The Supreme Court Alters the Landscape on Collection of Union Agency Fees

by Eric M Brown on Aug. 08, 2018

Employment Employment  Employee Rights Employment  Labor Law 

Summary: A recent U.S. Supreme Court decision declares agency fees collected from employees who are not members of the union unconstitutional.

On June 27, 2018, in the decision of Janus v. American Federation of State, County, and Municipal Employees, Council 31, the United States Supreme Court held that an Illinois law that forces public employees to contribute an agency fee (also known as a “fair share” fee) if they choose not to join a union it violates free speech rights on nonunion members by compelling them to subsidize private speech on matters of substantial public concern. The landmark decision reverses forty years of precedent and requires public employers to immediately discontinue the collection of union dues (agency fees) from nonmembers of the union.

Under the Illinois Public Labor Relation Act, employees who decline to join a union are not assessed full union dues but must instead pay what is generally called an agency fee, which amounts to a percentage of the union dues. Under prior Supreme Court precedent, nonunion members may be charged for the portion of union dues attributable to activities that are “germane to the union’s duties as collective bargaining representative” but nonmembers may not be required to fund the union’s political and ideological projects. The plaintiff in the case, Mark Janus, was employed by the Illinois Department of Healthcare and Family Services as a Child Support Specialist. Employees in his unit are among the 35,000 public employees in Illinois who are represented by the American Federation of State, County, and Municipal Employees, Counsel 31 (AFSCME). Janus refused to join the union because he opposes “ ‘many of the public policy positions that [it] advocates,’ including the positions it takes in collective bargaining.”

“Because the compelled subsidization of private speech seriously impinges on First Amendment Rights, they cannot be casually allowed.” The Supreme Court rejected the previous defenses of the agency fee arrangement that served as the prior Supreme Court’s precedent, which included a purported state interest in maintaining “labor peace” and in addressing “free riders” – those employees who receive the benefits of union representation without shouldering the costs. The Court concluded that these concerns have proven unfounded in the federal government experience where federal law prohibits agency fees, and in the 28 states that prohibit agency fees. The Court held 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.”

Pennsylvania has an agency fee law similar to the Illinois law held unconstitutional. However, as a result of the Supreme Court’s decision in Janus, public employers should immediately discontinue collecting agency fees (or fair share fees) from employees who are not members of the union. It is further recommended that you place a union on notice of its duty to reimburse nonunion employees in the amount of any fees that have been collected to date.

The attorneys at Siana Bellwoar are ready to assist you in preparing the necessary letters and notices to the Union to effect this seminal change in the law.

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