Take Two: The Supreme Court Again to Decide the Constitutionality of Public Sector Union “Fair Share Fees”
As we previously reported, on 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. 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.
The Court was poised to hear an appeal by a class of plaintiff teachers in Friedrichs v. California Teachers Association 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 resolved unceremoniously by an equally divided Supreme Court on March 29, 2016, in a single sentence, leaving the decision of the Ninth Circuit upholding the California fair share fee law to stand. This decision upheld the constitutionality of state laws that allow unions to charge public employees who choose to opt-out of union membership fair share fees.
Illinois and twenty 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.
Now, with the appointment of conservative Supreme Court Justice Neil Gorsuch, the fair share fees issue has again come to the forefront with the Supreme Court granting certiorari to hear the case of Janus v. AFSCME on September 29, 2017.
The Janus case emerges from a contentious relationship between Governor Rauner and Illinois public-sector unions. As we previously reported, on February 9, 2015, Governor Rauner signed an Executive Order eliminating fair share fees paid by state employees. In response, on March 5, 2015, the Illinois AFL-CIO and twenty-six labor unions filed suit in state court to block the Executive Order. Simultaneously, Governor Rauner filed suit in federal court seeking a declaratory judgment that fair share provisions were unconstitutional. Later that month, three other state employees intervened in Governor Rauner’s federal lawsuit challenging the fair share fees. Governor Rauner was subsequently dismissed by the district court for lack of standing, but the suit by the intervening plaintiff employees survived. The district court subsequently held that the Abood decision remained valid and dismissed the lawsuit.
On March 21, 2017, the Seventh Circuit Court of Appeals upheld the district court’s decision, finding that until the Supreme Court overrules Abood, state laws may still require public sector employees to pay fair share fees to unions for non-political activities. On September 28, 2017, the Supreme Court granted certiorari to determine the continuing viability of Abood. Oral arguments are expected to take place in early 2018 and a decision is anticipated before June adjournment.
With the appointment of Justice Gorsuch, the Supreme Court has reverted to a conservative majority. Based on increasing criticism of Abood in recent Supreme Court decisions, we anticipate that the Court will likely overturn Abood and prohibit states from enacting laws that require non-union members to pay fair share fees.
We will continue to monitor future developments and will update accordingly.