No More Agency Fees for Public Employees

By Meagan L. Thomson

July 19, 2018

For over forty years, public-sector unions could impose what were known as “agency fees” on non-members. The logic was that a union serving as the exclusive representative of a unit of employees is required to represent the interests of all employees, union member or not. So the imposition of agency fees made a certain kind of sense: non-members benefited from a union’s duty to represent them, and in turn, a union could impose an agency fee on non-members, who don’t pay union dues.

The Supreme Court’s recent decision in Janus v. American Federation of State, County, and Municipal Employees, Council 31, No. 16–1466 (June 27, 2018) changed all that. Relying heavily on the concept that the government cannot compel speech, the Supreme Court held that extracting fees from non-member public-sector employees to fund union activities violated the employees’ First Amendment rights.

Earlier decisions had drawn a line between those fees for activities related to collective bargaining, known as “chargeable” expenditures, and funding for a union’s political and ideological activities, known as “nonchargeable” union expenditures. In overturning that precedent, the Janus majority found the line “impossible to draw with precision.”

Post-Janus, public sector unions will need to convince employees to become and stay members in order to generate funding. Absent a voluntary agreement on the part of employees to pay dues, public sector unions could experience a significant decline in revenue. This possibility is referred to as the “free-rider problem.” Essentially, this issue involves employees that the union has a legal obligation to service but that decide not to pay dues.

The Janus dissent highlighted this issue in the public-sector union context: unions must fairly represent all employees in a unit, whether or not they are members. Now that they are no longer required to pay agency fees, why would non-member employees want to fork over union dues if they could receive the same benefit without paying? That’s the challenge facing organized labor in the government context in the wake of this decision.

Disclaimer: This blog post is for informational purposes only. This blog is not legal advice and you should not use or rely on it as such. By reading this blog or our website, no attorney-client relationship is created. We do not provide legal advice to anyone except clients of the firm who have formally engaged us in writing to do so. This blog post may be considered attorney advertising in certain jurisdictions. The jurisdictions in which we practice license lawyers in the general practice of law, but do not license or certify any lawyer as an expert or specialist in any field of practice.

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