Supreme Court Hears Public Employee Union Case

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In a closely watched case brought by 10 California teachers – the Supreme Court is poised to decide the first amendment issue of whether public workers should be required to support unions they have declined to join, overruling a key precedent that authorizes public-employee unions to collect ‘agency fees’ from non-members for collective bargaining.

A ruling in the teachers’ favor in Friedrichs v. California Teachers Association (Case No. 14-915) would affect millions of government workers and culminate a political and legal campaign by a group of prominent conservative foundations aimed at weakening public-sector unions. Those unions stand to lose fees from both workers who object to the positions the unions take and those who simply choose not to join while benefiting from the unions’ efforts on their behalf.

The basic idea is pretty straightforward.  Agency fees work like this: Public sector unions are required to cover all employees in a given bargaining unit, whether the employees opt into union membership or not. Public sector employees (which include EMTs, firefighters, public school teachers, social workers, and more) thus pay agency fees to their respective unions even if they are not union members, because public sector unions work on behalf of everyone in their bargaining unit, not just union members.  Agency fees do not fund unions’ political activities, but rather strictly the costs of union grievance-handling, organizing, and collective bargaining.

Supreme Court Hearing

Public unions appeared on the defensive in the U.S. Supreme Court as conservative justices appeared open to overruling the precedent that authorizes public-employee unions to collect fees from non-members for collective bargaining.

“The union basically is making these teachers compelled riders for issues on which they strongly disagree,” said Justice Anthony M. Kennedy, putting a twist on the idea that non-union members are “free riders” unless they are required to pay for the union’s bargaining efforts.

“Many teachers think that they are devoted to the future of America, to the future of our young people, and that the union is equally devoted to that, but that the union is absolutely wrong in some of its positions,” Kennedy added during oral arguments. “And agency fees … require that employees and teachers who disagree with those positions must nevertheless subsidize the union on those very points.”

Justice Antonin Scalia, who has expressed concerns about the free-rider problem and thus was perhaps one of the unions’ best hopes for getting a fifth vote to join the court’s four liberals to preserve the 1977 precedent,  Abood v. Detroit Board of Education, did not give the unions much reason for optimism either.  Abood v. Detroit Board of Education (1977) upheld the right of public sector unions to extract agency fees from public sector workers, and found that agency fees do not violate employees’ freedom of speech, so long as they do not fund unions’ political activities.

“The problem is that everything that is collectively bargained with the government is within the political sphere, almost by definition,” Scalia said. “Should the government pay higher wages or lesser wages? Should it promote teachers on the basis of seniority or [some other] basis? All of those questions are necessarily political questions.”

Plaintiff teachers are asking the Supreme Court to overrule Abood and hold that states may not allow unions to exact agency fees from public employees who refuse to join. They contend their First Amendment speech rights are offended by such compelled fees.  Abood held that state interests in maintaining labor peace and eliminating free riders justified requiring nonmembers to pay such fees, which are also known as service fees or “fair share” fees.  Although the proportion of fee-payers in the 23 states that authorize such fees is relatively small, a decision against the unions would adversely impact union revenue.

Plaintiff’s were also challenged during the hearing by the court’s liberal bloc—Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor, and Elena Kagan.  On Monday, Kagan emphasized stare decisis, the court’s principle of overruling its past decisions only in extraordinary circumstances.

“Mr. Carvin, you come here, of course, with a heavy burden,” Kagan said. “That’s always true in cases where somebody asks us to overrule a decision. It seems to be particularly true here. This is a case in which there are tens of thousands of contracts with these provisions. Those contracts affect millions of employees, maybe as high as 10 million employees. So what special justification are you offering here? ”

In response, the plaintiff’s attorney, Mr. Carvin, argued that the Abood decision erroneously denied a group of people a fundamental right to be free from supporting speech with which they disagree.

Justice Breyer then joined in, saying the court makes many decisions that infringe on individual rights, but “you start overruling things, what happens to the country thinking of us as a kind of stability in a world that is tough because it changes a lot?”

The defense of Abood and agency fees was divided between a lawyer for the state of California; one representing the CTA and its parent, the National Education Association; and one from President Barack Obama’s administration.

The same liberal bloc dissented two years ago when the court ruled that a group of Medicaid home-health workers were really not government employees and could not be forced to pay agency fees to a union representing a majority of such workers in Illinois.  Writing for a 5-4 majority in that previous case, Harris v. Quinn, Justice Samuel A. Alito Jr. wrote at length about Abood‘s “questionable foundations,” but he concluded then it wasn’t necessary to overrule the 1977 decision in the Illinois case.  As such, it is anyone’s guess what happens next.

The defense of Abood and agency fees included the solicitor general of California, who said the states and local school districts have important interests as employers when they seek to bargain with a single union representing a class of employees and that union is representing the interests of the non-members as well as members.    Also representing the defense was the California Teachers Union who argued that “overruling Abood now would substantially disrupt established First Amendment doctrine and labor-management systems in nearly half the country.”

U.S. Solicitor General Donald B. Verrilli Jr. also argued on the unions’ side, saying that overruling Abood would “disrupt those long-term relationships that have developed over time, and the expectations that have developed over time, and you’re going to replace them with a different kind of a situation in which the union is going to have a different set of incentives, trying to ensure that the maximum number of people are willing to pay union fees.”

“And the way that the unions are likely to try to do that is through trying to convince employees that they need the union because otherwise management is going to do them harm,” Verrilli added. “And I do think that that’s a significant problem here for public employer perspective now, in a time of budgetary constraints, when difficult decisions have to be made and cuts have to be made.”

Potential Impact

So what happens if, in yet another 5-4 ruling, the high court rules against agency fees? The ruling’s details will obviously matter, but it’s likely public-sector unions may still bargain on behalf of public-sector workers – union members and non-members alike – though workers will have far less of an incentive to pay dues to a union once they’re voluntary.  The result is an existential threat to the unions that rely on agency fees and have operated under the system the Supreme Court helped enshrine a generation ago.

A decision in the case is expected by late June.