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One year after the Supreme Court dealt government employee unions a severe financial blow, the country’s biggest public employee unions remain surprisingly flush, according to this report from POLITICO PRO.
In its June 2018 ruling in Janus v. American Federation of State, County and Municipal Employees, the high court shut off a crucial source of revenue for unions that represent government workers: mandatory fees collected from union nonmembers to cover their share of collective bargaining costs.
As Janus‘ one-year anniversary approaches, a POLITICO review of 10 large public-employee unions indicates they lost a combined 309,612 fee payers in 2018. But paradoxically, all but one reported more money at the end of 2018. And collectively, the 10 unions reported a gain of 132,312 members.
“In talking to folks, my perception is that there has been good news, that membership has not been falling off dramatically,” said Sharon Block, a former Obama Labor Department official who now runs the Labor and Worklife Program at Harvard Law School.
The unions’ financial and membership gains are especially striking given that Janus was, for government employee unions, a double-edged sword.
In addition to taking away fair-share fees, the Supreme Court took away much of the reason for government employees to remain union members. That’s because Janus enabled a government worker, simply by quitting the union, to enjoy the benefits of union representation without having to pay for them. Many anticipated Janus would prompt government workers toquit unions in droves, driving down those unions’ revenues even further.
That fear wasn’t misplaced. A state-by-state analysis of Bureau of Labor Statistics data on the percentage of government employees represented by labor unions, broken down by Barry Hirsch of Georgia State University and David Macpherson of Trinity University, indicates that public unions’ reach among state employees has receded somewhat since Janus.
Before Janus, 22 states and the District of Columbia allowed unions to collect agency fees from nonmembers. In those states, the percentage of public employees represented by a union — union members and nonmembers — dropped 1.1 percentage points, to 52.8 percent in 2018, down from 53.9 percent in 2017. The percentage of public employees in those states who were union members dropped 1 percentage point, to 49.7 percent in 2018, down from 50.7 percent in 2017. In total, public unions in those states lost union coverage for 115,625 employees.
By comparison, the 28 states that barred public employee fair-share fees prior to the ruling showed no change during that period in the percentage of public sector employees represented by a union, and a tiny (0.1 percentage point) bump in union membership.
Four of the 10 large public employee unions surveyed by POLITICO — the Service Employees International Union, the United Food and Commercial Workers, Laborers’ International Union of North America and the United Automobile Workers — also represent many private-sector workers, who were unaffected by Janus. So it’s hard to judge whether Janus caused that group’s combined loss of about 59,000 members in 2018 (in addition to losing more than 100,000 agency-fee payers).
Because the 10 surveyed unions haven’t yet reported to the Labor Department membership numbers for 2019, POLITICO can gauge Janus‘ effects on them only during the firstsix to eightmonths the ruling was in effect; significant attrition may yet occur in 2019 and the years that follow.
Even so, available evidence indicates public employee unions are weathering Janus surprisingly well.
The nation’s single largest public employee union, the 3 million-member National Education Association, has not yet filed with the Labor Department and did not provide POLITICO specific data. But in an interview, NEA President Lily Eskelsen García said the union took in more money than last year by persuading fee payers to become full members.
“We sit here today having budgeted for what we thought might be the worst-case scenario — of a drop of a couple hundred thousand members — and we are up several thousand,” García said.
The 1.3 million-member AFSCME, which describes itself as the nation’s largest public “services” employee union — and was the defendant in Janus — gained nearly 28,000 members in 2018 (even as it lost more than 110,000 agency-fee payers). The 1.7 million-member American Federation of Teachers, another public employee giant, is not required to file with the Labor Department until later this year. But it told POLITICO it gained more than 17,000 members in the eight months that followed Janus, even as it lost nearly 85,000 agency-fee payers.
More surprising still, eight of the nine large unions that have filed full-year 2018 data with the Labor Department reported financial gains in 2018 totaling a combined $379,384,917. The one exception — the American Federation of Government Employees, which represents federal workers — couldn’t plausibly attribute its reported financial losses to Janus because, even before the ruling, AFGE was barred from collecting fair-share fees.
The financial gains extended even to the four government-employee unions included in POLITICO’s survey that lost members in 2018 (plus those 100,000-plus agency-fee payers). SEIU, which in 2018 lost more than a thousand members (and nearly 99,000 agency-fee payers) reported a 15 percent gain in assets.
How did public employee unions end up with more money and in most cases with more members after a Supreme Court ruling that was expected to eviscerate both?
The answer appears to be preemptive organizing. “Unions were really prepared because, sadly, the outcome was really predictable,” Block said.
Some of the unions raised dues. AFSCME, which has raised its minimum monthly dues an average 25 cents over each of the past 10 years, bumped its minimum monthly dues by 50 cents in 2018, to $18.40, according to its filings with DOL.
The United Food and Commercial Workers — one of the four surveyed unions that lost members in 2018 but still posted financial gains — raised its minimum monthly dues that year by $1, to $16.04. It was the first dues increase for the union since 2013, according to its filings with DOL.
Other unions planned budget cuts. The NEA said in June 2018 it was preparing to cut $28 million from its budget and would reduce its staff. AFSCME, in addition to bumping dues higher than in previous years, continued a trend of reduced political spending. In 2018, the union shelled out $53.1 million for political activities, compared to $55.3 million in 2016 and $64.6 million in 2014, according to DOL filings.
Labor leaders started arming themselves years ago as conservative foundations and right-to-work groups backed lawsuits to eliminate agency-fee payers. The rationale behind these lawsuits was that fair-share fees were compelled political speech that violated union nonmembers’ First Amendment rights. Public employee unions were already barred from using fair-share fees to pay for political activities; the fees could be used only to pay for collective bargaining. But the lawsuits argued that even collective bargaining constituted political speech when performed by a union that represented government employees.
One of the most promising lawsuits, first filed in 2013, was Friedrichs v. California Teachers Association. Bankrolled in large part by the Bradley Foundation, the case was argued before the Supreme Court in January 2016. Unions braced themselves for a loss after Justice Antonin Scalia, the only Republican appointee deemed a possible ally, indicated in his questions that he would likely vote against fair-share fees.
In response, unionsbegan persuading non-union members to become full-time members and organizing workplaces that didn’t have a union at all.
“We knew which Supreme Court justices would be with us and which ones would not be with us, and lo and behold we were right,” said García, the NEA president. “We didn’t just sit back and put our feet up.”
Scalia’s death in February 2016 brought unions a reprieve by deadlocking the high court 4-4 on Friedrichs, leaving in place a lower court’s ruling upholding fair-share fees. But the election of President Donald Trump signaled the status quo wouldn’t last long.
Conservative legal groups paint a more sinister portrait of public employee unions’ pre-Janus preparations, arguing they were underhanded — and perhaps illegal.Since Janus, conservative organizations have filed lawsuits accusing unions of everything from imposing impossibly small disenrollment windows to deceiving workers into signing paperwork that made them union members.
“The Janus decision sits inside a set of other attacks that extremists in the right wing have been inflicting on working people and their organizations for decades,” SEIU President Mary Kay Henry told POLITICO.
The Fairness Center, a Pennsylvania-based conservative nonprofit, filed a lawsuit against SEIU on behalf of a public employee in Lehigh County, Pa., who said he was barred from leaving his union save for a 15-day window before the expiration of the collective bargaining agreement.
“Part of the story here is that maybe the numbers don’t reflect reality — that there are actually a number of people kept from leaving their unions,” said David Osborne, the Fairness Center president. “Unions have also asked people to sign forms with the union that say people agree to stay with the union for a long period of time, and even if they choose to leave a union they still have to pay union dues.”
But SEIU’s Henry said Janus offered a perfect foil for the larger war organized labor is facing.
“Janus was seized on by us and other parts of the labor movement as an opportunity to re-educate and activate our members in a much bigger fight that we’re all committed to having,” she said.
The National Right to Work Legal Defense Foundation asked the Supreme Court to compel SEIU to return $32 million in fees to home-care workers in Illinois, challenging a state law that permits home care workers for Medicaid recipients to unionize. (The Trump administration recently issued a rule barring states from the practice.) Conservative groups are also pursuing a broader case to require unions to refund bargaining fees collected before the Janus ruling.
Meanwhile, conservative groups are urging workers to leave unions. The Freedom Foundation, a conservative nonprofit active in the Pacific Northwest, said its “multifaceted” campaign to “educate” employees prompted 45,000 government employees toleave their unions in Washington, Oregon and California.
“People don’t know [about the ruling],” said Ashley Varner, a Freedom Foundation spokesperson. “They’re not being told at work, they’re certainly not being told by their government union reps, so we have to find more ways to reach people.”
Unions are asking some state legislatures to come to their aid. Last month, Democratic Washington Gov. Jay Inslee signed a bill preempting conservative groups’ efforts to force the return of fair-share fees. In April, Illinois Gov. J.B. Pritzker signed a bill banning local governments from adopting right-to-work laws.
Before the Supreme Court even ruled in Janus, New York Gov. Andrew Cuomo signed legislation saying unions need not provide full benefits to workers who aren’t members.
“It is the union movement that drives the Democratic Party,” Cuomo said upon signing the bill. “And that’s why they want to weaken the union movement.”
The Labor Department today said that gig workers on a smartphone-based app are not considered employees under federal law, handing a win to businesses seeking to loosen standards on joint employment.
In an opinion letter, DOL said that workers who are connected to jobs via an unnamed app don’t meet the legal definition of an employee under the Fair Labor Standards Act. DOL cited a six-part test to determine the degree to which a worker is economically dependent on an employer.
“Your client provides a referral service,” DOL wrote. “As such, it does not receive services from service providers, but empowers service providers to provide services to end-market consumers. The service providers are not working for your client’s virtual marketplace; they are working for consumers through the virtual marketplace. They do not work directly for your client to the consumer’s benefit; they work directly for the consumer to your client’s benefit.”
DOL this month took steps to roll back an Obama-era guidance on joint employment, proposing a rule that would make it harder to hold businesses jointly liable when their franchisees or contractors violate the the FLSA. The test would weigh whether the business has the power to hire and fire; to supervise schedules and “conditions of employment”; to set pay; and to maintain employment records.