On Wednesday, June 27, 2018, the United States Supreme Court ruled in a 5-to-4 decision that the application of public sector union fees to nonmembers is a violation of the nonmembers’ First Amendment rights. The Court’s decision in Janus v. AFSCME overturns precedent established in a 1977 Supreme Court decision, Abood v. Detroit Board of Education, where the Court allowed the collection of union fees from nonmembers for collective bargaining related costs, excluding lobbying and political expenses. In overturning the decision, the majority in Janus held that Abood was “poorly reasoned” and an “anomaly in…First Amendment jurisprudence.” The court’s decision in Janus will have a long-lasting effect on public sector labor unions and will affect millions of unionized workers across the country.

Writing for the majority, Justice Samuel Alito wrote that public sector unions’ “fair share” fees violate the free speech rights of nonmembers by “compelling them to subsidize private speech on matters of substantial public concern.” Until Wednesday’s ruling, over 20 states had in place a fair share provision, which required people represented by unions who did not choose to be union members to pay fees to cover the cost of the unions’ collective bargaining activities. The Janus decision immediately nullified these fair share provisions. Justice Alito recognized the potential short term and long term implications of this decision for public unions, writing that “the loss of payments from nonmembers may cause unions to experience unpleasant transition costs in the short term, and may require unions to make adjustments in order to attract and retain members.” However, Justice Alito weighed these disadvantages against the “considerable windfalls that unions have received” via fair share fees and ultimately sided against the unions.

The decision came down along ideological lines, with Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas, and Neil Gorsuch joining Alito. In a dissent joined by Justices Stephen Breyer, Ruth Bader Ginsburg, and Sonia Sotomayor, Justice Elena Kagan warned that the majority’s ruling in Janus will have “large-scale consequences.” For example, Justice Kagan warned that, “Public employee unions will lose a secure source of financial support. State and local governments that thought fair-share provisions furthered their interests will need to find new ways of managing their work-forces. Across the country, the relationships of public employees and employers will alter in both predictable and wholly unexpected ways.”

The Court’s ruling in Janus is one of the most consequential rulings this term for employers. With this decision, public sector employees around the country will no longer be required to pay fees or dues to their unions, even if those unions collectively bargain on their behalf. This will likely impact public sector union membership and revenue production.

The Janus decision may also have a large impact on private employers. Although the First Amendment issues at the forefront of the Janus dispute will have no bearing on the collection of fair share fees by private sector unions under the National Labor Relations Act, the loss of revenue that the public sector unions have derived from such fees will likely impact their ability to finance political and employment policy-related campaigns such as the Fight for $15. The Janus decision also is likely to negatively impact union membership not only in the public sector, but also in the private sector in states that have not adopted right to work statutes As a result, the decision could have wide ranging impact on private employment as well.