Last week the Supreme Court issued a decision that “agency fees” charged by unions for non-members violate the First Amendment’s protection of freedom of speech and right of association. The decision, Janus v. American Federation of State, County, and Municipal Employees Council, is seen as a major blow to many public-sector unions who rely on agency fees as part of their income structure. The NJPSA and professional associations like it should not be affected. NJPSA, whose membership is voluntary, has never relied on agency fees for membership.
What are agency fees? They are fees charged by a bargaining unit for those who hold positions represented by the majority representative but who refuse to pay dues. In many cases agency fees include the requirement to pay local, county, state and national dues. In New Jersey it is referred to as “representation” fees authorized by N.J.S.A. 34:13A-5.5, the relevant portion of which has now been deemed to be unconstitutional. The statute provides as follows:
….the majority representative and the public employer of public employees in an appropriate unit shall, where requested by the majority representative, negotiate concerning the subject of requiring the payment by all nonmember employees in the unit to the majority representative of a representation fee in lieu of dues for services rendered by the majority representative.
The representation fee in lieu of dues shall be in an amount equivalent to the regular membership dues, initiation fees and assessments charged by the majority representative to its own members less the cost of benefits financed through the dues, fees and assessments and available to or benefitting only its members, but in no event shall such fee exceed 85% of the regular membership dues, fees and assessments.
The idea that unions could assess representation fees to non-members to recover the costs of collective bargaining, contract administration, and grievances has been a long-standing practice. Approved unanimously by the Supreme Court in 1977 in the matter of Abood v. Detroit Bd. Of Ed. the Court at that time held that fees charged to non-members was a needed tool for labor and management allowing for single majority representation by a majority vote and for addressing what to do with “free riders;” employees who benefit from collective negotiations but who refuse to bear the cost.
Why allow for only a portion of the dues to be assessed to non-members? In the Abood matter, while validating the concept of assessing a representation fee to non-members, the Court also held that objectors to union membership or policy may not have their dues used for ideological or political purposes. Non-members could not be forced to pay the full union dues if they disagreed with the union’s political advocacy. As a result, New Jersey carved out a portion of full dues assessment to allow for political advocacy with representation fees capped at 85%.
In the case decided by the Court last week, Janus, an Illinois state employee whose position was represented by a public-sector union, refused to join the union because he opposed many of its positions, including those taken in collective bargaining. He contended that forcing him to pay union dues, even if only a portion of the whole amount, violated his First Amendment right of freedom of association as well as speech.
In supporting Janus, Justice Alito, writing for the majority, overruled Abood. He found that requiring the payment of union dues by employees who hold positions represented by the union but who disagree with the union, either as to collective negotiations or political activity, violate their First Amendment right. Pointing to the fact that unions represent “millions” of employees in the 28 States that prohibit agency or representation fees, Justice Alito said the benefits of representation fees – single majority representation with everyone paying their fair share of the costs associated with collective negotiations – could “readily be achieved through means significantly less restrictive of associational freedoms than assessing agency fees.” What those other means may be remains to be seen.
What impact will this decision have on the public sector? Clearly, it will significantly affect unions that have had representation fees. The current PERC statute may very well have to be amended. In the future, a pay for service plan may have to be implemented for those who choose not to pay their union dues. Given the positive impact collective negotiations have had in advancing the interests of public sector employees, the hope is that public sector unions will avoid the dire results predicted by the dissent in Janus; that when the “vicious cycle finally ends, chances are that the union will lack the resources to effectively perform the responsibilities of an exclusive representative – or, in the worst case, to perform them at all.”
How will this affect the NJPSA? We don’t believe that it will be impacted. The NJPSA will continue to be a voluntary membership organization as it has been since its founding in 1981. It will continue to provide negotiation services to local member organizations. It will continue to assist members with grievances. It will continue to offer to its members legal services – legal insurance – for employment related disputes through its legal assistance program. It will continue to advocate on behalf of its members both in the courts and in the legislature, and closely monitor new legislation that may result from this decision. It will continue to make its staff available to provide advice and direction to members when needed. And, the FEA, the professional development arm of the NJPSA, will continue to provide high quality professional development to our members – New Jersey’s school leaders.
Robert M. Schwartz
NJPSA Chief Counsel