On January 11, 2016, the Supreme Court of the United States (“SCOTUS“) heard oral arguments in Freidrichs v California Teachers Association. If questions from the bench are any indication of the Court’s perspective on the matter, public sector unions in the United States may be in trouble.
Freidrichs considers whether California State law requiring non-union members to pay “agency fees” violates the first amendment right to freedom of speech. Agency fees are charged to cover the cost of services performed by the union on behalf of all employees – in particular, collective bargaining activities.
The Plaintiffs argued that, in the context of public sector employers, requiring non-union members to subsidize the collective bargaining activities that they disagree with essentially constitutes government-compelled speech. The conservative members of the bench appeared to support the argument that, because state spending on public sector organizations is a matter of public concern (i.e. political), any collective bargaining activities that could cost the state any money at all is a form of political speech. It should therefore be subject to the high standard of strict scrutiny under the first amendment if employees are required to make payments that advance political speech they disagree with.
From the union side, the central concern is that a ruling in the Plaintiffs’ favour will facilitate a free-rider problem, where employees decline to join the union but take advantage of the benefits secured for them by the union. A high enough degree of attrition would hamper a unions’ ability to effectively advocate for employees. In oral argument, however, Justice Scalia indicated that he didn’t think the consequences were likely to be so negative.
Many traditionally Republican States already have so called “right-to-work” legislation banning mandatory fees for non-union members. A decision in favour of the Plaintiffs would, however, extend such a ban to States with the majority of public employees, including New York and California.
This case stands to further widen a growing gap in the stability and security faced by public sector unions in Canada versus the United States. In contrast with Freidrichs, the Supreme Court of Canada (“SCC“) has upheld the mandatory payment of union dues for the purposes of collective bargaining, even where the money is spent on political causes the employee disagrees with. Although mandatory union dues are a violation of an employee’s Charter right to freedom of association, they are justified and constitutional because, in the SCC’s view, the right was not intended to protect against association with others that is a necessary and inevitable part of membership in a modern democratic community.
While there is no legislation requiring non-union members to pay union dues in Canada – such requirements are a product of collective agreements – some Canadian statutes explicitly permit so-called “closed-shop” provisions in collective agreements which prevent public sector employers from hiring non-union members, with few exceptions. Ultimately, any potential impact of the Freidrichs case, when SCOTUS releases its decision, will likely occur on the political front. The Ontario PC Party’s 2012 white paper on flexible markets indicates an appetite to address the distinction between fees paid for collective bargaining and other political activities in Canada. The labour landscape that emerges in the United States after SCOTUS decides Freidrichs could guide future legislative changes in Canada.