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Janus argument reveals battle will be tough for the Court

By Pamela Wolf, J.D.

It’s hard to say which stakeholders are sitting on the edge of their seats the most awaiting the Supreme Court’s final word on whether public-sector unions will be permitted to collect so-called “agency” or “fair-share” fees, as they are alternative called, going forward. Janus v. American Federation of State, County, and Municipal Employees, Council 31 (16-1466), argued before the Justices on February 26, holds many implications, most directly for public-sector unions, but also for private-sector unions. Both government and private employers are also watching carefully—undoubtedly looking for a ruling that would greatly diminish the already declining power of unions. Judging from oral arguments, the Court will have a hard time with this decision, likely dividing sharply, or coming up with a compromise with which most of the Justices can live. Justice Gorsuch was notably silent during the arguments. Most observers believe that the Court will rule against the public-sector unions.

Central to the outcome is the question of whether the fees amount to compelled speech in violation of the First Amendment for those who do not wish to join or support the union. Conversely, there is the question of whether employees who benefit from a union’s activities should be permitted to skip paying any union fees at all and become “free riders.”

Time to dump precedent? The case also invites the Justices to overturn the Court’s 1977 decision in Abood v Detroit Board of Education, which held it constitutional for a government to compel employees to pay such fees to an exclusive representative for speaking and contracting with the government over policies that affect their profession. The Court’s June 2014 in Harris v. Quinn questioned the foundation for the precedent established in Abood, but let it stand in the face of a case involving workers who were not “full-fledged” state employees and thus to whom Abood did not apply. Notably, Harris involved the Illinois Public Labor Relations Act (PLRA), which is also at issue in Janus.

The Court had an opportunity to resolve this question last term, but with a vacancy on the court still remaining after Justice Scalia’s death on February 13, 2016, there was a tie among the Justices in Friedrichs v. California Teachers Association, leaving the issue for another day. And the federal government has flipped its position on the question under the Trump Administration. The brief supporting the employee in Janus v. American Federation of State, County, and Municipal Employees, Council 31 (16-1466), takes the opposite position from DOJ’s amicus brief filed two years earlier in Friedrichs v California Teachers Association (14-915) The DOJ now argues that it is time to overturn Abood.

Why are union fees different? Almost as soon as he got started in his argument on behalf of Janus that Abood should be overruled, Justice Ginsburg queried William Messenger (National Right to Work Legal Foundation, Inc. (NRTW)) on three things: (1) student activities fees and whether they are different from agency fees, and why; (2) mandatory bar association payments; and (3) agency fees compelled by state law in the private sector.

Messenger asserted that student fees and the bar association fees are distinguishable for reasons, as stated in Harris, that are justified by different interests. “The state bar associations are justified by the state’s compelling government interest in regulating the practice of law before its courts,” he explained. “The student association fees are justified by … a university’s compelling interest in setting up a viewpoint-neutral forum for speech. And then, with respect to the private sector cases, they hinge on a question of state action.” According to Messenger, only public sector union fees are being challenged. In the private sector, there would be a question of whether state action applied and thus whether the rule of Janus would apply to that case.

Government as employer. Justice Sotomayor quickly intervened, saying she thought “we had always recognized that the government as employer had a compelling interest in regulating its employment decisions. We permit the government to fire people, deprive them of all money, not just a fair share fee, but deprive them of any income if they speak outside of the government’s approved policy messages or messages generally.” She noted that, if we can permit the government as an employer to have a compelling interest to something so dramatic as firing somebody, why can’t that “interest in having workplace peace, workplace routine in which issues are decided in a … collective way,” be a compelling interest comparable to the others?

The government’s interests in restricting speech do not apply to compelling support forspeech, according to Messenger, and they often cut the opposite way. He pointed to the government’s interest in the Hatch Act in restricting political activities, which he said was “in preventing the politicalization of the workforce and preventing government employees from being organized into a political machine.” Those same interests do not justify forcing people to support the speech of an advocacy group, Messenger said.

Sotomayor called it no different than forcing student participation in fees to provide a public forum or fees to have a bar association regulated. “These are all forcing the subsidization of private interests for a government purpose,” she observed. “And the government purpose here is labor relations and labor peace.” Sotomayor said that Messenger still had not told her why this is not a compelling state interest.

Least restrictive, narrowly tailored? According to Messenger, the Court does not have to reach that question “because agency fees are not a least restrictive means to satisfy any labor peace interest the government may have in listening to one union.” In Abood, the Court explained that the government’s labor peace interest was in listening to one union instead of several unions.

Returning to her student participation and bar association fees analogy, Sotomayor noted that, in that scenario, there may be all sorts of alternative means, such as not permitting students who don’t pay to participate in activities because of the price of being permitted to participate, or state run bar associations. But the question, she said, is whether the alternative that the state has chosen is “one that is well-fitted to … its need,” whether it is “well-tailored, narrowly tailored.” The Justice said she didn’t see how that can be done here, given the interests of the government in ensuring that unions represent everybody.

Free-rider problem. Messenger opened the door to Justice Sotomayor’s inquiry about “free riding” when he asserted that an agency fee is not necessary for exclusive representation. He called exclusive representation a “valuable benefit for a union” that gives it “extraordinary powers to compel the government to listen to it at the bargaining table, to not listen to other advocacy groups.”

“But it drains it of resources that make it an equal partner in the marketing setting,” Justice Sotomayor suggested. “If you are right, that it’s not only the people who are opposed to the union but also union supporters who may think I’d rather keep the money in my own pocket, and then you’ll have a union with diminished resources, not able to investigate what it should demand at the bargaining table, not equal to the employer that it faces.”

Messenger argued that the duty to represent non-members does not raise costs, which prompted Justice Ginsberg observer that individuals who do support the union might want to take the opportunity not to have to pay agency fees, but not for ideological reasons. Messenger asserted that the reason doesn’t matter because the First Amendment bars the government from probing into subjective beliefs.

The NRTW attorney acknowledged, however, that union resources could be diminished by people exercising their right not to subsidize the union, but called it “a perfectly acceptable result.”

Why First Amendment protection? Justice Sotomayor queried why First Amendment protection would attach here, when generally, in the government employment setting it would not where terms and conditions of employment are at issue. Messenger said it is a matter of scale. Here you have AFSCME “bargaining over issues that affect hundreds of millions of dollars and affect thousands of employees across the board,” he explained, saying it’s the scale of it that makes it political.

Sotomayor asked if that changes whether the union asked for something, or the employees directly asked for it, though it’s still a work-related demand. She gave the example of employees who come into a public auditorium as a group (with permission to be there) and each stand up and say they want higher wages. Is that still an employment issue, or is it now a public policy matter because everyone wants it and they have now articulated it, she queried.

Messenger said it would move toward a matter of public policy if it was not already there. He supplemented his earlier contention, saying that this would be a matter of scale and subject. The subjects–wages health insurance, the many ways in which the government operates–”are very important both to the public fisc and to the operation and delivery of services,” he clarified.

David L. Franklin, Solicitor General of Illinois, saw the First Amendment issue much differently. “This Court’s cases uniformly recognize that the state has a much freer hand when it manages its personnel as an employer than when it regulates its citizens as a sovereign … that freer hand includes broad authority to put conditions on employees’ speech,” he asserted. As to whether that “deference to the employer’s prerogatives somehow depends on the scale or the scope of the speech in question,” Franklin said that this had never been the law. “The government is still acting as an employer when it treats … its employees as a group or as a whole,” he argued. “That’s why this Court has repeatedly used the Pickering framework and other deferential public employee tests to uphold generally applicable workplace policies.”

Franklin said that the petitioner “wants to vault over all of the break points in this Court’s First Amendment law with respect to public employees and go straight to strict scrutiny.” However, he stressed, “this Court has never applied strict scrutiny to a condition of public employment that was backed by a bona fide interest that the state has as an employer. Never, not once.”

Restricted vs. compelled speech. Justice Alito suggested, “When you compel somebody to speak, don’t you infringe that person’s dignity and conscience in a way that you do not when you restrict what the person says?” While you might in some circumstances, Franklin said that here, we are talking about “compelled payment of a fee,” which he called “one step removed from compelled speech.”

Justice Sotomayor observed that the Court has drawn a line showing “a big difference between compelled speech and compelled subsidy.” For example, people can be compelled to pay bar associations, so long as they cannot be prevented from speaking out in disagreement. This is “compelled subsidy.” Just as in bar association cases, “any union member is free to get up publicly in any setting he or she wants to say they don’t agree with the position the union is taking, correct?,” she queried. Franklin agreed.

State’s interest in managerial prerogatives. The state’s interests in Janus, according to Franklin, are an interest in dealing with a single spokesperson for the employees and in imposing on that spokesperson a legal duty to represent everyone. Agency fees are complementary to those those interests. They serve the state’s managerial interests in two ways. “First, they allow us to avoid a situation where some employees bear the cost of representing others who contribute nothing. That kind of two-tiered workplace would be corrosive to our ability to cultivate collaboration, cohesion, good working relationships among our personnel,” Franklin explained. “Second, independent of that, we have an interest at the end of the day in being able to work with a stable, responsible, independent counterparty that’s well-resourced enough that it can be a partner with us in the process of not only contract negotiation …”

Justice Kennedy interrupted: “It can be a partner with you in advocating for a greater size workforce, against privatization, against merit promotion … for teacher tenure, for higher wages, for massive government, for increasing bonded indebtedness, for increasing taxes? That’s … the interest the state has?” Later, he added, “doesn’t it blink reality to deny that that is what’s happening here?” The Justice thus signaled his position in favor of overruling Abood.

Is there a compromise? Pressed by Justice Breyer as to what would be an appropriate compromise in Janus, Franklin suggested that the line drawn by Justice Scalia’s separate opinion in the Court’s Lehnert v. Ferris Faculty Association opinion was superior to the one drawn by the plurality in that case. “We’ve offered a test for where to draw the line between chargeable and non-chargeable expenses that, in practice, would overlap with, would coincide with, Justice Scalia’s line in most cases, but the reason that we think that it’s superior to the plurality’s line is that the germaneness test does have a vagueness problem and in … some instances, it allows what it shouldn’t allow, which is, for chargeability, for speech to the government as a sovereign,” he said, adding that “a very firm line can be drawn there.”

David C. Frederick (Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C.), arguing on behalf of the union, presumably pointing to a potential compromise, noted that here, the state “has carved out the questions about managerial discretion.” Managerial policy cannot be bargained for, nor can the state’s budget. “So what we’re talking about is how you manage the workplace,” he said.

Contract reliance. Justice Kagan expressed concerns about the fact the 23 states and Puerto Rico would have their statutes declared unconstitutional if Abood is overruled, with contracts for perhaps more than 10 million workers invalidated. She also said, “Our usual stare decisis doctrine makes it quite clear that reliance is an important consideration on the scales.” After some discussion of whether and to what extent the contracts would survive, Messenger, the NRTW attorney, pointed out that the contracts would need to be renegotiated in the next one to three years, and so a ruling in favor of Janus would not really affect the reliance interests.

Is political influence the real question? Justice Kennedy asked Frederick whether he thought this case affects the political influence of the unions. “I’m asking you whether or not in your view, if you do not prevail in this case, the unions will have less political influence; yes or no?” Frederick said that, yes, unions will have “less political influence.” Replied Justice Kennedy, “isn’t that the end of this case?”

It is not the end of the case, according to the union’s lawyer, because that is not the right question. “The question is: Do states, as part of our sovereign system, have the authority and the prerogative to set up a collective bargaining system, in which they mandate that the union is going to represent minority interests on pain of being subject to any fair labor practice,” Frederick said.

The case is No. 16-1466.