Labor & Employment Law Daily Washington state employees can’t recoup pre-Janus agency fees
Tuesday, December 4, 2018

Washington state employees can’t recoup pre-Janus agency fees

By Lisa Milam, J.D.

A group of Washington state workers who objected to paying compulsory agency fees to AFSCME were unable to recoup the forced payments made to the public employee union during the pendency of the Supreme Court’s landmark decision in Janus v. AFSCME Council 31. A federal court concluded that AFSCME had continued to collect the agency fees in good-faith while that case was pending. The union followed the law in place at the time and it “could not reasonably anticipate that a Supreme Court action would create a constitutional challenge to its actions,” the court concluded. It would not require the union to have engaged in “telepathy” to discern that the High Court would overturn its longstanding Abood decision (Danielson v. American Federation of State, County, and Municipal Employees, Council 28, November 28, 2018, Bryan, R.).

What Janus did. In Janus, a divided U.S. Supreme Court held that nonunion public employees cannot be compelled to pay an “agency fee” to cover union expenditures for collective bargaining activities. Concluding that the extraction of agency fees from nonconsenting public employees violates the First Amendment, the High Court in its June 2018 decision overruled Abood v. Detroit Bd. of Ed., a decision it issued 50 years ago, finding that the precedent had been undermined by more recent High Court decisions.

Leading up to the High Court showdown in Janus, and also on the heels of the decision, opponents of agency fees sought to recoup the fees they had already paid to unions while the case was pending. The case at hand was one such lawsuit. The plaintiffs contended that the union had improperly used their agency fees “to advance pro-union ideological or political purposes” to which they were opposed. They sued the union and state of Washington officials, seeking a declaratory judgment that the agency fees violated the First Amendment, an injunction prohibiting the collection of agency fees, and monetary relief for fees that had been wrongly collected.

Good faith defense. The court had previously dismissed claims for injunctive relief against the state defendants as moot since, post-Janus, they voluntarily ceased collecting the agency fees. For the same reason, the court dismissed the claims for injunctive relief against the union here as well. A somewhat trickier question was whether the plaintiffs were entitled to monetary relief from the union—which turned on whether the union, in collecting the agency fees pre-Janus, had a good-faith belief in a presumptively valid state law, and as such, were shielded from section 1983 liability.

Union followed applicable law. The court found “ample authority” for the good-faith defense to apply here, noting that, “although the precise contours of the defense have not been clearly defined by the Supreme Court, circuit courts, including the Ninth Circuit, have acknowledged its general contours of equity and fairness.” In this case, the union followed the law that applied at the time when it collected the agency fees, the court observed, “because prior to Janus, collection and use of compelled agency fees was lawful” under binding Supreme Court precedent, and the fees were deducted pursuant to a valid collective bargaining agreement with the state, under a presumptively valid state law. Might the union nonetheless have identified the “constitutional defect” at hand in advance of Janus? Not before the High Court hinted it might overrule Abood, the court said.

Telepathy not required. The plaintiffs argued that even if the good-faith defense applies, the union should have to establish its subjective state of mind as to its belief that the deductions were lawful. However, applying a subjectivity standard here ends in a “perverse outcome, if followed to its logical conclusion,” the court noted. Assuming the union subjectively believed the Court would not overrule Abood, and the collection of agency fees would remain lawful, then the good-faith defense would apply; yet, if it subjectively (and correctly) believed the Court would overrule Abood, the union would have no good-faith defense. “This is an awkward result, because as noted elsewhere, ‘[a]ny subjective belief [the union] could have had that the precedent was wrongly decided and should be overturned would have amounted to telepathy.’”

“The Union Defendant should not be expected to have known that Abood was unconstitutional, because the Supreme Court had not yet so decided,” the court found. With a nod to stare decisis, it rejected the plaintiffs’ reasoning as a matter of policy, too. “Inviting discovery on the subjective anticipation of an unpredictable shift in the law undermines the importance of observing existing precedent and ignores the possibility that prevailing jurisprudential winds may shift. This is not a practical, sustainable or desirable model,” the court wrote. Consequently, it found the union was entitled to the good-faith defense as a matter of law.

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