As the Post-Janus Dust Settles….Is Direct Reimbursement Coming to Connecticut?

It’s been a little over four months since the United States Supreme Court issued its decision in Janus v. AFSCME Co. 31, 585 U.S. ___ (2018).  In Janus, as you’ll recall, the Supreme Court in a 5-4 decision held that agency shop provisions – which  mandate that public sector employees pay union dues or a reduced agency or service fee to the union representing the bargaining unit whether the employee wants to be represented by the union or not – violate the First Amendment free speech rights of objecting employees by requiring them to subsidize private speech on matters of substantial public concern.  (See our prior blog posts on Janus here, here and here if you’d like a refresher.)

In some respects it may seem as if – at least in Connecticut – the Janus case was much ado about nothing.  By and large, at least anecdotally, it would appear that it’s business as usual for Connecticut’s public sector employers and employee unions. Reports suggest that Connecticut’s unions have not seen significant drop offs in union membership, and may even be increasing membership as a result of the Janus decision.  Nationally, however, a recent membership report from the National Education Association (“NEA”) shows that since April (the Janus decision was issued by the Supreme Court in late-June) the NEA has lost 17,000 members – roughly half of one percent of its total membership.  Perhaps more notably though, the same report shows that the NEA has lost 87,000 agency fee payers since April.

While Connecticut’s post-Janus experience has yet to prove especially dramatic, Janus implementation issues are being hotly contested in courtrooms and state legislatures all across the country.  In a number of cases, public sector employees — often with the support of conservative, right-to-work advocacy groups — have filed suit seeking the “return” of agency fees and/or union dues that they claim they were coerced into remitting to public sector unions in violation of their First Amendment rights.  Cases advancing this basic theory are currently pending in Ohio, Minnesota, Washington state and elsewhere.

Simultaneously, a number of state legislatures have debated and enacted various legislative “fixes” to Janus.  Many of these fixes were enacted prospectively, in anticipation of the Supreme Court outlawing agency shop requirements in Janus.  For instance, this past May in New Jersey, legislation was passed granting public sector employee unions increased access rights to new employees during working hours, while in Hawaii, legislation was passed in April and May setting limited time-frames during which employees can opt out of paying union dues.

One potential legislative fix that appears to be gaining some traction among pro-union activists is an idea dubbed “direct reimbursement.” Direct reimbursement legislation would amend state law so that public sector employers themselves would directly fund public sector labor unions.  Rather than permitting public sector unions to collect dues from bargaining unit members, the direct reimbursement approach would essentially cut out the middleman and require the public employer to pay the costs the union incurs when engaged in collective bargaining activities.  In other words, instead of forcing unions to fund their operations by collecting dues from members – a process made more onerous by the Supreme Court’s Janus ruling – direct reimbursement would mandate that state and/or local governments cut lump-sum checks to the unions that represent their employees in collective bargaining.

University of California-Davis School of Law Professor Aaron Tang explains the direct reimbursement model in detail in a forthcoming Columbia Law Review article entitled Life After Janus. According to Professor Tang, direct reimbursement offers public-sector unions their best legislative hope for minimizing the potentially crippling effects of Janus.  Rather than tinkering with the process for objecting-employee opt outs or enacting legislation that obligates public sector unions to only bargain on behalf of members or with respect to certain matters (i.e. contract negotiation, but not individual grievance adjustment), Professor Tang argues that direct reimbursement offers a constitutionally viable way for unions to maintain the resources they enjoyed under agency shop rules, but without the compelled agency fee component that the Supreme Court found violated the First Amendment rights of objecting employees in Janus.

Direct reimbursement legislation, in Professor Tang’s view, is not as foreign a concept as it might seem. State and federal Public Defenders’ offices across the country (while often grossly underfunded) finance their work with tax dollars and nonetheless play an adversarial role in court against the same governments that fund their operations.  In Professor Tang’s opinion, why can’t the same basic structure be set up for public sector collective bargaining?

Professor Tang also rejects the notion that a direct reimbursement model would effectively render public sector unions “company unions” — unions beholden to management rather than the members they purportedly represent.  While critics of direct reimbursement have suggested that unions that are dependent on public funding must be company unions and cannot realistically act as an independent voice for workers, Professor Tang suggests that design features like independent review boards could be established to ensure that unions are appropriately funded regardless of political whim.

Life After Janus is definitely worth a read for those interested in exploring the possibilities of a post-Janus world.  The direct reimbursement model could well be on the Connecticut legislative agenda at the start of the new year, for as my colleague Bill Connon discussed in a previous blog-post, back in 2016 proposed Connecticut House Bill No. 5505 would have permitted boards of education and the unions that represent certified teachers and administrators to enter into direct reimbursement arrangements whereby the board of education would pay a lump-sum “service fee” to subsidize the union that sits across the table during contract negotiations.  House Bill No. 5505 did not pass, but after Ned Lamont’s election as governor and Democratic gains in the state House and Senate there may be stronger appetite for a direct reimbursement fix to Janus. Of course, any desire to implement a direct reimbursement model (and impose yet another financial obligation upon Connecticut governmental bodies) must be considered in the context of the ongoing fiscal crisis that the State of Connecticut and its municipalities are facing, which conservative critics argue is related to the high costs imposed by current collective bargaining obligations. Stay tuned.