Supreme Court to Hear Oral Argument in Case Involving Union Fees for Public-Sector Employees

by David G. Ritchie on January 11, 2016

Today, the U.S. Supreme Court is set to hear oral argument in Friedrichs v. California Teachers Association, Docket No. 14-915, a case in which the Court will be asked to decide whether “agency shop” arrangements violate the First Amendment rights of public-sector school employees on the premise that a public-sector unions’ activities are inseparably integrated into political speech.

“Agency shop” is a permitted arrangement under California law whereby a union can charge non-members a fee, sometimes called an “agency fee” or “fair share fee” for negotiation and representation services. This fee is typically proportional to the percentage of dues spent on representation services for all of the union’s members, exclusive of any portion that is spent on “political activities”.

Ten teachers are challenging the “agency fee” stating that they should not be forced to pay, when they are not members, particularly, because, they argue, there is no clear way to divide the functions and services provided by the union into representational costs and costs related to political action. Follow this link to access the proceedings and orders in the case, and for other coverage.

The challenge zeroes in on an earlier Supreme Court decision, Abood v. Detroit Board of Education, 431 U.S. 209 (1977), in which the Court decided such fees could be assessed for negotiations, administering contracts, and handling grievances just as is permitted in the private sector. The Court, however, indicated that the same fee could not be used to reclaim costs for the Union’s own ideological or political action efforts.

Since the Abood decision, criticism of it has grown. In Knox v. Service Employees International Union, 567 U.S. 310 (2012), four other members of the Court joined in Justice Samuel Alito’s majority decision in which he expressed concerns over his view that agency fee arrangements infringed on First Amendment rights and in which the Court found that such fees could not be increased independently of the process for establishing such fees on an annual basis and without advance notice to affected employees along with an opportunity to object. Justice Alito linked the compelled payment of the agency fees in that case to compelled speech and compelled association, and that the justification for the arrangement (that it furthers the interests of maintaining labor peace) is something of an anomaly. The Knox case was limited to the issue of increases to the fees without employee assent, and did not reach the overall issues of the constitutionality of the fee when measured against individual First Amendment rights.

More recently, the Supreme Court majority, in Harris v. Quinn, 573 U.S. ___ (2014), declined to extend Abood to cover employees who are home healthcare workers, but not direct, full employees of the state (the Court found that these employees were different in kind from full public-sector workers as the home healthcare workers are hired and dismissed as care providers by the recipients of caregiver services and not by any public agency.) Again Justice Alito wrote for the 5-4 majority, but did not overturn Abood despite opining that it was erroneously decided.

The additional scrutiny of Abood comes to a head under the Freidrichs case, and the Petitioners are asking the Court to finally overturn it, invalidating agency-fee arrangements for public-sector employees. The Petitioners have also advanced an alternative argument that employees should not be required to take steps to “opt-out” of such fees by filing, and instead asking that the Court require the Union to seek affirmative agreement to pay the fees from individual employees.

The case has far-reaching implications for public-sector workers and for labor-relations law generally within the State of California, if an invalidation of agency-fee arrangements results in a significant reduction in fee-generated revenue to public employee unions.