U.S. Supreme Court Declines to Hear Case Asking for Refund of Fair Share Fees
In 2018, the Supreme Court held in Janus v. AFSCME Council 31 that public employees could not be forced to pay fair-share fees to the union that represents them. “Fair-share fees” are an amount less than full union dues proportionate to the cost of negotiating and enforcing the union contract. There were many disappointing things about Janus, but perhaps the most disappointing was that in reaching its decision, the Supreme Court had to overrule one of its own decisions—Abood v. Detroit Board of Education—which it issued just 41 years earlier in 1977.
In Abood, the Supreme Court held that public employees could not be forced to pay the full amount of union dues (some of which goes to the union’s fraternal and political activities), but they could be forced to pay a lesser amount called “fair-share fees” because it costs money to negotiate and enforce contracts and process grievances, and the union is required to represent everyone regardless of union membership. Ensuring that everyone pays their fair share, Abood said, avoids the free-rider problem that occurs when employees refuse to contribute to the cost of union representation that benefits all employees. If everyone refused to pay their fair share, the union would have no money, could no longer represent anyone, and would cease to exist. Of course, it is no secret that weakening unions is the ultimate goal of the forces behind the Janus litigation.
The Abood decision represented a compromise that, on the one hand, prevented employees from being forced to finance causes they disagreed with, but, on the other hand, allowed them to be required to pay an amount less than full union dues to contribute their fair share to the cost of negotiating and enforcing the contract. It is undeniably true that employees covered by a union contract receive better pay and benefits than their non-union counterparts; so even if someone does not want to be a member of the union that represents them, it can hardly be viewed as unfair to require them to pay their fair share for union representation that they financially benefit from.
Public sector unions reasonably relied on Abood as the law of the land for the 41 years after it was decided until Janus was handed down. However, the Janus decision outlawing mandatory fair share fees was not enough for the anti-union National Right to Work Foundation and its allies. They wanted to harm unions as much as possible. So, after Janus was handed down, they sued the union for money damages in the amount of the fair share fees that employees had paid under Abood, arguing they never should have been required to pay them in the first place.
The Seventh Circuit Court of Appeals rejected this argument. It held, essentially, that the union could not be liable for money damages when it was relying on a Supreme Court ruling—Abood—that expressly held that fair share fees were lawful. It took the court some legal wrangling to get there, but the decision is ultimately one of common sense. How can someone be forced to pay damages for doing something the Supreme Court held was lawful? It is one thing to change the law going forward, but it is quite another to financially penalize someone for doing something that was lawful when they did it. Parties are entitled to rely on what the Supreme Court says the law is.
The right-to-work folks took the Seventh Circuit’s decision to the Supreme Court, hoping for a second favorable ruling from the Court. Fortunately, the Supreme Court declined to hear the appeal, which effectively makes the Seventh Circuit’s decision the final say in the states covered by the Seventh Circuit (Indiana, Illinois, and Wisconsin) until and unless the Supreme Court were to reverse course again in the future.
The Seventh Circuit’s decision in the second Janus case can be found here.