In an expected but potentially devastating blow to public sector unions, the Supreme Court announced on Tuesday that it will hear a case called Friedrichs v. California Teachers Association in its next term. Friedrichs, as Justice Elena Kagan explained in a similar case last year, asks the justices to “impos[e] a right-to-work regime for all government employees” throughout the country, and it does so based on an aggressive reading of the First Amendment that could have absurd consequences for the government’s relationship with its own employees. Should this case prevail, moreover, that decision could be an existential threat to many public sector unions, potentially draining them of the money they need to operate.
The primary issue at stake in Friedrichs are “fair share service fees,” a fee that the unions at issue in this case charge to non-members in order to compensate the union for bargaining on those non-members’ behalf. Under well-established law, unions are required to bargain on behalf of every worker in a unionized shop, regardless of whether a specific worker elects to join the union. This means that union members and non-members share alike in the benefits of working for a unionized employer, and these benefits can be significant. According to one study, workers in unionized shops enjoy a wage premium of nearly 12 percent.
If workers were allowed to accept these higher wages without having to pay anything in return, however, that would create a free-rider problem — where workers would have no incentive to join the union because they benefit regardless of whether they are members. Eventually, the union would be starved for funds, and all the workers would lose the benefits they gain from being unionized.
To combat this problem, unions have historically charged fees — alternatively referred to as “fair share” fees or “agency fees” — to non-members in order to recoup the costs of bargaining on the non-members’ behalf. These costs can be significant, as collective bargaining often requires a sophisticated team of financial experts and lawyers who must be paid as professionals. Nevertheless, an individual worker’s share of these costs typically do not exceed the value of the higher wages and increased benefits they receive from collective bargaining. And if the union fails to strike a deal that increases workers’ take-home pay once the cost of agency fees are covered, the workers always have the opinion of voting not to be represented by the union.
Friedrichs, however, asks the Court to invalidate these agency fees — or, at least, to declare them optional — and permit non-members of a public sector union to gain many of the benefits of being in a union without having to pay for it. Should this case succeed, it would place enormous, potentially even crippling, financial pressure on public sector unions.
The legal theory animating Friedrichs is rooted in the First Amendment’s prohibitions on compelled speech. The plaintiffs in this case argue that there is “no constitutionally significant difference between compelling public employees to subsidize public sector unions’ collective-bargaining efforts, compelling employees to speak in favor of such efforts, or prohibiting employees from speaking about such efforts.” In essence, they claim, unions must engage in a form of speech when they bargain on behalf of workers, and some of those workers may disagree with that speech. So requiring workers to fund collective bargaining amounts to a kind of compelled speech.
The biggest problem with this argument is that it proves far too much. Indeed, if workplace bargaining is subject to full First Amendment scrutiny, it’s unclear how the government is supposed to manage its workers at all. Consider a hypothetical Justice Kagan raised in a similar case, “[s]uppose an employee violates a government employer’s work rules by demanding, at various inopportune times and places, higher wages for both himself and his co-workers (which, of course, will drive up public spending). The government employer disciplines the employee, and he brings a First Amendment claim.” Disciplining employees who disrupt the workplace with inappropriately timed demands is a legitimate and necessary management practice, and yet, under the plaintiffs’ proposed rule in Friedrichs, such discipline most likely violates the First Amendment.
Indeed, as Justice Antonin Scalia warned in that same case, the plaintiffs’ rule could create First Amendment problems for managers who simply try to keep their own schedule, even if no worker is disciplined. “Suppose you have a policeman,” Scalia asked an attorney seeking to undermine agency fees, “who is dissatisfied with his wages. So he makes an appointment with the  police commissioner, and he goes in and grouses about his wages. He does this, you know, 10 or 11 times. And the commissioner finally is fed up and tells his secretary  I don’t want to see this man again. Has he violated the Constitution?”
The bad news for unions is that Scalia did not heed his own warning when he voted, along with the Court’s four other conservatives, to limit many unions’ ability to charge agency fees in 2014. Given that precedent, as well as a 2012 decision that also calls the viability of public sector agency fees into question, the future of agency fees looks grim.