Private-Sector Employers Unaffected by the Supreme Court’s Janus Decision on Union Dues
Private-Sector Employers Unaffected by the Supreme Court’s Janus Decision on Union Dues

While organized labor was dealt a major setback by the Supreme Court in Janus v. AFSCME, the landmark ruling does not impact the legality of union security clauses in the private sector.    In Janus, the Supreme Court held that the state’s extraction of union dues from non-consenting public employees violates the First Amendment.  The Court overruled Abood v. Detroit Board of Education, 431 U.S. 209 (1977), which held that state and local governments could lawfully require public employees to pay “agency fees” as a condition of continued employment.  Agency fees are intended to cover costs related to contract negotiation, grievance processing, and contract administration, but are meant to exclude costs related to union lobbying and political activism.  Following Janus, public employees can no longer be compelled to contribute any dues to unions, including so-called agency fees.

Public Sector Collective Bargaining is a “Political Process” of “Public Concern”
In Janus, the Court held that the private-sector “agency payer” model is not constitutional when applied to public sector employees.  The Court explained that, unlike in the private sector, collective bargaining in the public sector is inherently a political process.  This is because, in the public sector, local elected officials approve collective bargaining agreements.  In addition, wages, pensions, and benefits for public employees affect government finances and are therefore matters of important public concern.  In light of these factors, the Supreme Court held that state and local laws requiring public employees to pay agency fees to unions constitutes “compelled speech” that violates the First Amendment.  The Court observed that these political or public concerns may not be present in private-sector collective bargaining. 

The NLRA Allows Union Security Clauses For Private Employers, Unless Prohibited By State “Right to Work” Law
However, the Janus decision is expressly limited to public-sector employers.  For private-sector employees, the duty to pay union dues as a condition of employment remains governed by the text of the National Labor Relations Act (“NLRA”), and by federal court decisions that remain unaffected by Janus.    The NLRA allows individual states to pass “right to work” legislation prohibiting the obligation to pay union dues as a condition of employment.  Currently, 28 states have passed right-to-work legislation.  For states without right-to-work legislation, the NLRA allows unions and employer to enter into union security agreements that require employees to pay union dues as a condition of their continued employment.  In Communications Workers of America v. Beck, 487 U.S. 735 (1988), the Court held that private sector employees cannot be compelled under the First Amendment to maintain union membership, or to contribute financially to a union’s political activities.  However, private sector employees can be compelled to pay agency fees, which cover contract negotiations, grievance processing, and contract administration, as a condition of employment.

Seeds For A Future Legal Challenge In The Private Sector?
In the wake of Janus, we can expect that there will be efforts to expand First Amendment protections for private-sector dues payers.  In order for these efforts to be successful, the Supreme Court would need to overrule decades of case law upholding union security clauses limited to agency fees in the private sector.  It will no doubt take many years for challenges to mandatory union security clauses in the private sector to filter through the court system.

A Weakening Of Unions Across The Board
There has been tremendous growth in public sector unionization in the past 25 years.  This rapid growth stands in stark contrast to a dramatic decline in private sector unionization in the same time period.  Many unions represent both public employees and private employees, often within the same union local.  Certainly, unions have used increased dues obtained from public employees to offset dues losses in the private sector, and also to fund organizing efforts in the private sector.  Likewise, unions have used dues obtained from public employees to engage in political lobbying and to pass local and state legislation that affects private employers.  Janus will undoubtedly diminish the flow of public employee funds into union coffers.  The loss of funding may serve to weaken union strength across the board, including for private employers.

Specific Guidance For Private Sector Employers
Unionized employers in the private sector should understand that Janus does not impact their labor contracts.  Private sector employers must continue to abide by existing union security agreements.  However, the publicity of the Janus decision may encourage more employees in the private sector to exercise Beck objector rights, cancel their union membership, or to rescind their dues check-off authorizations.  If this happens, employers should understand that there are specific rules and time periods for when employees can terminate their union membership or rescind their dues check-off authorizations.  Employers should consult with their legal counsel for specific guidance.  In addition, private sector employers should be on the lookout for further litigation efforts to expand Janus, either in whole or in part, to private-sector employment.

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