Symposium: Evidence shows unions will survive without agency fees

Patrick Wright is the vice president for legal affairs at the Mackinac Center for Public Policy, which filed an amicus brief in support of the petitioner in Janus v. American Federation.

Janus v. American Federation of State, County, and Municipal Employees, Council 31 is the fourth case since 2012 in which Abood v. Detroit Board of Education, which upheld public-sector-union agency fees against a First Amendment challenge, has been questioned. The latest case, Friedrichs v. California Teachers Association, ended in a 4-4 tie after the death of Justice Antonin Scalia. The state interest put forth in defense of Abood by the four dissenting justices in a previous case, Harris v. Quinn – namely, that “absent a fair-share clause, a union can[not] attract sufficient dues to adequately support its functions” — is insufficient to overcome First Amendment objections. Further, if the Supreme Court does decide to overturn Abood, the manner in which it does so may have broad implications for employees in mandatory bargaining units who seek to exercise what would be their newly recognized First Amendment rights.

According to the Current Population Survey, 4.8 million public employees are in mandatory bargaining units for which agency fees are required (obtaining this figure requires use of a data analysis program to isolate the necessary entries). Since 2013, AFSCME has interviewed 600,000 of its members and determined that if Abood were overturned, 35 percent would pay fees “no matter what,” 15 percent “would likely not pay dues,” and the remaining 50 percent are “on the fence.” In 2012, Michigan enacted a right-to-work law that prohibits agency fees, and the Michigan Education Association has lost 25 percent of its membership since then. Assuming $656/person in dues or fees, if 25 percent of the 4.8 million public employees chose to stop paying dues or fees to the union, the public-sector unions’ annual fees and dues would drop from $3.1 billion to $2.4 billion. Thus, the rights of millions of employees, along with a significant amount of money, are at stake.

The petitioners in Abood raised two First Amendment challenges to public-sector agency fees. First, they argued that mandatory bargaining itself was unconstitutional in the public sector, and second, they maintained that agency fees were not permissible, even if mandatory bargaining was. Both challenges were rejected.

In Harris v. Quinn, the majority agreed that there was a state interest in having a single mandatory bargaining representative. Thus, the remaining question is whether Abood was correct that this state interest is sufficient to justify an agency fee. Writing for the majority in Harris, Justice Samuel Alito stated that “a union’s status as exclusive bargaining agent and the right to collect an agency fee from non-members are not inextricably linked.” The four dissenters disagreed, maintaining that “basic principles of economics” would prevent unions without access to agency fees from being viable.

Most know that there are mandatory bargaining unions in right-to-work states (be it in the public or private sector). This alone would seem to defeat the Harris dissenters’ economic theory. But to address that theory, we at the Mackinac Center for Public Policy sought to quantify the difference in union membership rates (the percentage of employees in a mandatory bargaining unit that are union members) between mandatory bargaining with agency fees and mandatory bargaining without them.

When we examined this question in Friedrichs, we used the CPS exclusively, but in Janus we eventually felt the need to create a second methodology involving state employee payrolls as well. Both provide support for the Harris majority’s contention that there is not an inextricable link between the state interest in having an exclusive bargaining agent and the imposition of agency fees.

Using the federal government’s CPS data, we determined that in agency-fee states, the union membership rate is over 90 percent, while in right-to-work states that rate is around 80 percent. These percentages applied in both the private and public sector. This 80 percent figure was in line with the union membership rates of the railway unions when the Railway Labor Act was amended to allow those unions to impose agency fees. A situation in which four out of five employees within a bargaining unit are paying full dues clearly indicates that the state would have a viable exclusive representative to bargain with even without agency fees and that the Harris dissenters’ economic theory is wrong.

Much of this data was included in our briefing in Friedrichs and occasioned an amicus brief in response and a policy paper — both of which used data from the National Center for Education Statistics Student and Staffing Survey rather than the CPS. This survey indicated that the union membership rate when there is mandatory bargaining and a right to work in the public sector is 66 percent. This is obviously lower than 80 percent, but still appears on its face to be sufficient to guarantee a viable exclusive bargaining agent.

In trying to determine whether the CPS or SASS provided better numbers, we developed another means of examining union membership – by looking at state payroll figures. Data were accumulated from all of the states on the number of state employees (excluding universities, for administrative convenience), those in mandatory collective bargaining units, and those that have union fees deducted from their paychecks. Employees who had dues withdrawn constituted a membership rate floor (as opposed to a membership rate, because there is a possibility that some members paid by means other than a paycheck withdrawal).

The payroll findings in agency-fee states were largely unremarkable. The membership floor was at 80 percent, which was lower than the CPS membership rate of 94.5 percent. But again, either figure would allow the state a viable bargaining partner.

When we turned to states with mandatory bargaining and no agency fee – the result being sought in Janus – the gap between the CPS membership rate (83 percent) and the payroll membership floor (29 percent or even less if Michigan were excluded) was stark. With these payroll floors, it is not immediately clear that the Harris dissenters’ economic argument is wrong.

Isolating Colorado and Florida, which had the lowest membership floors at 5.5 percent and 10.4 percent respectively, we looked at the union certification dates of various bargaining units. Mandatory bargaining for state employees only became legal in 2007, and in 2008 there were eight units certified, all of which are still in place. Florida’s largest state-employee union, AFSCME Council 79, represented over 47,653 state employees despite a membership floor of 1,369. Four state-employee units are represented by that union, and three of those units were certified in the late 1970s, with the other certified in 1981. Thus, this union has been able to exist for decades despite the low membership floor.

In looking at other certifications in Florida, Iowa, Kansas and Nebraska, we again see longstanding units even though those states are right-to-work states and have membership floors quite a bit lower than the CPS membership rate. Also notable are Arkansas and North Carolina, in which, even without mandatory bargaining or agency fees, over 40 percent of all state employees (not just those within bargaining units) had dues withdrawn from their paychecks. It is difficult to square these two states with the Harris dissenters’ economic theory.

Remember, the key question is whether the government’s need for an exclusive bargaining partner is being met, not whether the unions’ relative strength vis-à-vis public employers is being maximized. The burden of proof is on the government to show it needs to overcome the public employees’ First Amendment rights. A fascinating portion of the oral argument in Friedrichs featured various justices’ attempts to discuss survivability and the union’s repeated refusal to do so. This evasiveness implies that the unions know they have served as longstanding exclusive bargaining representatives in situations without agency fees and that they cannot claim that loss of those fees will compromise their viability.

Extrapolating from AFSCME’s percentages, if Abood is overturned, a little over three million public employees may consider ending financial support to their mandatory bargaining agents. Michigan’s experience in transitioning from an agency-fee state to a right-to-work state shows that the Supreme Court will need to clarify when and how public employees can leave the union, or else mass confusion could affect many of those employees adversely.

In Michigan, the Michigan Education Association indicated that it would use all legal means to fight right to work’s implementation. One way it did so was through maintenance of dues provisions that could only be rescinded within limited time windows. Adding to the chaos was Michigan’s decision to grandfather all union security clauses in current collective-bargaining agreements. This meant that right to work’s practical effect differed contract by contract and unit by unit. The end result was that hundreds to thousands of public employees were sent to collections agencies by the MEA, which gathered over $240,000 over the course of three years, according to its LM-2s.

The National Education Association has indicated that it plans to use the Michigan model on maintenance of dues if Janus overturns Abood. Also, during the oral argument in Friedrichs, some justices discussed whether current collective-bargaining agreements with agency-fee provisions should be allowed to run their course before a ruling overturning Abood would apply. However, there are likely tens of thousands of these agreements throughout the country, and what would trigger application of a new rule in Janus, should the employee prevail, could be difficult to discern. A reopener on wages? A memorandum of understanding? A change in health-care premiums?

The unions may claim a reliance interest in maintaining the holding in Abood. But, if Abood was wrong and agency fees are unconstitutional as to public employees, then the public-sector unions have been receiving an improper windfall of hundreds of millions of dollars annually for four decades. This unconstitutional imposition of fees should not be allowed to persist.