By: Dan Lautar, Esq. and Milko Cecez, Esq.
Following the death of U.S. Supreme Court Justice Antonin Scalia on February 13, 2016, the fate of “agency” fees in public sector labor unions remains uncertain. An “agency fee,” is a fee paid by non-union members to cover the cost of being represented by the union. On January 11, 2016, the U.S. Supreme Court heard oral arguments in Friedrichs v. California Teachers Association, a case involving a 28-year veteran teacher from Orange County, California, and nine (9) of her fellow non-union member teachers, who brought suit against the California Teachers Association (“CTA”), seeking to end the practice of requiring non-union members to pay a mandatory agency fee.
During oral arguments, lawyers for Friedrichs’ attempted to convince the U.S. Supreme Court to overturn its decision in Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977), wherein the Court held that states may compel nonunion members to pay agency fees to finance expenditures by their union for the purposes of collective bargaining, contract administration, and grievance adjustment. Friedrichs’s lawyers argued that the mandatory agency fee violates her First Amendment rights by compelling political speech that she may not agree with. The Center for Individual Liberties, the public interest law firm that underwrote the litigation and submitted a brief in support of Friedrichs to the Court, argues on its website that: “Requiring teachers to pay these ‘agency fees’ assumes that collective bargaining is non-political. But bargaining with local governments is inherently political. Whether the union is negotiating for specific class sizes or pressing a local government to spend tax dollars on teacher pensions rather than on building parks, the union’s negotiating positions embody political choices that are often controversial.”
The CTA argued that the Supreme Court should stand by its decision in Abood, which it says rests on solid constitutional footing. Further, the CTA argued that, without mandatory agency fees, a significant “free rider” problem would result, where employees refuse to financially contribute to the union while obtaining the benefits of the union. The CTA worries that the resultant free rider problem may deteriorate its ability to effectively represent employees.
It is unclear where the nine U.S. Supreme Court justices were in deliberating Friedrichs’ case prior to Justice Scalia’s passing. Between now and July, the Court has the option of ruling on the case, or holding the case over for re-argument once a new Supreme Court Justice is confirmed. If the Court decides to rule on the case with only eight Justices on the bench and it results in a 4-4 split decision, the tie would go to the victor in the lower court. In this case, the lower court – the Ninth Circuit Court of Appeals – applied Abood, and entered judgement in favor of the CTA, upholding mandatory agency fees.
Twenty-five (25) states currently have laws in place which mandate that public sector employees must pay agency fees to the unions that represent them. In Ohio, public sector labor unions may bargain to require non-members to pay agency fees (called “fair share fees” in the Ohio Revised Code), but it is not mandated by statute. O.R.C. §4117.09(C). Should a public employer in Ohio have an agency fee provision in its collective bargaining agreement, it must deduct the agency fee from the payroll of the employee and remit it to the recognized employee union. Depending on the outcome in Friedrichs, Ohio’s public sector labor laws may be fundamentally altered.