No one, with the possible exception of disenfranchised voters in North Carolina, has fared worse before the Roberts Court than working men and women. Under Chief Justice John Roberts’ leadership, the Court largely wrote a key protection for victims of sexual or racial harassment out of the law. It made it easier for employers to retaliate against workers who file civil rights complaints. It gave employers an easy way to immunize themselves from class action lawsuits brought by their workers. And, of course, there was that whole unequal pay for equal work case involving Lilly Ledbetter.
So when the justices announced that they would hear a major case concerning the rights of public sector unions, union-side attorneys reacted with understandable fear for the future.
Harris v. Quinn, which is being argued Tuesday before the Supreme Court, presents the question of whether public sector unions may charge what are known as “agency fees” to non-union members who benefit from the fact that the union bargains on their behalf. By one estimate, unionization raises worker wages by about 12 percent, so the benefits that non-union members receive from having a union bargain on their behalf are significant.
For decades, public sector unions have operated under a simple bargain. Unions are subject to two restrictions — they may not require non-members to fund the union’s political activity, and they must bargain on behalf of every worker in a unionized shop, regardless of whether each individual worker belongs to the union. In other words, the union cannot encourage non-members to join by bargaining for higher wages or other benefits that only apply to union members. When a union secures a wage increase, the non-members benefit from the higher wages as well.
The cost of bargaining with an employer can be significant, however. Negotiators must have the sophistication determine what sort of bargain would be beneficial to the workers but also feasible for the company to deliver. Lawyers are needed to review contracts and to draft them. Because non-union members benefit from the high wages, increased benefits and other advantages of having a union bargain on their behalf, unions are permitted to charge agency fees to non-members in order to cover those non-members’ share of the bargaining costs.
In practice, these agency fees are typically paid out of the increased wages that the non-members receive through the collective bargaining process, so the non-members wind up wealthier in the long run even though they are paying some fees to the union. If a union fails to deliver higher wages, a majority of the workers in a bargaining unit always have the option to vote not to be represented by the union.
In June of 2012, however, the five conservative justices indicated that they are ready to blow up this arrangement, at least with respect to public sector unions. Writing for himself and his fellow conservatives in Knox v. SEIU, Justice Samuel Alito labeled the agency fees “a ‘significant impingement on First Amendment rights.'” Though the conservative justices decided not to revise the Court’s past decisions permitting agency fees in Knox, it is not hard to guess how they will decide Harris now that this issue is directly before them.
A major purpose of agency fees is to prevent non-members from free-riding off of a union. Because non-members typically receive wage increases from the collective bargaining process regardless of whether they join the union or not, past Supreme Court decisions have recognized that it is fundamentally unfair to require a union to pay for benefits provided to non-members who don’t pay a dime into the system. Worse, blowing up the agency fees arrangement could potentially set off a death spiral, where unions are forced to charge higher fees to members to make up for lost agency fees, which in turn leads more members to quit the union, which in turn leads to higher membership fees.
And yet, when the Supreme Court is done with Harris, it is overwhelmingly likely that there will be five votes to authorize non-union members to become free-riders.