Supreme Court deals major financial blow to nation's public employee unions

Richard Wolf and Gregory Korte | USA TODAY

Show Caption Hide Caption Supreme Court deals massive financial blow to organized labor The Supreme Court has dealt a major blow to organized labor and the Democratic Party by ruling that unions cannot charge fees to non-members for collective bargaining gains.

WASHINGTON — A deeply divided Supreme Court dealt a major blow to the nation's public employee unions Wednesday that likely will result in a loss of money, members and political muscle.

After three efforts in 2012, 2014 and 2016 fell short, the court's conservative majority ruled 5-4 that unions cannot collect fees from non-members to help defray the costs of collective bargaining. Those fees, permitted under a 1977 high court decision, violate the free speech rights of those who do not want to contribute, the court said.

Justice Samuel Alito wrote the decision, announced on the final day of the court's term, which featured 13 similar 5-4 rulings with the same ideological lineup. In dissent, Justice Elena Kagan, joined by the court's three other liberals, accused the majority of "weaponizing the First Amendment."

President Trump wasted no time claiming the decision would help Republicans at the polls. "Big loss for the coffers of the Democrats!" he tweeted.

Supreme Court rules in favor of non-union workers who are now, as an example, able to support a candidate of his or her choice without having those who control the Union deciding for them. Big loss for the coffers of the Democrats! — Donald J. Trump (@realDonaldTrump) June 27, 2018

About 5 million workers could be affected by the decision overruling the court's 1977 decision in Abood v. Detroit Board of Education — those who pay dues or "fair-share" fees to unions in 22 states where public employees can be required to contribute. Workers in 28 states already cannot be forced to join or pay unions.

"It is hard to estimate how many billions of dollars have been taken from nonmembers and transferred to public-sector unions in violation of the First Amendment," Alito wrote. "Those unconstitutional exactions cannot be allowed to continue indefinitely."

From the bench, he noted that Illinois, whose Republican governor initiated the challenge, "has serious financial problems" that are exacerbated by costly union contracts. Gov. Bruce Rauner, who was at the court for the decision, has sought to renegotiate public employee contracts.

Kagan's angry dissent accused the court of "weaponizing the First Amendment in a way that unleashes judges, now and in the future, to intervene in economic and regulatory policy."

"Its decision will have large-scale consequences," Kagan said. "Public employee unions will lose a secure source of financial support. State and local governments that thought fair-share provisions furthered their interests will need to find new ways of managing their workforces."

Gorsuch is key vote

Justice Neil Gorsuch cast the deciding vote against what conservative opponents long have labeled a form of compelled speech. The money helps labor unions maintain political power in some of the nation's most populous states, including California, New York, Illinois, Pennsylvania and New Jersey.

Gorsuch, who had remained silent during oral argument in February, was the key because the court had deadlocked in a similar case two years ago following the death of Justice Antonin Scalia. The newest justice recently authored the court's 5-4 ruling that denied workers the right to join together in class action lawsuits rather than submit to employer-sponsored arbitration.

The ruling completed a four-for-four sweep for the Trump administration in cases where the Justice Department switched sides from the positions taken during the Obama administration. "The favorable Supreme Court decisions in all four cases reflect that we took the proper course of action," Attorney General Jeff Sessions said.

The 2016 case challenged a powerful teachers union in California; the new one targeted state employees in Illinois. But the threatened impact was the same: elimination of fees paid by police, firefighters, teachers and other government workers who don't join the unions that represent them.

The landmark ruling overrules the court's own 41-year-old precedent, which said workers did not have to pay for unions' political activity but could be required to contribute to other costs of representation, such as wage and benefit negotiations and grievance procedures.

The decision frees those non-members from the fees, but unions also are braced to lose dues-paying members now that they can save the full cost of membership, rather than the roughly 20% that pays for political activities. That could force unions to raise dues on those who remain.

"It is shameful that the billionaire CEOs and corporate special interests behind this case have succeeded in manipulating the highest court in the land to do their bidding," leaders of the nation's four major public employee unions said in a statement. "This case was nothing more than a blatant political attack to further rig our economy and democracy against everyday Americans in favor of the wealthy and powerful."

The case, Janus v. American Federation of State, County, and Municipal Employees, was backed by conservative groups that have tried for years to overturn the court's 1977 decision.

"Today’s decision is a landmark victory for rights of public-sector employees coast-to-coast that will free millions of teachers, police officers, firefighters and other public employees from mandatory union payments," said Mark Mix, president of the National Right to Work Legal Defense Foundation.

'Six-year crusade'

The court ruled 7-2, 5-4 and 4-4 on three similar cases in the past six years -- with Alito playing the leading role -- that ate away at the 1977 decision without overruling it entirely. In 2016, Scalia's death a month after oral arguments denied conservatives their fifth vote.

Kagan referred to her conservative colleagues' "six-year crusade" in her dissent, part of which she read from the bench. “Today’s decision will have large-scale consequences,” she said, not only by blowing up collective bargaining agreements but by undermining stare decisis by reversing earlier decisions.

The decision comes at a time when 61% of Americans approve of labor unions -- the highest rating in Gallup polls since 2003 -- and teachers' strikes have roiled states from West Virginia and Kentucky to Oklahoma, Colorado and Arizona.

"The fictional narrative of labor’s downfall is being upended by the reality working people are creating for ourselves," AFL-CIO President Richard Trumka said recently. "No matter the outcome of this case, millions of workers will continue to stand together to build a stronger, fairer America."

It remains unclear what impact the ruling will have on organized labor in general, which has suffered a 70-year decline in union membership. The nation's roughly 15 million union members make up less than 11% of the workforce, a drop from 35% during World War II. The decline is magnified in the private sector, where only 6.5% of workers remain unionized.

In the public sector, more than one in three workers belong to a union, a percentage that has held relatively steady for decades. AFSCME, the National Education Association, Service Employees International Union and American Federation of Teachers now face a likely loss of members.

Some groups that have fought to end compulsory fees argue that unions can stave off membership declines by better representing workers. They cite data from states such as Indiana and Michigan after the enactment of right-to-work laws.

Alito adopted that analysis in his opinion, which should be of little consolation to the unions.

"We recognize that the loss of payments from nonmembers may cause unions to experience unpleasant transition costs in the short term and may require unions to make adjustments in order to attract and retain members," he wrote. "But we must weigh these disadvantages against the considerable windfall that unions have received under Abood for the past 41 years."

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