The Court won’t raid the treasuries of public sector unions — at least not yet.
The Supreme Court announced on Monday that it will not hear a bloc of several cases that threatened to impose dire financial penalties on public sector unions. The cases all involved unions that charged fees to non-members that were legal at the time the unions collected those fees, but were later declared illegal by the Supreme Court in Janus v. AFSCME (2018) (we’ll call that case “Janus I”).
It’s easy to overread the significance of the Court’s decision not to hear a particular case. When the Court denies review of a lower court’s decision, that does not necessarily mean that a majority of the Court agreed with that decision.
Nevertheless, the anti-union cases that the Court decided not to hear on Monday were only the most recent in a train of cases targeting the finances of public sector unions. The Court’s decision to turn these latest cases aside suggests that, even with a 6-3 Republican majority, a majority of the justices believe they have done enough to prevent unions from collecting fees that the Court’s right flank finds objectionable.
The arguments presented by the plaintiffs in these cases, one of which was a continuation of the Janus case itself (we’ll call that one “Janus II”), were quite radical. As a federal appeals court explained in one of these cases, “the Rule of Law requires that parties abide by, and be able to rely on, what the law is,” not what the law may become in the future.
And yet the plaintiffs in these cases sought to impose potentially debilitating financial consequences on unions that complied with the law — only to have the Supreme Court change the law after the unions complied with it.
Janus v. AFSCME, briefly explained
The 2018 Janus case involved what are alternatively referred to as “agency fees” or “fair share fees” — fees that unions collect from non-members, to reimburse the union for services provided to those individuals.
By law, unions must represent every worker in a unionized shop, regardless of whether each individual worker joins the union. If a union contract provides that every worker gets a 5 percent raise, for example, that raise must go to everyone in the shop, including workers who choose not to join the union.
This arrangement creates a free-rider problem. If workers receive all the benefits negotiated by a union without having to pay to join the unions, then many workers will elect not to join the union. If too many workers make that decision, the union will be starved of the funds that it needs to operate and will collapse — and then no one will receive the benefits of unionization.
According to a 2021 paper by the Economic Policy Institute’s Larry Mishel, “the union wage premium — the percentage-higher wage earned by those covered by a collective bargaining contract — is 13.6 percent overall.” So workers typically are better off if they work in a unionized shop, even if they have to pay a small percentage of their wages as fees to the union.
Agency fees are a common solution to the free-rider problem. Often, when a union negotiates a contract with an employer, that contract will include a provision allowing the union to charge such fees to non-members, which reimburse the union for the cost of providing its services to those non-members.
Many states, however, have so-called “right-to-work” laws, which prohibit agency fees. In Janus I, the Supreme Court held that public-sector unions are forbidden from charging such fees anywhere in the country. So public-sector unions are now under a “right-to-work” regime even in states that reject such laws.
Janus I also marked a major shift in the Supreme Court’s caselaw. In Abood v. Detroit Board of Education (1977), the Court held that public-sector unions could lawfully charge agency fees to non-members. So, from 1977 until 2018, agency fees weren’t just legal, they were legal because the highest Court in the land said they were legal. Janus overruled Abood.
The plaintiffs in Janus II sought agency fees that unions collected while it was still legal to do so
The Janus II case, and the several related cases that the Supreme Court announced it would not hear on Monday, all involved agency fees that public-sector unions collected prior to the decision in Janus I. Thus, when the unions collected these fees, Abood was still good law, and the unions were acting entirely lawfully.
Lower courts have largely rejected claims brought by anti-union plaintiffs claiming that unions must reimburse the fees they collected prior to Janus I. As the United States Court of Appeals for the Seventh Circuit explained, until Janus I was decided, public-sector unions “had a legal right to receive and spend fair-share fees collected from nonmembers as long as it complied with state law and the Abood line of cases.”
Unions, the Seventh Circuit held, have an obligation to follow “what the law is, rather than what the readers of tea-leaves predict that it might be in the future.”
The Court’s action in the anti-union cases on Monday suggests that the Supreme Court will not disturb the dominant view among the lower courts, and that unions can heave a sigh of relief for the time being.
That said, there is no guarantee that this issue is gone for good. It is still possible that a lower court will break with the consensus view — that Janus I should not be applied retroactively to agency fees collected while Abood was still good law. And there is still at least one more case pending before the justices that presents the question of whether Janus I applies retroactively (the Court likely took no action on that case on Monday because additional briefing in that case is not due until late February).
But the Court’s latest action is a sign that there are, at least, some limits to how far it is willing to go in its decisions targeting unions.
Author: Ian Millhiser