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The United States Supreme Court Strikes Down Agency Fees

In a ruling that could cost public-sector unions millions and result in the transformation of organized labor in this country, the United States Supreme Court found in Janus v. AFCSME, Supreme Court No. 16-3638, that states and public-sector unions may no longer collect agency fees from non-consenting employees.

Over forty years ago, the United States Supreme Court ruled that public employees who do not belong to a union can be required to pay a fee – commonly known as a “fair share” or “agency” fee – that would cover the union’s costs to negotiate a contract which applies to all public employees, regardless of whether those public employees belong to a union.

The United States Supreme Court overruled this precedent in Janus, finding that the extraction of such fees from non-consenting public-sector employees violates the First Amendment because it forces individuals to endorse ideas they might find objectionable by subsidizing private speakers – i.e., unions. As a result, the United States Supreme Court concluded “States and public-sector unions may no longer extract agency fees from non[-]consenting employees.” Janus at 48.

In many jurisdictions, state law permits “a public-sector collective bargaining agreement [to] include[] an agency-fee provision” in which the fee “is automatically deducted from the non­member’s wages.” Janus at 48. The United States Supreme Court explicitly found that “[t]his procedure violates the First Amendment and cannot continue. Neither an agency fee nor any other payment to the union may be deducted from a non[-]member’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay. By agreeing to pay, nonmembers are waiving their First Amendment rights, and such a waiver cannot be presumed.” Janus at 48. Going forward a non-member must affirmatively consent to the payment of such fees through the execution of a waiver that is “freely given and shown by” clear and compelling evidence.

Public employers that deduct agency fees from employee wages should immediately contact legal counsel to discuss how to proceed in light of the United States Supreme Court decision in Janus. In addition, it is recommended that public employers revise collective bargaining agreements to comply with the Janus decision. McGown & Markling attorneys have successfully negotiated collective bargaining agreements on behalf of employers with a diverse range of associations and unions. The attorneys at McGown & Markling can assist public employers in complying with their legal obligations in a post-Janus world.

Authors: Matthew John Markling and Patrick Vrobel.

Note: This blog entry does not constitute – nor does it contain – legal advice. Legal jurisprudence is like the always changing Midwestern weather. As a result, this single blog entry cannot substitute for consultation with a McGown & Markling attorney. If legal advice is needed with respect to a specific factual situation, please feel free to contact a McGown & Markling attorney.

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