After Janus

Employers should proceed with caution

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This article was originally published on Law360.

The long-awaited decision in Janus v. AFSCME was the second within a month in which the U.S. Supreme Court ruled against unions, and both decisions will put employers in a strong position at the bargaining table. But if employers appear too eager to exploit the moment, they risk facing a backlash.

The high court affirmed the right of employees not to be forced to contribute to a cause they do not support by doing away with the “agency fees” many employees were forced to pay, even if they exercised their right not to join a union. And in Epic Systems v. Lewis, decided in late May, the court affirmed that employers have a right under the Federal Arbitration Act to require as a condition of employment entry into predispute arbitration agreements that waive an employee’s right to file or participate in class actions.

In the Janus ruling, the court held that the 1977 case of Abood v. Detroit Board of Education was wrongly decided under the First Amendment, because freedom of speech “includes both the right to speak freely and the right to refrain from speaking at all.”

Justice Samuel Alito wrote, “Forcing free and independent individuals to endorse ideas they find objectionable is always demeaning, and for this reason, one of our landmark free speech cases said that a law commanding ‘involuntary affirmation’ of objected-to beliefs would require ‘even more immediate and urgent grounds’ than a law demanding silence.”

The court did not hold back, even quoting one of the Founding Fathers. As Thomas Jefferson famously put it, “to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhor[s] is sinful and tyrannical.”

The impact of the decision will be felt in all 50 states. Police officers, teachers, fire fighters and other public employees now have the right not only to refrain from joining a union, but also to refrain from paying agency fees that support it. Janus’ impact will stretch into the private sector as well, because the “right-to-work” laws at issue in the case apply to both private and public sector employment.

Despite union rhetoric, the Janus ruling benefits workers in a number of ways. Prior to the decision, many states had laws requiring payment of “fair share” fees by employees, even if they chose not to join the union. This state of affairs left nonmembers with the worst of both worlds: the fees they were forced to pay were almost as high as regular dues, but they often faced ostracism and worse from co-workers and union officials. The high court’s ruling now affirms that the imposition of such fees violates the First Amendment rights of employees by effectively requiring them to fund speech with which they may not agree. “In simple terms,” Alito wrote, “The First Amendment does not permit the government to compel a person to pay for another party’s speech just because the government thinks that the speech furthers the interests of the person who does not want to pay.”

The high court’s decision is widely expected to force unions to reorient themselves back toward what should be their primary focus. Without the ability to force nonmembers to pay agency fees, combined with the likelihood that members may resign from the union if they know they will be spared the burden of paying those fees, public unions may see membership, and consequently dues and income,

decline drastically. Unions might wisely staunch the outflow by agreeing to reduce political spending and instead redirecting their resources toward their core mission: bargaining and contract administration.

A majority of states—28 of 50—are already “right-to-work” states, which have laws that prohibit agreements requiring membership in a union as a condition of employment. If, as expected, public unions lose agency fees and membership, they will be ill-equipped to fight the ongoing battle against right-to-work laws. And when workers are no longer forced to fund union activities with which they may not agree, they may see unions purporting to represent their employees lose members and financial and political clout.

Yet even without forced payment of agency fees, unions will remain in a position of authority. Alito rightly points out that “Even without agency fees, (a union’s) designation as the exclusive representative confers many benefits. As noted, that status gives the union a privileged place in negotiations over wages, benefits and working conditions. Not only is the union given the exclusive right to speak for all the employees in collective bargaining, but the employer is required by state law to listen to and to bargain in good faith with only that union.”

Following the rulings in Epic Systems and in Janus, employers may feel the wind is at their backs, yet as in any situation following a “pro-employer” ruling, caveats apply. Strategies for dealing with unions and unionization are very fact-specific and should not be undertaken without the advice of competent labor counsel. Employers who appear quick to try to disadvantage unions may provide fodder for union rhetoric that the employees need them for protection. Employers should not immediately roll back union-provided benefits, such as “for cause” termination requirements, or even agency fee agreements.

Instead, employers should seek to negotiate these at the table. Employers should also avoid the appearance of taking overt steps to undermine unionism or to persuade employees to quit their unions en masse, or they risk provoking union backlash and appeals to members’ fears. That said, employers should also not hesitate to provide truthful and objective information to their employees upon request about the employees’ rights.

Employers would do well to avoid making new or radical changes to their arbitration agreements in haste following the court’s decisions. Instead, it’s wiser to proceed with caution and forethought, and to consult with experienced labor and employment counsel in order to craft the most effective and least risky ways to implement desired changes.