Judgment Day for Public Unions

Public-sector unions are heading back to the U.S. Supreme Court in a case that could deal a devastating blow. The justices agreed on Thursday to hear a challenge to the unions’ fee system in its upcoming term, setting up a major clash on organized labor one year after the Court deadlocked in a similar case.

The Court took up Janus v. American Federation of State, County, and Municipal Employees, Council 31 in its first orders of the 2017-2018 term. The case centers on public-sector unions’ ability to collect what are known as agency fees, also sometimes called “fair-share fees.” It works like this: To fund their operations, these unions largely rely on dues and other contributions from their members. But they can also collect a smaller amount of fees from non-members who nonetheless benefit from the collective bargaining they provide—for example, higher wages and better working conditions.

Twenty-three states allow their public unions to collect the fees. The Supreme Court upheld the system in the 1977 case Abood v. Detroit Board of Education. Under Abood, unions can collect the fees without violating the Constitution so long as they only use the revenue to cover costs directly related to their collective-bargaining work. At the same time, the Court said, the money can’t be used to pay for a union’s political or ideological activities.

Mark Janus, an Illinois government employee backed by multiple conservative organizations, is asking the justices to overturn that decision. He argued in his petition to the Court that the fees amount to compelled speech, requiring him to subsidize political views he does not support in violation of the First Amendment. Because unions play a powerful civic and political role when striking collective-bargaining agreements, he considers this work to be inseparable from a union’s other political or ideological activities.

Organized-labor groups strongly disagree with Janus’s interpretation and opposed efforts to reconsider the 1977 precedent. Unions use the term “fair-share payments” because, they argue, the fees prevent non-members from free-riding on the collective-bargaining services from which they benefit. “At its core, Abood acknowledged that certain labor-relations interests justify the small intrusion on employees’ First Amendment interests that fair-share payments represent,” AFSCME Council 31 told the Court earlier this year.

If Janus prevails and Abood is overturned, the Court’s ruling could effectively act as a nationwide right-to-work law for the country’s public-sector workers, with potentially crushing implications for the funding and resources of the unions that represent them. AFSCME officials told Bloomberg that they estimated in 2015 that only about a third of the workers they represent would pay fees “no matter what,” and that about half were “on the fence” about it. In other words, if given the option to leave the union and avoid paying dues, many could take it and still be supported by collective-bargaining efforts.

“The Janus case is a blatantly political and well-funded plot to use the highest court in the land to further rig the economic rules against everyday working people,” Lee Saunders, the president of AFSCME, said in a statement. “The billionaire CEOs and corporate interests behind this case, and the politicians who do their bidding, have teamed up to deliver yet another attack on working people by striking at the freedom to come together in strong unions.”

The Court’s conservative members, led by Justice Samuel Alito, have also fired off signal flares on Abood in recent years. Writing for the majority in the 2012 case Knox v. Service Employees, Alito called the 1977 precedent “something of an anomaly” for its First Amendment implications. Two years later, in Harris v. Quinn, he criticized the Abood decision’s reasoning at length before concluding it was “questionable on several grounds.” The five-justice majority in Harris effectively telegraphed that they would be willing to overturn Abood in the future.

That opportunity presented itself during the 2015-2016 term when the Court agreed to hear Friedrichs v. California Teachers Association, which dealt with a similar fee system in California’s public schools. The justices heard oral arguments in January 2016 and appeared poised to overturn Abood. But the sudden death of Antonin Scalia the following month left the Court evenly divided between its liberal and conservative members. One month after his death, the justices announced they had deadlocked in a 4-4 split on Friedrichs. The outcome left a Ninth Circuit Court of Appeals ruling intact that hewed to Abood’s reasoning. When the Court reaches a 4-4 split, it leaves no national precedent and functions as if the justices had not agreed to hear the case at all.

The deadlock, and Scalia’s vacancy, essentially placed the future of public-sector unions in the hands of the 2016 presidential election. Justice Neil Gorsuch, who joined the Court in April after his nomination by President Trump, didn’t share his views on organized labor during his confirmation hearing. His track record as a judge on the Tenth Circuit strongly favored business interests over labor. Democrats also criticized Gorsuch during his confirmation hearing for a dissent he wrote in the case Trans Am Trucking v. Administrative Review Board. In it, he argued the law favored a company that fired a trucker for abandoning his vehicle after it broke down during a sub-zero winter night in Illinois.

Now, Janus offers Gorsuch his first opportunity since joining the Court to rule on a major labor case—one in which he would almost certainly provide the decisive fifth vote. Oral arguments have yet to be scheduled in the case; a final decision could come as soon as early next year.