High Court Split Spares Union ‘Fair Share' Pacts

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By Lawrence E. Dubé and Gerald B. Silverman

March 29 — On a 4-4 vote, the U.S. Supreme Court March 29 affirmed a lower court ruling that the First Amendment permits public employers to enter “fair share” or agency-shop agreements on which unions depend to finance their operations.

The court's action ends a legal challenge that posed a major threat to public sector unions. Some observers had predicted Rebecca Friedrichs and other teachers would persuade a majority of the high court the California Teachers Association's fair share agreement violated their constitutional rights. Such a ruling would have affected public sector unions across the country.

However, Justice Antonin Scalia's death on Feb. 13 left the court's liberal and conservative justices in a deadlock, and the court issued a one-sentence order that the judgment of the U.S. Court of Appeals for the Ninth Circuit rejecting the constitutional challenge was “affirmed by an equally divided Court.”

Outcome Not Surprise After Scalia's Death

The court's decision is “no big surprise,” Ilyse W. Schuman of Littler Mendelson P.C. in Washington told Bloomberg BNA, but she warned “the issue is not going to go away.”

After oral arguments in January, Schuman was one of the attorneys who predicted Scalia's vote would be critical for the court to overrule a 30-year-old precedent that has been considered key to preserving fair share agreements.

Schuman told Bloomberg BNA after the argument that Scalia would be the “swing vote” and predicted he would join Chief Justice John G. Roberts and Justices Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito in overruling Abood v. Detroit Board of Education, 431 U.S. 209, 95 LRRM 2411 (1977). That case held that such agency-shop arrangements in the public sector pass muster under the First Amendment if nonmembers' agency fees go solely toward the costs of bargaining, contract administration and grievance adjustment.

More Challenges in Works

However, the First Amendment issues raised in Friedrichs are likely to return to the court.

The National Right to Work Foundation said in a statement that its staff attorneys “already have five cases working their way through the court system asking that mandatory union dues and fees be struck down as a violation of employees’ First Amendment rights.”

The organization has several cases in progress that challenge requirements that public employees opt out of deductions for agency shop fees that are used for political and lobbying expenses, NRTW Vice President Patrick Semmens told Bloomberg BNA.

The organization is also representing employees in a First Amendment challenge (Schlaud v. United Auto Workers, U.S., No. 15-166) that is already on the Supreme Court's docket. In Schlaud, the U.S. Court of Appeals for the Sixth Circuit rejected a constitutional challenge to an agreement by Michigan child care providers . The providers have asked the court to review and reverse the Sixth Circuit ruling, and the court may consider as early as April 1 whether to hear the matter.

Challenge Moved Quickly to High Court

The Friedrichs plaintiffs filed a lawsuit in the U.S. District Court for the Central District of California against the California Teachers Association and other defendants.

The teachers, who were not union members, alleged that by “requiring Plaintiffs to make any financial contributions in support of any union, California's agency shop arrangement violates their rights to free speech and association under the First and Fourteenth Amendments to the United States Constitution.”

The district court said Abood foreclosed their argument, and the Ninth Circuit summarily affirmed the lower court judgment (No. 13-57095, 2014 BL 453683 (9th Cir. 2014)).

A Supreme Court ruling was expected by the end of the court's term in June, but Scalia's death left the justices in a deadlock that resulted in the issuance of a brief decision without written opinions.

Unions Welcome Ruling, Recognize Fight Not Over

Randi Weingarten, president of the American Federation of Teachers, told reporters in a press call that the Friedrichs ruling at least temporarily stopped an “onslaught” on public sector unions and employees.

Mary Kay Henry, president of the Service Employees International Union, agreed there has been a “constant attack” on the ability of unions to organize and represent public sector employees. However, she said the outcome in Friedrichs and developments such as winning a higher minimum wage in California show that when workers join together, “they can win.”

Weingarten and American Federation of State, County and Municipal Employees President Lee Saunders said that like other unions, their organizations are reaching out to members to convince them to become or remain full union members rather than simply paying agency fees for union representation.

Saunders said more than 260,000 fee-paying employees have converted to full American Federation of State, County and Municipal Employees membership, and Weingarten told reporters that “millions of people understand that it is only through their unions they can get a piece of the American pie.”

AFL-CIO President Richard Trumka offered a similar estimate in a statement: “All over the country working people are showing that we won’t allow wealthy special interests or their politicians to stand in our way to join collectively and make workplaces better all across America.”

The Communications Workers of America said the high court ruling “safeguards, at least for now, the right of public workers to engage in meaningful collective bargaining.”

Charging the case was “financed by anti-worker and corporate education supporters who have been working for years to stifle the voices of teachers and other public workers and weaken their collective bargaining rights,” the CWA said the legal challenge “clearly shows how extreme the right-wing assault on workers and their right to bargain, whether public or private sector, has become.”

Others Look Forward to Future Court Action

Other groups sharply disagreed with the unions' view of the First Amendment and fair share agreements, but there was no dispute about the immediate importance of the court's action.

“The most basic and practical conclusion from today’s decision is that by his untimely death, Justice Scalia gave public sector unions and perhaps all of organized labor the biggest boost they have gotten in years,” Mark J. Neuberger, a litigation lawyer who is of counsel with Foley & Lardner LLP, told Bloomberg BNA.

The attorney said he believes that “at least in the court of public opinion, the tide has turned against mandatory union dues,” but the controversy won't be settled until the Supreme Court has nine justices who will give it another opportunity to review the constitutional issues that were raised in Friedrichs.

Fisher & Phillips LLP told public employers in an alert the law firm provided to Bloomberg BNA: “At this point, no response or follow-up action is required from public sector employers.”

“Public sector employers would be wise to not comment to union leaders or speak publicly regarding today’s decision,” the law firm said. “Any statements could be misconstrued and used against you if you are currently in negotiations or dealing with some level of union unrest.”

The Goldwater Institute, which describes itself as “a national leader for constitutionally limited government,” issued a statement calling the high court's action “a disappointing and anticlimactic outcome for one of the most important cases in recent memory.”

Charging public sector unions “thrive by taking away other people's money against their will and spending it on political goals those people often don't share,” said Timothy Sandefur, the institute's vice president for litigation. “We hope the Court will put a stop to it—some day.”

Future Court Composition May Determine Outcome

Richard A. Epstein, a law professor at New York University, told reporters in a call sponsored by the Federalist Society that it was “perfectly clear” after the oral arguments that Scalia would have provided the fifth vote required to overrule Abood, but a resolution of the dispute will now have to await the appointment of another Supreme Court justice.

Raymond Hogler, professor of management at Colorado State University agreed.

Several comments focused on President Barack Obama's nomination to the Supreme Court of the Judge Merrick B. Garland of the U.S. Court of Appeals for the D.C. Circuit.

Sen. Patty Murray (D-Wash.) issued a statement after the court decision, calling it “one more reminder that we need a fully functioning Supreme Court to protect the rights of workers, women, and families across the country.”

“Now that the President has nominated Judge Merrick Garland, Senate Republicans should do their jobs by giving him all due consideration, a hearing, and a vote,” Murray said.

Perez, California Attorney General Pleased

Labor Secretary Thomas E. Perez issued a statement: “Today’s Supreme Court ruling is an important victory for public employees, for their right to have a voice at work, for their right to stand together and speak up for the things that matter to them, their families and their communities.”

“Unions have enabled public sector employees to secure a foothold in the middle class,” Perez said. “But those public servants have faced a powerful headwind in recent years. Despite a robust economic recovery, government employment hasn’t rebounded as private sector jobs have.”

California Attorney General Kamala D. Harris also praised the ruling. “Today's ruling protects the right of public employees working in our schools, universities, hospitals, and police agencies in California and across the nation to negotiate fair wages and benefits, without restricting any individual employee's freedom of speech,” Harris said in a statement provided to Bloomberg BNA. “While this decision is a victory, we must keep fighting to protect the ability of working families to make a living wage and pursue the American dream.”

Labor unions have not overlooked the likelihood that they will face a continuing struggle over public sector representation. Saunders told reporters in a press call that “all of us need to be ready for battle at all times.”

Friedrichs Hopes for High Court Rehearing

Even before the court decides whether to take up another case, however, the Center for Individual Rights, which brought the legal challenge for Friedrichs and other teachers, will ask the high court to rehear Friedrichs.

The organization's president, Terry Pell, told Bloomberg BNA during a press call that Friedrichs would need the votes of five of the court's eight justices to grant such a rehearing.

Friedrichs and her fellow teachers couldn't get five votes on the merits of their legal challenge, but Pell said they hope the eight justices would grant rehearing as a mechanism of keeping the constitutional challenge alive in “basically a holding period” until a ninth justice is confirmed by the Senate and seated on the high court.

Pell said he has no view on whether the Senate should confirm a new justice now or later, and he declined to express a view on the Garland nomination, but he said a “lot of time and money and effort” went into bringing the Friedrichs case before the Supreme Court.

Acting with the teachers, Pell said the Center for Individual Rights will file its petition for rehearing within 25 days and hopes the court will “sit on it” until nine justices can resolve the case.

Friedrichs told reporters in the press call that she supports the rehearing bid and she is “definitely in this for the long haul.”

Michael A. Carvin of Jones Day in Washington, argued the case for Friedrichs. California Solicitor General Edward C. DuMont argued for the attorney general of California. David C. Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel P.L.L.C. in Washington, represented union respondents and Solicitor General Donald B. Verrilli argued for the U.S. as an amicus curiae.

To contact the reporters on this story: Lawrence E. Dubé in Washington at ldube@bna.com and Gerald B. Silverman in Albany, N.Y., at gsilverman@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com