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Commentary By Stephen Vukovits

Janus Ruling Challenges Unions to Prove Their Value

Economics Regulatory Policy

On Wednesday the Supreme Court ruled in Janus v. AFSCME that public-sector union agency fees are a form of compelled speech and therefore violate the First Amendment.  This decision reversed the precedent of Abood v. Detroit Board of Education (1977), which allowed nonmembers to be charged for unions’ collective bargaining efforts.

Writing for the Court, Justice Samuel Alito remarked “no reliance interests on the part of public-sector unions are sufficient to justify the perpetuation of the free speech violations that Abood has countenanced for the past 41 years.”  Until Wednesday, employees were charged union fees without their consent.  Mark Janus was forced to pay 78 percent of full dues to the AFSCME Council 31 representing public employees in Illinois, despite his disagreement with the union’s policy and collective bargaining positions.

This coercion was found to be a violation of his freedom of association and freedom of speech rights.  The majority opinion quotes Thomas Jefferson’s famous declaration “to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhor[s] is sinful and tyrannical,” demonstrating how modern union compulsion tactics go against America’s founding principles and constitutional framework.

Notably, Justice Alito’s opinion makes it clear that “neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages… unless the employee affirmatively consents to pay.”  This crucial distinction sets the precedent that all union fees must be opt-in in nature.  Employees, not unions, now have the power to demand to see how their fees are used before deciding to pay.

Not only is it unconstitutional to force nonmembers to pay agency dues, it is also bad economics.  In her dissent, Justice Elena Kagan worries that “public employee unions will lose a secure source of financial support.”  This logic reveals that opponents of liberating workers are more concerned with the union bottom line than whether a valuable service is being provided.  If unions’ benefit to workers matched their fees, the effect of this decision would be minimal.

Supply and demand should dictate union membership in the same manner as a company trying to attract customers.  Relying on coercion is not a good business model.

Unions have disputed this line of thinking by suggesting that nonmembers who do not pay fees would be free-riders and undeserving of any benefits from collective-bargaining agreements.  Justice Alito pushes back on this notion, arguing unions’ exclusive representative privileges “greatly outweigh any extra burden imposed by the duty of providing fair representation for nonmembers.”  Unions are already given monopolistic powers when negotiating with employers.  They do not need tyrannical powers over employees as well.

In the 28 states with Right to Work laws, unions have already adapted to these realities.  Similarly, federal government workers have not been forced to pay agency fees.  Without being able to charge nonmembers, unions in these jurisdictions have had to prove their value to attract dues-paying members.  Instead of spending an estimated $229.2 million in political contributions since 2008, public-sector unions could be more attractive by prioritizing workers over political agendas.

Additionally, this ruling could prompt unions to be more transparent about their operations.  Justice Alito argued that “objecting employees also face a daunting and expensive task if they wish to challenge union chargeability determinations.”  It is nearly impossible to determine what union costs are related to representation.  Now, workers will have an even greater incentive to demand a budget from their union representative.  This exposure should prompt unions to end inefficient practices and cut unrelated expenditures if they hope to retain members.

Ultimately, the effect of this decision rests on how unions react.  If they undergo a self-evaluation and realize the best business model is competition, not coercion, all parties will benefit.  Those who do not want to join a union will no longer be forced to pay any fees, and unions will have to improve their practices to provide more benefits to workers.  As a result, the ruling in Janus frees the individual while simultaneously challenging unions to prove their value.

Stephen Vukovits is a contributor to Economics 21.  Follow him on Twitter @svukovits.

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