Decline in Union Membership Expected After High Court Ruling

Supreme Court held that mandatory public-sector union fees are unconstitutional

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What does the future look like for labor unions after the U.S. Supreme Court's landmark decision banning mandatory union fees for public-sector employees? Employment law attorneys told SHRM Online that they anticipate a decline in union membership.

"Unions are a business," said Todd Lyon, an attorney with Fisher Phillips in Seattle and Portland, Ore. "Dues monies are their accounts receivables. So, with less accounts receivables, unions will need to reduce staff. And with less staff, we expect unions to reduce their advocacy by taking less grievances to arbitration and directing less lawsuits."

Since unions may have fewer dues-paying members, there may be a shift in the amount of funds that are allocated toward different union activities, noted David Broderick, an attorney with Littler in Newark, N.J.

For instance, labor unions may have less money available for political activities, such as lobbying and campaign contributions, said Shannon Farmer, an attorney with Ballard Spahr in Philadelphia.

The Supreme Court's decision in Janus v. AFSCME Council 31, U.S., No. 16-1466, puts to rest an issue that has been dangling before the court for years by effectively granting the freedom to public employees to make a personal decision whether to pay union fees, Broderick said. The court's five conservative justices joined the majority opinion and the four liberal justices joined the dissent.  

American Federation of State, County, and Municipal Employees (AFSCME), the union in the case, called on its members to stand together. "Unions will always be the most effective force and vehicle to propel working people into the middle class," said AFSCME President Lee Saunders. "The American labor movement lives on, and we're going to be there every day, fighting hard for all working people, our freedoms and for our country."

Shortly after the Supreme Court's opinion was issued on June 27, Justice Anthony Kennedy announced his retirement. The conservative justice was appointed by President Ronald Reagan in 1988 and is known for his "swing votes." He has sometimes sided with liberal justices, such as on the issuance of marriage licenses to same-sex couples. President Donald Trump now has the opportunity to shape the high court's conservative majority.

Growing Trend

The Supreme Court's decision in Janus continues the trend that is developing in the private sector, where more and more states have passed laws outlawing all forms of mandatory union dues, said Mark Neuberger, an attorney with Foley & Lardner in Miami.

Currently, 28 states have "right-to-work" laws that make it illegal to require workers to join a union or pay related fees as a condition of employment. But some of those state laws affect only the private sector.

[SHRM members-only HR Q&A: What is a "right-to-work" state?]

The high court's ruling will weaken the effectiveness—economically and politically—for all public-sector unions in the remaining states that had allowed compulsory agency fees, Neuberger said. "On a grander scale, for good or for worse, this decision will lead to a further decline in the percentage of the American workforce that is unionized."

Although the case does not involve or directly impact private-sector unions or employers, the Janus decision may result in unions shifting their focus away from public-sector employees toward organizing those in the private sector, Broderick noted. 

Fair-Share Fees

The issue in Janus was whether employees in a bargaining unit could be required to pay "fair-share" or "agency" fees even if they opted not to join the union. Agency fees cover the cost of collective bargaining activities—since unions must represent everyone in the unit regardless of membership—but don't include expenses related to lobbying and other political activities.

In the 5-4 vote on June 27, the Supreme Court held that states and public-sector unions may no longer require workers to pay agency fees, because forcing workers to pay such fees violates their First Amendment rights to free speech and association.

"The decision reinforces the fundamental right guaranteed by the constitution for people to decide which organizations they want to join—and fund—and which they don't," Neuberger said.

Writing for the majority, Justice Samuel Alito Jr. said employees must "affirmatively consent to pay" dues. This means that workers must opt in—rather than opt out—to have dues automatically deducted from their paychecks.

The Society for Human Resource Management (SHRM) believes that every employee has the right to make a private choice about whether to join a union. "Going forward, it will be interesting to see if the Janus decision has any impact on private-sector unions as well," said Patrick Brady, SHRM's congressional affairs director.

Before Janus, nonmembers might be charged about 90 percent of the membership dues without having voting rights or other membership benefits, Farmer explained. Therefore, some bargaining unit members might have opted to pay the extra 10 percent to become full members and have the associated rights, even if they didn't want union representation. So more workers than just those who opted to only pay agency fees may drop out now that fees aren't mandatory, she noted. 

Although Janus may impede unions' financing for collective bargaining efforts, "public unions were not issued a complete death blow," Broderick said. In a footnote, the justices suggested that unions may be allowed to charge nonmembers for representing them in grievance proceedings.

What's Next?

It's impossible to know the precise impact that the Janus ruling will have on labor unions, Farmer said.

Will the decision fuel efforts at the federal level to pass a nationwide right-to-work law for the private sector? "For years, we have seen federal legislation on this very issue that has not been successful," Broderick said. "It is unlikely that the Janus decision will impact this long-standing tension in Congress."

Republicans have historically supported and Democrats have opposed right-to-work laws. Farmer noted that the midterm election might be more telling on the future of right to work than the Janus ruling. 

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