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Non-Union Members Denied Fair-Share Fee Refunds After Janus

Labor & Employment Publications

Earlier this month, the Seventh Circuit joined the consensus across the country, concluding in two separate cases that unions that collected fair share fees prior to the U.S. Supreme Court’s ruling in Janus v. AFSCME, 585, U.S. ____ (2018), in accordance with state law and Abood v. Detroit Bd. Of Educ., 431 U.S. 209 (1977), are entitled to assert a good faith defense to Section 1983 liability. As previously reported, the U.S. Supreme Court’s ruling in Janus v. AFSCME declared fair share fees to be unconstitutional. An in-depth analysis of Janus v. AFSCME can be found here. The Seventh Circuit’s rulings, in effect, preclude non-union members from recovering fair share fees paid prior to the Janus decision.

In Janus v. AFSCME, 2019 WL 5704367 (7th Cir. 2019), a three-judge panel of the Seventh Circuit declined to grant monetary damages to Mr. Janus, finding that AFSCME had a legal right to charge nonmembers fair share fees until the Supreme Court’s ruling in Janus, and, therefore, AFSCME had acted in good faith when it collected those fair share fees prior to that decision. The Seventh Circuit declared that Mr. Janus received all that he is entitled to, which consists of the following: declaratory and injunctive relief, and a future free of any association with a public union. A copy of the Janus II decision can be found here.

That same day, in Mooney v. IEA, 2019 WL 5704368 (7th Cir. 2019), the Seventh Circuit affirmed the dismissal of a lawsuit filed by Stacey Mooney on behalf of herself and a putative class of similarly situated persons, seeking restitution for the fair share fees paid prior to Janus. Unlike monetary damages, which compensate the plaintiff and pay for his/her losses, restitution is aimed at forcing the defendant to disgorge benefits that would be unjust to keep. Ms. Mooney argued that because her fair share fees should never have been deducted, the union received a windfall based on its violations of her constitutional rights. The Seventh Circuit rejected this argument, finding that her claims were exactly the same as those of Mr. Janus, who sought damages flowing from a First Amendment violation. A copy of the Mooney decision can be found here.

Taken together, the Seventh Circuit has effectively diminished the legal pathway to recover fair share fees that were deducted prior to the Supreme Court’s ruling in Janus. To date, every court that has considered the question whether there is a good-faith defense to liability for payments collected prior to the Supreme Court’s ruling in Janus has ruled in the affirmative.