Friedrichs is a case about fair share fees in the public sector. The question is whether the First Amendment prohibits public employers from bargaining and enforcing fair share agreements. So it was notable that one of the first questions during Monday’s oral argument – and the first question that Justice Kennedy asked petitioners’ counsel – concerned the private sector. Here’s the exchange:

Justice Kennedy: If – if you were to prevail, what would happen with private employers in a state which said that there should be an – a union shop?

Mr. Carvin: Nothing, Your Honor.

. . . .

Justice Kennedy: And – and because?

Mr. Carvin: Because the First Amendment doesn’t apply to private employers, and because in Beck the Court established the rules for agency shops based on the statute without any First Amendment –

Justice Kennedy: I think that’s correct as a basic distinction. It is true, though, assuming that you have a state statute which allows an agency shop or a – a closed shop, that that is State participation in the very kind of coerced membership and coerced speech that you’re objecting to.  (Emphasis added).

Steve Greenhouse, at The Guardian, noticed this exchange and wrote:

Justice Kennedy signaled on Monday that he thought it might also be a first amendment violation for states to require private-sector workers to pay agency fees. That could open the door to a follow-up lawsuit that could be devastating to labor – one that sought to bar agency fees in the 25 non-right to work states that allow such fees in private-sector unionized workplaces.

There are at least two ways to think about what Justice Kennedy said (and both should be taken with the grain of salt that is appropriately applied to oral argument interpretations). One possibility is that Kennedy was trying to clarify that a holding for the Friedrichs petitioners would not have any bearing on private sector labor relations. In other words, that Justice Kennedy was working to cabin the implications of overruling Abood. This is a possible theory, but it doesn’t quite square with what Justice Kennedy actually said: again, that it is “true” that a law allowing agency shop agreements “is state participation in the very kind of coerced membership and coerced speech” petitioners claim is at issue in Friedrichs.

A second way to interpret Kennedy’s comment is as Greenhouse suggests: Kennedy believes that a labor law that permits agency shop agreements in the private sector constitutes “State participation” – a.k.a. state action – in coerced speech and association and thus such a law implicates (and probably violates) the First Amendment. This would mean that (on Kennedy’s view) NLRA § 8(a)(3), which allows for agency shop agreements in the private sector, is unconstitutional.

Finding state action in a labor law that permits private parties to bargain agency shop agreements would mark a dramatic departure from the Court’s state action doctrine, and seems exceedingly unlikely for this reason. In fact, petitioners’ counsel noted as much. He replied to Kennedy’s statement by saying:

Well, I don’t, in candor think that would create state action under the Court’s modern jurisprudence, such as Moose Lodge, where it turns on who is making the decision that is being objected to. In your hypothetical it would be the private employer.

In fact, if state action arises from a law that permits private parties to bargain a certain type of contract, then there’s infinitely more state action out there than is currently understood, and so a lot more room for constitutional claimsmaking. Indeed, on this view, state action could be nearly pervasive.

As to the more likely doctrinal implications of Friedrichs for the private sector, Justice Scalia’s comments toward the end of the argument are probably more relevant than Justice Kennedy’s remark. As Justice Scalia said to the Solicitor General:

[T]he problem is that [the public sector] is not the same as a private employer, that what is bargained for is, in all cases, a matter of public interest. And that changes the – that changes the situation in a way that – that may require a change of the rule. It’s one thing to provide [agency fees] for private employers. It’s another thing to provide it for the government, where every matter bargained for is a matter of public interest.

This statement from Justice Scalia portends very bad things for agency fees in the public sector. But it’s also an argument as to why Friedrichs’ damage is unlikely to extend to the private sector.