ARE UNIONS A CONSTITUTIONAL ANOMALY?

• Author: estlund, cynthia

INTRODUCTION

This term in Friedrichs v. California Teachers Ass'n1 the Supreme Court will consider whether ordinary public employees may constitutionally be required to pay an "agency fee," as a condition of employment, to the union that represents them in collective bargaining. The Court established the terms of engagement in 2014 in Harris v. Quinn,2 which struck down an agency fee provision on narrower grounds, but which expanded the "right to refrain" from associating with unions and raised the specter of constitutionalizing the "right-to-work" regime that now prevails in nearly half the states. Along the way, the Court proclaimed the current agency fee regime, blessed many times by the Court itself, to be an "anomaly." This Article takes that observation as a point of departure for a broader inquiry into whether labor unions are themselves anomalies in our legal system, particularly in their constitutional entitlements. The answer is a qualified and complicated "yes."

It is important not to overstate the anomaly, for unions belong to a larger category of private entities with public regulatory functions.3 As Professor Louis Jaffe observed in 1937, the legislature "has neither the personnel nor the information to provide the detailed day-by-day regulation which is necessary if regulation is to be responsive to complex, ever changing situations."4 Nor are administrative bodies always up to the job. Rather, "[g]roup self-government" by regulated actors can better solve some problems-for "experience and experiment lie immediately at hand"-and better satisfy demands for participation and self-expression in a complex democratic society.5 The New Deal launched a number of experiments in group self-government, some short-lived, others more enduring.6 More recently, much modern regulatory scholarship has converged around the notion of "regulated self-regulation," and the importance of engaging both targets and beneficiaries of regulation-mostly private corporations and private associations-in the regulatory enterprise.7 Labor law, in which collective bargaining between unions and employers partially supplants direct regulation of terms and conditions of employment, was and is a leading exemplar of regulated self-regulation through private groups.8

Constitutional controversy has periodically flared over public regulatory structures in which private groups play a leading role.9 The controversy peaked in the mid-1930s when the Court blew up central components of the early New Deal partly because of improper delegation of legislative power to private groups.10 But even after the New Deal "switch in time," public regulatory schemes in which private institutions play central roles have drawn constitutional scrutiny.11 Examples include vestiges of New Deal-style corporatism, such as state-backed trade associations;12 venerable vessels of professional self-regulation, such as the integrated bar associations that regulate lawyers in many states;13 and innovative adjuncts to urban government, such as "business improvement districts" that represent, tax, and regulate local businesses.14

One constitutional challenge to some of these public-private regulatory schemes is that they violate a First Amendment right to refrain from associating with private organizations and from contributing to their expressive activities.15 The single biggest target of these First Amendment challenges, and a recurring source of constitutional litigation from the New Deal to the present, has been organized labor. Under U.S. labor laws, unions typically represent not only their own members but also some nonmembers of the union, some of whom object to paying dues or fees that may be required of them as a condition of employment. Those objectors have contributed to and benefited from an expanding constitutional right to refrain from what they claim is compelled association and expression.

For private entities with public regulatory functions, it may be inevitable that those regulatory functions come with powers, responsibilities, and restrictions that would otherwise be intolerable, or at least anomalous, for voluntary associations in a free society. But that is about as far as generalities will take us in understanding the nature of labor unions for purposes of constitutional adjudication. Unions are unlike other organizations in our society, even other private groups exercising public regulatory functions. Very simply, context matters, and it should matter in adjudicating constitutional challenges that arise from the mix of public and private power in the labor setting, just as it should in other settings. This Article contends for what Professor Pildes calls "institutional realism"16 in the constitutional review of claims by and against labor unions. Pildes addresses the constitutional status of public institutions such as courts and administrative agencies,17 but the virtues of realism versus formalism apply when analyzing private institutions that play a central role in public regulatory schemes. Institutional realism in the labor law context requires courts to grapple with the institutional particularities of labor unions and labor law.18

Unions are voluntary membership associations with a long history of independent activism, a foundational claim to organizational autonomy, and constitutional rights to freedom of speech and association.19 They were central protagonists in the epic industrial conflict that roiled American society for much of the past century, and they were also central to its settlement.20 By virtue of that settlement, unions became regulatory actors, as well as regulated actors, in the administration of industrial relations and became subject to a constellation of powers, privileges, duties, and restrictions unique to labor relations.

Labor law both restricts and empowers labor unions in ways that set them apart from other voluntary associations.21 Consider the current controversy over unions' ability to collect an agency fee from workers they represent, including objecting nonmembers. It is indeed unusual for voluntary associations to be able to demand fees from nonmembers. But it is equally unusual for voluntary associations to bear legal responsibilities toward nonmembers, as unions do when chosen by a majority of workers within a bargaining unit to serve as the exclusive representative for all. Over several decades, Congress and the Court hammered out a constitutional compromise over the agency fee issue that governs both the public and private sectors: individuals cannot be compelled, as a condition of employment, to join a union or contribute money to a union's political and ideological activities. But employees can be required, if a contract so provides and if state law allows, to pay the portion of union dues that reflects the costs of collective bargaining and contract administration activities. The latter was necessary, the Court said, to prevent workers from "free riding"-benefiting from the union's services without paying for them.22

Alarm bells went off in the union bar in 2012 when a majority of the Court characterized the prevailing constitutional compromise over unions' ability to demand a fee from nonmembers as "something of an anomaly."23 It is an anomaly that the Court found unacceptable for the so-called partial public employees in Harris-home health care workers who were state employees only for limited purposes-and that the Court will closely scrutinize in Friedrichs when it confronts the challenge to agency fees in the core of public employment. And if history is any guide, the issue will soon be raised in the private sector, where the First Amendment claim will face an imposing state action hurdle.

This Article uses the agency fee conundrum as a point of entry into a deeper inquiry into the nature of unions in our legal system and elsewhere. The power to compel dissenting nonmembers to pay an agency fee to a union must be understood as part of a tacit legislative bargain-a larger constellation of rights, powers, restrictions, and duties that U.S. labor law confers or imposes on unions. The free-rider problem at the heart of both Harris and Friedrichs only hints at the larger quid pro quo by which the labor laws constrain and empower unions.24 Some of its particulars vary across the federal and state laws that govern private and public sector labor relations. But the basic architecture of all those labor laws echoes the National Labor Relations Act (NLRA) regime that governs most of the private sector and that will serve as the paradigmatic case here.

Under the NLRA, unions gained powers and privileges unlike those of other voluntary associations. Those powers and privileges are mainly embodied in the principle of exclusive representation and the employer's duty to bargain in good faith, both of which are contingent on a collective decision by a majority of employees in a particular workplace in favor of union representation.25 But unions have also lost large chunks of the autonomy and freedom of action that other voluntary associations enjoy, or later came to enjoy, under the First Amendment.26 Both the unusual powers of unions (conferred by the original NLRA in 1935) and the unusual restrictions on their associational and expressive freedoms (mostly codified into federal law by the Taft-Hartley amendments of 1947 and the Landrum-Griffin Act of 1959) have repeatedly generated constitutional controversies. This Article seeks to illuminate those controversies by linking the quid and the quo of labor law-both the additions to and the subtractions from unions' entitlements-in the constitutional analysis of its parts. The unusual restrictions on unions, and the corresponding benefits to individuals, might justify the unions' unusual legal privileges and powers. That might help the unions in their agency fee battles. But the reverse is also true: unions' unusual legal privileges and powers...