The Supreme Court Case That Could Clobber Public-Sector Unions

A "radical" argument to make the entire United States a right-to-work nation


William Messenger of the National Right to Work Committee asked the Supreme Court today to hold that public employee unions are unconstitutional.

“This is—I'm just going to use the word here, it is a radical argument. It would radically restructure the way workplaces across this country are—are run,” Justice Elena Kagan said from the bench.  Since 1948, she pointed out, states have had the power to enact “right-to-work” laws that limit union power. Was Messenger arguing that “a right-to-work law is constitutionally compelled?”

Messenger didn’t back off. “In the public sector, yes,” he replied.

His clients, home-care providers paid by the state of Illinois with federal-state Medicaid funds, had started out arguing only that they were not “employees” for purposes of coverage by the Court’s previous labor precedents. (Though they get state paychecks, they are selected and supervised by the families they serve.) But after cert was granted, their lawyers, the NRTWC’s legal-defense fund, decided instead to go for the kill shot. They want the court to hold that permitting the unions to collect fees for representing non-members—the so-called “agency fee”—violates the First Amendment.

At least four members of the Court seemed ready to reach that “radical” result. The fate of public employee unionism in the nation seemed, by the end of the argument, to lie in the hands of Justice Antonin Scalia.

In a series of decisions dating back to the 1950s, the Court has repeatedly said that states may, if they wish, allow private and public employers to make these contracts, and a number of states do. Their backers say they make workplace relations easier—the union brings employee concerns to the state, which addresses them in an efficient way. The contracts allow the unions to receive payment only for bargaining expenses. Other things unions do—backing candidates, lobbying legislatures, conducting high-impact litigation—are “non-chargeable” expenses, precisely because they might raise First Amendment “compelled-speech” concerns.

In this case, the state of Illinois in 2003 designated the home-care workers as state employees for the purpose of collective bargaining. The workers then held an official vote, and a majority voted to certify the Service Employees International Union as their “exclusive bargaining agent.”  Non-members, like the plaintiffs in this case, pay a fee that is a set annual “chargeable” percentage of union dues.  The rationale for the agency fees is that non-union employees benefit from the contracts unions negotiate, and thus would be “free riders” if the union could not charge them.  If unions cannot collect fees, soon employees would stop joining, and they would lose their ability to speak for workers.

Here’s a summary of that “free rider” argument:

What is distinctive . . . about the “free riders” who are nonunion members of the union's own bargaining unit is that in some respects they are free riders whom the law requires the union to carry-indeed, requires the union to go out of its way to benefit, even at the expense of its other interests. In the context of bargaining, a union must seek to further the interests of its nonmembers; it cannot, for example, negotiate particularly high wage increases for its members in exchange for accepting no increases for others. Thus, the free ridership (if it were left to be that) would be not incidental but calculated, not imposed by circumstances but mandated by government decree.

That defense was written by Justice Antonin Scalia in a 1991 case called Lehnert v. Ferris Faculty AssociationMuch depends on whether he stands by those words today.

The Court today is much more conservative than it was in 1991. Two years ago, in a case called Service Employees International Union v. Knox, the Court’s conservative majority sent a message to unions: You are a mistake; we will settle with you soon.  Knox called agency fees an “anomaly” under the First Amendment. It was a strong lure for lawsuits like this one.

The argument against public-sector agency fees is this: Since public employees work for government, everything they bargain about is political. Higher wages, better benefits, new work rules—all affect the state budget.  Assessing fees from non-members thus requires them to pay for political speech.

All the expenses, in other words, are non-chargeable.

Scalia appeared skeptical of that argument, but it went over with three of the other four conservatives. (Justice Clarence Thomas, as usual, said nothing.) In essence, the three conservatives seemed to think that everything in government is completely corrupt and unions are just a part of the statist conspiracy—a special interest in league with big-government Democrats.

Justice Alito, the author of Knox, took point Wednesday. “Governor Blagojevich got a huge campaign contribution from the union and virtually as soon as he got into office he took out his pen and signed an executive order that had the effect of putting, what was it, $3.6 million into the union coffers?” Verilli responded that after Blagojevich’s order, a bipartisan majority in the legislature had ratified the decision to classify the home care providers as state employees eligible to unionize.

Alito next argued that union members may not want all these supposed benefits: “Now, what do you say to the young employee who is not very much concerned at this point about pensions, but realizes there's a certain pot of money, and it's either going to go for pensions or it's going to go for salary at the present time[?]”

Paul Smith, representing the union, noted that the workers had gotten hefty raises since voting to form a union. Alito scoffed. “The State can say, this is how much these people are being paid, it's not enough, we want to increase it, we want to increase it by 10 percent, 20 percent, 30 percent, whatever it is.  . . .  Why do they need to have the union intervene here?”

Chief Justice John Roberts seemed obsessed with the idea that this case concerns “Medicaid reimbursement rates.”  (It doesn’t; the home-care providers are paid in part with Medicaid funds, but are hourly employees who get regular paychecks from the state, unlike doctors or other professionals, who get reimbursement from programs like Medicare and Medicaid.) For him, Medicaid has been hijacked by the nanny state—in National Federation of Independent Business v. Sebelius, he wrote that Medicaid “is no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage.”  Now he asked Verilli, “if the union wants to talk about Medicaid rates with the State because they would get a higher wage or could get a higher wage if Medicaid reimbursement was higher, is that within the -- their functioning as a union rather than a political group?” Verilli said that it would almost certainly not be.

Justice Anthony Kennedy suggested that public-employee unions are bad because they deal with government. “Suppose the young person thinks that the State is squandering his heritage on unnecessary and excessive payments or benefits and wages. Is that not a political belief of the highest order?. . .  [Y]our position is that the public employees must surrender a substantial amount of First Amendment rights to work for the government?”

Smith gamely pointed out that the Roberts Court has repeatedly held exactly that—for example, in a case called Garcetti v. Ceballoswhere Justice Kennedy himself wrote that a “government entity has broader discretion to restrict speech when it acts in its role as employer”  and when the speech being limited has the potential to “affect the entity’s operations”—a definition collective bargaining neatly fits.

The four Democratic appointees tried to keep the Court’s attention fixed on a long line of precedent. “You're asking us to overturn a case that's been the law for 35 years,” Justice Stephen Breyer told Messenger. “I guess there are millions of instances in which employees and employers and others have relied on it in collective bargaining.” He suggested that NRTWC wants the Court either to hold that public employees cannot have unions, or that their unions can exist but can’t bargain about wages and benefits. There was a third possibility: “The courts of the United States are going to fashion, using the First Amendment as their weapon, a new special labor law for government employees.”

Messenger seemed indifferent to which of the three the Court picked. And he made it clear that he would be back soon with a case asking the court to invalidate “exclusive bargaining agent” contracts.

But millions of public employees will be watching this case closely.  Their collective-bargaining rights are hanging by a thread.