Government unions don’t have to refund so-called agency fees to public employees who were forced to pay them before the Supreme Court struck down such mandatory dues as unconstitutional in 2018, a federal appeals court ruled.
The ruling is a victory for the labor movement, which has been seeing a drop-off in membership figures since the Supreme Court’s landmark ruling in Janus v. AFSCME (2018) threw a wrench in how unions finance their operations.
In Janus, the Supreme Court overruled Abood v. Detroit Board of Education (1977), which held public-sector unions could collect forced agency fees from non-members to finance their collective bargaining activities, without infringing the First and Fourteenth Amendments.
As the Olympia-based Freedom Foundation summed up the Janus decision: “Everything a public-sector union does is political advocacy, and the First Amendment does not tolerate compulsory subsidization of political advocacy.”
After the 2018 opinion, unions stopped collecting the fees.
But three Washington state government workers who, prior to the Janus ruling, were compelled to remit agency fees to the Washington Federation of State Employees even though they weren’t members, have sued, seeking “an award of damages for agency fees wrongfully seized” for themselves and similarly situated workers, their legal complaint stated.
A federal trial court in Washington state dismissed the lawsuit in November 2018. The plaintiffs appealed, and a panel of three judges on the 9th U.S. Circuit Court of Appeals sided with the union and upheld the trial court in a ruling Dec. 26 in the case cited as Danielson v. Inslee. The 7th Circuit Court of Appeals has also held that public employees have no right to a refund for agency fee payments made before the Janus ruling.
The 9th Circuit panel consisted of Judges Ronald M. Gould, Jacqueline H. Nguyen, and Gregory A. Presnell. Nguyen was appointed by then-President Obama; Gould and Presnell were appointed by then-President Bill Clinton.
Writing for the unanimous panel in a 20-page decision, Nguyen found the union had collected the fees in good faith and shouldn’t have to return them.
“The Union bears no fault for acting in reliance on state law and Supreme Court precedent,” Nguyen wrote. “It collected and spent fees under the assumption—sanctioned by the nation’s highest court—that its conduct was constitutional. And the Union provided a service to contributing employees in exchange for the agency fees it received.”
The union is “not required to forecast changing winds at the Supreme Court,” she wrote.
“It is true that, under current law, the employees suffered a constitutional wrong for which they may have no viable means of compensation if the good faith defense prevails,” Nguyen wrote. “Nonetheless, it would not be equitable to order the transfer of funds from one innocent actor to another, particularly where the latter received a benefit from the exchange.”
It’s unclear if the Washington state employees will appeal the ruling to the Supreme Court.
The Janus ruling has spurred a flurry of legal activity.
Two Wisconsin attorneys are relying on the Janus opinion in their challenge to compulsory state bar association fees.
Adam Jarchow and Michael Dean are expected to petition “the Supreme Court to end mandatory bar association fees, which are common to the regulation of legal practice in at least 30 states,” The Daily Caller News Foundation reported.
“The plaintiffs say their case is a natural extension of the Supreme Court’s 2018 Janus v. AFSCME decision, which struck down mandatory ‘agency fee’ payments to public sector unions on First Amendment grounds. The dispute presents the high court with its first opportunity to extend the Janus decision to other contexts.”
The National Right to Work Foundation is reportedly litigating about 30 cases related to Janus that seek more than $120 million in refunds.