Janus, Two Years On: More Necessary Than Ever

This June 27 marked the second anniversary of the Supreme Court ruling in Janus v. AFSCME Council 31, a pivotal event in labor relations whose potential long-run impact is only beginning to be felt. The High Court’s upholding by a 5-4 margin of the constitutional right of Mark Janus (in photo), an Illinois state civil servant, to withhold dues from an affiliate of the American Federation of State, County and Municipal Employees has enabled numerous nonmembers across a wide range of public-sector jobs to decline to pay without worrying about losing their jobs. In response, unions and their political allies are going to great lengths to circumvent the ruling. They know what is at stake. Their actions unintentionally underscore why the Court made the right call. And Mark Janus isn’t quite done yet.  

Government employee unions, especially at the state and local levels, have become a dominant force in collective bargaining. Decades ago, they were anything but that. In 1960, a time when private-sector union membership was peaking at about a third of all nonagricultural private employees in the U.S., only 2 percent of all state and local government employees had collective bargaining rights much less an active contract. By 2010, that figure had risen to 63 percent. The Sixties and Seventies were the turning point. Many states during those decades passed laws either encouraging or requiring public agencies to collectively bargain with their employees. Currently, about half of the states require bargaining with all public employees and around another dozen do so with some public employees. Reinforcing this tendency was the general increase in government intervention in the economy. This broadened opportunities for union organizing, revenue collection and political influence. While the unionized share of the private-sector work force since the early Sixties has declined to where it is now only 6.2 percent, the figure for the unionized public-sector work force is 33.6 percent. Seen another way, public-sector employees currently account for a little under 15 percent of the U.S. work force yet more than half of all union members.   

This transformation has corrupted our politics. For decades, and with increasing brazenness, public-sector unions have used political brinkmanship to exact large wage/salary and benefit concessions from government agencies. It is current and future taxpayers who have borne and will continue to bear their cost. This outcome could have been predicted. Public-sector unions are unique, embodying what Rutgers University political scientist Leo Troy calls the New Unionism. Unlike the Old Unionism, which is focused mainly on winning economic gains, the New Unionism has an interest in radically expanding the managerial State. Government monopolization of service provision, whether in education, sanitation or health care, represents new opportunities for union organizing, membership and political influence. This in turn puts pressure upon elected officials to meet union demands or risk losing favor with voters, increasingly dependent upon government largesse.    

The incestuous relationship between public-sector union leaders and government officials has enabled unions to function as adjuncts of the very agencies with whom they negotiate. Political scientist Mallory Factor and wife Elizabeth Factor, in their 2012 book, Shadowbosses, explain why unions hold the cards:

Government employee unions use politics to elect their own bosses — the government officials, like mayors and governors, who will be the actual bosses of the union members. And unions get to fire bosses who don’t perform for them. How does that work? The unions use political spending to help pro-union politicians get elected to office. These politicians become government officials who make decisions about union contracts and legislators who pass laws important to unions. And, if these politicians don’t support the unions’ agenda, the unions throw them out and elect other politicians in their place. Government employee unions are great at getting their allies reelected and punishing at the polls any politicians who fight their power.

Public-sector unions, then, represent their own interests, not those of the general public.

This arms-length partnership is mortgaging our country’s future. By winning lifetime job security for members, public-sector unions have created the basis for explosive growth in wages, salaries, and especially long-term benefit commitments. In many state and local jurisdictions, retiree pension and health plans are severely underfunded. As Union Corruption Update has noted in recent years, public employee retirement systems in Illinois, New Jersey and Rhode Island have entered dangerous fiscal straits. Union leaders, far from owning up to their role in this situation, grow reflexively indignant over any attempt to limit their bargaining power. Just days after the Supreme Court handed down its Janus decision, for example, Randi Weingarten, president of the American Federation of Teachers, wrote in an editorial: “Stamping out unions has long been the aim of many wealthy conservatives, because it’s easier for them to win elections, maintain economic dominance, and disempower workers when individuals can’t collectively improve their lives through the strength and solidarity of union.”

A major explanation behind the power of government employee unions lay in the judicial branch. The U.S. Supreme Court’s 1977 ruling in Abood v. Detroit Board of Education established the template for the public-sector union shop. A unanimous majority ruled that a government agency has the authority to terminate nonmember employees under union contract if such employees do not pay partial dues (also known as “agency” or “fair share” fees) to the union. While the ruling did not preclude states from enacting Right to Work laws to prohibit agency fees, it did give states the authority to enforce them at a union’s behest. Public employee unions across a wide range of occupations, recognizing their newfound power, now had a green light to step up organizing, escalate contract demands, and provide monetary and other assistance to elect (and re-elect) supportive office-seekers. Many states caved in willingly. Each side, after all, had a stake in expanding government.

Yet union monopoly power has not been absolute. Over the years, dissenting public employees filed court challenges against certain aspects of forced dues clauses in their union contracts, though without challenging the basic premise of Abood. Several complaints made their way into the Supreme Court, which issued favorable rulings. In 1986 the Court ruled in Chicago Teachers Union v. Hudson that a public employee union cannot establish an agency fee schedule for nonmembers without first soliciting their input. In 1991 it ruled in Lehnert v. Ferris Faculty Association that public-sector fees must be “germaine” to collective bargaining and must not “significantly add to the burdening of free speech that is inherent in allowance of an agency or union shop.” In 2012 the Supreme Court concluded in Knox v. SEIU that a Sacramento affiliate of the Service Employees International Union had acted illegally in imposing a special assessment on covered employees in order to fund organized opposition to two California statewide ballot initiatives (both defeated) seven years earlier. And in 2014, in Harris v. Quinn, the Court ruled that nonunion private-sector home care providers in Illinois could not be forced to pay dues to a public employee union simply because a portion of their paychecks came out of state Medicaid funds. The majority opinion in that latter case moved the Court closer than ever to overturning Abood. “No person in this country,” wrote Justice Samuel Alito, “may be compelled to subsidize speech by a third party that he or she does not wish to support.”

With Harris v. Quinn, the door was now open to challenging the principle of the union shop. Opportunity already was knocking. Rebecca Friedrichs, an Anaheim, Calif. public school teacher, joined by several other school employees, had sued the California Teachers Association in federal district court in April 2013. At the request of the plaintiffs, the district and a circuit court dismissed the case, as the plaintiffs’ goal was getting hearing at the Supreme Court. The Court, to the surprise of many, gave standing. And it heard oral arguments. In February 2016, however, Justice Antonin Scalia, the potential tiebreaker vote in an otherwise deadlocked Court, died of natural causes. And the unwillingness of Senate Republicans to consider a replacement until 2017 rather than take their chances with President Obama’s nominee, Merrick Garland, made any future vote next to impossible. The Supreme Court in short order announced that it would not hold a vote. Unions, for the time being, had won the day.

While that was going on, however, another case, originating in Illinois, did break the ice. Mark Janus, a child support specialist for the State of Illinois and a nonmember, believed that the roughly $45 per month assessment imposed upon him by an AFSCME affiliate infringed upon his First Amendment rights. He filed suit in federal court for the right to withhold payment. A district and then a circuit court dismissed his case. But this was 2017, and Donald Trump was president. And Trump’s nominee to replace Justice Scalia, Neil Gorsuch, having been approved by the full Senate, ascended to the Supreme Court bench that April. Five months later, the High Court granted standing to Mark Janus, whose original suit had been filed on his behalf by Illinois Governor Bruce Rauner back in February 2015. A coalition of unions responded with outrage, calling the suit an attempt to “rig the economic rules against everyday working people.” The Court heard arguments in February 2018. And in late June, by 5-4, it ruled that Mark Janus could not be compelled to pay fair share dues. A public-sector union seeking to collect dues from a nonmember covered by contract, the Court concluded, must first secure the worker’s affirmative consent. The 22 states (plus the District of Columbia) which authorized such dues capture no longer had the authority to enforce it. At least that was the situation on paper.  

Public-sector unions and partisan elected officials, anticipating the outcome, already had been laying the groundwork for resistance. Months earlier, AFSCME had conducted a massive organizing drive, meeting face to face with around 600,000 employees; the effort yielded 12,000 new members. In New York State, where nearly 70 percent of all public employees are covered by union contracts, Governor Andrew Cuomo signed an executive order requiring all state agencies to keep their employee personal information private, claiming that this was necessary to protect employees from anti-union harassment. This was a straw man. All states provide such protection. If anything, it is unions, especially during card check organizing campaigns, that intrude upon the privacy of unorganized workers. Additionally, the New York State Labor Department began classifying certain government workers as “union employees” as a pretext for deducting dues, without even confirming membership. Every bit as egregious, the state now allows the New York State United Teachers to strip all nonmember workers under representation of their life insurance, eye care and dental coverage.   

Other states have taken similar actions. California, Maryland and Washington State, for example, now maximize every opportunity for a union to make its for membership before unorganized workers. In California, public employers now must share employee contact information with a union during an organizing drive. Yet when it comes to promoting transparency of views opposing unionization, it’s a different story. California, New Jersey and Washington State, for example, have taken steps to prohibit public employers to provide information to their employees that could discourage union membership; in New Jersey, employers who violate this mandate must reimburse unions for lost dues. Meanwhile, in Rhode Island, police unions now have the authority to stop representing nonmembers in employment grievance cases. A growing number of states also have enacted measures that make exit from a union far more difficult. Steps include reduction of the time frame during which reluctant workers may opt out and expansion of paperwork requirements for those expressing a desire to leave. New Jersey, in fact, passed such legislation even before the Janus decision was handed down.

In light of these and other obstacles to circumvent Janus, it is a minor miracle that state and local employee unions are experiencing any net attrition. Yet the process has begun. Less than a year following the decision, a study by the website POLITICO of 10 large unions with a sizable presence of public-sector employees found that these unions lost a combined 309,612 fee payers in 2018. Another study, conducted by labor economists Barry Hirsch (Georgia State University) and David Macpherson (Trinity University) with the use of U.S. Bureau of Labor Statistics data, found that in the 22 states allowing unions to collect agency fees from nonmembers, the percentage of public employees represented by a union dropped from 53.9 percent in 2017 to 52.8 percent in 2018. And the total percentage of public employees in those states who were full union members fell from 50.7 to 49.7 percent, a net loss of 115,625 workers. These are not exactly overwhelming losses. Likewise, an analysis of Form LM-2 annual financial reports by Bloomberg Law of membership changes in eight major private- and public-sector unions during 2017-19 found that only three of them had lost members, and in each case the loss was less than 5 percent. The largest decline, in both absolute number and percentage, occurred in AFSCME, though it was far less than the 30 percent drop projected by some observers.

Let’s have a closer look at the Bloomberg Law numbers. AFSCME, with roughly 1.3 million members, had a net loss of 70,000 fee-paying nonmembers; its addition of 40,000 full-time members wasn’t enough to offset the loss of 110,000 fee payers. The Service Employees lost a net of 55,000 members. The American Federation of Teachers, on the other hand, gained a net of 1,800 members and fee payers during this period. Though there was an exodus of fee payers, the union signed up more than 92,000 new members thanks to aggressive organizing campaigns. “We went to basics, re-creating community, engaging with our members,” said AFT President Randi Weingarten. “By and large, they stayed with the union.” And even AFSCME’s Saunders is optimistic, emphasizing the importance of his union’s “back to basics” approach to retaining members.

Money isn’t necessarily a problem either. All but one of the ten unions surveyed by POLITICO — the exception was the American Federation of Government Employees (a federal employees union barred from collecting fair share fees) — reported a gain in cash on hand during 2018, a rise largely attributable to a combined membership gain of 132,312. Moreover, even a loss of dues payers doesn’t necessarily translate into a loss of funds. The SEIU, for example, in 2018 lost more than 1,000 members and nearly 99,000 nonmember agency fee payers yet reported a 15 percent gain in cash assets. The three million-member National Education Association, the nation’s largest public-sector union, also showed an uptick. “We sit here today having budgeted for what we thought might be the worst-case scenario — of a drop of a couple hundred thousand dollars,” said NEA President Lily Eskelsen Garcia, “and we are up several thousand.” All told, eight of the nine unions that filed full-year 2018 financial reports with the Labor Department registered a composite gain of nearly $380 million.  

Supporters of worker liberty also are in it for the long fight. And that includes Mark Janus himself. This March, he filed a petition for certiorari with the Supreme Court with the intention of recovering approximately $3,000 in dues he had paid prior to the June 27, 2018 decision. A district and then a circuit court had denied standing in 2019. As of now, the Supreme Court has yet to announce if it will take up the case. If it does grant standing, as Union Corruption Update explained in early June, he will have a strong case. There is ample legal precedent for retroactive fee collection. And there are plenty of other similar lawsuits going on. On May 11, the Springfield, Va.-based National Right to Work Legal Defense Foundation and the Chicago-based Liberty Justice Center, for example, announced the filing of a joint class action suit on behalf of six Minnesota state employees who for years had been required to pay dues to a pair of unions if they wanted to keep their jobs. The plaintiffs are seeking a combined nearly $19 million in refunds for about 8,000 state and local government employees.

The Department of Health and Human Services (HHS) under President Trump also has aided the cause of worker liberty in the wake of Janus. On May 2, 2019, HHS issued a final rule to protect independent non-joining home care providers who are partly or fully compensated by state Medicaid funds from automatic dues assessments by public employee unions. This practice, known as “dues-skimming, has gained favor in many states in recent years. With government serving as a de facto collection agency for public-sector unions, the unions have generated an extra $200 million a year in revenues. The SEIU and AFSCME in particular have found this arrangement lucrative. The regulation, not unexpectedly, has run into resistance. Only a little over a week after publication of the final rule, attorneys general in five states – California, Connecticut, Massachusetts, Oregon and Washington – sued HHS to block the rule from going into effect. The SEIU, in typical demagogic form, called the regulation “racist” and an “attempt to silence home care workers,” as if these workers are delerious over being forced to pay for representation they never sought in the first place. California in particular has ignored the rule.

Even more potentially significant than the Janus ruling have been subsequent efforts by former union members and/or current fee payers to challenge the idea of forced representation. In other words, rather than be satisfied simply with not having to pay dues to a union, some dissenting workers are challenging their unions authority to bargain exclusively on their behalf. Academia is a common setting for such cases. In a pair cases of cases filed in federal district courts in 2018 by the Columbus, Ohio-based Buckeye Institute, Jade Thompson, a high school teacher in Ohio, and Kathleen Uradnik, a professor of political science at St. Cloud University in Minnesota, argued that their respective unions, by forcing them to accept representation they never asked for, violated their First Amendment rights. Similarly, in early January, Jonathan Reisman, an associate professor of economics at the University of Maine, filed an appeal with the U.S. Supreme Court to review a circuit court ruling that rejected his claim that mandatory representation violated his rights. Here, too, the Buckeye Institute is representing the plaintiffs. All three cases are active.

To summarize, public-sector unions are not public-spirited. They are intensely political organizations, ever focused on maximizing opportunities for organizing, representation, and bargaining, and on forging alliances with supportive office seekers and holders. Their own interests come first. And up to a point, those interests heavily overlap with those of their employers. Indeed, given their track record, it would be remarkable if the unions weren’t doing everything in their power to circumvent the Supreme Court. Don’t be misled by their healthy financial balance sheets. These unions are determined to win, economically and politically. And in their world, the two outcomes amount to almost the same thing. Two years after the fact, the Supreme Court’s Janus decision appears more a start than a finish. Its necessity is more evident than ever.