Compulsory Payment of Fair Share/Agency Fees by Public Employees Held Unconstitutional

Public Sector Alert

(by John A. McCreary, Jr., Robert Max Junker and Stephen L. Korbel)

In Janus v. AFSCME Council 31, ___ U.S. ___, No. 16-1466 (2018) the U.S. Supreme Court declared that Illinois’ statutory requirement for nonmembers to pay an “agency fee,” intended to support the collective bargaining related expenses of unions representing public employees, violated the First Amendment. The Janus Court reasoned that because public sector bargaining addressed and affected such matters as the allocation of scarce public resources and the cost of public services, “the union speech at issue in this case [collective bargaining and grievance/arbitration proceedings] is overwhelmingly of substantial public concern,” slip op. at 31. The compulsory payment required by Illinois law, therefore, fell squarely within the Court’s precedent prohibiting governmental compulsion of, or interference with, individual expression. The Court concluded that Illinois’ requirement that nonmembers pay agency fees to unions “violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.” Janus, slip op. at 1. The Court remanded the case to the lower court for further proceedings, which are likely to consist entirely of a damages calculation.

The Janus decision invalidates Pennsylvania’s Public Employee Fair Share Fee Law, 43 Pa.C.S.A. §1102.1 et seq. (Fair Share Law). The Fair Share Law permits public employers and the unions representing their employees to negotiate the payment of “fair share fees” by nonmembers: “If the provisions of a collective bargaining agreement so provide, each nonmember of a collective bargaining unit shall be required to pay to the exclusive representative a fair share fee.” 43 Pa.C.S.A. §1102.3. The “fair share fee” is defined as the “regular membership dues required of members of the exclusive representative, less the cost for the previous fiscal year of its activities or undertakings which were not reasonably employed to implement or effectuate the duties of the employee organization as exclusive representative.” The law requires any public employer that has agreed to fair share to deduct the amount certified by the union from the pay of each nonmember identified by the union. Id. §1102.4(a).

Janus is clear that Pennsylvania’s law does not survive:

For these reasons, States and public-sector unions may no longer extract agency fees from nonconsenting employees. Under Illinois law, if a public-sector collective bargaining agreement includes an agency-fee provision and the union certifies to the employer the amount of the fee, that amount is automatically deducted from the nonmember’s wages. §315/6(e). No form of employee consent is required.

This procedure violates the First Amendment and cannot continue. 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. By agreeing to pay, nonmembers are waiving their First Amendment rights, and such a waiver cannot be presumed. [Citations omitted]. Rather, to be effective, the waiver must be freely given and shown by “clear and compelling” evidence. [Citations omitted]. Unless employees clearly and affirmatively consent before any money is taken from them, this standard cannot be met.

Slip op. at 48.

All public employers in Pennsylvania therefore need to immediately stop deducting fair share fees from the pay of employees who are not members of the union. Further, public employers and public sector unions should anticipate litigation from nonmembers individually or as a class seeking to recover fair share fee payments previously made.

For more information regarding the Janus decision, please contact John A. McCreary, Jr. at 412-394-6695 or jmccreary@babstcalland.com, Robert Max Junker at 412-773-8722 or rjunker@babstcalland.com, or Stephen L. Korbel at 412-394-5627 or skorbel@babstcalland.com.

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