Agency fees, the First Amendment and Rauner’s executive order

Jeffrey Schwab

Jeffrey Schwab is a senior attorney with the Liberty Justice Center.

Jeffrey Schwab
February 21, 2015

Agency fees, the First Amendment and Rauner’s executive order

When it comes to collecting ‘fair share’ fees, abolishing the practice would be the only outcome that’s truly fair to workers across the country.

Gov. Bruce Rauner issued an executive order on Feb. 9 directing state agencies to stop taking “fair share” union fees, also known as “agency” fees, from state employees who have chosen not to join the union.

The executive order builds on the logic of the U.S. Supreme Court case Harris v. Quinn, which held that the First Amendment prohibits the state from forcing people who receive a government subsidy, but who are not actual government employees, to pay union fees. The reasoning of this case should apply to nonunion government employees as well. All speech by public-sector unions, including collective bargaining, is political because it affects public policy. Forcing nonunion employees to support a union means forcing them to pay for such political speech, and therefore violates the First Amendment.

Unions and their supporters, however, argue that agency fees are justified because they prevent nonunion employees from “free riding,” a term unions use to imply that agency-fee payers are unfairly benefiting from union services. They claim these fees provide for nonunion employees’ share of the cost of collective bargaining, contract administration, and the pursuance of matters affecting wages, hours and conditions of employment.

There are two big problems with this argument: First, attempts to prevent free riding cannot justify forcing a person to pay for union lobbying or political speech, even if it might benefit that person, because doing so violates that person’s rights to free speech and free association under the First Amendment. Second, many nonunion employees might not want the services the union provides or find them beneficial.

Individuals have different circumstances, needs and wants – not every state worker necessarily favors greater spending and bigger government. Some workers may object to the union’s services because they believe it leads to unnecessary government spending, which is unsustainable in the state’s current financial situation. Others may prefer 401(k)-style retirement plans because they don’t want their retirement plans being mismanaged by the government.

Employees also might not like the way the union manages its money. For example, AFSCME spent only 51 cents of every dollar in union dues on representation of workers in 2013, while most of the rest of the money went to administration, overhead, and political and lobbying activities. Also in 2013, the Service Employees International Union Healthcare Illinois-Indiana spent $1.5 million out of its $46.2 million budget on hotels, air travel, rental cars, restaurants and catering. And the Illinois Education Association, the state’s biggest teachers union, devoted just 26 percent of its budget to representation in 2014, with nearly 70 percent going to administration and overhead and 3 percent to political activities.

State law allows, but does not require, unions to deduct agency fees. The 196-page collective-bargaining agreement for the American Federation of State, County and Municipal Employees contains provisions that require the deduction of agency fees from nonunion employees. It’s not hard to imagine why a nonunion employee might object to unions obtaining the power to collect agency fees via the collective-bargaining process, while justifying such fees from nonunion employees as the cost of collective bargaining.

Further, there is no reason to believe agency fees are being used for purely nonpolitical activities. Unions get to decide for themselves which expenses are chargeable to nonmembers, and often categorize purely political activities as representational. In some cases, unions have categorized contributions to groups whose activities consist of running “issue campaigns” as representational activities. Nonmember employees generally can’t afford to spend the time and money required to challenge these determinations, so they are in effect forced to pay for union politics even if they choose to opt out.

Agency fees are wrong because they force people to pay for services they may not want or find beneficial, and compel people to pay for union political speech, in violation of their First Amendment rights. While some government employees may find union representation beneficial, nonunion employees don’t have a choice. The unions could avoid these First Amendment issues by simply allowing these employees to opt out of the union’s representation, and not receive union services, under “one or none” policies.

If they don’t, the U.S. Supreme Court should take up a case involving agency fees, and issue an opinion protecting nonunion employees’ First Amendment rights. When it comes to collecting “fair share” fees, abolishing the practice would be the only outcome that’s truly fair to workers across the country.

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