A Response to Justice Kagan: Ending Agency Fees Won’t End Unions (Part 1)

by Robert Alt

Would eliminating agency fees for state public employees—by which employment is conditioned upon a worker paying a fee to the union for collective bargaining expenses, even if he or she disagrees with the positions advanced by the union—make unions unable to function?  Justice Kagan suggested as much in her dissent in Harris v. Quinn, and undoubtedly the effect of eliminating agency fees on unions will be a question that the Supreme Court will grapple with next week during oral arguments in Friedrichs v. California Teachers Associations, a case which asks whether public-sector agency fee requirements violate the First Amendment.  

But empirical evidence makes clear that Justice Kagan’s stated concern is unfounded, and that unions can operate just fine, thank you very much, even when they are not able to collect dues and agency fees as a condition of employment.  While this may be a disappointment to opponents of unions, it clarifies the substantial basis for ending the agency fees: vindicating the First Amendment rights of a minority of union members and fee payers who object to the compelled speech and association foisted upon them by laws that require that they either pay union fees or be subject to termination.

In Harris v. Quinn, Justice Kagan wrote a dissent joined by Justices Ginsburg, Breyer, and Sotomayor positing that eliminating mandatory agency fees—which they called “fair-share agreements”—would prove devastating to unions and their ability to represent and bargain on behalf of their members.  The dissent worried that because the law requires unions to represent both members and non-members fairly, allowing non-members to opt-out of paying agency fees would create a “free-rider problem” that would jeopardize the very existence of public-sector unions.  Explaining the concern, the dissent wrote:

In such a circumstance, not just those who oppose but those who favor a union have an economic incentive to withhold dues; only altruism or loyalty—as against financial self-interest—can explain their support.  Hence arises the legal rule countenancing fair-share agreements: It ensures that a union will receive adequate funding, notwithstanding its legally imposed disability—and so that a government wishing to bargain with an exclusive representative will have a viable counterpart. Harris, 134 S.Ct. at 2656 (2014) (Kagan, dissenting).

This concern is not supported by available evidence or even shared by some prominent union leadership. 

If the Friedrichs Court overturns Abood v. Detroit Bd. of Education, public employees will not be forced to pay agency fees to their unions.  Such freedom would create an environment similar to those provided by right-to-work laws, and thus the union experience in right-to-work states offers valuable, empirical guidance regarding the future of public unions in the absence of Abood.

First, taking a broad view of private-sector union data, the Bureau of Labor Statistics Current Population Survey (CPS) covering the last 15 years (2000-2014) calculated union membership rates among workers covered by a collective bargaining agreement.  The CPS data showed that the union membership rate among workers covered by a collective bargaining agreement was 93% in agency fee states and 84% in right-to-work states.  Over that 15 year span, these percentages stayed relatively constant, with a stable union membership rate over 80%, and showing no signs of the rampant free-riding that the Harris dissent seems to fear.

In my next post, I will examine data from states that have adopted right-to-work to see the impact of the policy change on union membership rates.

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