What Does the Supreme Court’s Union-Dues Ruling Mean for HR?

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​Now that the U.S. Supreme Court has banned mandatory union fees in the public sector, HR professionals working for certain government employers will need to update their payroll practices.

"States and public-sector unions may no longer extract agency fees from nonconsenting employees," Justice Samuel Alito Jr. wrote for the majority in Janus v. AFSCME Council 31, U.S., No. 16-1466. Prior to the ruling, public-sector workers in certain states could be required to pay "fair share" or "agency" fees even if they weren't union members. Since labor unions must represent the entire bargaining unit regardless of membership, the fees are meant to cover the cost of collective bargaining, contract administration and grievance adjustments—but not political activities, such as lobbying.

The Supreme Court deemed such mandatory agency fees to be a violation of public workers' First Amendment rights to free speech and free association. The justices said that employees who want to continue to voluntarily pay agency fees must opt in—rather than opt out—of having the fees deducted from their paychecks.

[SHRM members-only HR Q&A: What is a union shop?]

It is important to note that only public-sector employers in states without right-to-work laws are affected by the Supreme Court's ruling, said Mark Kisicki, an attorney with Ogletree Deakins in Phoenix.

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. The Supreme Court's ruling makes every state a right-to-work state for the public sector, said Shannon Farmer, an attorney with Ballard Spahr in Philadelphia.



Though the ruling doesn't have a direct impact on the private sector, passing right-to-work laws is a trend states are likely to continue, noted Mark Neuberger, an attorney with Foley & Lardner in Miami.

Here's what affected employers should be doing in light of the decision:

Obtain Written Consent

HR professionals in unionized workplaces are familiar with the dues checkoff—an employee's voluntary authorization to automatically deduct union dues from paychecks. Affected employers will now need to create an opt-in form to obtain written consent from workers who want to continue paying agency fees.

But the Supreme Court's decision left a lot of questions unanswered, noted David Broderick, an attorney with Littler in Newark, N.J. Do checkoffs count as voluntary authorization? Must employers get new authorizations from all workers in the bargaining unit? The safest route is to work with the union to get new authorizations from everyone.

"Public-sector employers may consider contacting their local union representatives to request dues authorization forms and provide written notification that, pursuant to the Supreme Court's recent decision, the employer will be halting all dues deductions for employees without voluntary dues-deduction authorizations," said Stephanie Dodge Gournis, an attorney with Drinker Biddle in Chicago.

If agency fees have already been collected but not yet sent to the union, Kisicki recommended not sending those funds to the union until workers sign opt-in forms.

The Supreme Court's ruling is effective immediately, but, depending on their systems, some employers might not be able to stop payroll deductions immediately. Employers should be prepared to refund any fees that are deducted, Farmer said.

Have a Plan

The federal National Labor Relations Act (NLRA) governs private-sector collective bargaining, but state laws regulate public-sector labor relations. Thus, when updating HR practices involving union-fee deductions, Neuberger recommended that affected public employers first check the applicable state laws that govern collective bargaining.

Next, employers should reach out to the union. Employers and unions can't negotiate over the law—mandatory agency fees are now illegal in the public sector—but the best way to move forward is to try and work something out amicably, Neuberger said.

Employers should also review the collective bargaining agreement (CBA), he said. Some CBAs allow the union to spend 15 minutes during new-hire orientation explaining the benefits of union membership. Union representatives will likely say that they also want the opportunity to talk to workers who pay agency fees, to convince them to join the union or to continue paying fees. This issue might be governed by the CBA, as well as state labor-relations laws, he added.

Affected employers should consider contacting a qualified legal representative to evaluate their rights, responsibilities and obligations, Gournis said.

Address Morale Issues

There may be some workplace tension between workers who support the union and those who opt not to pay fees. Thus, employers need to pay close attention to employee morale issues that this ruling might generate, Neuberger said. "If you have employees who are going around calling people freeloaders, that is going to cause problems."

HR should get out in front of the issues and have open communication with employees, Broderick said.  "Make employees understand what the ruling means and let them know that they have the right to have their voices heard." Employers should consider having a zero-tolerance rule for workplace bullying and should handle any union-related issues in the same way as other bullying, he noted.

The Society for Human Resource Management believes in the fundamental right—guaranteed by the NLRA—of every employee to make a private choice about whether to join a union, according to SHRM's 2018 Guide to Public Policy Issues.

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