The real lesson of Janus is that the Court is no longer infatuated with the National Labor Relations Act and its doctrinal baggage.
My first post delved briefly into the history and significance of the concept of “exclusive representation” in labor law. This post will explore the even more dubious application of the NLRA (private sector) model of collective bargaining (including exclusive representation) to the public sector.
In the interest of disclosure, I was drawn to this topic long ago. My primary practice area for 30 years as a lawyer was labor and employment law, representing management. In 1984, I wrote an article for the Journal of Labor Research entitled “Legal Aspects of Exclusive Representation: Ruminations on the Private-Public Sector Analogy.” In that article (written, sadly, before the digital era), I pointed out—as have many others—that collective bargaining has no place in the public sector. Indeed, in the United States, state and local governments did not grant public employees the right to join unions and/or bargain collectively until long after the New Deal—the 1960s and 1970s—and some still don’t. (Ironically, as government payrolls have expanded dramatically in recent decades, and unionized industries in the private sector have contracted, the membership of public sector unions now exceeds that of private sector unions.)
Even President Franklin D. Roosevelt, the father of the New Deal, rejected unionization of government employees. The “inequality of bargaining power” rationale for the NLRA does not exist when the employing entity is the polity, not a corporation. The allocation of taxpayer resources is fundamentally a political decision, not a market transaction. And, unlike the private sector economy, which is constrained by the market, the government operates as a monopoly; all citizens are required to pay taxes. Thus, the discipline of competition, which limits both a private sector union’s demands and the employer’s acquiescence to them, does not moderate collective bargaining in the public sector. Excessive labor costs are passed through to the “consumer” (i.e., the taxpayer) with no market recourse. Strikes by government employees hold the public hostage with no market alternative for the services being withheld. For these reasons, public employees should not have the right to unionize or bargain collectively. The inevitable result is unsustainable benefit and pension costs negotiated by public employee unions that are driving many cities and states into insolvency.
The biggest difference, however, between the private sector model (NLRA) and the public sector is that “state action” does not generally exist when the employer is a privately-owned business, but is omnipresent when the employer is a governmental entity. All constitutional rights (save the 13th Amendment) protect the individual against the state or federal government, not against private parties. This is where the doctrinal underpinnings of Abood get interesting. In a series of decisions beginning with Hanson (1956)—followed by Street (1961) and Allen (1963)—the U.S. Supreme Court interpreted the Railway Labor Act (similar to the NLRA, but without the 1947 Taft-Hartley Act’s protections against the closed shop) to prohibit the use of employees’ compelled financial support for any purpose other than expenses connected with collective bargaining. Thus, a dissenting employee cannot be required to support—with compelled dues, fees or other assessments—a union’s political activities.
Because Hanson, Street, and Allen all involved private sector employers, where was the “state action”? That is a good question. As Justice Alito noted in Harris v. Quinn, the Court’s decisions were often fractured and confusing, and the “reasoning” was opaque. Many commentators concluded that the opinions in Hanson, Street, and Allen were based on statutory grounds. In any event, in 1977, the Supreme Court had occasion to address, for the first time, the constitutionality of “union security” clauses (such as mandatory payment of dues or “agency fees”) in public sector labor contracts, in which the government (as employer) was requiring dissenting employees to financially support a union. The resulting decision, Abood v. Detroit Board of Education, was a travesty, for reasons I will explore in the next post. [To be continued]