Mindful of Janus, California has fought to protect public unions

OCTOBER 2017 TERM

On Wednesday, the U.S. Supreme Court issued its long awaited decision in Janus v. American Federation of State, County, and Municipal Employees, Council 31, 2018 DJDAR 6308 (June 27, 2018). As widely predicted, the court held that "agency shop" provisions in labor contracts violate the First Amendment and are now invalid.

"Agency shop" refers to arrangements requiring all employees in a bargaining unit to pay a fee, regardless of whether the employee is a member of the union. For local California agencies covered by the Meyers-Milias-Brown Act, "agency shop" is defined as: "An arrangement that requires an employee, as a condition of employment, either to join the recognized employee organization or to pay the organization a service fee in an amount not to exceed the standard initiation fee, periodic dues, and general assessments to the organization."

In 1977, the Supreme Court upheld agency shop provisions against a First Amendment constitutional challenge in Abood v. Detroit Board of Education. The First Amendment issues stem from the fact that agency shop arrangements effectively force employees to contribute to labor organizations that engage in political and other union activities. In upholding the arrangements, the Abood court reasoned that the "service fees" imposed in agency shop arrangements are fair because all employees in a bargaining unit benefit from the union's work whether or not they are dues paying members. When service fees are imposed and calculated to be attributable only to activities that benefit all employees in a bargaining unit -- such as contract negotiations and processing grievances -- then the compulsory fee arrangements arguably do not violate the First Amendment.

Abood was challenged earlier in Friedrichs v. California Teachers Association, but the Supreme Court split 4-4 after Justice Antonin Scalia died suddenly. 136 S. Ct 1083 (2016). With the appointment of Justice Neil Gorsuch, it was predicted that a subsequent challenge would result in overturning Abood in a 5-4 decision.

The predictions have come true. Janus now overturns Abood, thus invalidating agency fee arrangements throughout the United States.

The Janus Decision

Janus presented one key question to the Supreme Court: "Should Abood v. Detroit Board of Education, 431 U.S. 209 (1977), be overruled and public sector agency fee arrangements declared unconstitutional under the First Amendment? " In a 5-4 opinion authored by Justice Samuel Alito, the Supreme Court answers "yes."

The opening paragraph of the opinion provides a clear summary: "Under Illinois law, public employees are forced to subsidize a union, even if they choose not to join and strongly object to the positions the union takes in collective bargaining and related activities. We conclude that this arrangement violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern."

The Supreme Court's conclusion is sweeping: "States and public-sector unions may no longer extract agency fees from nonconsenting employees. ... 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."

Justices Sonia Sotomayor and Elena Kagan filed dissenting opinions.

Janus expressly reverses the holding in Abood, and remands the case back to the lower courts.

California Laws

Given the make-up of the Supreme Court, labor unions have long understood the risk that Abood might be overruled, thereby shrinking their revenue stream. In an effort to mitigate against the financial impact of stopping mandatory service fees, labor has promoted, and the California Legislature has passed, three different pieces of legislation.

On June 27, 2017, Gov. Jerry Brown signed Assembly Bill 119, which guarantees access of union representatives to all public-sector new employee orientations. This bill did not change any requirements for union membership but ensured that public-sector unions had a captive audience to solicit memberships from new employees. Among other things, AB 119 provides that labor unions have mandatory access to new employee orientations, including the right to a segment of the orientation agenda.

On Oct. 7, 2017, Brown signed Senate Bill 285. This bill flatly states that "a public employer shall not deter or discourage public employees from becoming or remaining members of an employee organization." Cal. Gov. Code Section 3550.

And most recently, the Legislature passed SB 866, a bill that was crafted behind closed doors and which arose only at the very end of the legislative session. SB 866 is currently on Brown's desk and he is expected to sign it. All of its provisions would go into effect immediately. Among other things, SB 866 extends and expands to additional public employer sectors the requirement not to deter or discourage union membership to job applicants; and requires bargaining before public employers may send "mass communications" that discuss encouraging or discouraging the right to join labor organizations.

Conclusion

The ramifications of Janus remain to be seen, but it is not a positive development for public sector labor unions. Although the constitutional issues will continue to be debated, Janus is now the law. Agency shop is effectively dead, and public agencies must now dismantle fee paying arrangements.