U.S. Supreme Court building. Photo by Diego M. Radzinschi

The U.S. Supreme Court's ruling that public-sector unions can't force nonmembers to pay fees to cover collective bargaining costs is expected to undermine union power. Public unions, which represent workers such as police officers, teachers and firefighters, rely on these fees as a big source of revenue.

The court's ruling in Janus v. AFSCME, issued on the last day of the term, overturned precedent set in 1977 that said unions could collect fees from nonmembers for the purpose of collective bargaining. The court said these fees violate First Amendment speech rights—that even collective bargaining, essentially, is a political act.

The Bureau of Labor Statistics estimates that 10.7 percent of U.S. workers were union members in 2017, down from 20.1 percent in 1983. Nearly a third of U.S. government employees are members of a public-sector union.

Here are early takeaways and predictions from employment attorneys on the impact of the court's ruling.

➤➤ Reduced revenue streams likely means less lobbying. Public sector unions will have reduced revenue streams, which will change the way these groups conduct their business. Expect reduced lobbying efforts at the federal and local level to influence pro-union legislation, said Steven Suflas, labor and employment partner at Ballard Spahr.

Fisher Phillips attorneys Todd Lyon and Lisa Vickery said less union-backed legislation at the state and local level could benefit public and private employers. Public sector unions are a major financial backer for progressive causes and candidates, which has an effect on local elections, as well, the attorneys noted in a client analysis.

“As an initial matter, public sector unions in agency shop states will immediately lose a valuable revenue stream, effectively crippling many of their efforts,” the Fisher Phillips lawyers said. “All of the state laws permitting public sector unions to require non-members to contribute to their coffers are struck down and no longer enforceable.”

Unions “will now need to both maintain and grow their membership to survive, but will have much smaller bank accounts to get the job done. This will be an uphill battle for them,” the attorneys said. “Janus will impact not only unions' representational activities, but their role in the political arena. Many recent pro-worker ballot initiatives and legislation—including minimum wage increases and expansive paid sick leave—were developed, lobbied for, and funded by organized labor. The budget for such causes has now been slashed dramatically.”

James Redeker, partner at Duane Morris, said public-sector unions have “had it easy.” He said unions will work to make the union's power more visible with employees, so that the value of the unions is on the front burner.

“There has been a focus on maintaining political relationships, but now the focus can be on serving their constituents and making it worthwhile to be in the unions,” he said. “That is a different paradigm for the public employers.”

➤➤ But unions will get more creative. For public-sector unions, the Supreme Court's ruling will mean using tighter budgets for ramped-up grassroots organizing. There are already signs that this is happening. “They have not been sleeping on this issue,” Suflas said. “It's going to be old-fashioned union block walking and tackling the fundamentals.”

Celine McNicholas, director of labor law and policy for the Economic Policy Institute, said workers will struggle to have a voice with the Supreme Court's decision. She noted that the right to unionize and collectively bargain will continue to be covered heavily as workers try to shift the balance of power. “As was seen in the reaction to the teachers' strikes in West Virginia, Oklahoma, and beyond, when issues of economic justice and workers' rights are put front and center, the interests of the wealthy few rarely prevail,” she said.

Baker & Hostetler partner Andrew Grossman said in a post at the Competitive Enterprise Institute: “Don't expect the unions to simply follow the law without a fight. Already, labor attorneys are surely hard at work to contrive arguments that any kind of interaction with a labor union constitutes 'affirmative consent' and that, once ensnared into paying union dues, public workers will be stuck doing so for years—or at least until the next opt-out window.”

➤➤ Watch the maneuvering in the states—for and against unions. Ballard Spahr's Suflas said the Supreme Court's ruling could influence state houses across the country to pass legislation including right-to-work laws. Progressive states could also move to adopt laws that try to counteract the justices' decision.

Lyon and Vickery of Fisher Phillips also predicted state legislatures may seek to pass new laws aiming to boost union membership by giving public sector union members time off from their jobs to recruit new members, or requiring all workers to attend orientation sessions with union representatives to increase access to potential new members.

Mark Neuberger, of counsel to Foley & Lardner, said in a statement that dues are the lifeblood of all labor unions and the decision will continue a developing trend in the private sector: More states are passing laws that outlaw all forms of mandatory union dues.

“This decision will weaken the effectiveness, both economically but also politically, for all public sector unions in the 22 states that as of yesterday allowed compulsory agency fees. On a grander scale, for good or for worse, this decision will lead to a further decline in the percentage of the American workforce that is unionized.”

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