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A State's extraction of agency fees from non consenting public-sector employees violates the First AmendmentAuthored by: Richard J. Morgan, South Carolina Employment Law Letter
June 28, 2018

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For the second time this term of court, the United States Supreme Court on the final day of the term addressed a First Amendment issue. In the first case, Masterpiece Cakeshop v. Colorado Civil Rights Commission, the Court found on very narrow grounds that the Colorado Civil Rights Commission violated the baker’s free exercise portion of the First Amendment. Now in Janus v. State, County, and Municipal Employees, the Court under the freedom of speech prong of the First Amendment, found that states and public-sector unions may no longer extract agency fees from non consenting employees. The Court found that the First Amendment is violated when money is taken from non consenting employees for a public-sector union. Employees must choose to sup­port the union before anything is taken from them.  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.

 In order to reach the decision (5-4), the majority first had to discuss and overrule its 1977 Abood v. Detroit Board of Education decision. In Abood, the Court upheld the constitutionality of agency-shop fees.An agency shop is a form of union security agreement where the employer may hire union or non-union workers, and employees need not join the union in order to remain employed. However, the non-union worker must pay a fee to cover collective bargaining costs.

In overruling Abood, the Court wrote that the State’s extraction of agency fees from non consenting public-sector employees violates the First Amendment. Abood erred in con­cluding otherwise, and stare decisis cannot support it. In judging a First Amendment free speech case, the Court noted that the lesser “exacting” standard rather than the “strict scrutiny” standard was used, and it made the Abood decision an outlier in First Amendment jurisprudence. The Court observed that neither of Abood’s two justifications for agency fees passes mus­ter under this strict scrutiny standard. First, agency fees cannot be upheld on the ground that they promote an interest in “labor peace.” The Abood Court’s fears of conflict and disruption if employees were represented by more than one union have proved to be unfounded: Exclusive rep­resentation of all the employees in a unit and the exaction of agency fees are not inextricably linked. To the contrary, in the Federal Gov­ernment and the 28 States with laws prohibiting agency fees, mil­lions of public employees are represented by unions that effectively serve as the exclusive representatives of all the employees. Whatever may have been the case 41 years ago when Abood was decided, it is thus now undeniable that “labor peace” can readily be achieved through less restrictive means than the assessment of agency fees.

Second, avoiding “the risk of ‘free riders,” is not a compelling state interest. Free-rider “arguments . . . are gener­ally insufficient to overcome First Amendment objections,” and the statutory requirement that unions represent members and nonmembers alike does not justify different treatment. As is evident in non-agency-fee jurisdictions, unions are quite willing to represent nonmembers in the absence of agency fees. And their duty of fair representation is a necessary concomitant of the authori­ty that a union seeks when it chooses to be the exclusive representa­tive. In any event, States can avoid free riders through less restric­tive means than the imposition of agency fees.

The Court found that the First Amendment, made applicable to the States by the Fourteenth Amendment, forbids abridgment of the freedom of speech. The Court observed that it has held time and again that freedom of speech “includes both the right to speak freely and the right to refrain from speaking at all.” The right to eschew association for expressive purposes is likewise protected. As the Court noted in a 1984 decision, the freedom of association . . . plainly presupposes a freedom not to associate.

This case applies to public sector employers. Private sector employers fall under different standards more generally governed by the Railway Labor Act and the National Labor Relations Act. The bottom line is the funding of public sector unions has likely taken a big financial hit as a result of this decision.