Supreme Court stops employers from collecting automatic agency fees for public-sector unions

The U.S. Supreme Court ruled against labor unions holding that public-sector workers who are in a union-represented bargaining unit cannot be required to pay agency fees, also called “fair share” fees, in order to cover the costs of collective bargaining.  The Court stated that requiring such payments violated public-sector employees’ First Amendment rights. This decision overturned Abood v. Detroit Board of Education, which allowed for workers represented by a union but who did not want to be members of the union to be charged the fair share fees as long as those workers did not have to pay for the political or ideological activities of the union.

Public-sector unions will lose a substantial amount of money under this decision and may be required to cut back on some of their more costly activities, like court actions and arbitrations.  These unions will also now face the challenge of showing workers that the fees are worthwhile in order to avoid losing members who do not want to pay the fees, but will still enjoy union negotiated benefits.

In addition, the decision also requires that employees affirmatively consent to pay an agency fee or any other payment to a public-sector union.  Currently, employers automatically deduct the fee from qualified workers’ paychecks unless the workers opt-out.  Public-sector employers who follow this practice should immediately consider sending out forms to employees who fit the criteria to ensure that the employee consents before taking any further union fees out of the employee’s pay.

Additional details can be found in the Court’s opinion.  You may also contact a member of Buckingham’s Employment & Labor Practice Group today to discuss your options following this decision.