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Counsel’s Corner: Supreme Court’s Ruling on Union Fees – What Impact Could This Have?

Earlier this month, voters in Missouri overwhelmingly rejected a right-to-work law proposed by the Missouri Legislature.

Background

Right-to-work laws ban compulsory union fees for non-union members. Currently, 27 states nationwide have right-to-work laws in place. The Missouri ruling was a significant victory for unions, as voters rejected the proposal in favor of allowing fair-share fees.

Fair-share fees are paid by non-union employees to cover unions’ nonpolitical costs, like collective bargaining.

Unions maintain that this practice is fair because these paying employees who do not join unions, still benefit from union representation in collective bargaining, and reducing such fees weakens a union’s ability to bargain for workers’ rights.

Right-to-work supporters argue that workers should have the right to take a job without the requirement of paying union fees.

Summary

The Missouri vote was good news for unions after the U.S. Supreme Court’s Janus v. AFSCME decision in June that ruled that deducting fair-share fees from the non-union members without their express consent was unconstitutional.

The Janus decision overruled 40 years of precedent and is perceived to be a significantly negative blow to unions. The U.S. Supreme Court itself acknowledged that the decision would financially impact unions and force them to make adjustments to attract and retain members.

For now, Janus will not directly impact the Missouri elections, as it addresses public sector unions, while the recent Missouri ruling only addresses the private sector.

Relevancy and Impact 

These recent developments illustrate the ongoing history relating to organized labor in the U.S. The 1935 Wagner Act was fundamental in establishing workers’ rights to organize and join unions to engage in collective bargaining. By 1947, the Taft Hartley Act was enacted to restrict unfair labor practices and allowed states to establish right-to-work laws.

Labor union membership in the U.S. has been dropping since then and is now roughly a third of what it was at its peak.

Labor unions invested heavily to make sure the voters in Missouri rejected right-to-work law. The results revealed that the majority non-union members voted to reject right-to-work. Interestingly, these same voters also supported Donald Trump in the 2016 election, who is a right-to-work advocate. The Missouri election results show the continued support for unions by all workers, rather than solely union members.

The growth of the gig economy may give a hint of workers’ continued need for organized labor. Independent contractors have the right to control their work and make extra income on demand. However, these opportunities are in exchange for employee rights and protections. The growth of worker misclassification litigation illustrates workers’ need for representation to protect their rights.

There is an opportunity for labor representation that is more cost-efficient than lawsuits. Unions will need to engage this growing workforce to avoid the losses the Janus decision may create.

The Future of Unions 

Unions will have to adapt to stay relevant. Union models are focused on fixed worksites and static workforces. They will have to find a way to address the growing numbers of workers in the gig economy who move from one client to the next, week after week.

The gig economy is the opposite of the “stable workforce” for which unions are currently best suited to serve. If Janus is an indication of the direction of the U.S. courts, organized labor will have to embrace worker challenges presented by the evolving workforce.

The Missouri election, however, could also indicate that workers are not looking for the end of organized labor.

Geoff Mohun is General Counsel and the Chief Compliance Officer for iWorkGlobal.

He has a Juris Doctorate from John F. Kennedy School of Law and is a graduate of California State University, Chico. He was admitted to the State Bar of California in 1997. Connect with Geoff on LinkedIn.

 

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