What teachers’ unions should expect from the Supreme Court’s ‘opt-in’ ruling

The Supreme Court‘s widely expected decision in Janus v. AFSCME struck down public sector unions’ ability to charge agency fees to public employees who aren’t union members, delivering a significant blow to teachers unions’ power.

Justice Samuel Alito’s majority opinion overturned Abood v. Detroit Board of Education, the 1977 precedent that affirmed the legality of “fair share” fees. Alito bluntly argued that Abood was poorly reasoned, and that agency fees violate “the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.”

{mosads}In a strident dissent, Justice Elena Kagan argued that stare decisis should have retained the precedent: “Reviewing those decisions not a decade ago, this Court — unanimously — called the Abood rule ‘a general First Amendment principle.’”

The bulk of the minority opinion focused on how the ruling will affect labor and collective bargaining. “More than 20 states have statutory schemes built on (Abood),” she argued, “Those laws underpin thousands of ongoing contracts involving millions of employees … judicial disruption does not get any greater than what the Court does today.” Anticipating this verdict, many experts predicted membership declines of 20, 30, or even 50 percent. But an unexpected part of the ruling could make these losses even greater.  

The primary reason for anticipated membership declines is that eliminating agency fees changes the real cost of union membership. The petitioner for instance, Mark Janus, could have paid full dues, but choosing not to join the union still had to pay 78 percent of dues as an agency fee. For Janus, the real cost of membership was the difference: 22 percent of dues. Without agency fees, the choice is either 100 percent or nothing, nearly quadrupling the real cost of membership. Agency fees didn’t drive Janus to join the union, but many members who joined under this marginal cost of membership could now defect.

Again, this was expected and teachers’ unions — which collectively may be the nation’s most powerful public sector interest group — have budgeted for losses. The National Education Association’s (NEA) 2017–18 budget anticipates losing 10 percent of members, while the United Federation of Teachers, the AFT’s New York City affiliate, expects losses between 20–30 percent. Now, in response to Janus, unions are doubling down on traditional member-recruitment and retention tactics. For instance, New York teachers’ unions pushed their allies to enact a state law barring non-members from receiving certain union benefits. It’s an open question whether drawing brighter lines will stem losses.

But one small but pivotal aspect of the ruling was not expected: that public employees must now opt-in, rather than opt-out of the union. Arguing that compelled fees violate workers’ First Amendment rights, and joining a union is thus a waiver of First Amendment rights, the opinion demands that teachers declaratively opt-in to the union. In Alito’s words, the union cannot collect any fee “unless the employee affirmatively consents to pay.” This seemingly small addition will exacerbate union declines, and make it all the harder for unions to fight attrition.

Small changes in default positions can make enormous differences. Take the example of organ donation rates, which in Austria are more than 90 percent, and in neighboring Germany are about 15 percent; the difference is that Austrians have to opt-out of organ donation, while Germans must affirmatively opt-in. By adding the opt-in requirement on top of ruling out agency fees, the Janus ruling went further than most expected.

Not coincidentally, Janus paves the way for another case on this very issue, Yohn v. CTA, which is waiting in the wings. Ryan Yohn and seven other California teachers challenge the California Teachers Association’s (CTA) burdensome opt-out restrictions, the very types of measures some unions have pushed as an answer to Janus.

“The opt-in/opt-out issue is just as much a First Amendment issue as the compulsory dues issue,” Yohn argued. Now, even if Janus doesn’t quite assure a defeat in Yohn in lower courts, there is little doubt about how the Supreme Court would rule.

Teachers’ unions may have underestimated Janus’ breadth, but Kagan’s dissent did not underestimate the ruling’s impacts, which affect untold thousands of contracts, and could — as many union officials have argued or threatened — erode labor peace. Some labor unrest after Janus is a real possibility, and the statewide teacher strikes this spring demonstrated its potential. But those strikes ignited in states with weak unions, where teacher pay and education spending was markedly low. In contrast, agency-fee states have stronger unions, better pay and higher spending, meaning the very states Janus will hit hardest won’t have the fuel to ignite a resurgence.

Janus solves one problem but may allow another. The Abood precedent allowed unions in some states to collect arguably inflated agency fees, and thereby keep membership artificially high year after year. These overpowered unions led to the judicial crusade to stop what opponents considered clear abuses. Janus ends them, but it doesn’t end the story. Unions now face the free rider problem that the court ruled could not justify agency fees.

Make no mistake, Janus is an unequivocal loss for unions. With no middle path to balance the free rider challenge unions face, Janus offers a legal solution, but leaves serious practical questions unresolved. Anti-union forces will certainly celebrate the ruling, and unions will decry it, but many in the middle may come to see this as an overcorrection, one that will force teachers’ unions to reinvent themselves to retain their once monumental influence.

Nat Malkus is deputy director and resident scholar in education policy studies at the American Enterprise Institute. Brendan Bell is a research assistant at the American Enterprise Institute.