At the end of the 2012 Term, the Supreme Court decided Knox v. SEIU, Local 1000.  The case involves the constitutional permissibility of mandatory dues-payments arrangements in the public sector.  At issue in Knox itself was an accounting procedure that SEIU used for a one-time assessment to pay for a “political fight-back fund.”  Because the SEIU assessment was somewhat unusual, the actual holding of Knox is fact-bound and unlikely to have much future bite.  On the other hand, there is dicta in the case suggesting that five of the Justices are ready to declare that all mandatory dues payments arrangements in the public sector are unconstitutional.  Such a holding would upset decades of precedent, cause enormous problems for public sector unions, and convert the country into a right-to-work state when it comes to public employment.

Again, Knox itself does none of these things.  But because the Court can be read as inviting future litigation to test the constitutionality of mandatory dues payments in the public sector – also known as “agency shop” clauses – we are going to track post-Knox litigation on this blog.  This post will briefly lay out the most potentially radical part of the Knox holding and then review what seems to be the first piece of litigation attempting to convert the Knox dicta into law.  [NB: We focus here on the part of Knox that portends a future holding that agency shop clauses in the public sector are unconstitutional.  Another piece of dicta in Knox suggests that dues payments for political activities must be opt-in rather than opt-out.  This dicta is certainly relevant too, and we may address it in subsequent posts.]

Here is the basic background:

A good number of states have decided that collective bargaining can be in the interests of the public.  In these states, where public employees vote to form a union, the employer has an obligation to bargain with the union.  But the union also has an obligation – namely, to represent all the workers in the bargaining unit, whether or not those workers choose to become union members.  To make sure that each worker pays her fair share of the costs of representation, and to ensure that nobody gets to free ride on the dues paid by others, state governments allow employers to require everybody in the unit pay dues.

Over the years, the Supreme Court has crafted a doctrine to structure and police these mandatory dues arrangements.  The basic rule has been this: in order to avoid the free-rider problem, public employers can require that employees pay their fair share of the union’s collective bargaining and contract administration expenses, but, to avoid a compelled political speech and association problem, employees have been given a right to opt out of funding the union’s political program.

This basic rule – approving of mandatory dues for collective bargaining activities – was announced in 1977 in Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977).  But the rule, and the constitutionality of the agency shop, is called into question by the Knox majority.  Here’s what Justice Alito, writing for the Court, had to say (internal citations omitted):

Because a public-sector union takes many positions during collective bargaining that have powerful political and civic consequences, the compulsory fees constitute a form of compelled speech and association that imposes a significant impingement on First Amendment rights.  Our cases to date have tolerated this impingement, and we do not revisit today whether the Court’s former cases have given adequate recognition to the critical First Amendment rights at stake.

So, here, an invitation to future litigation: the Court does not consider today whether Abood is still good law.

Alito then continued (internal citations again omitted):

The primary purpose of permitting unions to collect fees from nonmembers, we have said, is to prevent nonmembers from free-riding on the union’s efforts, sharing the employment benefits obtained by the union’s collective bargaining without sharing the costs incurred.  Such free-rider arguments, however, are generally insufficient to overcome First Amendment objections. . . .  Acceptance of the free-rider argument as a justification for compelling nonmembers to pay a portion of union dues represents something of an anomaly.

So, having invited a future test of Abood, the Knox majority then signals why Abood was incorrectly decided.

On April 30, 2013, ten California public school teachers, along with a nonprofit religious organization called the Christian Educational Association International, took up the invitation in Knox and filed what appears to be the first post-Knox case challenging the continued validity of Abood and the constitutionality of public-sector agency shop clauses.  See Friedrichs v. California Teachers Ass’n, No. 8:13-cv-00676-JST-CW (C.D. Cal. 2013).  In the litigation, the plaintiffs seek to enjoin enforcement of the provision of the California Educational Employment Relations Act that authorizes agency shops.  As the plaintiffs state in their complaint, “California’s teachers’ unions routinely take positions in the collective-bargaining process that have profound political and budgeting consequences.”   Requiring public employees to pay dues to support this collective-bargaining activity, they argue, is unconstitutional.  As the plaintiffs put it, Abood is “irreconcilable” with Knox.

We will keep tabs on Friedrichs and report relevant developments.  In the meantime, please let us know of other post-Knox litigation.