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U.S. Supreme Court to Consider Broad Challenge to Unions’ Right to Collect Agency Fees

   Published on:  23 Oct, 2013

On October 1, the United States Supreme Court agreed to hear the appeal of a federal class action, Harris v. Quinn, regarding the constitutionality of compelled payment of fair share fees. In that case, nonmember home health workers in Illinois claimed fair share (or “agency”) fees—fees unions have long been able to charge nonmembers for representational costs—violated their First Amendment rights.

The federal Seventh Circuit Court of Appeals rejected the lawsuit based on decades of case law permitting unions to collect fair share fees. The Supreme Court’s willingness to hear Harris provides an ominous signal that the Court may overrule, or severely limit, well-established law upon which many unions have relied for decades to pass along some of the costs of representation to nonmembers.

The conservative majority on the Court has previously expressed its hostility toward the fair share fee system. In 2011, in Knox et al., v. SEIU, Local 1000, the Court ruled against SEIU, requiring the union to: (1) issue nonmembers a new notice (a Hudson letter) for every special assessment; (2) obtain consent of nonmembers (i.e., “opt in”); and (3) bear all financial risk when making estimations.

And the majority encouraged broader challenges in the future. First, it hinted that the “opt in” requirement as to special assessments could be expanded to collection of regularly assessed fees as well. Second, it expressed its willingness to reconsider long-settled cases like Chicago Teachers Union v. Hudson, 475 U.S. 292 (1986), and Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977), which set forth methods for collection of fair share fees by public employees.

One potential outcome of Harris is that the Court may expand Knox by requiring that all nonmember fees—special and regular assessments—may be collected on an opt in basis only. Alternatively, as the plaintiff class seems to be asking, the Court could try to find some First Amendment basis for prohibiting unions from requiring agency fees from nonmembers, which could in turn invalidate many state laws.

If you have any questions, please contact Jonathan Yank at jonathan@majlabor.com.