Supreme Court Upholds The Constitutionality of Public Sector Union “Fair Share Fees”
March 30, 2016
As we previously reported, in July 2015, the United States Supreme Court decided to hear an appeal of a case from the United States Court of Appeals for the Ninth Circuit regarding the legality of “fair share” fees for public employees. On March 29, 2016, an equally divided Supreme Court issued a one-sentence decision affirming the Ninth Circuit’s decision in Friedrichs v. California Teachers Association, thereby upholding the constitutionality of state laws that allow unions to charge public employees who choose to opt-out of union membership “fair share” fees.
“Fair share” fees are fees that are proportionate to the union’s costs associated with collective bargaining, contract administration and other activities germane to the union’s duties as the collective bargaining representative. Public sector unions cannot use “fair share” fees toward their political activities.
California, as well as Illinois and nineteen other states, currently have state laws that allow unions to collect fair share fees from public employees who choose to opt-out of union membership. The Court was poised to hear an appeal by a class of plaintiff teachers in Friedrichs who challenged the constitutionality of the California law allowing for “fair share” fees. Given recent Supreme Court decisions eroding its precedent in this arena, many predicted that the Court’s conservative majority would overturn Abood v. Detroit Board of Education, its 1977 decision holding that state laws may require public sector employees to pay fees to unions for the union’s non-political work.
However, with the unexpected death of Justice Scalia, the Court was left with a 4-4 split and no tie-breaking vote. Thus, with one vacancy on the Court, this highly contentious case was unceremoniously resolved in a single sentence leaving the decision of the Ninth Circuit upholding the California “fair share” fee law to stand.
Where do we go from here? The Court’s decision in Friedrichs leaves the Ninth Circuit decision in place, but is not itself precedential. Abood remains binding authority throughout the country. The plaintiffs have stated that they intend to file for a rehearing before the full Court whenever Justice Scalia’s seat is filled. Additionally, there are currently several cases similar to Friedrichs that remain pending, including the case of Bruce Rauner v. American Federation of State, County and Municipal Employees, Council 31. The Rauner case has been stayed until July 7, 2016, presumably pending the Court’s decision in Friedrichs. We expect the federal district court and subsequently the United States Court of Appeals for the Seventh Circuit to uphold the Illinois “fair share” law based on Abood’s binding precedent. However, the question that remains is whether the Supreme Court will agree to hear another “fair share” fee case similar to Friedrichs in the near future, and that answer likely depends on who is confirmed to fill Justice Scalia’s vacancy on the Court. Given the 4-4- split decision, the expectation is that the full Court (whenever it is full) will want to resolve the issue.
At this point, it is difficult to predict when Justice Scalia’s seat will be filled. President Obama has nominated Merrick Garland, the Chief Judge of the U.S. Court of Appeals for the District of Columbia Circuit, to fill Justice Scalia’s vacancy. However, Senate Republicans have vowed not to take any action to conduct hearings or confirm the nomination, despite the fact that Judge Garland is universally considered to be a moderate. Therefore, the identity of the Justices voting to grant or deny certiorari on this issue may be very different than those who decided to grant certiorari to Friedrichs.
We will continue to monitor future developments and will update accordingly.