Union fees at risk as justices review Detroit precedent

Washington — Arguments will be heard at the U.S. Supreme Court on Monday in another challenge to the mandatory fees that some government employees must pay to their unions for negotiating and administering their contracts.

At stake is a 40-year-old precedent out of Detroit known as Abood v. Detroit Board of Education, in which the court unanimously upheld mandatory public-sector union fees, also called agency fees, in 1977.

The court challenge endangers tens of thousands of union contracts in nearly half of the states that are organized around the framework established in Abood. Tossing it would impose a nationwide “right-to-work” policy across the public sector, which employs roughly half of the nation’s 14.8 million union workers.

It’s the third time in four years the High Court has weighed the issue. The justices heard a similar case last term, but they deadlocked, 4-4, after the death of Justice Antonin Scalia. The addition of Justice Neil Gorsuch, an appointee of President Donald Trump, could tip the balance toward right-to-work advocates.

Illinois state employee Mark Janus wants the justices to overturn Abood, arguing that forcing him to subsidize positions he disagrees with violates his First Amendment rights.

Janus also contends that Abood is “unworkable,” in part because of difficulties in distinguishing between activities related to politics, for which fees may not be charged, and activities related to collective bargaining, which can be charged.

Janus’ union, the American Federation of State, County and Municipal Employees, contends that agency fees ensure that all workers who benefit from a collective-bargaining agreement pay their fair share of the cost of negotiating and administering it.

Labor advocates worry that a victory for Janus would sap union treasuries and lead to free-riding, in which some employees opt out but still benefit from the union’s bargaining for better wages, health care and workplace protections.

Detroit native Mary Kay Henry, president of the 2 million-member Service Employees International Union, said the case is the latest in a 40-year assault on unions by corporate interests.

“I know intimately as a Michigander that the presence of the UAW and other unionized workers in that state created a middle class standard of living way beyond union membership. That’s no longer true in this country,” said Henry, who grew up in Troy.

“To us, Janus is part of a concerned attack on the ability of people to join together and raise wages and create good jobs, and is going to further erode the ability of us to take poverty-wage work and make it a middle-class standard of living.”

Michigan part of challenge

Janus, represented by the National Right to Work Foundation, says bargaining with the government is political speech that’s no different than lobbying the government, because bargaining and lobbying both involve meeting with public officials to influence public policies.

Michigan and several other states side with Janus, highlighting municipal bankruptcies like Detroit’s in which public-employee benefits played a role. They argue that collective bargaining affects taxpayers’ pocketbooks.

Employees usually don’t have to pay agency fees in Michigan or the 26 other states with right-to-work laws.

But the case could effectively transform public-sector unions into voluntary organizations in states without right-to-work provisions. Surveys suggest that some workers would continue to pay dues, but others wouldn’t.

Frank T. Mamat, a labor attorney in Farmington Hills, noted a study by the Empire Center for Public Policy predicting that government unions in New York could lose $110 million a year if a portion of workers — who indicated they’d rather not belong to unions — opt out of membership.

“That’s just one state, so extrapolate that to the other states for the amount that is at stake,” said Mamat, who was involved in drafting Michigan’s right-to-work law.

“It’s not only a huge problem for the unions, but for the Democratic Party because that’s the only people they make contributions to.”

The 1977 ruling said government had an interest in promoting “labor peace” and preventing free-riding by employees who don’t pay dues but benefit from union representation.

The Abood court said agency fees could be used only for “collective bargaining, contract administration and grievance adjustment,” and not political or ideological activities.

In its brief to the court, AFSCME says Abood was correctly decided and appropriately deferred to government’s “broad managerial powers” as an employer. It rejects the claim that Abood has proven “unworkable,” noting the court has applied it in other contexts.

“Abood itself recognized that the line between collective-bargaining and ideological activities would be ‘somewhat hazier’ in the public-employee context. But line-drawing difficulties are insufficient reason to abandon sound constitutional principle,” lawyers for the union wrote.

The Supreme Court has criticized Abood’s reasoning in recent years. In a 2014 case, Justice Samuel Alito said Abood was questionable, noting that under the First Amendment, “no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support.”

Dissenting in the same case, Justice Elena Kagan came to Abood’s defense, doubting that without a fair-share clause, unions could draw sufficient dues to adequately support operations: “(U)nion supporters (no less than union detractors) have an economic incentive to free ride.”

Impact debated

The Mackinac Center for Public Policy in Midland has pushed back against the contention that unions would not survive without collecting agency fees.

In its brief to the court, the Mackinac Center analyzed state government payroll data, finding at least 80 percent union membership in jurisdictions with mandatory bargaining and agency fees. In right-to-work states, the membership rate fell to an average of 29 percent.

Nevertheless, in states with low public-sector union membership, unions had been in place for decades, said Patrick Wright, the organization’s vice president for legal affairs.

The center also looked at the Michigan Education Association, which has lost 25 percent of its membership and 22 percent of its dues since 2012 (the state’s right-to-work law took effect in March 2013). But the union still has 87,600 members and collects nearly $48 million in dues, Wright noted.

“Michigan kind of gives the court an idea of what’s likely to happen on a national scale because we were a strong agency-fee state with a strong history of unionism, and we transferred to right to work,” Wright said.

The membership decline is in part because some choose not to be part of the union and “not to pay their fair share of the costs,” MEA spokesman Doug Pratt said.

“We’ve survived it because we’ve focused on making sure members are well-served and are listened to in our association. That’s a strong suit that we have, and that many labor unions have,” Pratt said.

Union membership in Michigan was up 1.2 percentage points last year, according to the U.S. Bureau of Labor Statistics.

“But what’s the driver? It’s more to do with workers feeling that the rules of our economy are rigged against them, and that they need to stand together to ensure their voice is heard,” Pratt said.

Nineteen state attorneys general signed a friend of the court brief by the office of Michigan Attorney General Bill Schuette that urges the justices to abandon the “meaningless distinction between collective bargaining and other political activity.”

Michigan says collective bargaining helped cause municipal bankruptcies such as Detroit’s, where inflexible union contracts contributed to the city’s record-setting bankruptcy. The city’s $3.5 billion in unfunded pension liabilities represented a fifth of its total debt when the city filed for bankruptcy in July 2013.

Some municipalities say the court needs to consider the destabilizing effect of throwing out agency fees, arguing it would lead to legal challenges and demands for renegotiation of contracts at the state and local levels.

“Contracts would have to get renegotiated. Labor relationships would get a lot more tense and heated, and it would make it harder for my clients to serve the public and deliver public services,” said Samuel Bagenstos, who teaches labor and constitutional law at the University of Michigan Law School.

He represents Pennsylvania Gov. Tom Wolf and public officials in 15 other states without right-to-work laws whose brief offers examples of innovation and efficiencies they say were developed as a result of “stable” labor-employer relationships.

“If labor unions that represent employees can’t count on stability, then they will have to get very hostile and aggressive with their employers to develop and maintain fervency among their membership,” Bagenstos said.

“From an employer’s perspective, it’s better to have strong and stable unions — not unions worrying about where they’re next dime is going to come from, and worried that if they make people angry, those workers will just free ride.”

mburke@detroitnews.com