Supreme Court Ruling Strikes Down Fees Charged to Non-Members by Public Sector Unions

The role of labor unions in the modern economy is often a controversial issue. It is exceedingly difficult to deny, however, that they have improved working conditions for employees in New Jersey and around the country. Today’s unions are arguably victims of their own success, as many people no longer see them as necessary. Workers nevertheless still benefit from the ability to bargain collectively with their employers. Federal and state laws protect workers’ ability to organize for purposes of collective bargaining, but many states have enacted laws that limit unions in important ways. A recent decision by the U.S. Supreme Court, Janus v. AFSCME, 585 U.S. ___ (2018), specifically impacts public sector unions and their ability to collect fees to support their collective bargaining activities. If you have a question about your union, contact a New Jersey labor law attorney.

The National Labor Relations Act (NLRA) of 1935 allows workers to organize in order to engage in collective bargaining with their employer regarding pay, working conditions, and other features of employment. See 29 U.S.C. § 157. Union members support these activities by paying membership fees. Workers who do not become dues-paying members often still benefit from the union’s efforts. This is commonly known as the “free rider problem.” Some unions dealt with this by negotiating “closed shop” agreements, by which the employer could only hire union members; or “union shop” agreements, which required all employees to join the union or pay an “agency fee” once they had been hired.

The Taft-Hartley Act of 1947 banned closed shop agreements, and only allowed union shop agreements or agency fees to the extent that they do not conflict with state law. Id. at § 164(b). Many states have enacted “right to work” laws, which prohibit unions from charging agency fees to non-members.

In addition to collective bargaining activities, unions may also engage in political activities like contributing to campaigns that support their goals. Political disagreements are often a reason why individual employees do not want to join a union. Public employees have raised First Amendment challenges to agency fees payable to public sector unions. The Supreme Court allowed such agreements, provided that agency fees were used solely for “collective bargaining, contract administration, and grievance adjustment purposes,” in Abood v. Detroit Bd. of Educ., 431 U.S. 209, 232 (1977).

The plaintiff in Janus objected to paying dues to a public sector union in Illinois “because he opposes many of the public policy positions that [it] advocates.” Janus, slip op. at 4 (internal quotations omitted). He filed a lawsuit claiming violation of his First Amendment rights. Amid various challenges to public sector agency fees, his case made its way to the Supreme Court. In a 5-4 decision, the court ruled in the plaintiff’s favor. It held that public sector union agency fees “violate[] the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.” Id. at 1.

The ruling expressly overrules Abood. While the court acknowledges that public sector unions will lose revenue as a result of this ruling, it states that it must balance those losses “against the considerable windfall that unions have received under Abood for the past 41 years.” Id. at 47.

If you are involved in a dispute with your employer in New Jersey or New York, the Resnick Law Group’s employment attorneys are here to help you. Please contact us at 973-781-1204, at 646-867-7997, or online today to schedule a confidential consultation to see how we can help you.

More Blog Posts:

NLRB Considers Revisiting 2014 Ruling Regarding Employer Restrictions on Use of Company Email by Employees in New Jersey and Nationwide, The New Jersey Employment Law Firm Blog, September 28, 2018

New Jersey Continues to Reject “Right to Work” Laws, The New Jersey Employment Law Firm Blog, September 4, 2018

NLRB Addresses the Question of When the NLRA Protects Employees’ Statements on Social Media, The New Jersey Employment Law Firm Blog, March 18, 2014


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