Leech Tishman

Supreme Court to Revisit Decades-Old Union Fee Issue

By: Robert F. Schultz, Esq.

On January 11, 2016, the United States Supreme Court heard oral arguments in Friedrichs v. Cal. Teachers Ass’n, U.S. No. 14-915. At issue in Friedrichs is whether requiring public-sector employees to make financial contributions in support of a union, of which they are not members, violates those employees’ rights to free speech and association. At stake in Friedrichs is the validity of a decades-old Supreme Court decision and a potentially large source of revenue for public-sector unions.

Background on Agency Shop Arrangements: Abood

The arrangement highlighted in Friedrichs, which requires non-members of a public-sector union to pay fees to the union, is often referred to as an “agency shop” or “fair share” agreement. In Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977), the Supreme Court addressed a Michigan statute that permitted such a labor contract provision, whereby every employee represented by a union, even if not a member, had to pay to the union a fee equal in amount to union dues. Abood and the other plaintiffs challenged the required fees and argued that the use of those fees for the union’s political and ideological activities, with which the plaintiffs did not agree, deprived them of their First Amendment rights. In determining that the fee requirement did not violate the employees’ Constitutional rights, the Court drew a distinction between union expenditures for the expression of political views and expenditures for collective bargaining activities. Relying on this distinction, the Court held that requiring fees from non-members did not violate the Constitution so long as those fees were used to finance only collective bargaining, contract administration and grievance adjustment.

The Court’s decision in Abood left the states free to decide whether or not to allow agency shop agreements. Twenty-five states have prohibited these agreements, while the remainder, including California, allows them.

Revisiting Agency Shop Agreements: Friedrichs

In Friedrichs, the case currently before the Court, the plaintiff employees argue that Abood should be overruled and all public-sector agency shop agreements invalidated under the First Amendment. The state of California and the teachers’ union contend that the state has important interests in being free to manage the public workplace and in dealing with a single bargaining agent – both interests they believe will be negatively impacted should public-sector employees not be required to subsidize the cost of collective bargaining through the use of agency shop arrangements.

In addition to the Constitutional issues, the Court is also concerned with its precedent. The Abood decision is nearly 40 years old, and various other decisions of the Court (along with countless public-sector employers and unions) have relied on it in enforcing similar arrangements.

Potential Impacts of Friedrichs

If the plaintiffs in Friedrichs succeed and Abood is overturned, states will no longer be able to allow agency shop agreements for public-sector employee unions. A potential long-term impact would be that a significant portion of public employees now required to pay fair share fees will elect to withhold those payments. If even one-half of the employees no longer pay into the unions in the twenty-five states that now permit required payments, the economic and political power enjoyed by public-sector unions will be substantially reduced.

The Court is expected to render a decision in Friedrichs before the end of its term in June.

Robert Schultz is Counsel in the Employment Practice Group in Leech Tishman’s Pittsburgh office. He has over 35 years of experience in labor-related legal representation and is available to counsel your organization on the use of agency shop agreements in light of the Supreme Court’s forthcoming decision in Friedrichs v. Cal. Teachers Ass’n. Robert can be reached at 412.261.1600 or rschultz@leechtishman.com.

Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in alternative dispute resolution, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, safety & toxic torts, estates & trusts, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Los Angeles, New York and Wilmington, DE. For more information call 412.261.1600 or visit us at www.leechtishman.com.

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