One of the most important public sector court cases in decades, Janus v. American Federation of State, County, and Municipal Employees, Council 31, was heard in the United States Supreme Court in February, and a decision is expected to be published later this spring or early in the summer.
At issue in this case is whether public unions may force workers who do not join the union to pay them a “fair share fee” that covers the union’s non-political activities. The plaintiff, Mark Janus, works as a child support specialist for the state of Illinois, and argues that his First Amendment rights are being violated by being compelled to pay union fees.
To understand the significance of this case for public education, we need context and background.
Background The requirement for public employees to pay fair share fees does not exist in every state: New Jersey is one of 22 states where public employees must pay fair share fees. This means that most New Jersey public school employees, and virtually all teachers, work in a “union” environment, where the terms and conditions of employment are controlled by the union contract. However, each employee retains the right to choose whether to join the union, If the employee decides not to join the union, the employee is still responsible for paying the bulk, which in New Jersey is approximately 85 percent, of the union dues.
This is called a “fair share fee,” “compulsory union dues,” or “agency shop fee.” The long standing rationale for these agency shop fees is that the union is responsible for negotiating collectively and processing grievances on behalf of the entire negotiations unit–including the employees who opt out of the union. The small percent of dues (in New Jersey approximately 15 percent) that the union reports as being spent on political speech (things like supporting candidates for office and advocating for regulatory changes) is refunded to an agency shop payer.
The history of agency shop provisions also requires some explanation. In 1980, the New Jersey Employer–Employee Relations Act (known as PERC) was amended to make fee arrangements something that unions could bring to the table for negotiations. This law also specifies that agency shop fees cannot exceed 85 percent of regular membership dues. It is the responsibility of the union to annually compute this percentage; this calculation must be based upon the union’s actual negotiations and representation expenditures in the previous year. (The fee may include the cost of lobbying as long as those expenditures are not for ideological or political purposes unrelated to negotiations and/or contract administration.) These fees are paid through payroll deductions. In 2002, the law was amended to allow unions that had been unsuccessful in negotiating such fee arrangements to petition PERC to mandate the inclusion of such a provision in an agreement: If the union can demonstrate that certain procedural safeguards are in place, PERC must order the inclusion of an agency shop provision. Given the legislative history, it is no surprise that agency shop provisions are near universal for New Jersey public school union contracts.
Under current law, each state can determine if public employees who choose not to join unions must pay these agency shop fees. New Jersey has determined that such employees must pay. This status quo may end abruptly this summer when the U. S. Supreme Court decides the Janus case.
Judicial History How did we get here? The seminal case involving agency shop fees is the 1978 U.S. Supreme Court case, Abood v. Detroit Board of Education. In Abood, the court found that while non-union employees may not be compelled to pay for the ideological or political speech of unions, they could be assessed a portion of the dues to cover the union’s “collective bargaining, contract administration, and grievance adjustment” expenses.
Over the past several years, the U.S. Supreme Court chipped away at the Abood precedent. In Knox v. Service Employees Local 1000 in 2002, the court held that government union members had to be given an opt-in, not opt-out, system for a one-time special assessment.
In 2014, in Harris v. Quinn, the Supreme Court held that medical assistants paid by the state of Illinois but mostly supervised by home care clients were not “full-fledged” public employees and, thus, could not be compelled to pay union dues. In that decision, the majority opinion stated that the legal reasoning underpinning the Abood decision was “questionable on several grounds.”
During the 2015-2016 term, the U.S. Supreme Court agreed to hear Friedrichs v. California Teachers Association — a case that was viewed as a frontal assault on the constitutionality of mandatory agency shop dues. The lead plaintiff, Rebecca Friedrichs, a California public school teacher, opted out of the union, but still had to pay a large portion of dues.
In part, the plaintiffs claimed the collective bargaining process for teachers’ unions is inherently political because the compensation and policies being negotiated affect government budgets and these compelled fees violated their First Amendment rights because the fees result in subsidizing union speech with which they disagree. A decision was reached on March 29, 2016, when an evenly-divided U.S. Supreme Court issued a one-sentence opinion upholding agency shop fees in the public sector. The tie vote in Friedrichs let stand the lower court’s decision adhering to the precedent in Abood and finding that mandatory agency shop fees, in the public sector, did not violate non-members’ First Amendment rights.
During this time, the Janus case was making its way through the courts. The fact pattern for Janus is very similar to the Friedrichs case: a child support specialist with the state of Illinois, Mark Janus, the lead plaintiff, had to pay agency shop fees as a condition of employment. Like Ms. Friedrichs, Mr. Janus’s claim was that his First Amendment rights to freedom of speech and freedom of association were violated by forced contributions to a public sector union with which he disagrees.
Potential Impact Within an agency shop, public sector unions can tell potential members, “Look, you’re already paying most of the cost of dues anyway; just pay a little more, and you can receive all the benefits of membership.” The effect of the New Jersey agency shop law and its 85 percent payment requirement is that few public employees opt to pay agency shop fees rather than full union dues. Yet, if the court strikes down mandatory agency shop fees, a teacher is faced with an entirely different incentive.
What would be the impact on union membership in the wake of a Janus decision striking down mandatory agency shop fees? A review of the past gives us some guidance. The current situation is a culmination of a decade-long reexamination of public sector unions and their relationship to bargaining unit members. Over this time period, several states, including Wisconsin, Michigan, and Iowa, have joined the ranks of states that do not mandate the payment of agency shop fees. These states are commonly called “right to work” states, and the most high profile state in this category is Wisconsin.
Wisconsin’s Act 10 was debated, passed, and signed into law in summer 2011. “The Battle of Wisconsin,” as it was termed, garnered press coverage and included extended and spirited civil protests. Badger state unions and, in particular, the Wisconsin Education Association (WEA) lost that battle, decisively. In the aftermath of Wisconsin’s elimination of agency shop fees, membership in the WEA was cut in half. The change also had significant impact on the public policy debate: In the year prior to the law’s passage, WEA spent $2.3 million on lobbying efforts and two years after the law’s passage, WEA spent only $175,540.
The elimination of agency shop fees for Wisconsin’s public sector was packaged with additional measures that severely limited collective bargaining. Such changes to collective negotiations are implausible given New Jersey’s political environment. The evidence suggests, however, that the impact on union membership could be significant. Take for example the state of Michigan: Right to work was passed in 2013, and over the next four years, the Michigan Education Association lost 25 percent of its membership.
Public sector unions and the New Jersey Education Association (NJEA) are a vibrant force in state and local politics. In 2016, NJEA had over 200,000 members. For the 2017-2018 school year, NJEA dues (including national, county, and local association dues) can exceed $1,200 for teachers; this funding allows the union to be a potent force in state and local politics. Also, NJEA’s political expenditures totaled $57 million from 1999 to 2014, more than any other special interest group in that 15-year period, according to the N.J. State Election Law Enforcement Commission. If the Supreme Court decides as expected, and nixes agency shop fees for New Jersey’s public sector, there may be significant changes to the political dynamic in the state.
What’s Next? Oral arguments in the Janus case took place on Feb. 26, 2018. The Supreme Court’s decision is expected by the close of the court’s term at the end of June. Even after the decision is issued exactly what the case means for public schools in New Jersey may not be totally clear. Loss of membership, and changes in union’s approach to advocacy are possible if the court sides with the plaintiff. However, every state is different and the case’s exact impact on New Jersey’s school districts is uncertain at this point. In the meantime, public employers should keep the following facts in mind:
- Under New Jersey law, public employees have the right to form, join, and assist unions without fear of penalty or reprisal.
- Public employees have the equivalent right to refrain from any such activity.
- A duly-designated union is entitled to act for and to negotiate agreements covering all employees in the negotiations unit.
- Such a union is responsible for representing the interest of all unit employees without regard to union membership.
In closing, S-2137, which, as this article goes to print, sits on the governor’s desk, may be a political bellwether for the state’s public sector labor relations. Longstanding state law has allowed employees to stop the deduction of union dues effective on the following July 1 or Jan. 1. Among other actions proposed in the bill, S-2137 narrows the withdrawal window to the 10 days following each individual employee anniversary date.