August 2018

California Legislature Reacts to Supreme Court’s Blow Against Unions

By Jason Fischbein

Paul, Plevin, Sullivan & Connaughton LLP
 

By Joss Teal

Paul, Plevin, Sullivan, & Connaughton

Introduction

On June 27, 2018, the United States Supreme Court issued perhaps the most significant decision to impact collective bargaining this century in Janus v. American Federation of State, City, and Municipal Employees, Council 31 (AFSCME).1 In a 5-4 decision, the Court declared as unconstitutional the common requirement that public employees who opt not to join a union still be required to pay “agency” fees to that union.2 In an attempt to mitigate the effects of the Supreme Court’s decision, the California Legislature enacted, and Governor Jerry Brown signed into law, Senate Bill 866.3 The interaction between SB 866 and the Janus decision, and how California public employers should navigate the two, is addressed below.

Janus v. AFSCME

Until now, public employees in 22 states, including California, who declined to join a designated union were not assessed full union dues but instead had to pay what was generally called an “agency fee” to cover the costs of collective bargaining that would benefit them. The union would set the agency fee annually and send nonmembers a notice explaining the basis for the fee and the breakdown of expenditures.

The plaintiff in this case, Mark Janus, was employed by the Illinois Department of Healthcare and Family Services as a child support specialist.4 Under Illinois law, Janus was forced to subsidize the union that represented his unit, even though he chose not to join and strongly objected to the positions taken by the union in collective bargaining.5 Janus challenged the constitutionality of such public-sector agency fee arrangements and asked the Supreme Court to overrule Abood v. Detroit Bd. of Ed.,6 which approved them.7 

In a widely expected result, the Supreme Court found agency fees to violate the Free Speech Clause of the First Amendment.8 The Court reasoned that requiring public sector employees to pay an agency fee to a union violated the free speech rights of nonmembers by compelling them to subsidize private speech on matters of public concern.9 In doing so, the Court overruled Abood, rejecting the arguments that agency fees are necessary to achieve “labor peace” and to avoid free-riders.10 The majority ordered that “[n]either an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.”11

California Senate Bill 866

Governor Brown signed SB 866 on the same day that Janus was decided. The bill was designed to give public sector unions more control over the dues authorization process by (1) ensuring employer cooperation in administering dues deductions and (2) limiting employer communications concerning employee representation.

Specifically, SB 866 mandates that employers must continue to allow payroll deductions for union dues.12 Additionally, any requests by an employee to start or cease deductions must be submitted to the union.13 The union is then responsible for notifying employers about changes to employees’ deductions, including the amount of dues to be deducted from individual employees’ paychecks.14 The public employer must honor the authorizations provided by the union and may not request a copy of the employee authorization from the union unless a dispute arises about its existence or terms.15 The union must indemnify any costs incurred by the employer in defending claims brought by employees regarding payroll dues deductions.16

Concurrently, if a public employer decides to “disseminate mass communications” to its employees or applicants concerning union membership, the employer must first meet and confer with the union concerning the content of the communication.17 If the employer and union cannot agree about the communication and the employer decides to issue its proposed message, it must also distribute a communication of reasonable length provided by the union.18

What Janus & SB 866 Mean for Public Employers

The mandate from Janus is clear: public employers must immediately stop deducting agency fees from non-union employees’ pay unless they have affirmative consent from the employees to do so. While SB 866 directs employers to “honor the terms of the employee’s written authorization for payroll deductions,” Janus requires this to be limited to dues deductions for union members, not agency fees for non-members. However, employers must continue to honor payroll-deduction requests of members under SB 866. 

Importantly, any requests by members to cancel or change a deduction must be handled by the union and the revocability of an authorization will be determined by its terms.19 Public employers should identify any agency-shop MOU provisions or “maintenance of membership” clauses in their labor agreements and ensure an applicable severance provision exists to hold such clauses invalid without requiring renegotiation. 

Finally, SB 866 reiterates that employers are prohibited from deterring or discouraging applicants for public employment from becoming members of an employee organization or deterring or discouraging current members from continuing or discontinuing membership.20 Union representatives, however, are still guaranteed a chance to recruit new public employees after they are hired.21

In this changing public employment landscape, it is imperative that public employers understand both Janus and SB 866 going forward.


1 138 S. Ct. 2448 (2018).
2 Id. at 2459.
3 S.B. 866, 2017-2018 Reg. Sess. (CA 2018) (enacted).
4 Janus, 138 S. Ct. at 2461.
5 Id.
6 431 U.S. 209 (1977).
7 Janus, 138 S. Ct. at 2462.
8 Id. at 2486.
9 Id. at 2459–60.
10 Id. at 2466.
11 Id. at 2486.
12 S.B. 866 § 1.
13 Id.
14 Id.
15 Id.
16 Id.
17 Id. § 2.
18 Id.
19 Id. § 1.
20 Id. § 2.
21 Id. § 3.