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Supreme Court Tie Leaves Public Sector Agency Shops In Place...For Now

By Ethan M. Dennis / Mar 31, 2016

On March 29, 2016, in Friedrichs v. California Teachers Association, the Supreme Court issued a one-sentence decision affirming, by a 4-4 vote, the Ninth Circuit Court of Appeals' decision in a case challenging the constitutionality of "agency shop" arrangements in the public sector. As a practical matter, the Supreme Court left in place the current system established nearly 40 years ago by Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977). Following Abood, the vast majority of public sector collective bargaining agreements permit employees to opt out of paying full union dues, but require all public employees - regardless of whether they choose to belong to the union - to pay "agency fees," which may only be used towards union expenses related to collective bargaining. 

Rebecca Friedrichs, a teacher in California, alleged that the "agency shop" arrangement under which she worked violated the First Amendment. Throughout the litigation, the plaintiff admitted that she brought the case to overturn Abood. Recognizing Abood as binding precedent, the District Court and the Ninth Circuit Court of Appeals ruled against her. At oral argument, the Justices' questioning, including Justice Antonin Scalia, suggested that the Court would overturn the Abood decision in a 5-4 vote. After Justice Scalia's death, the Supreme Court became deadlocked at 4-4 and thus affirmed the decision of the Ninth Circuit. 

This case threatened to deprive public sector unions of a significant revenue source and the maintenance of the status quo has been interpreted as a major victory for labor. However, given the tie vote, such a victory may be temporary. The Supreme Court has left this issue unresolved, and it is certain to arise again once a replacement for Justice Scalia is appointed. Indeed, the lawyers for Rebecca Friedrichs have already informed the press that they will request that the Supreme Court rehear the case. Therefore, government employers should keep abreast of the following legal principles set forth in Abood and subsequent decisions on compelled union dues.

The Abood Court recognized that public sector unions engage in political activity. The Abood Court held that the First Amendment prohibited a public employer and union from requiring a public sector employee to contribute to the support of an ideological cause the employee opposes. The Abood Court also held that compelling an employee to finance union activity that is related to collective bargaining is permissible under the First Amendment to prevent "free-riders" and foster "labor peace." In response to the distinction recognized in Abood, state and local governments have set up "agency shops" that require all employees to pay dues towards expenses related to collective bargaining and opt out of paying for any political expenses. 

Over the past few years, the Supreme Court has chipped away at Abood and expressed a willingness to overturn it altogether. In Knox v. Serv. Emps. Int'l Union, Local 1000, 132 S. Ct. 2277 (2012), the Supreme Court ruled that government employees had to opt-in to a one-time dues increase rather than allow unions to require government employees to opt-out. In Harris v. Quinn, 134 S. Ct. 2618 (2014), a 5-4 decision, the Supreme Court found that "personal assistants," who provide home care services tailored to the individual's needs, were not full-fledged public employees in Illinois. The Court held that the employer and union could not compel such employees to pay either union dues or agency fees. In reaching that conclusion, the majority of the Harris Court questioned the continuing viability of Abood and its reasoning. In her dissent, Justice Kagan noted that Abood is "the foundation for not tens or hundreds, but thousands of contracts between unions and governments across the nation."

Given the importance of this case law, government employers must keep an eye on the development of continuing challenges to "agency shop" arrangements. Government employers may keep the current system intact ... for now.

If you have any questions about the Court's decision, please contact Ethan Dennis at (215) 640-8427 or EDennis@clarkhill.com, or another member of Clark Hill PLC's Labor and Employment Practice Group or Education and Municipal Law Practice Group.