Labor & Employment News Alert
One Court Declines to Find Retroactive Liability Against Public-Sector Unions in the Wake of Janus
December 9, 2018
This past summer saw a significant upheaval in the area of public-sector labor law with the United States Supreme Court ruling in Janus v. American Federation of State, County, and Municipal Employees, Council 31, which held that agency fees could not be automatically deducted from an employee’s pay unless that employee affirmatively consents to the payment. (You can read more on the Janus decision here).
On November 28, 2018, a court ruling addressed one of the first legal questions Janus brought: Do public-sector unions have to return dues that the unions had already collected, following the Janus decision? The answer would appear to be a “No,” at least for now. Danielson v. American Federation of State, County, and Municipal Employees offers the first decision on the merits to this question, though the National Right to Work Foundation is currently litigating several other pending lawsuits urging courts to apply Janus retroactively.
In Danielson, several employees—supported by anti-union groups—brought suit against the American Federation of State, County, and Municipal Employees Union and argued that the Union should not be able to retain funds that the Union collected under collective bargaining agreements (through the use of “dues check-off authorizations”), which the Supreme Court had declared unconstitutional in Janus. Naturally, the Union argued that, although the Court ruled the way it did in Janus, it was still entitled to those funds it had collected before the Janus decision. While this poses an interesting legal question (retroactive applicability of court decisions), this question also poses significant practical applications as well. Simply put, there is a lot of money at stake for unions.
However, in Danielson, United States District Judge Robert Bryan for the Western District of Washington granted the Union summary judgment on the employees’ proposed class action and held that the “good faith defense” under § 1983, the statute under which this action was brought, applied. Simply, when the Union collected the fees, the fees were legal under both state and federal law and the Union could not have known how the Supreme Court would rule in Janus beforehand. Judge Bryan essentially reiterated an old adage of the high Court: The law is what it is until the Supreme Court says it isn’t.
Moreover, Judge Bryan also refused the employees’ request to declare forced fees as unconstitutional and to block the Union from collecting them, and declared the issue moot since the Union had ceased collecting the fees in the aftermath of Janus. Judge Bryan had also dismissed an identical lawsuit against the State of Washington for the same reasons. This ruling prevented the parties from moving on with discovery, which the employees wished to use to determine whether the Union believed itself to be on firm legal ground in the build-up to Janus. However, the court reasoned that allowing the employees to examine the Unions’ “subjective state of mind” would result in a “perverse outcome.”
Basically, if the Union had thought that the Supreme Court would not overrule Abood v. Detroit Board of Education, which had allowed public employers to require agency fees of nonmember employees, then the agency fees would be protected. But if the Union anticipated the Supreme Court would overrule Abood, then the collection of the fees would not be protected. "This is an awkward result, because as noted elsewhere '[a]ny subjective belief [the union] could have had that the precedent was wrongly decided and should be overturned would have amounted to telepathy,'" Judge Bryan opined.
To be sure, this is not the end of the story. The employees plan on appealing this decision, and there are numerous other lawsuits pending before courts in other jurisdictions around the country on this same issue. However, Danielson offers the first decision post-Janus and provides some insight how other courts may address the retroactive applicability of Janus. Given the Supreme Court’s current make-up, this may be the first of many labor law cases to keep an eye on in the near future.