In a long-awaited decision, the United States Supreme Court has ruled that “agency fee” laws in 22 states plus Washington, D.C. violate the First Amendment rights of public sector employees. Public sector employees who exercise their right not to join the union representing their bargaining unit can no longer be required to pay “agency fees” to that union to cover the costs of negotiating contracts, processing grievances, and representing unit members in disciplinary proceedings. The ruling in Janus v. AFSCME Council 31 could cripple powerful public sector unions financially and blunt their political influence if a significant number of employees elect to resign their union membership.

The Supreme Court’s 5-4 decision in Janus overrules its 1977 ruling in Abood v. Detroit Board of Education, which held that non-member public sector employees in a bargaining unit could be required to pay the equivalent of union dues to cover the costs of “collective bargaining, contract administration, and grievance adjustment purposes.” While Abood required unions to have a procedure for unit employees to object to paying for certain expenses unrelated to representational activity (such as political activity), in practice the agency fees that non-member public sector employees are often required to pay to unions representing their collective bargaining units have been substantially equivalent to paying the full cost of union membership. As the cost differential between full union membership and paying agency fees is usually insignificant, it stands to reason that many employees who would otherwise refrain from joining their respective unions elected to enroll as full union members in order to be able to participate in union votes. Now that employees cannot be required to pay agency fees, there may be a rush of employees to withdraw from union membership in order to avoid paying dues to a union that these employees never wanted to join in the first place.

The Supreme Court considered the substantially same issue in Friedrichs v. California Teachers’ Association in 2016; however, the death of Justice Scalia and the stalled nomination of Merrick Garland to replace him caused the court to deadlock 4-4. The deadlocked Supreme Court resulted in the continuation of the legality of agency fee laws. The confirmation of Neil Gorsuch as the ninth Supreme Court Justice likely changed the outcome in this case.

The 22 states with agency fee laws struck down by this decision are: Alaska, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, New Mexico, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington, along with Washington, D.C.

State-Level Responses to the Janus Decision

In New York, the powerful public sector unions have already pushed through amendments to the Public Employees Fair Employment Act (or Taylor Law), which defines the rights and limitations of unions for public employees, in anticipation of an unfavorable decision in Janus. Salient changes include:

• Limiting the scope of a union’s duty of fair representation by giving public employee unions the option not to provide representation to non-members in any disciplinary cases. Unions will not be required to offer any legal, economic, or job-related services beyond those provided in the collective bargaining agreement.
• Requiring public employers to notify an employee organization of new employees and provide contact information for new employees.
• Requiring public employers to allow a duly appointed representative to meet with new employees at the work site during work time for a reasonable amount of time without requiring employees to charge leave time.
• Permitting employee organizations (unions) to use electronic membership cards.
• Requiring that when union members return to the same employer after voluntary or involuntary leave, these employees will return as union members and the right to deduct dues will be automatically reinstated. The union will not be obligated to obtain new dues authorizations for these employees.

Similar to New York’s amendments to the Taylor Law, New Jersey adopted the Workplace Democracy Enhancement Act. Like the Taylor Law amendments, the act:

• Requires that employers provide contact information for new employees.
• Requires that employers allow unions access to the workplace and the employer’s email system to contact new employees for the purpose of recruiting them to join the union.
• Prohibits employers from encouraging employees to resign from or relinquish membership in a union or to revoke the deduction of union dues.

Earlier this year Washington modified its law in anticipation of the Janus decision. Specifically, the law:

• Removed the requirement that employers receive employee written authorization in order to enforce a union security provision in a collective bargaining agreement and deduct from the payments of bargaining unit members the dues required for union members, or for nonmembers, a fee equivalent to dues.
• Removed the requirement that written employee authorizations be filed with the employer.

Proactive Post-Janus Compliance Guidance for Employers

Public sector employers should ensure that they have the appropriate forms and payroll codes to identify non-union members in their system so that they do not collect union dues or agency fees from employees who have elected to refrain from union membership. Employers must also be prepared to process grievances and administer discipline to employees who are not represented by the union.

Employers seeking assistance in establishing procedures to ensure compliance with the Supreme Court’s ruling in Janus and/or New York’s Taylor Law Amendments may contact:

• Sean P. Beiter
• Caroline J. Berdzik
• Or another member of the Employment and Labor Practice Group

Similarly, employers seeking representation in impact negotiations with employee organizations over the Supreme Court’s ruling in Janus may contact:

• Sean P. Beiter
• Matthew C. Van Vessem
• Kristin Klein Wheaton
• Jonathan M. Bernstein
• Christopher P. Maugans
• Caroline J. Berdzik
• Or another member of the Employment and Labor Practice Group