Judge Strikes Down "Right to Work" Law as Unconstitutional

On April 8, 2016, a Circuit Court in Wisconsin held its “right to work” law was an unconstitutional taking of the Plaintiff-Union’s property without just compensation. (International Association of Machinists District 10, Local Lodge 1061 v. State of Wisconsin (Apr.8, 2016) Case No. 2015CV000628.)

Approximately 26 states have adopted “right to work” laws, which prohibit union security agreements requiring employees to pay union dues as a condition of employment. As the Wisconsin court noted, the “duty of fair representation” prevents a union from declining to represent non-paying members.

The Wisconsin Constitution, like the California and federal Constitutions, prevents the taking of property for public use without just compensation. A taking requires (1) a property interest (2) that has been taken (3) for the public use (4) without just compensation.

The Wisconsin court found the Unions had a property interest in the services they perform for their members and non-members and that the “right to work” statute was a regulatory taking. While the “right to work” laws were determined to be for the “public use,” the court found the State had not compensated the Unions with money for their services. The State argued the Unions had been justly compensated for their compelled labor with the privilege of “exclusive representation.” However, the court rejected this argument, noting “just compensation” requires the payment of money, not a grant of special privileges or other non-monetary benefits.

In a recent California case, Friedrichs v. California Teachers Association, plaintiffs argued that requiring union dues as a condition of employment violated their First Amendment right to free speech. Had the lawsuit been successful, California would have become a “right to work” state, barring agency-shop agreements and "fair share fees." After the death of Justice Scalia, however, the Supreme Court issued a 4-4 decision in the case. With no majority holding, California “fair share fees” were safe. Plaintiffs have already filed a petition for rehearing asking the Supreme Court to reconsider the case when a new, ninth Justice is confirmed.

Under the takings rationale, however, right to work states would either have to pay unions to provide services to all employees or allow unions to decline representation for non-paying members. 

Supreme Court to Decide Challenge to CTA's Fair Share Fees

On June 30, 2015, the United States Supreme Court agreed to hear a constitutional challenge to the California Teachers Association's ability to collect fair share fees from non-members who benefit from CTA contracts.

Fair share fees, also called agency fees, are fees paid by employees who benefit from a union contract, but opt out of full membership.  Many unions, particularly in public safety, have voluntary membership rates above 99%.  But other unions have lower voluntary member rates for a variety of reasons and rely on fair share fees to finance contract negotiations and other core union activities.

Courts have long considered fair share fees constitutional in the public sector since the Supreme Court's 1977 decision Abood v. Detroit Bd. Of Ed., 431 U.S.209, 232.  But courts require unions who collect them to divide their core labor activities from other other activities and assess a fair share fee that only covers the cost of core activities.  In California, these rules are part of PERB's regulations. They require unions to give non-members written notice about agency fees and, depending on their size, prepare audited financial statements.  In this way, the courts balance the rights of non-members with the needs of the unions that provide critical services.

But the Supreme Court indicated recently it may change that balance and let non-members free ride on union benefits.  Last year, in Harris v. Quinn, the Supreme Court held the First Amendment prohibited fair share fees from some types of organized workers.  In the opinion, the Court disparaged fair share fees and invited another challenge.  But that case involved home health care workers who did not have a traditional union-member relationship and did not apply to other types of employees.  Now, the Court will hear a direct challenge to fair share fee requirements under California's regulatory scheme in its October term.