On Monday, the Supreme Court heard the case Janus vs. AFSCME, with the fate of the labor movement seemingly in the balance. At stake are agency fees: Public-sector unions can collect fees for service from employees who don't join the union that represents them, which the plaintiff argues is an unconstitutional act of compelled speech.
The deep-pocketed backers of Janus aim to bankrupt unions and strip them of whatever power they still have, but if the court rules that an interaction a union has with the government is political speech, they might not be so happy with the results. Many have noted that such an overreaching and inconsistent decision could have unintended consequences by granting a heretofore denied constitutional right to collective bargaining and transforming thousands of workplace disputes into constitutional controversies.
What the Janus backers (and most commentators) miss is that agency fees are not just compensation for the financial costs of representation, but for the political costs of representing all the members in the bargaining unit and maintaining labor peace. As AFSCME's attorney pointed out in his oral arguments, the agency fee is routinely traded for a no-strike clause in most union contracts. Should those clauses disappear, employers will have chaos and discord on their hands.
American labor laws, and the employers who benefit from them, prefer that if there's going to be a union, only one should serve as the exclusive representative of all eligible employees in a workplace. That scheme imposes on unions a legal obligation to fairly represent all members of the bargaining unit, and a political imperative to defend the terms of any deal as "the best we could get" (even if it includes concessions on benefits and work rules). It rewards the unions with a guaranteed right to exist and a reliable base of fee-paying membership. But it rewards employers with the far more valuable guarantee of the right to direct the uninterrupted work of the enterprise while union leadership has to tamp down rank-and-file gripes and discord for the length of the contract.
The combination of exclusive union representation, mandatory agency fees, no-strike clauses and "management's rights" are the foundation of our peculiar labor relations system. No other country structures its labor relations system quite like this. Knock one part out, as the Janus plaintiffs aim to do with agency fees, and the whole system can fall apart. Employers will not like the chaos that this will bring.
Before this system evolved during the New Deal, multiple unions did compete in individual workplaces for dues-paying members and shop floor leadership. They would compete over who made the boldest wage and hour demands and who led the most disruptive job actions, as well as who could forge a more productive relationship with management or just flat-out take a sweetheart deal. But no deal could bring lasting labor peace, as any union cut out of the deal had a political need to disparage its terms and agitate for a fresh round of protests.
World War II strained this system. As a show of patriotism, unions pledged not to strike to maintain defense production, but were rewarded with federally enforced wage freezes to combat inflation. Workers who were squeezed by rising consumer prices found themselves unable to file a grievance if they were fired for engaging in wildcat strikes; many chose to quit their unions in protest. With their leadership and revenue under threat, union leaders considered abandoning their no-strike pledge.
To maintain production and labor peace, federal arbitrators began granting unions a "maintenance of membership" clause in contracts, which compelled union members to continue to pay dues during the terms of a collective bargaining agreement. That evolved into today's union shop and agency fee. Public-sector labor laws, which are immediately at issue in Janus vs. AFSCME, are modeled on private-sector labor law and ruled by the same bargaining dynamics.
