Employment, Negotiations & Union Dues Now Free Choice

Originally published by: SBC MagazineJuly 3, 2018
by Kirk Grundahl, P.E. and Sean Shields

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The Supreme Court recently ruled that the First Amendment, the Bill of Rights, liberty and freedom for all Americans is on a solid foundation. It is a day that the word choice supports the freedom to choose, by the individual being affected by the choice. Please find below a summary of key quotes from the ruling, which are very instructive for all business relationships. 

The Supreme Court recently ruled: “Petitioner Mark Janus is a state employee whose unit is represented by a public-sector union (Union), one of the respondents. He refused to join the Union because he opposes many of its positions, including those taken in collective bargaining. Illinois’ Governor, similarly opposed to many of these positions, filed suit challenging the constitutionality of the state law authorizing agency fees.

The state attorney general, another respondent, intervened to defend the law, while Janus moved to intervene on the Governor’s side. The District Court dismissed the Governor’s challenge for lack of standing, but it simultaneously allowed Janus to file his own complaint challenging the constitutionality of agency fees. The District Court granted respondents’ motion to dismiss on the ground that the claim was foreclosed by Abood. The Seventh Circuit affirmed.”

The Supreme Court provided the following insights (direct quotes):

“1. The District Court had jurisdiction over petitioner’s suit. Petitioner was undisputedly injured in fact by Illinois’ agency-fee scheme and his injuries can be redressed by a favorable court decision. For jurisdictional purposes, the court permissibly treated his amended complaint in intervention as the operative complaint in a new lawsuit.

2. The State’s extraction of agency fees from nonconsenting public sector employees violates the First Amendment. Abood erred in concluding otherwise, and stare decisis cannot support it. Abood is therefore overruled.

3. For these reasons, States and public-sector unions may no longer extract agency fees from nonconsenting employees. The First Amendment is violated when money is taken from nonconsenting employees for a public-sector union; employees must choose to support the union before anything is taken from them. Accordingly, neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.

Designating a union as the employees’ exclusive representative substantially restricts the rights of individual employees. Among other things, this designation means that individual employees may not be represented by any agent other than the designated union; nor may individual employees negotiate directly with their employer.

Protection of the employees’ interests is placed in the hands of the union, and therefore the union is required by law to provide fair representation for all employees in the unit, members and nonmembers alike.

Employees who decline to join the union are not assessed full union dues but must instead pay what is generally called an “agency fee,” which amounts to a percentage of the union dues. Under Abood, nonmembers may be charged for the portion of union dues attributable to activities that are “germane to [the union’s] duties as collective bargaining representative,” but nonmembers may not be required to fund the union’s political and ideological projects.

In labor-law parlance, the outlays in the first category are known as “chargeable” expenditures, while those in the latter are labeled “nonchargeable.” Illinois law does not specify in detail which expenditures are chargeable and which are not. The IPLRA provides that an agency fee may compensate a union for the costs incurred in “the collective bargaining process, contract administration[,] and pursuing matters affecting wages, hours[,] and conditions of employment.”

Excluded from the agency-fee calculation are union expenditures “related to the election or support of any candidate for political office.”

Applying this standard, a union categorizes its expenditures as chargeable or nonchargeable and thus determines a nonmember’s “proportionate share,”; this determination is then audited; the amount of the “proportionate share” is certified to the employer; and the employer automatically deducts that amount from the nonmembers’ wages.

Nonmembers need not be asked, and they are not required to consent before the fees are deducted. After the amount of the agency fee is fixed each year, the union must send nonmembers what is known as a Hudson notice.  This notice is supposed to provide nonmembers with “an adequate explanation of the basis for the [agency] fee.” If nonmembers “suspect that a union has improperly put certain expenses in the [chargeable] category,” they may challenge that determination.  As illustrated by the record in this case, unions charge nonmembers, not just for the cost of collective bargaining per se, but also for many other supposedly connected activities. Here, the nonmembers were told that they had to pay for “[l]obbying,” “[s]ocial and recreational activities,” “advertising,” “[m]embership meetings and conventions,” and “litigation,” as well as other unspecified “[s]ervices” that “may ultimately inure to the benefit of the members of the local bargaining unit.”  The total chargeable amount for nonmembers was 78.06% of full union dues.

For these reasons, States and public-sector unions may no longer extract agency fees from nonconsenting employees. Under Illinois law, if a public-sector collective-bargaining agreement includes an agency-fee provision and the union certifies to the employer the amount of the fee, that amount is automatically deducted from the nonmember’s wages.  No form of employee consent is required. This procedure violates the First Amendment and cannot continue. Neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay. By agreeing to pay, nonmembers are waiving their First Amendment rights, and such a waiver cannot be presumed.

Unless employees clearly and affirmatively consent before any money is taken from them, this standard cannot be met.

Abood was wrongly decided and is now overruled. The judgment of the United States Court of Appeals for the Seventh Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.”

PDF icon supremecourtdecision.pdf377.96 KB

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