Legal Alerts Jun 28, 2018

What Public Employers Need to Know Now in Wake of Janus Decision

SCOTUS Changes How Public Sector Union Fees are Collected; Governor Also Signs SB 866

The United States Supreme Court overturned years of precedent yesterday and ruled that a public sector employer could not deduct an agency fee, or any other form of payment, to a public sector union from an employee’s pay unless the employee affirmatively consented to the payment. Public agencies will feel an immediate impact by the Janus v. American Federation of State, County, and Municipal Employees decision in terms of how they collect fees — and even how they communicate about such to their employees.
In Janus v. American Federation of State, County, and Municipal Employees, a public sector employee challenged an Illinois statute that required employees who choose not to join the union to still pay an “agency fee” that presumably covers the union’s cost of representing employees during negotiations and other related matters. The Court had previously addressed this issue and ruled that a public sector employee who did not join the union could be required to pay the agency fee, but could not be required to pay any additional amount designed to cover the union’s political and ideological projects, as requiring an employee to pay for those projects would violate his or her First Amendment rights. The employee challenging the Illinois law claimed that the distinction between an agency fee designed to cover the costs of negotiations and additional amounts designed to cover political and ideological projects was irrelevant because the issues the union advanced in negotiations were also political and ideological.
The Supreme Court agreed with the employee. In a 5-4 decision, the Court found that forcing employees to endorse ideas and positions they believed to be objectionable violated their First Amendment right to free speech. In that regard, positions advanced by a union in negotiations often dealt with import issues of public concern, like the public agency’s budget, taxes, the level of services provided and how to prioritize competing issues of public concern. The Court also determined that the union’s justifications for agency fees, that they promote labor peace and avoid the “free rider” risk where employees can enjoy the benefits of collective bargaining without having to pay their fair share of the costs, were insufficient to justify the intrusion those fees imposed on the employees’ free speech rights.
Accordingly, the Court ruled that public sector employers and their unions could no longer require nonconsenting employees to pay an agency fee. Specifically, “neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.”
Given the Supreme Court’s ruling, public employers are likely required to immediately stop collecting agency fees (fair share or service fees). Unions may take the position that employees have already authorized the deduction, as most employees complete an authorization for deduction when electing whether to become members and pay dues, or pay agency fees. However, at the time any authorization was made by employees, employees were unable to opt not to pay fair share fees. Therefore, any authorization may be invalid and inconsistent with the terms of the Janus ruling. Public agencies should carefully evaluate their options and legal risks before taking any actions.
In addition, in response to the decision, Gov. Jerry Brown signed Senate Bill 866. Effective immediately, this bill provides specific provisions on the authorization and revocation of the authorization for dues and fees that must be followed by public employers. Included in the new law are procedures for the authorizations for deductions and revocations, which require submission to the union for administration, and the union then informs the employer. Notwithstanding the new procedures outlined in the bill, the question of whether prior authorization for fair share fees can still be relied upon remains.
Among the other significant provisions of the new law, are the restrictions on “mass communications” to employees. Any “mass communication” sent to employees or applicants concerning their rights to join or support an employee organization, or refrain from joining or supporting an employee organization, require the employer to meet and confer. If the employer and employee organization cannot agree on the communication, the employer must also distribute, at the same time, the employee association’s own mass communication. Mass communications include a written document, or a script for an oral or recorded presentation or message, that is intended for delivery to multiple public employees. Therefore, public employers should not communicate about the Janus decision with employees, unless the procedures described above are followed.
If you have any questions about this opinion or SB 866 and how they may impact your agency, please contact the authors of this Legal Alert listed to the right in the firm’s Labor & Employment practice group, or your BB&K attorney.
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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