The Limited Effects of the Supreme Court's Janus Decision

States that want to allow public sector unions, and avoid "free-rider" problems, should still be able to do that -- just by paying unions directly, rather than via compelled agency fees.

I hope to blog a good deal about today's Janus v. AFSCME decision in coming days. As readers might gather, I disagree with the majority, for reasons discussed in Will Baude's & my amicus brief, but I also disagree with some aspects of the dissent; and in any event, I'd rather deal with separate conceptual aspects in separate posts.

For now, let me suggest that, going forward, Janus might not change that much (though after what will doubtless be a thorny transition period). In particular, state legislatures that like the pre-Janus agency fee model—under which non-union-member state and local employees had to pay "agency fees" to unions in order to support collective bargaining—can maintain the practical economic effects of that model, without violating the First Amendment.

Let's take a stylized example: Say that Illinois is paying some employees $50,000/year, and deducts $500/year from each paycheck in union dues to their union. Now, after Janus, such payments can no longer be compelled. But Illinois thinks it's important that the union get adequate funding for its collective bargaining activities, and thinks that, given that unions have to fairly represent all employees (both union members and others) in such bargaining, all employees should share in that cost.

Illinois can then change its practices: It would cut the employees' salary by $500/year, and then pay $500/year/employee, straight from state coffers, to the union as a "contract administration fee"—just as it may pay other entities that provide important services to the government (cleaning, accounting, insurance processing, etc.). The employees would still have a take-home paycheck of $49,500, as before. Illinois is still paying $50,000/employee, as before. And the union is still getting $500/employee as before (plus whatever extra dues people who join the union choose to pay, dues that could then be used for other purposes, such as political advocacy). Or if cutting the salary is too politically infeasible, or carries improper symbolism, just reduce the expected cost-of-living increases for the following year by the $500/year.

Here, I think there would be no First Amendment problem, even under the Janus majority opinion. After all, no employee would be required to pay any money to a union; the money would come directly from a state or local government treasury, much as money for a wide range of purposes (education, government publicity compaigns, government contracting) comes directly from such treasuries. That the money is paid on a per-employee basis shouldn't matter; nor should it matter that the employee salaries or future cost-of-living increases were reduced to cover this payment.

The government can cut my salary as a UC employee by $500 and then spend the $500 on funding some new classes, or funding anti-smoking ads, or paying money to a private organization that would then put out anti-smoking ads. It should be free to cut my salary by $500 and then pay the $500 to a union that would then engage in collective bargaining. To the extent I'll still be subsidizing the government payment, it will be only in the sense that all taxpayers subsidize all government expenditures—and the Court has never suggested that such use of tax money even implicates the Free Speech Clause. Indeed, such a system might better reflect the argument in favor of public sector unions, which is that they are said to provide fair treatment for employees, an orderly bargaining process, and labor peace. If a state government thinks unions provide such valuable beneifts for the state, why not pay them for it, the way the state government pays other organizations that perform various services for the state?

Now I think this helps show that the Janus majority erred in claiming that the agency-fee system is unconstitutional; as the dissent points out, "when a government mandates a speech subsidy from a public employee," that is really just "levying a tax to support collective bargaining," and doesn't violate the First Amendment. But, rightly or wrongly, the majority held thatrequiring the money to be paid "by the employee" (in the sense of being withheld from the employee's paycheck) violates the First Amendment, because at that point the employee is being compelled to directly fund the union. Fine then: If the state government thinks that the union is providing a valuable service to the state, the government can just fund it directly out of general tax revenues.

As a recent article by Prof. Benjamin Sachs points out, this may require some changes to state law. Many state labor laws now bar direct payments by employers to state employee unions (a holdover from a time when people were especially concerned about undue employer control of unions). And state campaign finance laws sometimes restrict political action by government contractors, which unions might end up becoming under this new proposal. But if a state legislature wants to change the law this way, and presumably legislatures in many of the states that allow compulsory agency fees would, it can do so.

I realize that some people might say that this is an attempt to work around the Court's decision, and is thus impermissible. But some such workarounds are fine; compare, e.g., Johanns v. Livestock Marketing Ass'n (2005), which upheld an agricultural advertising funding system that was economically very similar to a different funding system that the Court had struck down on First Amendment grounds in United States v. United Foods, Inc. (2001).

The question is whether the workaround solves the underlying constitutional problem. If the problem is that requiring government employees to pay money to a union violates the First Amendment, then the workaround would solve it, because then the money would be paid by the government from general treasury funds, and not by the employees.

And if the problem is that requiring even taxpayers to subsidize unions, via the government, violates the First Amendment, then the law has a much bigger problem on its hands: After all, taxpayer money flows to a vast range of speakers, both governmental and private, through a vast range of government programs and government contracts. I don't believe the Court in Janus was suggesting that all these payments—to public education, to government contractors for services rendered, to government-selected private organizations whose speech the government wants to funds, and more—are constitutionally suspect.