Compelled Public Sector Agency Fees Declared Unconstitutional by Supreme Court

The U.S. Supreme Court this morning in Janus v. AFSCME (download here) reversed 40 years of labor law precedent and concluded that  requiring public employees to pay “agency fees” for labor unions that they don’t want to belong to violates the First Amendment of the U.S. Constitution.

Previously, prior cases have banned forcing public sector employees from joining a union and paying union dues. But a number of states permitted union contracts that required employees to still pay an “agency fee” to cover the costs of collective bargaining.

In its 5-4 decision, the U.S. Supreme Court rejected this — leaving public sector unions, particularly in states like Connecticut, to potentially lose significant funds from employees who say that they want no part of their salary to go towards unions.

Given that this blog covers more employment law than labor law, and focuses more on private-sector than public sector, I’m not going to do a deep-dive today into the case. The SCOTUSBlog is one good resource. 

But my labor law colleagues at my firm have spending the morning looking into this.  Here’s the quick recap posted this morning on the Employment Law Letter blog and the impact to Connecticut public-sector employers.:

The immediate effect of the Court’s decision is that agency fee (or “fair share” fee) provisions in collective bargaining agreements are invalid. The Court specifically states that agency fees and similar payments may not be deducted from an employee’s pay unless the employee has expressly consented to the deduction.

This statement suggests that employers should stop deducting agency fees unless and until an employee has affirmatively consented.

Because Connecticut law requires express employee consent for payroll deductions, Connecticut public sector employees have likely already consented to the deduction of agency fees.

However, public sector employers should be prepared for employees approaching them and requesting that the agency fee deductions be stopped, effectively withdrawing their consent.

Justice Alito’s decision is emphatic in this point and the significant dollars at stake:

We recognize that the loss of payments from nonmembers may cause unions to experience unpleasant transition costs in the short term, and may require unions to make adjustments in order to attract and retain members. But we must weigh these disadvantages against the considerable windfall that unions have received under Abood for the past 41 years. It is hard to estimate how many billions of dollars have been taken from nonmembers and transferred to public-sector unions in violation of the First Amendment. Those unconstitutional exactions cannot be allowed to continue indefinitely.

Watch my firm’s blog for more details on this critical decision in the public-sector.

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