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U.S. Supreme Court Rules In Janus V. AFSCME That Agency Fees Violate The First Amendment and SB 866 Is Signed Into Law In Response

Client Alert

Introduction

On Wednesday, June 27, 2018, the United States Supreme Court issued its decision in Janus v. AFSCME ((2018) 585 U.S. __) declaring that union “agency fees” violate the First Amendment and, consequently, are unconstitutional. The Court’s decision will significantly impact labor law precedent and recognized employee organizations because non-union workers/members can no longer be forced to pay fees to public sector employee organizations/unions.

The Decision

Janus, an employee at the Illinois Department of Healthcare and Family Services, asked the court to overrule a longstanding Supreme Court decision which found that public sector unions could require employees affected by their negotiations to pay agency fees. Janus argued that his monthly fee to the AFSCME union representing his bargaining group was unconstitutional because the fees infringed on his First Amendment rights, and that, in the case of public employees whose contract negotiations are with the government, the fees were a form of political advocacy.

The U.S. Supreme Court agreed with Janus' argument and concluded that requiring public employees to pay agency fees violates free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.  A union cannot require a nonmember to pay an agency fee or any other payment, unless the employee affirmatively consents to pay and knowingly waives their First Amendment rights.  Such a waiver must be freely given and shown by "clear and compelling" evidence. (Slip Opinion, p. 48.)

The Court rejected the contention that agency fees should be upheld because they promote an interest in “labor peace,” by opining that unions are still able to effectively serve as representatives of public employees in the federal government and in the twenty-eight states that currently prohibit agency fees. (Slip Opinion, pp. 11-12.)  Moreover, the Court held that avoiding the risk of “free rider” nonmembers is not a compelling state interest; and even if it were a compelling interest, avoiding free riders can be achieved through less restrictive means than the imposition of agency fees. (Slip Opinion, pp. 13-18.) 

What the Decision Means for Public Agencies

Janus is now the prevailing law in the country and, therefore, public agencies and unions are immediately prohibited from collecting agency fees on non-union employees. This effectively makes California a “right to work” state, meaning no person can be compelled, as a condition of employment, to join or not to join, or to pay dues to a union.  Accordingly, any agency resolutions or collective bargaining agreements relating to union dues and agency fees must be reviewed to determine which provisions have been invalidated or otherwise impacted by the Janus decision, which will require meet and confer and, ultimately,  amendment in conformance with Janus.

Impact of SB 866

On June 27, 2018, Governor Brown signed into law Senate Bill 866, which is effective immediately. This bill is clearly a direct response to the anticipated Janus decision.  SB 866 amends existing and creates new state law that: (1) makes the union, not the public agency, responsible for determining member consent to union membership, and the agency must honor authorizations for dues deductions provided by the union; (2) regulates a public agency’s ability to send a “mass communication” to employees about their rights to join or support, or refrain from joining or supporting unions; (3) prohibits a public agency from deterring or discouraging employees and applicants for public employment from becoming or remaining members of unions; and (4) requires a union to indemnify a public agency for claims of employees for improper deductions the agency made in reliance on authorizations provided by the union.  The new law impacts a public agency’s ability to communicate with employees about the Janus decision. If a public agency desires to send a mass communication to employees concerning the Janus decision, they will be required to engage in the meet and confer process with the affected union. If the agency and union cannot agree on the contents of the communication, then the parties must follow the alternate process of distributing two sets of mass communication: one from the agency and one from the union.

What are the next steps?

Moving forward, public agencies should take the following actions:

  1. Notify the impacted employee organizations regarding the immediate cessation of deductions of agency fees, and meet and confer with the employee organizations regarding the negotiable effects of this decision, including but not limited to, the identity of agency fee payers and what to do with fees still on hand or otherwise not transmitted.
  2. Amend collective bargaining agreements to comply with Janus by including language that explicitly states that only union employees will be required to pay union dues, and nonunion employees will not be required to pay agency fees unless a waiver form is signed, acknowledging that they are knowingly and affirmatively consenting to pay agency fees and waiving their First Amendment rights.
  3. Discuss with employee organizations the implications and requirements of SB 866 regarding notice of employee orientation meetings; obligation to meet and confer about the agency’s mass communication to employees on the rights to form and join employee organizations; and the agency’s initial response to allowing employee organizations to assume control over the revocation of fees.
  4. Defer questions from employees regarding membership changes, cancellations, and other inquiries to employee organizations.
  5. Be prepared to address new employee organization issues regarding representation rights and potential fees to be charged non-union members.

For further information, please contact Colin Tanner or Pam K. Lee from Aleshire & Wynder, LLP’s Labor and Employment Law Practice Group at (949) 223-1170.

Disclaimer:  Aleshire & Wynder, LLP legal alerts are not intended as legal advice.  Additional facts or future developments may affect subjects contained herein.  Please seek legal advice before acting or relying upon any information in this communication.