U.S. Supreme Court Closes the Door on Union Agency Fees

by Yelana Love

On June 27, 2018, the United States Supreme Court decided Janus v. American Federation of State, County, and Municipal Employees,[1]  The Court, explicitly overruling Abood v. Detroit Bd. of Ed.,[2]  held that an Illinois state law requiring all employees in a bargaining unit exclusively represented by a public-sector labor union, including employees who had chosen not to join the union and who opposed the union’s collective bargaining and other positions, to pay an agency fee to the union, violated the First Amendment to the United States Constitution. The Court reasoned that the problem with the law was that it forced employees who had chosen not to join the union “to subsidize [the union’s] private speech on matters of substantial public concern.”[3]

Factual and Legal Background of the Case
The Illinois Public Labor Relations Act (IPLRA) allows employees of the State of Illinois and its political subdivisions to unionize. Under the IPLRA, if the majority of employees in a bargaining unit vote to be represented by a labor union, the union is designated as the exclusive representative of all the employees within the bargaining unit, including employees who choose not to join the union. Employees who join the union must pay full union dues. The specific provision of the IPLRA at issue requires employees who do not join the union to pay a percentage of the union dues referred to as an “agency fee.” In Abood, the United States Supreme Court had rejected a First Amendment challenge to an agency fee, concluding that nonunion employees may be charged an agency fee for the portion of union dues used to pay for activities that are “germane to [the union’s] duties as collective bargaining representative,” but not for any portion of dues used to fund the union’s political and ideological projects.[4]

Mark Janus was an Illinois state employee working in a bargaining unit that voted to be represented by a union.[5]  Janus elected not to join the union because he opposed many of its policy positions, but he was required to pay an agency fee, which was automatically deducted from his pay.

Janus filed a complaint in federal court asserting that “nonmember fee deductions are coerced political speech” and “the First Amendment forbids coercing any money from the nonmembers.”[6]  Relying on Abood, the union moved to have the case dismissed. The District Court granted the motion to dismiss and the Court of Appeals for the Seventh Circuit affirmed the decision. The United States Supreme Court granted certiorari to consider whether the required payment of an agency fee for nonunion, public-sector employees is unconstitutional.

Analysis of the Decision
The Court begins its opinion by discussing Abood, noting that in that case “the Court upheld the constitutionality of an agency-shop arrangement like the one now before us,” but that “in more recent cases we have recognized that this holding is ‘something of an anomaly,’ and that Abood’s ‘analysis is questionable on several grounds.'”[7]  The Court then considers “whether Abood’s holding is consistent with standard First Amendment principles,”[8]  pointing out that the First Amendment forbids abridging the freedom of speech, which “includes both the right to speak freely and the right to refrain from speaking at all.”[9]  The Court recognizes that a “‘significant impingement on First Amendment rights’ occurs when public employees are required to provide financial support for a union that ‘takes many positions during collective bargaining that have powerful political and civic consequences'”[10]  and concludes that “[b]ecause the compelled subsidization of private speech seriously impinges on First Amendment rights, it cannot be casually allowed.”[11]

Next, the Court determines the appropriate level of scrutiny to be applied when determining the constitutionality of agency fees. Rejecting both the dissent’s view that the Court should “apply what amounts to rational-basis review, that is, that we ask only whether a government employer could reasonably believe that the exaction of agency fees serves its interests,”[12] and Janus’ request to subject the law at issue to strict scrutiny, the Court instead follows the precedent it set in Knox[13] and applies exacting scrutiny. Exacting scrutiny is a standard under which the compelled subsidy of an agency fee must “serve a compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms.”[14]

In Abood, the Court allowed agency fee agreements because they promoted the state’s interest in labor peace and the avoidance of free-riders. But the Janus Court rejects both of these rationales. Instead, it concludes that “[w]hatever may have been the case 41 years ago when Abood was handed down, it is now undeniable that ‘labor peace’ can readily be achieved ‘through means significantly less restrictive of associational freedoms’ than the assessment of agency fees.”[15]  The Court is equally unpersuaded by the free-rider argument, relying on Knox for the principle that “free-rider arguments…are generally insufficient to overcome First Amendment objections.”[16]  Accordingly, the Court concludes that because the state interests relied on in Abood fail to pass exacting scrutiny analysis, the Abood court erred in upholding public sector agency fee agreements as constitutional. The Court overrules Abood, holding that the agency fee provision of the IPLRA challenged by Janus violates the First Amendment.

Impact of the Decision on Colorado
The Janus decision appears to have little immediate, direct impact on Colorado. Colorado does not currently have statutes related to public sector unions and therefore does not have any statutes requiring nonunion, public sector employees to pay agency fees. However, Janus would presumably discourage a future Colorado General Assembly from enacting a law requiring the payment of agency fees by nonunion public sector employees, because such a law would clearly violate the First Amendment as interpreted by the Janus Court.


[1] Janus v. AFSCME, Council 31, 585 U.S. ___, 138 S. Ct. 2448, 201 L. Ed. 2d 924 (2018).

[2] 431 U.S. 209 (1977).

[3] Janus, 138 S. Ct. at 2460, 201 L. Ed. 2d at 934.

[4] Abood, 431 U.S. at 235-36.

[5] The specific union was the American Federation of State, County, and Municipal Employees, Council 31.

[6] Janus, 138 S. Ct. at 2462, 201 L. Ed. 2d at 937.

[7] Janus, 138 S. Ct. 2463, 201 L. Ed. 2d at 938.

[8] Id.

[9] Id. (quoting Wooley v. Maynard. 430 U.S. 705, 741 (1977)).

[10] Janus, 138 S. Ct. at 2464, 201 L. Ed. 2d at 939 (quoting Knox v. Service Employees, 567 U.S. 298, 310-311)(additional internal citation omitted).

[11] Id.

[12] Janus, 138 S. Ct. at 2465, 201 L. Ed. 2d at 940.

[13] Supra note 10.

[14] Knox, 567 U.S. at 310.

[15] Janus. 138 S. Ct. at 2466, 201 L. Ed. 2d at 941 (Quoting Harris v. Quinn, 573 U.S. ___ (2014)).

[16] Knox, 567 U.S. at 310.