After SCOTUS ruling, 7th Circuit denies compulsory fees refund to non-union member

Despite a Supreme Court ruling making mandatory union fees for non-member public employees illegal, the 7th Circuit Court of Appeals has declined to award a fee refund to the named plaintiff in a landmark labor law case.

The three-judge panel in Mark Janus v. AFSCME, et al., 19-1553, ruled Tuesday that Illinois public employee Mark Janus is not entitled to a refund on some or all of the fees he paid to the American Federation of State, County and Municipal Employees Council 31, upholding a decision from the Northern District of Illinois Court.

Janus, who was a non-union Illinois child support specialist, pursued a federal lawsuit claiming his First Amendment rights were violated by his payment of compulsory union fees because union work is inherently political. He urged the high court to overturn the 41-year precedent of Abood v. Detroit Board of Education, 431 U.S. 209 (1977), which had upheld compulsory fees on the notion that even non-union public employees benefit from collective bargaining.

The death of Justice Antonin Scalia left the court divided 4-4 on a similar question in an earlier California case, but the confirmation of Justice Neil Gorsuch is often credited as the reason behind the 5-4 vote in favor of overturning Abood. The decision in Janus v. AFSCME, 585 U.S. ___ (2018), came down in June 2018, raising questions about whether union membership or revenue would suffer.

Despite the ruling in his favor, the majority justices did not hold “that Mr. Janus has an unqualified constitutional right to accept the benefits of union representation without paying,” 7th Circuit Chief Judge Diane Wood wrote Tuesday.

“The only right the Janus … decision recognized is that of an objector not to pay any union fees,” Wood said. “This is not the same as a right to a free-ride. Free-riding is simply a consequence of exclusivity; drop the duty of fair representation, and the union would be free to cut off all services to the non-members.”

The Supreme Court remanded Janus on the issue of remedy to the district court, which entered summary judgment for AFSCME on Janus’ request for a refund of all fair-share fees he had paid, finding the union had a good-faith defense. The 7th Circuit agreed, ruling more broadly that “under appropriate circumstances, a private party that acts under color of law for purposes of section 1983 may defend on the ground that it proceeded in good faith.”

“Until Janus …  said otherwise, AFSCME had a legal right to receive and spend fair-share fees collected from nonmembers as long as it complied with state law and the Abood line of cases,” the chief judge wrote. “It did not demonstrate bad faith when it followed these rules.”

Thus, the court said, Janus has received all of the relief he is entitled to: declaratory and injunctive relief, as well as a “future free of any association with a public union.”

The panel concluded by noting the good-faith defense is narrow, saying it applies only to “private parties who act under color of state law for purposes of section 1983.”

“We predict that only rarely will a party successfully claim to have relied substantially and in good faith on both a state statute and unambiguous Supreme Court precedent validating that statute,” Wood wrote.

In a separate concurrence, Senior Judge Daniel Manion opined that unions “received a huge windfall” during the 41 years of Abood remaining law.

“Even though the Supreme Court reach the wrong result in Abood 41 years before Janus II, the unions justified their acceptance of many millions of dollars because they accepted the money in ‘good faith,’” Manion wrote. “Probably a better way of looking at it would be to say rather than good faith, they had very ‘good luck’ in receiving this windfall for so many years.

“Since the court is not holding that the unions must repay a portion of the windfall,” he continued, “they can remind themselves of their good luck for the years ahead.”

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