Janus vs AFSCME Ruling Imminent – What Will Change?

In February 2018 the US Supreme Court heard arguments in Janus vs. AFSCME, a case that challenges the ability of public sector unions to compel public employees to pay agency fees. While public sector employees currently have the ability to opt-out of paying that portion of union dues that are used for political activities, they still have to pay agency fees. This is based on the presumption that all members of a bargaining unit benefit from union negotiations with management, therefore all of them should pay those costs.

The Janus case argues that in the public sector, even these negotiations are inherently political and therefore it would be a violation of the right to free speech to compel any employee to help pay for them. The Supreme Court appears likely to agree. In an unrelated case also affecting unions, this week the US Supreme Court just ruled in favor of employers, affirming that “employers have the right to insist that labor disputes get resolved individually, rather than allowing workers to join together in class-action lawsuits.” The majority opinion was written by newly appointed Justice Gorsuch, reinforcing hopes that he will rule for the plaintiffs in the Janus case.

But will making agency fees optional result in dramatic change?

The potential is there for dramatic change, because as of 2017, 7.2 million government workers belong to a union. Their total membership nearly equals the total membership of private sector unions, 7.6 million, despite federal, state and local government workers only comprising about 17% of the U.S. workforce. In California, state and local government unions are estimated to collect and spend over $1.0 billion every year.

Clearly, a ruling for the plaintiffs in the Janus case will cause a reduction in public sector union dues revenue. If public employees are no longer compelled to pay agency fees, some of them will stop paying them. But how many will stop paying?

A study released this month by the Illinois Economic Policy Institute (IEPI) – which based on the composition of its board of directors appears to be sympathetic to unions – estimates that 726,000 public sector union members will no longer pay dues, a drop of around 10%. IEPI’s study also estimates that in California, public sector union membership will decline by 189,000, dropping from an estimated 1,235,000 members in 2017 down to 1,046,000 members. But will California’s public sector union membership really drop by 18%, taking nearly $200 million out of their annual collections?

Other data does support the 18% figure, even indicating it could be higher. A 2018 national survey released by the center-left organization Educators for Excellence posed several questions to teachers on the topic of union membership. For example, when asked “If you were not automatically enrolled into your union membership, how likely would you be in the coming year to actively opt in?” there were only 60% who were “very likely” to opt-in, and only another 22% who were “somewhat likely.”

The survey also asked non-union members – those members who have opted out of paying the political portion of their dues, but still pay agency fees – “If you could, how likely would you be to opt-out of paying agency fees to a union” there were 36% who were “very likely” to opt-out, and another 25% who were “somewhat likely.” How do these responses translate into lost revenue?

According to UnionStats.com, only about 6% of California’s public sector employees who are part of collective bargaining units have opted to become non-members, i.e., only paying the agency fees. Crunching these variables is problematic. Are the e4e national survey results representative of California? Are the responses by teachers in the e4e survey representative of public employees in other sectors? Nonetheless, the e4e survey results do suggest the revenue loss to public sector unions could be greater than the amount predicted by the IEPI study.

For example, if you assume that all of California’s public sector members who were “very likely” to opt out of union membership did so, and half of those who were “somewhat likely” to opt out did so, and if you made a similar set of assumptions based on the survey responses of the non-union members who were employed within collective bargaining units, you would see a public sector union membership in California decline by 320,000, a decline of 26%, from an estimated 1,235,000 members to 915,000 members.

The biggest unknown is the details of the upcoming Supreme Court ruling. While all indications so far are that the ruling will be in favor of Janus, what remedies will result? A huge variable will be which party will have to take the initiative. That is, will employees have to approach the unions and request to opt-out of membership, or will the unions have to approach the employees and request them to opt-in to membership? Another huge variable will be how often the opportunity to change membership status be offered. No matter whether union membership is based on employees getting to opt-in or having to opt-out, when will they do that? Once per year, within narrowly specified dates, or perpetually at any time? It is likely the ruling will leave many of these details up to the individual states to decide.

Which brings us back to California, with a state legislature that is a wholly owned subsidiary of public sector unions. As noted in detail (with links to the relevant legislation) in the CLEO policy brief “How Local Officials Can Prepare for the Janus Ruling,” California’s state legislature has been working overtime to circumvent the anticipated Janus decision. In summary:

“So how are the unions preparing for the Janus ruling? By (1) making sure the union operatives get to new employees as soon as they begin working, (2) by preventing agency employers from saying anything to deter new employees from joining the unions, and (3) by preventing anyone else from getting the official agency emails for new employees in order to inform them of their rights to not join a union.”

Public sector employees face a difficult choice. They can accept union representation, knowing that in most cases this results in their receiving over-market pay and benefits, or they can reject union representation, knowing that the agenda of public sector unions is almost always in opposition to the public interest. That’s not easy.

What must be easy, however, is for public employees to have access to whatever information is needed to withdraw from public sector union membership. This way, those who wish to stay true to the ideals of public service can put the interests of the public in front of their personal interests, by knowing how to jump through through whatever bureaucratic hoops the unions and the state legislature may put in their way.

This case constitutes a new challenge for those who oppose public sector unions. Making sure that to whatever extent the Janus ruling liberates public sector employees from the grip of public sector unions, those public employees will know how to realize their freedom, quitting those unions, putting the citizens they serve in front of themselves.

The Janus decision is expected by June 30th, if not sooner.

Edward Ring co-founded the California Policy Center in 2010 and served as its president through 2016. 

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REFERENCES

UnionStats.com – Ref. “Union Membership, Coverage, Density, and Employment by State and Sector, 1983-2017”

California’s Government Unions Collect $1.0 Billion Per Year – CPC Analysis, May 2015

Understanding the Financial Disclosure Requirements of Public Sector Unions – CPC Study, June 2012

How Local Officials Can Prepare for the Janus Ruling – CLEO Policy Brief, October 2018