The Road to Abood: Where Did the Supreme Court Go Wrong?

With this series of posts, I return to constitutional law issues that SCOTUS will address in the 2015-16 term.  One case in particular—Friedrichs v. California Teachers Association—is hugely important and has already generated a great deal of commentary.  This site recently hosted an excellent Liberty Forum on the topic, Friedrichs, which involves a constitutional challenge to the compulsory payment of union dues by public employees, promises to be one of the most closely-watched cases next term.  Part of the interest owes to anticipation that the Court may overturn a nearly 40-year old precedent, Abood v. Detroit Board of Education, 431 U.S. 209 (1977), which was criticized but not overruled last year in Harris v. Quinn, 573 U.S. ___, 134 S. Ct. 2618 (2014).  Without duplicating my colleagues’ thorough discussion, I offer a few additional observations.

In a free society, membership in a club or organization—and the concomitant obligation to pay dues—should be strictly voluntary.  Similarly, the decision whether—and to whom—to make political contributions is a deeply personal one that each individual should be able to make without coercion or duress.   Freedom of association and freedom of speech are core components of personal autonomy—“the right to be left alone.”  Thomas Jefferson noted long ago that “To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical.”  Yet government employees are routinely required to pay dues (or “agency fees”) to inherently-political public employee unions as a condition of employment.

To understand why, one must understand a few elements of basic labor law.  “Collective bargaining,” as it currently exists in the United States, was established in 1935 by the National Labor Relations Act, a New Deal statute sometimes referred to as the “Wagner Act.”  After a majority of employees in an appropriate “bargaining unit” have voted to authorize a labor union to represent them, federal law requires the employer to negotiate in good faith with the union concerning terms and conditions of employment.  Once it is certified as the bargaining representative, the union represents all employees in the bargaining unit, not just those that voted for union representation.  This is the concept of “exclusive representation,” embodied in section 9(a), which was designed to increase wages by allowing workers to form a labor cartel (hence the term “collective bargaining”).  The NLRA disfavors individual competition in the labor market on the Marxian theory that—absent collective action—workers lack adequate “bargaining power” to negotiate adequately with concentrations of capital (i.e., corporate employers).

The Great Depression was erroneously perceived as a failure of free market capitalism.  As a solution, New Deal legislation frequently sought to cure the “defect” of competition by requiring market participants (whether farmers, producers, or workers) to act collectively.  In fact, the principle of exclusive representation was originally derived from the wide-ranging “codes of fair competition” established by National Industrial Recovery Act (1933), which was declared unconstitutional in Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935).  The corporatist NIRA is regarded today as a semi-fascistic statute inspired by Benito Mussolini’s economic innovations in the 1920s.  Modern day collective bargaining under the NLRA has escaped that taint, although even liberal stalwarts such as Derek Bok, former president of Harvard University, have acknowledged that the United States is alone among industrialized nations in embracing the concept of exclusive representation.  [See Derek C. Bok, Reflections on the Distinctive Character of American Labor Laws, 84 Harv. L. Rev. 1394, 1397 (1971)]

Exclusive representation was controversial at the time the NLRA was enacted, and the Supreme Court initially upheld the constitutionality of the NLRA in NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45 (1937) by pretending that section 9(a) did not preclude “such individual contracts as the company might elect to make directly with individual employees.”  This was disingenuous in the extreme.  By 1944, when the dust had settled regarding the constitutionality of economic regulation, the Court in J. I. Case Co. v. NLRB, 321 U.S. 332, 338-39 (1944), interpreted section 9(a) to mandate exclusive representation as we now understand it—individual bargaining is superseded  “to serve the welfare of the group” and as “a contribution to the collective result.”

Labor unions invariably insist on “union security” features in collective bargaining agreements, including “dues check off” (i.e., employer withholding of union dues from the employees’ paychecks) and whatever type of mandatory membership or participation is allowed under local law.  Objections to compelled membership in and/or mandatory financial support of  labor unions by non-members (or “dissenting employees”) has been a recurring subject of litigation, leading to numerous Supreme Court decisions on the subject.  The Supreme Court has used the concept of exclusive representation to uphold the mandatory payment of union dues (or, in “right to work” states, agency fees) with the rationale that allowing dissenters to refrain from paying their “fair share” would permit them to be “free riders,” benefiting from the union’s representation without appropriate payment.

Of course, this rationale assumes that the dissenting employees have in fact benefited from union representation; it is also possible that the dissenters could have obtained equal or better terms of employment on their own.  After all, the whole point of exclusive representation is to sacrifice “individual advantages” for the good of the bargaining unit as a whole.  Without exclusive representation–an anomalous and antiquated concept steeped in the New Deal’s infatuation with government-regulated cartels—there would be no need (or justification) for forced dues arrangements.  The most straightforward solution to the supposed “free rider” problem would be to abolish the concept of exclusive representation.  [To be continued]