By Steve Thorpe
The recent Supreme Court decision in Janus v. AFSCME is being called a powerful blow against organized labor because employees may be disinclined to join unions if they don’t have to pay anything to reap the benefits of a contract. The ruling bars unions from collecting mandatory fees from government employees who don’t want to join the union but still benefit from the contracts. The decision overruled a 40-year-old precedent in the Michigan case Abood v. Detroit Board of Education, which unanimously upheld mandatory public-sector union fees. Justice Samuel Alito’s majority opinion said that Abood was "poorly reasoned" and led to "practical problems and abuse." Andrey Tomkiw works in the Detroit office of Dinsmore & Shohl LLP. His focus is representing employers in labor and employment law cases, as well as in business matters. He concentrates much of his practice on assisting human resource professionals tasked with drafting and implementing policies and also works with union clients on addressing unfair labor practice charges, collective bargaining strategies and pension withdrawal liability.
Thorpe: Give us some background on this case.
Tomkiw: For the past 41 years, unions in the public sector were allowed to require non-union members to pay an “agency” or “fair share” fee for their pro rata share of the union’s contract-related services.
The general justification for the agency fee requirement is that because the union is certified to be the exclusive bargaining agent for all members of the bargaining unit, all employees should, at the very least, pay for the union’s contract-related services. In the Janus case, the agency fee was about 78 percent of the full dues charged to regular union members.
In a 5-4 decision, the Supreme Court ruled that public sector unions cannot charge agency fees to employees who decline to join the union, but are covered by a collective bargaining agreement. The Court ruled the fees are unconstitutional, as they violate the First Amendment rights by forcing workers to support a political organization.
Thorpe: What will be the immediate effect of the decision on employers and unions?
Tomkiw: Given that 28 states currently proscribe agency fees, the impact will not be as immediate and widespread as proffered by the unions. Cutting off agency fees will definitely financially weaken the unions, but the unions still remain relatively strong in the public sector.
To put it in perspective, 37.9 percent of the workers in the public sector are represented by unions versus 7.3 percent of the workers in the private sector. Given the support the unions enjoy in the public sector, and the fact that the very low percentage of the public sector unionized workforce to date has selected to pay agency fees only, the financial effect will not be immediate.
The trickle-down effect of a reduction in financial strength of the unions means it will likely hire fewer representatives, take fewer cases to arbitration, and not have the resources to organize new members at the same levels as in the past. Interestingly, some union strategies have been to push the government to privatize operations so that the Janus ruling does not apply to those privatized operations.
Regarding impact on employers, it is basically nil, other than administrative and bookkeeping tasks.
Thorpe: Justice Alito’s majority opinion said that all public sector bargaining is inherently political and that collecting fees from non-consenting government employees, who are protected by the First Amendment, violates their free-speech rights. Is this a free speech case, a labor law case, or both?
Tomkiw: Because the employers here are public sector, the First Amendment applies to public sector bargaining units. To ignore the realities that unions are inherently political is difficult to do credibly. The unions are very involved in state and local legislation efforts and ballot initiatives.
Further, not only do the unions advocate legislation and ballot initiatives directly addressing terms and conditions of employment, it is commonplace for unions to support a vast array of political causes. The Court very specifically noted that the political climate 41 years ago in Abood has changed.
It could be argued that by expanding the scope of their political activities to non-labor related issues, the unions themselves changed those conditions, giving rise to the Janus ruling.
Thorpe: Currently 28 states have adopted “right-to-work” legislation that says individuals can’t be required to join unions or pay dues. Also, a national bill is pending in Congress. How does Michigan’s right-to-work law interact with this ruling?
Michigan’s 2012 Right-To-Work law produced much less impact on the unions than anticipated. Unions did not see an en masse departure of its membership. In fact, membership in the UAW has actually grown in Michigan since 2012. The only true impact the Janus decision has on Michigan workers was the Right-To-Work laws exempted police, firefighters, dispatchers and emergency medical responder unions. That carve-out has now ended.
Of interest, unions are taking certain creative measures to try to keep their workers locked in. For example, Michigan Education Association stated it would accept resignations only if they were mailed in and then changed the mailing address to a new, little publicized, post office box. Further, one union has also restricted resignations to the month of August, locking in members who miss that deadline for another 11 months.
Thorpe: Some say the ruling will likely affect police and fire employees who are currently exempt under Michigan's statute. Agree?
Tomkiw: Historically, public sector unions are strongest in schools and in emergency services. The impact on Michigan’s Right-To-Work law has not been as great as anticipated across the board. It would not be realistic to expect police and fire employees to significantly depart from the established nationwide norms. It will take years to fully see what impact, if any, the Janus ruling will have.
Thorpe: There is some debate on how the ruling will eventually affect private sector unions. How do you see it unfolding?
Tomkiw: There has been a slow but steady erosion of the union’s strength and support amongst the rank and file. Initially, it appears the effect to be primarily limited to being an economic setback to the unions. This may cause the unions to rethink their strategies and political involvements. t may be a sign of things to come for the 22 states that have not yet adopted right-to-work legislation. It is like only a function of time before other states follow suit.
However, as with all things, this is likely cyclic. As the unions re-invent themselves, we may see the pendulum swinging back the other way in our lifetime. That is yet to be seen.
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