union and disagreed with many of its public policy positions, including the positions it took in collective bargaining.  Under Illinois law, state employees are permitted to unionize.  If a majority of the employees in a bargaining unit votes to be represented by a union, that union becomes the exclusive representative of all employees, including employees like Janus, who choose not to join the union.  As the exclusive bargaining representative, the union has a duty to protect the interests of all employees.  Although non-union members do not pay union dues, the union collects an “agency fee” from them.  The agency fee, which is a percentage of union dues, is intended to reimburse the union for activities relating to the union’s duties as a collective bargaining representative, but is not supposed to cover activities relating to the union’s political and ideological projects.

In an opinion written by Justice Alito, the Court held that requiring non-union members to pay agency fees to the union amounted to compelling them to subsidize private speech on matters of substantial public concern in violation of the First Amendment.  After Janus, public sector unions may no longer collect agency fees from non-union members without affirmative consent.  Justice Alito recognized that when large numbers of employees speak through their union, the category of speech that is of public concern (such as a request for a wage increase and its corresponding impact on the state budget) is greatly enlarged.  The Court rejected the proffered rationales of “labor peace” and avoiding the risk of free riders as a justification for agency fees.  The Court also suggested that to the extent that the representation of non-union members in disciplinary matters burdens the union, that burden can be eliminated by requiring non-union members to pay for that service or by denying representation in disciplinary proceedings to non-union members.

The Court had questioned Abood in previous opinions in Knox v. Service Employees and Harris v. Quinn.  Many had expected the Court to overrule Abood in Friedrichs v. California Teachers Association, but Justice Scalia passed away before the decision was rendered in Friedrichs, so Friedrichs was affirmed by an equally divided Court in a 4-4 opinion.  In deciding to overturn Abood, the Court argued that there were very strong reasons not to follow established precedent, including the involvement of fundamental free speech rights, Abood’s “poor” reasoning, the impracticality of distinguishing between chargeable agency fees and non-chargeable political or ideological expenditures, and the fact that Abood had been undermined by more recent decisions and developments.

In her dissent, Justice Kagan decried the “weaponizing [of] the First Amendment, in a way that unleashes judges, now and in the future, to intervene in economic and regulatory policy.”  She observed that in the policy debate about agency (also known as fair-share) fees, twenty-two states, including Illinois, had weighed in on the side of agency fees and twenty-eight states had prohibited them.  Justice Kagan argued that the majority chose the winners in the debate by “turning the First Amendment into a sword, and using it against workaday economic and regulatory policy.”  In her view, [t]he First Amendment was meant for better things.  It was meant not to undermine but to protect democratic governance – including over the role of public-sector unions.”

The fallout from Janus remains to be seen.  Membership in public sector unions could shrink.  The ruling in Janus, which is premised on the First Amendment, however, should not affect private sector unions.