People gather outside the Supreme Court during oral arguments in the U.S. v. Micosoft case February 27, 2018 in Washington, DC.
Supreme Court deals blow to organized labor
01:53 - Source: CNN

Editor’s Note: Craig Becker is general counsel to the AFL-CIO. He was counsel to one of the employee parties in Epic Systems. The views expressed in this piece are his own.

CNN  — 

In Janus v. AFSCME, the US Supreme Court’s conservative 5-4 majority held that public employees cannot be required by state law to pay a fair share of the cost of services that unions must provide members and nonmembers alike.

Janus comes a month after Epic Systems Corp. v. Lewis, where the same majority decided employees can be required by companies to submit all workplace grievances to private arbitration and waive their rights both to go to court and join together in class-action lawsuits.

Craig Becker

With these two decisions, the court erodes procedures of peaceful collective activity central to workplace law for more than half a century. And it weakens efforts to secure fair treatment at a time of soaring economic inequality. But consequences unintended by the court may follow: new legislation to curb the use of arbitration and greater constitutional protection of labor protest.

Janus uproots an entrenched principle of labor law. Since passage of the National Labor Relations Act in 1935, collective bargaining has incorporated the principle of majority rule: when employees vote by a majority to be represented by a union, the union has a legal duty to represent everyone, members or not.

The union’s duty extends even to representing nonmembers individually – for instance, if they are unfairly fired. To prevent free riders from bearing the fruits of union representation without paying a penny for it, federal law governing the private sector, as well as state law governing the public sector in nearly half the states, approves charging nonmembers a “fair-share” fee.

This fee covers only collective bargaining and contract enforcement, offsetting the union’s duty of fair representation, and strictly excludes the cost of political or ideological activities. The amount at stake in Janus was around $45 a month for the plaintiff, Mark Janus, a child support specialist in the Illinois Department of Healthcare and Family Services.

Until now, the Supreme Court recognized the fair-share system in the public sector to be constitutional, upholding it against First Amendment challenges.

In the landmark 1977 case Abood v. Detroit Board of Education, the court found the fee was essential to preserving “labor peace” via the collective bargaining process and did not violate nonmembers’ freedom of association. But Janus overturns that 41-year-old precedent.

Writing for the majority, Justice Samuel Alito finds that the fair-share fee “violates the free speech rights of nonmembers.” The decision, in effect, requires union members to subsidize services to nonmembers. “Judicial disruption does not get any greater than what the Court does today,” Justice Elena Kagan writes in dissent. “More than 20 States have statutory schemes built on the decision. Those laws underpin thousands of ongoing contracts involving millions of employees.”

Epic likewise undermines the legal protection of collective activity – the right of employees to band together to mount challenges against workplace abuses through class-action lawsuits. The NLRA broadly entitles workers to engage in “concerted activity” for “mutual aid or protection.” This guarantee has long been construed to embrace group litigation to enforce common rights, such as earning a minimum wage and being free from racial discrimination or sexual harassment.

In Epic, however, the court upheld the practice of making employment conditional on agreement to individually arbitrate all disputes. The decision invokes an obscure 1926 statute, the Federal Arbitration Act, adopted by Congress to ensure that courts respect voluntary arbitration agreements involving commercial contracts between business parties.

But such business agreements are nothing like mandatory workplace arbitration contracts of today that bar employees from acting in concert to enforce their rights. Under such contracts, even two employees cannot join together to make a claim.

The effort of enforcing common rights through class-action lawsuits parallels that of collective bargaining supported by fair shares fees. Both amplify the voice of individual employees, redressing power imbalances in the workplace while facilitating peaceful resolution of disputes.

As Justice Ruth Bader Ginsburg wrote in dissent in Epic, “By joining hands in litigation, workers can spread the costs of litigation and reduce the risk of employer retaliation.” The court has undercut that right, by entitling employers to require the waiver of collective enforcement and leaving employees no recourse but to make individual claims in a private arbitration forum.

Already, the extraordinary unfairness of mandatory individual arbitration agreements has prompted corrective legislation to be introduced in Congress. In the wake of the oral argument in Epic, Sen. Richard Blumenthal of Connecticut introduced the Arbitration Fairness Act of 2018 to prohibit enforcement of pre-dispute arbitration agreements in employment as well as in civil rights, consumer, and antitrust disputes.

And Senators Lindsey Graham of South Carolina and Kirsten Gillibrand of New York have introduced a bipartisan bill to end forced arbitration of workplace sexual harassment claims. While these bills probably won’t pass the current Congress, a future Democratic Congress may very well push them forward.

State initiatives are also underway. Earlier this month, Washington’s governor, Jay Inslee, issued an executive order directing state agencies to contract only with employers who don’t impose compulsory individual arbitration. Epic has spurred new policy designed to curtail the move to privatize and atomize adjudication.

Janus, too, may have unexpected consequences.

The Supreme Court, since the Burger years, has placed public employee speech about the terms of work outside the protection of the First Amendment, on the grounds that it is not of “public concern,” limiting the right of government employees to protest workplace wrongs. But in Janus, the court has doubly reversed course, finding that matters at issue in public-sector collective bargaining fall within the First Amendment’s sphere but also that fair-share fees are unconstitutional.

The silver lining here for public employees is that the ruling should amplify free-speech rights on the job, including freedoms to voice concerns about wages, hours, benefits and working conditions. Or else, as Justice Kagan warns, “we will discover that today’s majority has crafted a ‘unions only’ carve-out to our employee-speech law.”

Janus brings the First Amendment directly into the government workplace.

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    Who are the workers affected by the court’s rulings? In Janus, it’s diverse public employees covered by collective bargaining – from teachers to firefighters. In Epic, it’s everyone whose workplace rights are violated – from gas station attendants deprived of a minimum wage to Hollywood stars subjected to sexual assault. The court has undermined the protections all derive from the right to act in concert.

    But the question has hardly been closed. As legislative constraints on mandatory individual arbitration emerge, the expansion of First Amendment rights into government workplaces to protect dissociation from union representation must also entitle public employees to voice collective demands for economic justice. The court has spoken, but surely not the last word.