Supreme Court Invalidates Public-Sector Union Agency Fees: Considerations for Congress in the Wake of Janus

Supreme Court Invalidates Public-Sector Union Agency Fees: Considerations for Congress in the Wake of Janus

Legal Sidebari

Supreme Court Invalidates Public-Sector
Union Agency Fees: Considerations for
Congress in the Wake of Janus
July 20, 2018
On June 27, 2018, the Supreme Court held that “agency fee” arrangements between a union and a
government employer necessarily violate the First Amendment, overruling its 1977 decision in Abood v.
Detroit Board of Education. Agency fee arrangements (sometimes called “fair share” provisions) require
employees to pay a fee to the union designated to represent their bargaining unit (i.e., an exclusive union
representative) even if the employees are not members of that union. The Abood Court had held that these
arrangements are constitutional insofar as the union uses the fees for “collective bargaining activities” and
not “ideological activities unrelated to collective bargaining”—described in later cases as “chargeable”
versus “nonchargeable” expenditures. But this term, in Janus v. American Federation of State, County,
and Municipal Employees, Council 31 (AFSCME), a five-member majority of the Court reversed course,
holding that Abood was “wrongly decided” and that public-sector agency fee arrangements “violate[] the
free speech rights of nonmembers by compelling them to subsidize private speech on matters of
substantial public concern.” The case has potential implications not only for public-sector employers and
workers, including those in more than twenty states that authorize public-sector agency fees, but also for
other forms of compulsory fee arrangements required or authorized by Congress, the states, or other
governmental entities.
The Janus Decision
Justice Alito wrote the majority opinion in Janus on behalf of himself, Chief Justice Roberts, and Justices
Kennedy, Thomas, and Gorsuch. He began by evaluating whether Abood’s countenance of public-sector
agency fee arrangements “is consistent with standard First Amendment principles,” including the
“cardinal constitutional command” that the government may not force individuals to express views with
which they disagree. Justice Alito opined that compelled speech poses at least as great a threat under the
First Amendment as governmental restrictions on speech, and perhaps more so because it “coerce[s]
[individuals] into betraying their convictions.” He reasoned that compelled subsidies raise “similar First
Amendment concerns” to the extent individuals are forced to provide financial support for political and
civic causes that they oppose.
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Justice Alito’s opinion next addressed the proper level of scrutiny to apply to agency fee arrangements.
He rejected the lowest form of scrutiny—rational basis review—as “foreign to our free-speech
jurisprudence,” and considered whether strict scrutiny (the Court’s most stringent test) or exacting
scrutiny (a “less demanding test”) should apply. Justice Alito noted that in a prior decision involving
agency fees, the Court had expressed reservations about whether the exacting scrutiny standard, which
derives from cases involving the compulsory subsidization of commercial speech, sufficiently protected
the constitutional interests at stake in cases involving agency fees, which the Court viewed to implicate
noncommercial speech. Justice Alito ultimately declined to resolve which of the two standards best fit the
context of agency fee arrangements, holding that Illinois’s public-sector agency fee arrangement “cannot
survive under even the more permissive [exacting scrutiny] standard,” under which a compelled subsidy
must “serve a compelling state interest that cannot be achieved through means significantly less restrictive
of associational freedoms.”
Applying the exacting scrutiny standard, Justice Alito reasoned that neither of the governmental interests
undergirding Abood justifies the significant impingement that agency fees work on non–union members’
First Amendment rights. First, in the majority’s view, while the government may have a compelling
interest in preserving “labor peace” by preventing “rivalries” among multiple unions, it need not rely on
agency fees to achieve this end, because a state can authorize exclusive representation (thus allowing the
government employer to bargain collectively with only one entity) without also authorizing agency fees.
Justice Alito cited the exclusive representation without agency fees of millions of public employees across
the federal government and the twenty-eight states that generally prohibit agency fees as evidence that
“‘labor peace’ can readily be achieved ‘through means significantly less restrictive of associational
freedoms’ than the assessment of agency fees.” Second, Justice Alito reasoned that avoiding a “free-rider”
problem—where the union is forced to represent on fair terms employees who elect not to pay dues or
fees to the union but who nonetheless benefit from union representation—does not constitute a
compelling state interest. He noted, by way of analogy, that the government could not constitutionally
compel seniors, veterans, or doctors to pay for the lobbying efforts of private groups that seek to benefit
these populations. The majority also surmised that a union that seeks and secures the position of exclusive
representative enjoys sufficient benefits and privileges to alleviate the free-rider concerns raised in Abood.
Much of the majority opinion was dedicated to rejecting several additional arguments advanced by
AFSCME and the dissent for upholding agency fee arrangements that were not rooted in the Abood
decision. The primary argument in this vein was that Abood is consistent with the Court’s First
Amendment framework for evaluating the constitutionality of government regulations of public employee
speech set forth in Pickering v. Board of Education. Under Pickering and its progeny, if a public
employee speaks “as a citizen on a matter of public concern,” then the employee’s speech is protected
unless the government employer’s interest in “promoting the efficiency of the public services it performs”
outweighs the employee’s interests in commenting on the public matter. Justice Alito reasoned that any
attempt to “shoehorn Abood” into the Pickering framework would result in a “painful fit,” because:
(1) the Pickering line of cases involved discrete employment decisions relating to one employee’s speech
rather than a “blanket requirement that all employees subsidize speech with which they may not agree”;
(2) Pickering applies in the context of speech restrictions rather than compelled speech or subsidies; and
(3) applying Pickering would “substantially alter the Abood scheme” by potentially allowing public
employers to compel their employees to subsidize union speech on political or ideological matters, which
Abood currently forbids as a nonchargeable expenditure.
According to the majority, even if Pickering applied to agency fee arrangements, the Illinois agency fee
arrangement at issue in Janus would not survive Pickering’s test because: (1) the union is speaking, not
for the government employer whose interests are balanced against the employee’s speech under
Pickering, but for the employees themselves; and (2) union speech, particularly in collective bargaining,
affects how money is spent and “addresses many other important matters” of public concern, such as
“education, child welfare, healthcare, and minority rights.” Moreover, Justice Alito reasoned, Illinois’s

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asserted interest in “bargaining with an adequately funded exclusive bargaining agent” is insufficient to
overcome the First Amendment rights of public employees under Pickering.
Justice Alito also rejected what the majority viewed as AFSCME’s “most surprising” argument: an
“originalist defense of Abood” based on assertions that the First Amendment, as originally understood,
did not protect the free speech rights of public employees. Justice Alito found AFSCME’s position
inconsistent with its other defenses of Abood (which implicitly recognized at least some First Amendment
protections for public workers) and reasoned that AFSCME had offered “no persuasive founding-era
evidence that public employees were understood to lack free speech protections.”
Finally, Justice Alito explained why, in the majority’s view, the judicial doctrine of stare decisis—which
generally counsels against overruling prior judicial decisions but “is at its weakest” when the Court
interprets the Constitution—did not require the Court to stand by Abood. Building on several post-Abood
decisions from the Roberts Court that may have presaged the end of public-sector agency fees (for more
information on those cases, see CRS’s original post on Janus), Justice Alito reasoned that none of the five
factors that the Court typically evaluates in deciding whether to overrule a past decision counseled in
favor of retaining Abood:
 Quality of Abood’s reasoning: Justice Alito reasoned that neither Abood nor the two
cases on which it relied “gave careful consideration to the First Amendment.”
 Workability of Abood’s rule: Justice Alito reasoned that “Abood’s line between
chargeable and nonchargeable union expenditures has proved to be impossible to draw
with precision.”
 Consistency with other decisions: Justice Alito described Abood as an “outlier” among
the Court’s First Amendment decisions, particularly in view of “later cases involving
compelled speech and association [that have] employed exacting scrutiny, if not a more
demanding standard” and “cases holding that public employees generally may not be
required to support a political party,” a rule handed down “despite a ‘long tradition’ of
political patronage in government.”
 Developments since Abood: Justice Alito reasoned that the “ascendance of public-sector
unions” and “a parallel increase in public spending” have “given collective-bargaining
issues a political valence that Abood did not fully appreciate.”
 Reliance interests: Finally, while acknowledging that “reliance provides a strong reason
for adhering to established law” in some cases, Justice Alito reasoned that no such
interests justify retaining Abood. According to the majority, agency fees are embodied in
contractual provisions of relatively short duration (i.e., a few years) and public-sector
unions were on notice of the “uncertain status of Abood” because of recent criticism of
Abood from the Court, during which time the unions likely entered into new collective
bargaining agreements or renewed old ones. In addition, Justice Alito rejected the
dissent’s view that the need to rework state laws once Abood is overturned is a sufficient
reliance interest, positing that “[s]tates can keep their labor-relations systems exactly as
they are—only they cannot force nonmembers to subsidize public-sector unions,” in line
with the federal government and twenty-eight other states.
Considerations for Congress
The Janus decision may have significant implications for the roughly 6.7 million state and local
government employees who are represented by unions, many of whom reside in states that currently
authorize the assessment of agency fees for at least some categories of public-sector employees.
Supporters of agency fees have argued that such fees oftentimes are integral to a stable labor relations

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system. For example, a union organizing director has argued that without public-sector agency fees
“many unions will abandon exclusive representation altogether,” and government employers will lose a
contract term “routinely traded for a no-strike clause in most union contracts.” In contrast, some
opponents of agency fee arrangements view the Janus decision as an important victory for the First
Amendment rights of public-sector workers. Like the majority in Janus, they have argued that unions and
states can adapt in ways that will not significantly undermine labor relations.
Regardless of the policy implications of Janus, the decision raises a number of important legal issues for
the courts and policymakers to consider going forward. The Janus Court addressed two potential (albeit
more limited) alternatives to agency fee arrangements that might be of interest to legislators seeking to
allow public-sector unions to collect at least some form of payment from nonmembers. First, the Court
recognized that, as with other constitutional rights, public employees can waive their First Amendment
rights concerning agency fees. Accordingly, while public-sector employers and unions are no longer free
to deduct agency fees from nonconsenting, non–union members, they may collect fees from nonmembers
who have “clearly and affirmatively consent[ed] before any money is taken from them.” Second, the
Court suggested that the First Amendment may allow for more tailored approaches to charging
nonmembers who avail themselves of a particular union service, such as union representation in grievance
procedures. For example, “[i]ndividual nonmembers could be required to pay for that service or could be
denied union representation altogether.” One commentator has advanced another alternative to agency fee
arrangements: state or local laws authorizing or requiring public-sector employers to “subsidize unions
directly” to offset the costs of collective bargaining and mitigate any “free-rider” effects of prohibiting
agency fees.
Although the holding in Janus is limited to public-sector agency fees, the case could bear on future
analysis of First Amendment issues in the context of other types of fees charged by governmental entities,
or even fees collected in the private sector depending on the level of governmental involvement. The
dissenting Justices in Janus reiterated the concerns they had expressed in a prior decision about the effects
of overruling Abood on other Court precedents “involving compelled speech subsidies outside the labor
sphere.” And while the Court has previously extended Abood’s rationale to diverse contexts like
mandated state bar dues (in September, the Supreme Court is slated to consider whether to hear a First
Amendment challenge to mandatory bar associations), public university student activity fees, and generic
advertising assessments on fruit growers, it remains unclear whether such laws can be sustained on
grounds other than Abood.
The implications of the Janus decision for the private sector are even less clear. A key reason the Court
gave for overturning Abood was that the Abood Court “did not sufficiently take into account the
difference between the effects of agency fees in public- and private-sector collective bargaining.” In the
public sector, the Court reasoned, “core issues such as wages, pensions, and benefits are important
political issues,” whereas “that is generally not so in the private sector.” However, the Court did not
completely foreclose a private-sector, First Amendment challenge to agency fee arrangements, noting that
there remains an open question as to whether a private-sector employee could advance a First Amendment
claim based on the theory that a state or federal government’s mere authorization of agency fees amounts
to state action.
In view of these considerations, Janus appears to be a major First Amendment decision that is
likely to have legal implications beyond the realm of public employee unions.

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Author Information

Victoria L. Killion

Legislative Attorney

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