Unions Can Still Charge Fair Share Fees — For Now
GARY M. MESSING
GREGG M. ADAM
Messing Adam & Jasmine LLP
Many readers will have noted the death of United States Supreme Court Justice Antonin Scalia in mid-February. Perhaps no case was more affected by the timing of Justice Scalia’s passing than Friedrichs v. California Teachers Association. As we described in the January 2016 edition of PORAC Law Enforcement News, in Friedrichs a group of dissident teachers in Southern California seemed to be on the cusp of overturning four decades of precedent and persuading a majority of the nine justices to prohibit public employee unions nationwide from collecting fair share fees from employees who choose not to join their union. Of course, the unions would still be required by California law to negotiate the same wages, benefits and working conditions for nonmembers, process their grievances, etc.
PORAC and PORAC LDF were part of a public safety coalition nearly half a million members strong that submitted an amicus curiae (or friend of the court) brief to the United States Supreme Court. Our firm co-authored the brief with the Stanford Law School Supreme Court Litigation Clinic. The brief approached the issue from a uniquely public safety perspective, highlighting how divisive our closely knit workplaces could become if some employees were allowed a “free ride” (be permitted to pay no dues or fees). For a copy of the brief, see https://goo.gl/ORsh5H.
Oral argument in Friedrichs took place on a cold Washington, D.C., morning on January 11, 2016. Following the argument, commentators invariably predicted the demise of a fair share fee system that has stood since 1977, when the Supreme Court decided Abood v. Detroit Board of Education. That decision allowed public sector unions to charge nonmembers an agency fee (commonly called a fair share fee) to cover the costs of negotiating their wages and benefits and enforcing their contracts. Unions were prohibited from charging nonmembers anything attributable to political activity. This way, reasoned the Court in Abood, the First Amendment rights of nonmembers would be protected against infringement. A workable system of agency fee provisions has subsequently been promulgated by many states. However, many states, particularly in the Midwest (most famously, Wisconsin) and the South, have set up so-called “right to work” laws, which prohibit agency fees as a matter of statutory law.
Friedrichs wanted to make “right to work” the law for public sector employees nationwide. In Knox v. Service Employees International Union, Local 1000, in 2012, the Supreme Court struck down a special assessment that SEIU launched to fight Governor Schwarzenegger’s unsuccessful 2005 anti-union propositions for failing to give nonmembers an opportunity to opt out. In that decision, Justice Samuel Alito ruled against SEIU but also ventured far beyond the issue before the Court to make it clear that he thought the entire system of agency fees was unconstitutional. Subsequently, in 2014, in Harris v. Quinn, an Illinois case, the conservative justices went even further, basically inviting a challenge to the entire structure of agency fees.
Friedrichs accepted the invitation and brought a broad challenge to agency fees. The record in the case was threadbare, in part because the plaintiffs wanted to move quickly to the Supreme Court, and because they sought a broad ruling striking down agency fees. As expected, both the Federal District Court and the Ninth Circuit Court of Appeals rejected the challenge, citing Abood. However, when the Supreme Court quickly granted certiorari, especially after oral argument, the strategy appeared likely to succeed.
Then Justice Scalia died, and all bets were off. The eight remaining justices were presumed to be split 4-4.
There was much speculation about what the Supreme Court would do. Perhaps Chief Justice Roberts could be persuaded to rule in favor of stare decisis (the legal doctrine that says disputes should be decided based upon precedent — in this case Abood); perhaps the Court would hold the case over until next term, when a new ninth justice would decide the case; or perhaps the Court would acknowledge the stalemate and wait for the next challenge to Abood, after the presidential election determines the leaning of the Court.
Quickly and somewhat surprisingly, it was the latter option that prevailed. On March 29, 2016, the Court issued a one-sentence opinion upholding the Ninth Circuit’s decision and essentially accepting that Abood remains the law of the land for now.
So, what happens next? First, we understand that Friedrichs may file a petition to reargue the case. However, since this requires five votes, it seems unlikely that such a petition will be granted. Second, of course, comes the election. With the Republican majority in the U.S. Senate unlikely to grant a confirmation hearing to President Obama’s pick to replace Scalia, D.C. Circuit Chief Judge Merrick Garland, the next president will likely pick the next appointee to the Supreme Court. The conventional wisdom expects a Republican president’s nominee to support overturning Abood and vice versa if a Democrat prevails.
So, it is possible that potential new litigants may hold off from suing until the political uncertainties are resolved; however, it is arguably just as possible that other anti-union groups may sue to position themselves to be the next case accepted by a conservative-leaning Supreme Court.
If litigation occurs, unions may be heavily involved. Most MOUs have some type of agency fee provision, and invariably these provisions have “defend, indemnify and hold harmless” clauses to protect employers. So this means that even if an employee sues the employer (which usually makes the agency fee deduction from paychecks), the union will likely have to defend the claim and absorb any damages.
About the Authors
Gary Messing and Gregg Adam of Messing Adam & Jasmine LLP are PORAC LDF panel attorneys. In April 2015, after practicing at Carroll, Burdick & McDonough for many decades, they formed a new law firm predominately representing public safety unions and their members in their labor relations.