Season 2: Episode 11: Public-Sector Unions and Agency Fees- Examining Janus v. AFSCME

Just a few months ago, the Supreme Court issued a critical and controversial decision in Janus v. AFSCME, holding that public sector unions may not collect agency fees from nonmembers. What does this mean and whom will this affect? What are the implications for school boards around the country and what are some best practices for board members to keep in mind? Lisa and Miriam dive into the legal and practical ramifications of this momentous ruling.

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Lisa: Welcome back to Class Act: Updates and Education Law.

Miriam: I’m Miriam.

Lisa: I’m Lisa, and we are attorneys at Walter | Haverfield in Cleveland, Ohio. We practice school law, and every few weeks, we get together and talk about the most recent legal developments in education, relevant to school boards, administrators, teachers, really, anyone who works in the education realm. This past summer, the Supreme Court issued a really important decision for school boards and unions in Janus v. AFSCME.

Miriam: Which is the American Federation of State and county Municipal Employees.

Lisa: We wanted to spend a little bit of time just talking about this case, explaining what it means for boards, public sector unions, and some of the issues that employees are still working through as this decision is being dissected.

Miriam: Let’s just start at the beginning, Lisa. As you know, the union is really the only entity that’s allowed to negotiate about wages and hours and conditions of employment. If you are a teacher, for example, you’re not going to be asking your employer, the school board, for a raise independently of your union. Your union is the entity that is permitted to negotiate with the school board about those kinds of employment conditions and wages.

Lisa: Now, generally, this isn’t just automatic that a union just appears, there are quite a few of really specific procedures or how unions develop. Those are complexities we’re not really going to dive into today, but we recognize that pretty much most public school districts already have the unions formed, and actively working within their system.

Miriam: Right. What’s really relevant today is that, unions have many different activities that they’re involved in. I think when we all think of unions, we think of entities that represent employees, teachers, in collective bargaining agreements, and negotiate about wages and hours and conditions, like I just mentioned. But aside from that, unions also donate to political campaigns, and participate in quite a few political activities.

Lisa: We came across a statistic that really, I kind of think, just puts us in perspective. The three largest public sector unions, as of 2017, were the National Education Association, the American Federation of Teachers, and the American Federation of State county and municipal employees. According to the Department of Labor, when you put these three unions together, their political activity in 2017, costs about $119 million. To really put that in perspective to how much they’re really actively spending in political activities, when we looked at those same unions, they spent a sum of about $153 million towards actively representing their membership and organizing. You can see, that’s still a pretty comparable–

Miriam: Half and half. Almost half and half. They’re spending almost, I would say, almost as much on political activities, as they are on negotiating on behalf of their members.

Lisa: Yes. I think it just really put in perspective, the activities of the unions, that it really isn’t just strictly working on a collective bargaining agreement and making sure that it’s being implemented.

Miriam: Right. These money, these funds that we just talked about, they come from fees and dues that the union collects, both from members and from non-members. I know that some of you are probably thinking, “What do you mean non-members? Why do non-members pay anything to unions at all? If I’m not a member, why do I need to pay anything?”

Lisa: Right. Well, and let’s remember, unions are still negotiating on behalf of the non-members as well, as whatever that group that the unions organized for. If you’re a teacher, they’re bargaining and doing the collective negotiations on behalf of you, even though you are electing not to be a member of the technical union. Previously, non-members were often required to pay agency type fee, which is not necessarily full dues, but a portion and in this case, the non-members had to pay approximately 78% of the full dues that the members were paying.

Miriam: If you were a non-member, you paid this agency fee, which was a portion of the full dues, and that’s because the unions negotiated on your behalf as well.

Lisa: So basically, you were still benefiting from whatever collective bargaining agreement was developed, and you were still getting the same types of salaries that were negotiated, the same type of leave.

Miriam: Benefits. Yes.

Lisa: Still getting all of that versus that not being negotiated on your behalf.

Miriam: Yes, exactly. Before this decision was released, agency fees were tightly controlled in terms of what the unions were allowed to use that money for, because it was coming from non-members.

Lisa: Yes, Miriam, let’s talk about that for a second. Could the unions use these fees then for whatever they felt like?

Miriam: No. Unions were allowed to use these agency fees, the partial payments from non-members, only for collective bargaining, contract administration’s grievances, and those were known as chargeable expenditures. They were not allowed to use those fees, agency fees, for political activities, non-chargeable expenses. That was the rule of law for about 40 years, under the previous case law of Abood v. Detroit Board of Education, which was decided in the ’70s. Unions had to keep these funds separate. The non-members wouldn’t have their funds used for political purposes that they didn’t agree with.

Lisa: That almost makes it sound like, “Why would anybody challenge this then?” When, yes, they have to pay a portion of the dues, but it’s not going to political activities.

Miriam: I think what happened in this case, is that the plaintiff, Mark Janus, argued that even though his money, even though his agency fee wasn’t going for a particular candidate for a political office, he’d still disagreed with what his agency fees were spent on. According to the case facts, his money was being spent on lobbying, social activities, advertising, conventions, litigations, and he just didn’t agree with it. What’s interesting is that this is actually a First Amendment case. This Supreme Court is pretty famous for accepting cases when they’re framed in terms of a First Amendment argument. I think that’s what the plaintiff, Mark Janus, did here. He presented his issue as a First Amendment question, and that’s why the court took it, and ultimately decided this in his favor.

Lisa: Why don’t we explain that a little more for our listeners, like what about the First Amendment really, was relevant here?

Miriam: Yes. Lisa, as you know, the First Amendment, not only protects a person’s right to free speech, it also protects a person’s right not to speak on a political topic, or any topic for that matter. Even, let’s say, a student who does not want to say the Pledge of Allegiance because reciting the pledge is against his or her religion, the school districts are not permitted, and we’ve talked about this on previous podcasts, school districts are not permitted to force that child to stand up and say the pledge or give a consequences if a child does not want to say the pledge. That’s because the Supreme Court interprets the First Amendment’s right to free speech to also mean that a person has a right not to speak on a particular topic. If a public sector union is using your money to subsidize political activity that you don’t agree with–

Lisa: So that would be like the lobbying, the social activities, the advertising, that those are speaking in a way of giving or opposing an opinion, that Janus was claiming he did not agree with.

Miriam: Yes, exactly. He argued, and the court accepted this argument, that this was a form of compelled speech. He was essentially being forced to endorse positions or activities that he didn’t agree with.

Lisa: Let’s talk about how the court accepted this argument.

Miriam: The Supreme Court held that agency fees, when collected by a public sector union, essentially forced non-members to subsidize ideas that they find questionable. Like I said, relying on the First Amendment, the court said that the constitution includes the right to refrain from speaking at all. Here, the union’s decisions, even when they were not specifically termed political, they still touched on questions and fundamental policy, like should teacher pay be based on seniority or merit pay?

Lisa: That seems to have been a pretty active topic, I’d say, over at least the last 10 years.

Miriam: Right. The court said, if your perspective is different than the union’s perspective, then they are essentially spending your money on positions that you disagree with. The court said, if a government entity is going to compel people to subsidize activities that they don’t agree with, then the state has to show it has a compelling interest that cannot be achieved through significantly less restrictive means.

Lisa: This is basically the court’s legal analysis when it looks at constitutional claims, and whether they should be upheld.

Miriam: Yes.

Lisa: This is basically showing it’s holding the government and school districts and government bodies, to a really kind of high standard for impeding on this right.

Miriam: Yes, exactly. This is called strict scrutiny. The court essentially said, to the union, “If you’re forcing people to speak, and you have to show that you have a compelling interest that cannot be achieved any other way, than by violating these employees’ free speech rights.” What the union said in response, and I thought this was a relatively good argument, is that, “Look, we’re going to fall apart. We’re going to be dismantled because nobody wants to pay these fees. People are just going to refrain from paying the fees, but they will still ask us to represent them.”

“We’ll still be engaging in negotiations and collective bargaining, for people who are not our members and who don’t have to pay anything.” That’s known as the free-rider question. I thought that was a legitimate concern.

Lisa: Yes, and the court just wrote it off as hogwash, right? And said, “You’re not going to be dismantled. This isn’t going to destroy you.”

Miriam: Yes. There was a strong dissent here. The strong dissent disagreed, criticizing the majority for not recognizing the financial impact that this would have on unions. When I was thinking about this case, Lisa, I was thinking about actually taxes. I was thinking about my taxes. I thought, if paying an agency fee is considered a form of compelled speech, if the non-member doesn’t agree with what the funds are being used for, then how is that different from anybody who pays their taxes? We all pay taxes, we all don’t necessarily agree with what our funds are being used for, whether it’s local issues like the library, or more national issues.

Lisa: I think there’s a couple of components there. One, you get to vote for certain things that go into determining your taxes, right? You get to vote for government leaders. Two, I think the compelling interest piece is the distinction between the two of these. The government probably would not be able to function if we all had to agree with every single decision that the government was making–

Miriam: In terms of our funds. Yes.

Lisa: Right. To tie that to taxes versus the connection here, with unions and what they’re doing.

Miriam: Yes, I agree with that. I think that that’s probably the main distinction here.

Lisa: Let’s get back to some of the key takeaways for our school district listeners out there, what things school board should be thinking about and doing. Please, keep in mind, the things we’re going to talk about, this is really still a developing area, these are just some initial steps, and some things to be thinking about. Certainly, we will have another episode, should we get any more guidance that we can give you more specifics but here’s just some things to start to do and have in your arsenal as you’re starting to get more questions from your employees because I do think we’re going to see employees turning to their employers now, more to answer their questions.

Miriam: This doesn’t affect union members at all, right, Lisa?

Lisa: Correct.

Miriam: Non-members, you have to stop taking out the fees, immediately stop the deductions, and they need to opt-in, instead of opting out. Also, you definitely want to review your collective bargaining agreements, and look at the withdrawal provisions, to determine whether the requirements for withdrawal from the union are too restrictive, misleading, discriminatory, or ambiguous.

Lisa: Yes, ultimately, I think this is going to be an area that some bargaining agreements may need to ultimately get revised depending on how stringent your provisions are.

Miriam: How strict they are, yes.

Lisa: I think we also want to really point out, communication with your staff, you’re really going to need to be cautious about what you are saying and what advice you’re giving. We definitely have heard of unions threatening to bring unfair labor practice charges against employers who were really more so advocating that the employees drop their membership or drop their contribution. You want to make sure you’re giving just straight facts of what options are, as opposed to really advocating for a point of view.

Miriam: I would also speak with your labor council to determine what kind of communications you can and can’t have with employees, if and when they do ask for advice.

Lisa: Yes, absolutely.

Miriam: I think it’s a good idea to touch base with your labor council on those issues. Ultimately, this is a controversial decision with a wide range of impact. Boards should work practically and amicably with your unions, to bring their CBAs in line with current law and minimize any kind of discord that would affect morale.

Lisa: Yes, absolutely. Thanks everyone for joining us today. Next time, we’re going to take a look at a recent special education decision that came out of the sixth circuit recently, and talk about how this might affect school districts and their special education obligations, especially related to placement in a child least restrictive environment.

Miriam: Have a great day. Don’t forget to leave us feedback, and rate us, on iTunes or Stitcher or wherever you get your podcast.

Disclaimer: The content of this podcast was provided for general information purposes only. The podcast is not legal advice, does not create an attorney-client relationship, and should not be relied upon in making legal decisions. Actions on legal matters should be taken only upon advice of legal counsel. Walter Haverfield does not guarantee the accuracy of information contained in this podcast.

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