On the same day of the United States Supreme Court’s Janus v. AFSCME decision (which held that the collection of mandatory agency fees is unconstitutional), California Governor Jerry Brown signed into law SB 866. This bill gives California public sector unions more control over the collection of employee membership dues.

Below is a brief Q&A discussing SB 866 and its impact on public employers.

Background

What is Janus?

Janus v. American Federation of State, County, and Mun. Employees (AFSCME) (2018) 138 S.Ct. 2448 is a Supreme Court decision issued on June 27, 2018, which held that extraction of union agency fees from nonconsenting public-sector employees violates the First Amendment. Under this holding, public sector unions (also referred to as associations) can no longer collect “agency fees” from non-union members unless those employees give explicit authorization. Thus, unions can no longer collect compulsory fees but can only collect payments from bargaining unit employees if those employees specifically authorize the payment of union dues.

What are union dues?

Union dues are the monies paid by employees to the union for representation and membership in the union. Full union membership entitles employees to certain added benefits. For example, union members may vote on union leadership, participate in collective bargaining, and can also serve in union leadership positions, e.g. acting as a union steward.

What are agency fees?

Agency fees are different from union dues. Employees who decline to join the union but are in a bargaining unit represented by the union are not allowed all the benefits of union membership but may be required to pay these fees to the union for other services.

An agency fee is essentially a mandatory service fee charged to non-union members. Unions have a legal obligation to represent all employees in the bargaining unit regardless of whether those employees are dues-paying members. Thus, many states, including California, have authorized public sector unions to charge an “agency fee.” Because unions are required to represent the entire bargaining unit, the agency fee was intended to prevent “free riders,” i.e., nonmember employees who would otherwise receive the benefits of union representation (such as collective bargaining, contract administration, and adjustment of grievances) without paying dues or otherwise compensating the union. An agency fee is a lesser amount than full union dues, which, theoretically, is the portion of the dues that is attributable to representational activities and does not include other costs, such as political expenditures. Before Janus, if employees were not dues-paying members of the union, they could be required to pay an agency fee. The Janus Court, however, ruled that compulsory agency fees are not legal.

The New Law

What is SB 866?

Senate Bill 866 was a trailer bill, attached to the 2018 California state budget, which was signed into law on June 27, 2018, the same day the Janus decision was issued by the Supreme Court. It is California’s attempt to allow its public-sector unions more control over the deduction of union dues now that agency fees have been declared unconstitutional under Janus.

How does SB 866 change the law?

SB 866 makes the following changes and/or clarifications to the law:

• If a union requests an employee payroll deduction for membership dues, public employers must honor that request and make the appropriate deductions from the employee’s wages. (Gov. Code, § 1152.)
• A union that certifies that it has authorization from the employee for membership dues to be deducted is not required to provide a copy of that authorization to the public employer unless a dispute arises about the existence or terms of the authorization. (Gov. Code, § 1157.12, subd. (a).)
• The union must indemnify the public employer for any claims made by the employee for deductions made in reliance on the union’s certification. (Gov. Code, § 1157.12, subd. (a).)
• Public employers must direct employee requests to cancel or change deductions to the union. The employer is required to rely on the information provided by the union regarding the cancellation of or changes to employee union dues. (Gov. Code, § 1157.12, subd. (b).)
  Public employers must not deter or discourage public employees or applicants from becoming or remaining members of the union, or from authorizing the deduction of union dues. (Gov. Code, § 3550.)
• If the public employer chooses to issue a “mass communication” to its employees concerning the public employees’ right to join or support a union, or to refrain from joining or supporting a union, the public employer must first meet and confer with the union concerning the content of that communication. (Gov. Code, § 3553, subd. (b).) A mass communication is defined as “a written document, or script for an oral or recorded presentation or message, that is intended for delivery to multiple public employees.” (Id. at subd. (e).)
• If no agreement is reached between the public employer and the union regarding the content of the mass communication, then the public employer must include a message of “reasonable length” from the union with its own communication. (Gov. Code, § 3553, subd. (c).)
• The Public Employment Relations Board will have jurisdiction over alleged violations of the sections discussed above related to the potential discouragement of union membership by public employers and the mass communication. (Gov. Code, § 3551, subd. (a).)

Additionally, last year, the California legislature passed AB 119, which required public employers to give unions mandatory access to employee orientations in order to speak with represented employees. (Gov. Code, § 3556.) SB 866 amends that law to state that the “date, time, and place of the orientation shall not be disclosed to anyone other than the employees, the exclusive representative, or a vendor that is contracted to provide a service for purposes of orientation.” This provision is intended to protect the employee’s privacy interests and maintain confidentiality when the union is having a discussion with the employee.

When does SB 866 come into effect?

SB 866 came into effect on June 27, 2018, the day the bill was signed.

Who does SB 866 apply to?

Public employers, including, but not limited to, cities, counties, districts, public authorities, and any other political subdivision of the state of California. Please note that public school employers and community college districts are not included as “public employers” for purposes of transmittal of payroll deductions to unions. (Gov. Code, § 1150, subd. (f).) Deductions for these entities are governed by the relevant Education Code sections.

What was the purpose of SB 866?

SB 866 gives the unions more responsibility and control over union membership dues. Public employers now act purely as middlemen between the employees and the unions when deducting dues. The burden will fall on the union to provide the employer with updated union membership lists so appropriate dues may be timely deducted by the employer.

Employer Questions

How do I know if my employees are paying agency fees or union dues?

Check the applicable memorandum of understanding to determine whether there is an “agency fee” provision. Are different employees in the same bargaining unit paying different amounts? If they are, this likely means that some are paying agency fees while others are paying union dues. Agency fees are usually a lower amount. If you are not sure, ask the union to provide you with an updated list of all employees in the bargaining unit who are union members. Dues cannot be deducted until the union confirms the employee is a member of the union and has authorized dues deduction. If an employee’s membership status with the union is “pending,” the union needs to confirm if and when the employee becomes a dues-paying member. Until then, dues should not be deducted.

Can I ask for proof that the employee has in fact authorized union dues to be deducted?

No. Under SB 866, public employers are required to take the union’s word that the employee has authorized the deduction and cannot demand proof of authorization from the union unless there is a dispute.

What if an employee tells me he or she no longer wants to be a member of the union?

Refer the employee to their union. Employers can only cancel or change dues deductions with the union’s consent. These matters are between the union and their employee members. The employer should avoid opinion on the subject and should remain neutral.

Should I stop payroll deductions for employees currently paying agency fees?

Yes. Mandatory agency fees are no longer legal under Janus. However, employers should reach out to the union representatives and give them written notice that they will be stopping deductions for agency fees in light of the Janus holding. While unions cannot prevent the employer from stopping agency fees deductions, they may want to meet and confer over the impacts.

Must we continue to comply with agency fees provisions contained in the memorandum of understanding?

No. Such provisions are no longer legally enforceable. Unions and employers may negotiate over new language and enter into a side letter, or they may simply agree to remove the provision.

What if the union doesn’t respond to my request for an updated membership list?

The employer should still move forward with cancelling deductions for agency fees. The burden is on the union to provide employers with an updated union membership list and the amount of those charges or deductions (if changed).

What should I do with employees who are already paying union dues?

You should continue payroll deductions for employees paying union dues unless or until you hear differently from the union. Again, it is best practice to reach out to the union to get an updated list of all union members.

Can I talk to my employees about dues deductions and maintaining their membership in the union?

Employers should be careful in their communications to represented staff members and should refer them to their union if they have any questions or concerns regarding dues deductions and/or whether to become or remain a union member.

What if I want to communicate to represented staff about the elimination of agency fees or the changes related to dues deductions?

Under SB 866, you must notice the union(s) and meet and confer with them before sending any mass communication to staff about their “rights to join or support an employee organization.” This is very broad. Thus, employers should proceed cautiously before commenting on Janus, dues deductions, or any union-related topic. Mass communication is broadly defined as any communication (verbal or written) which is spoken or sent to “multiple public employees.” Multiple employees can be two or more. Thus, employers should be aware that mass communication does not have to be an agency-wide memo, but can be a simple statement made in casual conversation amongst two or more employees. Employers should confer with the union on an acceptable mass communication to staff and otherwise provide employees factual answers without opinion or recommendation.

If you have any other questions regarding SB 866 and its implications, please contact Debra Hinshaw Vierra at debra@whitebrennerllp.com or Meg Wilson at meg@whitebrennerllp.com.