On March 29, 2016, the Supreme Court of the United States issued a per curiam opinion in a case on the validity of public-sector “agency shop” arrangements, which permit unions to charge a fee (in order to pay for select costs) to public employees who do not join a union. During oral argument, the Court had seemed likely to invalidate the fee and overrule the Court’s primary precedent. However, the recent death of Justice Scalia, having shifted the Court’s conservative-liberal balance, likely changed the outcome of this case. This morning, in Friedrichs v. California Teachers Association (14-915), an equally divided Court affirmed the decision of the Ninth Circuit Court of Appeals upholding the agency fee on the basis of decades-old Supreme Court precedent.

“Agency Shop” Arrangements

Under an agency shop arrangement, all workers in a unit covered by a union contract must pay union fees, regardless of whether they belong to the union. According to Supreme Court precedent, unions may require public-sector workers to pay an amount to support union activities related to collective bargaining—but not for union political activity (to which some workers would presumably object).

In 1977, in Abood v. Detroit Education Association, the Supreme Court extended this rule to the public-sector workforce. The Court ruled that unions may impose these fees on nonunion government workers for the following nonpolitical expenses: collective bargaining, administration of union contracts, and internal grievance procedures. The Abood Court acknowledged that public-sector unions engage in political activity but ruled that non-union public workers are not required to pay those costs.

The Friedrichs Case

A group of California public school teachers filed suit challenging the agency fee that their union required them to pay. In short, the teachers argued that all of a public sector union’s activities attempt to influence government policy making, and thus that nonmembers of the union should not be required to pay any union fees if they do not support those political activities. The teachers also expressly challenged the holding in Abood. The Ninth Circuit affirmed a trial court decision upholding the agency fee as required by Abood.

The case eventually reached the Supreme Court, which agreed to hear it to decide two issues:

  1. Whether Abood should be overruled and public-sector “agency shop” arrangements invalidated under the First Amendment to the U.S. Constitution; and
  2. Whether requiring public employees to affirmatively object to subsidizing nonchargeable speech by public-sector unions—rather than requiring that employees affirmatively consent to subsidizing such speech—violates the First Amendment.


The Supreme Court’s Decision

At oral argument in January of 2016, the line of questioning—and especially the liberal justices’ focus on the doctrine of stare decisis, dictating that Abood be upheld—seemed to indicate that the justices would rule, 5-to-4, against agency fees. Instead, with Justice Scalia’s passing, the justices split, 4-to-4, and issued a one-sentence decision: “The judgment is affirmed by an equally divided Court.” By affirming the Ninth Circuit’s decision, which followed Abood, the Supreme Court leaves the current agency shop system for public employees in place.

Practical Impact

The Supreme Court’s decision did not set any precedent on the constitutionality of agency shop arrangements and did not foreclose the possibility of similar cases reaching the Court in future terms—when a full bench will likely make all the difference.

According to Harold P. Coxson, a principal with Ogletree Governmental Affairs, Inc. and a shareholder in the Washington, D.C. office of Ogletree Deakins, “This is one of the first decisions to be altered by the death of Associate Justice Scalia and the resulting vacancy on the Supreme Court. It will not be the last. The Court had the option of setting the case for re-argument when a new justice is confirmed, but chose not to wait. For public-sector employees, the decision means continued payment of so-called ‘fair share’ union dues, often against their will. Unfortunately, the one-page decision affirming the Ninth Circuit provides no guidance for public-sector employers.”


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Traditional Labor Relations

The attorneys in Ogletree Deakins’ Traditional Labor Practice Group have vast experience in complex and sophisticated traditional labor law matters. This includes experience advising and representing employers of all sizes and across virtually all industries in connection with union representation campaigns, collective bargaining negotiations, strike preparations, labor arbitrations, and National Labor Relations Board proceedings.

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