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United States Supreme Court: Government Employers Cannot Withhold Union Dues from Non-Union Employees

June 27, 2018

By William K. Kennedy and Brett M. Waldron

Today, the United States Supreme Court issued a decision declaring that the First Amendment of the Constitution prohibits government employers from withholding union dues from the wages of public-sector employees who have chosen not to be union members. See Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al., 585 U.S. ___ (June 27, 2018) (Alito, J.).

The dues at issue are often known as “fair share” or agency fees. The idea behind them is that unions should be able to pass on the costs of the collective-bargaining process to all employees who benefit from it. Because unions represent all workers (not just members) in a particular bargaining unit, unions have long argued that these agency or fair share fees prevent non-members from getting a “free ride” by taking advantage of the union’s work for the unit but not contributing to those efforts. Almost half of the states – including Pennsylvania, New Jersey, and Delaware – permit government employers to deduct agency fees from employees’ paychecks, and many collective bargaining agreements between government employers and unions require the employers to withhold agency fees from non-member employees’ paychecks.

Non-members, however, have not remained quiet. They have argued against agency fees on a number of grounds. A particularly powerful argument has been based on the First Amendment, and asserts that the government cannot compel non-members to contribute money to a union that may use that money to fund political speech with which the non-members may disagree.

In Janus, the Supreme Court adopted this argument in ruling that “[n]either 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.” Janus, at *48. In so ruling, the Court took the extraordinary step of overruling one of its prior decisions — Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977) — which upheld a limited form of agency fees. The Janus Court determined that Abood was “poorly reasoned,” and that none of the arguments relied on in Abood or cited by the unions in Janus could be reconciled with the First Amendment. Janus, at * 1.

Justice Kagan, joined by Justices Ginsburg, Breyer, and Sotomayor, authored the primary dissenting opinion, in which she criticized the majority for overruling Abood.

For public-sector unions, the stakes could not have been higher. Without the ability to collect agency fees, public-sector unions may have to reevaluate the methods by which they aim to provide effective representation to members and non-members alike.

If you are a government employer, you should cease any deduction of agency fees from employees’ paychecks immediately. You should contact your attorney to discuss the best way to deal with any agency fees collected but not distributed to the union as of today’s date and any fees collected after today’s date.