Will the Supreme Court’s Janus decision impact Missouri’s right-to-work movement?

The U.S. Supreme Court issued its opinion June 27 in Janus v. American Federation of State, County, and Municipal Employees, Council 31, 585 U.S. ___ (2018), holding that nonunion members working in union positions for public employers are not obligated to pay agency fees, also known as “fair share” fees. This overturns Abood v. Detroit Board of Education, 431 U.S. 209 (1977) which set the precedent that as long as the agency fees represent the percentage of the union’s expenditures for collective bargaining, contract administration, and grievance adjustment purposes, then state governments can legislate that public employees employed in positions represented by unions, even though not union members, can be required to pay service charges or agency fees. In conjunction, unions are required to provide detailed notices of how the agency fees are being spent for “chargeable” activities (contract and bargaining based activities) and “non-chargeable” activities (political and lobbying activities). It should be noted that federal law prohibits unions that bargain for federal workers to charge agency fees to nonunion members, but according to the U.S. Department of Labor’s Bureau of Labor Statistics , about 27 percent of the federal workforce are union members.

The practical effect of the Abood case is that it provided unions that bargained for governmental employees a huge increase in agency fee revenue to perform their contract and bargaining functions, while member fees could be used for political purposes. In the private sector, it further justified union security agreements that similarly require that nonmember employees pay “fair share” fees for working in unionized positions and receiving the benefit of the unions’ bargaining efforts.

Given that union efforts and motives are fundamentally intertwined with politics and policy making, nonunion members who have been forced to pay agency fees have protested that agency fee laws and union security agreements violate their First Amendment rights to free speech. This is the exact argument that Mark Janus, a child support specialist for the Illinois Department of Healthcare and Family Services, made in the present case.

Janus argued it was a violation of his First Amendment rights to be obligated to pay fees to the American Federation of State, County, and Municipal Employees (AFSCME) under the Illinois Public Labor Relations Act (IPLRA) because he fundamentally disagreed with the politics of the union and many of the positions taken during collective bargaining. While Janus opted out of membership in AFSCME, because he worked in a union position he was still obligated to pay his agency fees (around 78 percent of what a union member paid). The case was initially filed by Illinois Gov. Bruce Rauner arguing that the IPLRA was unconstitutional, and Janus later joined. The Northern District of Illinois dismissed the case, stating that it was foreclosed by Abood, and the Seventh Circuit affirmed the decision.

Justice Samuel Alito, Jr. wrote the Supreme Court’s opinion, specifically holding: “Neither an agency fee nor any other payment to the union may be deducted from a nonmember's wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.” Justice Alito reasoned that the main arguments in support of the Abood decision in 1977 are no longer compelling. Specifically, in responding to the argument that agency fees are necessary to prevent nonmembers from enjoying the benefits of collective bargaining without having the burden of paying for them, Justice Alito wrote: “In simple terms, the First Amendment does not permit the government to compel a person to pay for another party’s speech just because the government thinks that the speech furthers the interests of the person who does not want to pay.” The court reasoned that there are less restrictive means to prevent the “free rider” situations, for example, obligating nonmembers to pay for grievance support.

In her dissent, Justice Elena Kagan explained that the decision will amount to severe consequences: “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.” According to the Bureau of Labor Statistics, in 2017 approximately 34.4 percent of public sector employees (7.2 million) and 6.5 percent of private sector employees (7.6 million) belonged to a union. “Within the public sector, the union membership rate was highest in local government (40.1 percent), which employs many workers in heavily unionized occupations, such as teachers, police officers, and firefighters.” While it is not readily known how many of these public employees are nonunion members paying agency fees, the potential impact of union budgets of losing agency fees is great and is expected to have a substantial impact on their operations.

State right-to-work movements

While the Janus opinion only has an immediate impact on governmental employees, it speaks to the greater right-to-work movement in many states. Missouri passed a law in early 2017 that would prohibit employers from requiring employees to join a union or pay union dues as a condition of employment. However, the law was prevented from taking effect when opponents collected enough petition signatures to force a referendum on the matter. Missouri voters will decide in a statewide vote on the Aug. 7, 2018, primary ballot whether the Missouri right-to-work law will take effect.

We anticipate that Missouri right-to-work proponents will use the Janus opinion to argue that even the U.S. Supreme Court agrees that employees should be afforded with the opportunity to elect to pay for union benefits even if their coworkers have organized. If Missouri’s law goes into effect, it will join 27 other states that have banned union security agreements between unions and companies that require nonunion members to pay “fair share” fees. We also anticipate the right-to-work movement to gain strength in the Illinois private sector.

If you have questions about how state labor laws affect your business, please contact one of the attorneys in our Employment & Labor practice group.