September 20, 2019
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. l:15-cv-01235 -
Robert W. Gettleman, Judge.
WOOD, Chief Judge, and Manion and ROVNER, Circuit Judges.
years, explicit Supreme Court precedent authorized
state-government entities and unions to enter into agreements
under which the unions could receive fair-share fees from
nonmembers to cover the costs incurred when the union
negotiated or acted on their behalf over terms of employment.
Abood v. Detroit Bd. of Educ, 431 U.S. 209 (1977).
To protect nonmembers' First Amendment rights, fair-share
fees could not support any of the union's political or
ideological activities. Relying on Abood, more than
20 states created statutory schemes that allowed the
collection of fair-share fees, and public-sector employers
and unions in those jurisdictions entered into collective
bargaining agreements pursuant to these laws.
2018, the Supreme Court reversed its prior position and held
that compulsory fair-share or agency fee arrangements
impermissibly infringe on employees' First Amendment
rights. Janus v. AFSCME, Council 31, 138 S.Ct. 2448,
2461 (2018). The question before us now is whether Mark
Janus, an employee who paid fair-share fees under protest, is
entitled to a refund of some or all of that money. We hold
that he is not, and so we affirm the judgment of the district
History of Agency Fees
turning to the specifics of the case before us, we think it
useful to take a brief tour of the history behind agency
fees. This provides useful context for our consideration of
Mr. Janus's claim and the system he challenged.
principle of exclusive union representation lies at the heart
of our system of industrial relations; it is reflected in
both the Railway Labor Act ("RLA"), 45 U.S.C.
§§ 151-165 (first enacted in 1926), and the
National Labor Relations Act ("NLRA"), 29 U.S.C.
§§ 151-169 (first enacted in 1935). In its quest to
provide for "industrial peace and stabilized
labor-management relations/' Congress authorized
employers and labor organizations to enter into agreements
under which employees could be required either to be union
members or to contribute to the costs of
arrangements. See 29 U.S.C. §§ 157, 158(a)(3); 45
U.S.C. § 152 Eleventh. Unions designated as exclusive
representatives were (and still are) obligated to represent
all employees, union members or not, "fairly, equitably,
and in good faith." H.R. Rep. No. 2811, 81st Cong., 2d
Sess., p. 4.
Railway Employment Dep't v. Hanson, 351 U.S. 225
(1956), a case involving the RLA, the Supreme Court held that
"the requirement for financial support of the
collective-bargaining agency by all who receive the benefits
of its work is within the power of Congress under the
Commerce Clause and does not violate either the First or the
Fifth Amendments." Id. at 231. In approving
agency-shop arrangements, the Court said, "Congress
endeavored to safeguard against [the possibility that
compulsory union membership would impair freedom of
expression] by making explicit that no conditions to
membership may be imposed except as respects 'periodic
dues, initiation fees, and assessments."' Id.
Hanson thus held that the compulsory payment of
fair-share fees did not contravene the First Amendment.
years later, in Int'l Ass'n of Machinists v.
Street, 367 U.S. 740 (1961), the Court discussed the
careful balancing of interests reflected in the RLA,
observing that "Congress did not completely abandon the
policy of full freedom of choice embodied in the [RLA], but
rather made inroads on it for the limited purposes of
eliminating the problems created by the 'free
rider.'" Id. at 767. The Court reaffirmed
the lawfulness of agency-shop arrangements while cautioning
that unions could receive and spend nonmembers' fees only
in accordance with the terms "advanced by the unions and
accepted by Congress [to show] why authority to make union
shop agreements was justified." Id. at 768.
Legitimate expenditures were limited to those designed to
cover "the expenses of the negotiation or administration
of collective agreements, or the expenses entailed in the
adjustment of grievances and disputes." Id. The
Court left the question whether state public agencies were
similarly empowered under state law to enter into agency-shop
arrangements for another day.
day came on May 23, 1977, when the Supreme Court issued its
opinion in Abood. 431 U.S. 209. There, a group of
public-school teachers challenged Michigan's labor
relations laws, which were broadly modeled on federal law.
Id. at 223. Michigan law established an exclusive
representation scheme and authorized agency-shop clauses in
collective bargaining agreements between public-sector
employers and unions. Id. at 224. The Court upheld
that system, stating that "[t]he desirability of labor
peace is no less important in the public sector, nor is the
risk of 'free riders' any smaller,"
id., and that "[t]he same important government
interests recognized in the Hanson and
Street cases presumptively support the impingement
upon associational freedom created by the agency shop here at
issue." Id. at 225. It recognized that
"government may not require an individual to relinquish
rights guaranteed him by the First Amendment as a condition
of public employment." Id. at 233-34.
Nonetheless, it said that a public employee has no
"weightier First Amendment interest than a private
employee in not being compelled to contribute to the costs of
exclusive union representation/' id. at 229, and
thus concluded that "[t]he differences between public-
and private-sector collective bargaining simply do not
translate into differences in First Amendment rights."
Id. at 232.
correct balance, according to Abood, was to
"prevent compulsory subsidization of ideological
activities by employees who object thereto without
restricting the Union's ability to require every employee
to contribute to the cost of collective-bargaining
activities." Id. at 237. And for four decades
following Abood, courts, state public-sector
employers, and unions followed this path. See, e.g.,
Locke v. Karass, 555 U.S. 207 (2009); Lehnert v.
Ferris Faculty Ass% 500 U.S. 507 (1991); Chicago
Teachers Union v. Hudson, 475 U.S. 292 (1986); Ellis
v. Railway Clerks, 466 U.S. 435 (1984). Agency-shop
arrangements, the Court repeatedly held, were consistent with
the First Amendment and validly addressed the risk of free
riding. See Comm'cns Workers of America v. Beck,
487 U.S. 735, 762 (1988) ("Congress enacted the two
provisions for the same purpose, eliminating 'free
riders,' and that purpose dictates our construction of
§ 8(a)(3) ... ."); Ellis, 466 U.S. at 447,
452, 456 (referring in three places to the free-rider
concern); see also Lehnert, 500 U.S. at 556 (Scalia,
time, however, the consensus on the Court began to fracture.
Beginning in Knox v. Sew. Emps. Int'l Union, 567
U.S. 298 (2012), the rhetoric changed. Abood began
to be characterized as an "anomaly," and the Court
started paying more attention to the "significant
impingement on First Amendment rights" Abood
allowed and less to the balancing of employees' rights
and unions' obligations. Id. at 310-11. Building
on Knox, Harris v. Quinn criticized the reasoning in
Hanson and Abood as "thin,"
"questionable," and "troubling." 573 U.S.
616, 631-35 (2014). Harris worried that
Abood had "failed to appreciate the conceptual
difficulty of distinguishing between union expenditures that
are made for collective-bargaining purposes and those that
are made to achieve political ends" and to anticipate
"the practical administrative problems that would
result." Id. at 637. The Harris Court
also suggested that "[a] union's status as exclusive
bargaining agent and the right to collect an agency fee from
non-members are not inextricably linked." Id.
and critically for present purposes, these observations did
not lead the Court in Harris to overrule
Abood. Informed observers thought that
Abood was on shaky ground, but it was unclear
whether it would weather the storm, be restricted, or be
overturned in its entirety. That uncertainty continued after
the Court signaled its intention to revisit the issue in
Friedrichs v. California Teachers Ass'n, 135
S.Ct. 2933 (2015), which wound up being affirmed by an
equally divided Court. 136 S.Ct. 1083 (2016).
Mark Janus was formerly a child-support specialist employed
by the Illinois Department of Healthcare and Family Services.
Through a collective bargaining agreement between
Illinois's Department of Central Management Services
("CMS") (which handles human resources tasks for
Illinois's state agencies) and defendant American
Federation of State, County and Municipal Employees
("AFSCME"), Council 31, AFSCME was designated as
the exclusive representative of Mr. Janus's employee
unit. Mr. Janus exercised his right not to join the union. He
also objected to CMS's withholding $44.58 from his
paycheck each month to compensate AFSCME for representing the
employee unit in collective bargaining, grievance processing,
and other employment-related functions.
however, Mr. Janus was not involved in this litigation. The
case began instead when the then-governor of Illinois
challenged the Illinois Public Labor Relations Act
("IPLRA"), which established an exclusive
representation scheme and authorized public employers and
unions to enter into collective bargaining agreements that
include a fair-share fee provision. 5 ILCS § 315/6.
Under that law, a union designated as the exclusive
representative of an employee unit was "responsible for
representing the interests of all public employees in the
unit," whether union members or not, § 315/6(d).
Fair-share fees were earmarked to compensate the union for
costs incurred in "the collective bargaining process,
contract administration and pursuing matters affecting wages,
hours and conditions of employment." § 315/6(e).
district court dismissed the governor for lack of standing,
but at the same time it permitted Mr. Janus (and some others)
to intervene as plaintiffs. Mr. Janus asserted that the
state's compulsory fair-share scheme violated the First
Amendment. He recognized that Abood stood in his
way, but he argued that Abood was wrongly decided
and should be overturned by the high court. Although the
lower courts that first considered his case rejected his
position on the ground that they were bound by
Abood, see Janus v. AFSCME, Council 31, 851
F.3d 746, 747-48 (7th Cir. 2017) ("Janus
I"), Janus preserved his arguments and then, as he
had hoped, the Supreme Court took the case.
time, the Court overruled Abood. Janus, 138 S.Ct. at
2486 ("Janus II"). It held that
agency-shop arrangements that require nonmembers to pay
fair-share fees and thereby "subsidize private speech on
matters of substantial public concern/' are inconsistent
with the First Amendment rights of objectors, no matter what
interest the state identifies in its authorizing legislation.
138 S.Ct. at 2460. This is so, the Court explained, because
"the First Amendment does not permit the government to
compel a person to pay for another party's speech just
because the government thinks that the speech furthers the
interests of the person who does not want to pay."
Id. at 2467.
aspects of the Court's opinion are relevant to Mr.
Janus's current claim for damages. First, the Court
characterized the harm inflicted by the agency-fee
arrangement as "compelled subsidization of private
speech," 138 S.Ct. at 2464, whereby "individuals
are coerced into betraying their convictions,"
id. It was not concerned in the abstract with the
deduction of money from employees' paychecks pursuant to
an employment contract. Rather, the problem was the lack of
consent (where it existed) to the use of that
money-i.e. to support the union's representation
work. In other words, the case presented a First Amendment
speech issue, not one under the Fifth Amendment's Takings
Court found that any legitimate interest AFSCME had in those
fees had to yield to the objecting employees' First
Amendment rights. In so doing, it rejected the approach to
free riding that earlier opinions had taken, holding to the
contrary that "avoiding free riders is not a compelling
interest" and thus Illinois's statute could not
withstand "exacting scrutiny." 138 S.Ct. at 2466.
Yet it came to that conclusion only after weighing the costs
and benefits to a union of having exclusive representative
status: on the one hand, the union incurs the financial
burden attendant to the requirement to provide fair
representation even for nonmembers who decline to contribute
anything to the cost of its services; on the other hand, even
with payments of zero from objectors, the union still enjoys
the power and attendant privileges of being the exclusive
representative of an employee unit. The Court's analysis
focused on the union rather than the nonmembers: the question
was whether requiring a union to continue to
represent those who do not pay even a fair-share fee would be
sufficiently inequitable to establish a compelling interest,
not whether requiring nonmembers to contribute to
the unions would be inequitable.
the Court hold that Mr. Janus has an unqualified
constitutional right to accept the benefits of union
representation without paying. Its focus was instead on
freedom of expression. That is why it said only that the
state may not force a person to pay fees to a union with
which she does not wish to associate. But if those unions
were not designated as exclusive representatives (as they are
under 5 ILCS §§ 315/6 and 315/9), there would be no
obligation to act in the interests of nonmembers. The only
right the Janus II decision recognized is that of an
objector not to pay any union fees. This is not the
same as a right to a free ride. Free-riding is simply a
consequence of exclusivity; drop the duty of fair
representation, and the union would be free to cut off all
services to the non-members.
the Court did not specify whether its decision was to have
retroactive effect. The language it used, to the extent that
it points any way, suggests that it was thinking
prospectively: "Those unconstitutional exactions cannot
be allowed to continue indefinitely," 138 S.Ct. at 2486;
"States and public-sector unions may no longer extract
agency fees from nonconsenting employees/' id;
"This procedure violates the First Amendment and cannot
continue/' id. In the end, however, the Court
remanded the case to the district court for further
proceedings, in particular those related to remedy.
Id. at 2486.
District Court Proceedings
most immediate effect of the Court's Janus II
opinion was CMS's prompt cessation of its collection of
fees from Mr. Janus and all other nonmembers of the union,
and thus the end of AFSCME's receipt of those monies.
That relief was undoubtedly welcome for those such as Mr.
Janus who fundamentally disagree with the union's
mission, but matters did not stop there. Still relying on 42
U.S.C. § 1983 for his right of action, Mr. Janus
followed up on the Court's decision with a request for
damages from ...