Supreme Court’s Union Ruling and Impact on HR Practices

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The U.S. Supreme Court decided in a 5-4 ruling that mandatory public-sector union dues are unconstitutional. Employees must now opt-in to having union fees deducted from their wages.

In Janus v. AFSCME Council 31, Illinois State employee Mark Janus claimed that union fees are unconstitutional under the First Amendment’s rights to free speech and association. The decision effectively overturns a previous ruling in Abood v. Detroit Board of Education (1977) in which the Court unanimously affirmed that union fees for the costs of “collective bargaining, contract administration, and grievance adjustment purposes” were legal in the public sector.

Associate Justice Samuel Alito Jr. wrote for the majority: "Neither an agency fee nor any other payment to the union may be deducted from a nonmember's wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.”

As of July 2018, 28 states have passed right-to-work laws that make it illegal to require workers to join a union or pay fees as a condition of employment. The Supreme Court’s ruling now guarantees this for public-sector employees nationwide, and we can expect states to continue passing their own “right-to-work” legislation covering private-sector workers as well.

Steps for Employers

Of course, the Court’s decision will require some organizations to update HR practices and smooth over any tensions with the union and among employees. Based on SHRM’s recommendations, here are five steps to consider:

  1. Employers should compose a new opt-in form for union fees

    HR professionals in unionized workforces are used to employee’s authorizing union fees to be automatically deducted from their paychecks. Now, they will need to obtain written consent from workers who wish to opt-in to paying union dues and related fees.

  1. Employers may need to refund employees

    The Court’s ruling is already in effect, but some employers may not be able to stop these payroll deductions in time. As employers work to update their payroll processes, they may need to refund employees who were not given time to opt-out for that cycle.

  1. Employers should understand the labor laws that affect your organization

    When HR professionals update their processes, they should consult individual state laws that address public-sector labor relations. In contrast, the federal National Labor Relations Act (NLRA) determines collective bargaining in the private sector.

  1. Employers should have an honest conversation with the union.

    Now that union fees in the public sector are illegal, employers should manage the union’s expectations. For example, some CBAs and state laws address specifically what union representatives can say during new-hire orientation. Are they able to talk openly about paying union fees or encourage new workers to opt-in?

  1. The employer should be ready to tackle any morale issues

    There may be tension between workers who still support the union and those who no longer wish to pay fees. Ultimately, this is a private choice among individual employees, and cultivating a culture of mutual respect goes a long way towards adjusting to the new law.

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