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Supreme Court Strikes Down Fair Share Fees in the Public Sector

Jun 29, 2018
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On Wednesday, the Supreme Court of the United States ruled unconstitutional state laws – including Ohio’s – that for decades have allowed unions to collect “fair share” or “agency” fees from public sector employees without their consent. The Court ruled that compelling a public employee to provide financial support to a union without the employee’s consent was an unconstitutional infringement on the employee’s freedom of speech and association under the First Amendment to the U. S. Constitution. Janus v. AFSCME.

Based on the Court’s long-awaited decision, it is unconstitutional for a unionized public-sector employer in Ohio to continue to withhold these “fair share” or “agency” fees from an employee’s paycheck without the employee’s express written permission. The decision is effective immediately.

For more than 30 years in Ohio, unionized public sector employees have had the choice to join the union and pay union dues or not. However, if the collective bargaining agreement between the employer and the Union included a “fair share” provision the employee was required to pay a “fair share” fee to the union. Typically, the fair share fee was equal to union dues less that portion of union dues that the union devoted to political activities.

In a 5-4 decision, the Court held that forcing public employees to provide financial support to a union, even if the employee opposed the positions advocated by the union, was a form of “forced speech” in favor of the union. The Court essentially found that all public-sector bargaining implicates important public policy concerns and that public employees cannot be compelled by their public employer to subsidize the union’s advocacy on such issues.

Public sector employers are well advised to consult with counsel to determine the best course of action in response to this landmark decision. Beyond the prompt suspension of fair share fee deductions, public employers must consider the specific terms of their collective bargaining agreements. For example, many contracts have provisions that speak to the obligations of the parties in the event a contractual provision is ruled to be unlawful or unconstitutional, as is the case here. Such provisions often call for bargaining over the impact of the court decision, but suspension of fair share fee deduction probably should not be delayed pending such bargaining.

This decision does not impact a public employer’s ongoing obligation to deduct union dues from the paycheck of employees who have authorized such deduction. (i.e. those who have chosen to join the union). The decision also does not impact how and when a public employee can withdraw from the union and thereby terminate the obligation to pay union dues. To be clear, the decision does not impact private sector and non-profit employers.

This decision is a drastic change and will impact public sector unions and employers significantly. The decision invalidates the laws of twenty-two states that have required non-union public sector workers to pay fair share fees. Please feel free to contact Jim Wilkins, Tom Green, or the K|W|W attorney you usually work with should you have any questions or if you would like assistance regarding this change in law.