On June 27, 2018, the U.S. Supreme Court overruled a 41-year-old legal precedent to hold that states may not compel public employees to contribute any money to the labor union that represents them. In Janus v. AFSCME, Council 31, the Court held that public employees have a First Amendment right not to contribute money to a labor union and that states have no compelling interest sufficient to overcome that free speech right.

The plaintiff in that case was an Illinois state employee represented by the American Federation of State, County and Municipal Employees, Council 31. He refused to join that union because he opposed many of the positions that the union advocated, including positions that the union took in collective bargaining. But Illinois, like many states, requires public employees represented by a union to pay an “agency fee” consisting of the portion of union dues (in this case 78%) that the union estimates are directly related to its duties as collective bargaining representative.

The Court held that public sector unions in labor negotiations engage in speech on matters of great public concern and that requiring employees to pay an agency fee to the union is essentially compelling them to support the union’s speech – whether or not they agree with it. The Court also concluded that a state’s desire for “labor peace” and its concern that public unions might collapse under the weight of “free riders” are not sufficient to justify the violation of the employees’ First Amendment rights.

This decision is expected to have a significant impact on public sector labor unions, which currently represent 37.9% of government workers. But the Court is unlikely to extend this holding to private sector labor unions, which currently represent 7.3% of non-government workers. The majority opinion in Janus noted that unions in the private sector do not engage in speech on matters of public concern when they negotiate with private employers. In addition, the majority noted in a footnote that it is “questionable” whether similar agency-fee requirements in the private sector involve the state action necessary to implicate First Amendment rights, because in the private sector, “union shop” states merely permit private parties (the employer and the union) to require payment of an agency fee, while public employees are required by state law to pay such fees. Therefore, while public employees may celebrate this victory, employees in the private sector are unlikely to see similar relief in the future.