On January 25, 2021, the Supreme Court decided that it will not hear several cases that sought to impose stringent financial penalties on public sector unions. All of these cases were concerned with agency fees, the mandatory payments that certain public employees are required to make to unions, which were declared illegal by the Court in 2018.
In the last five years, the United States Supreme Court has decided multiple cases involving agency fees. The most notable of these cases is Janus v. American Federation of State, County and Municipal Employees, Council 31. Janus once again raised the question of whether agency fee agreements in the public sector are constitutional under the First Amendment. Abood v. Detroit Board of Education set precedent in 1977, where the Court upheld a law that allowed a public employer whose employees were part of a union to mandate some of its employees who were not part of the union to still pay union fees. This decision was made because the employer benefited from their agreement with the union.
The Court’s decision was rooted in the belief that the collection of agency fees was not only legal but necessary in order to keep labor peace and avoid “free riders” — employees who would benefit from the union’s bargaining activities but not contribute financially to support the union. In Janus, the Court had to determine whether to overturn Abood. The decision would establish that non-unionized employees would not be required to pay a fee to cover the cost of a union’s contract. In a 5-4 vote, the Court reversed its ruling in Abood, holding that taking agency fees from a nonconsenting public employee violated the First Amendment. The Court explicated that both labor peace and the free rider problem could be mitigated through means other than restrictive and overreaching agency fees. Dissenting Justices’ arguments largely relied on the principle of stare decisis — the legal principle of determining points in litigation according to precedent — and that the precedent of Abood should not be overturned. However, the dissenting judges also explained that labor peace and free riders were best tended to using agency fees.
With a precursory glance over the main points of this case, it is easy to assume that agency fees are a violation of the First Amendment and that these public employees are being fined for their choice of profession. However, a deeper understanding of the purpose of agency fees and their effectiveness for both union members and nonmembers reveals why this surface level analysis leads to flawed reasoning surrounding the constitutionality of agency fees.
Moreover, it is pertinent to note that the Court considered agency fees as employees’ money because those fees are technically paid out of employees’ compensation. While the money that becomes fees may appear to come from an employee’s paycheck, it is also recorded as a mandatory payment on the expense side of the same paycheck. This is simply an accounting formality obligated by labor law. When contemplating the purposes of the First Amendment, agency fees are in fact a payment made by employers to unions. When considering union fees as payments from the employers themselves, it is much more difficult to argue that such fees are unconstitutional. In a similar vein, taxes levied on the American people are not necessarily agreed upon by every taxpayer, but ideally each dollar sent to the government is used for the betterment of the lives of everyone in the U.S. For example, when taxpayers pay for upgraded infrastructure to their cities like roads, sewer systems, and powerlines, these are not upgrades that every taxpayer has asked for but are generally considered beneficial for society. When applying the same logic to these union fees, their constitutionality becomes much more apparent.
Furthermore, the benefits of having a union in place are enhanced by the implementation of agency fees, a foundational reason for considering agency fees as property of the employer versus property of the individual employees. Unions were specifically created to increase the bargaining power of workers by giving them an organized outlet to negotiate collectively, and with efficacy, rather than as individuals. Unionization increases the power workers hold while bargaining with their employers, allowing them to negotiate higher wages than they would have been able to individually. Agency fees are a small price to pay for ultimately greater financial security.
Categories: Domestic Affairs