Sweeping class-action lawsuit could force unions nationwide to refund millions in fees

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Unions losing clout nearly one year after landmark Supreme Court ruling

Reports filed to the Department of Labor indicate the SEIU lost 210,000 agency fee payers after the Supreme Court ruled that forcing non-union members in right-to-work states to pay union fees violates the First Amendment; Doug McKelway reports.

A massive class-action lawsuit filed in Illinois on Wednesday could force unions to refund hundreds of millions of dollars in agency fees paid by thousands of workers nationwide prior to the Supreme Court's landmark ruling last year in Janus v. AFSCME.

That June 2018 decision barred public-sector unions from requiring nonmembers to pay the fees without obtaining their clear consent. It already has cost unions tens of millions of dollars in dues, experts say, though the ruling hasn't yet been applied retroactively to provide refunds to workers.

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The new Leitch et al., v. AFSCME litigation again unites the nonprofit law firms Liberty Justice Center (LJC) and National Right to Work Legal Defense Foundation, which worked together on the Janus case, against AFSCME -- the largest public-sector union in the country. The two legal groups are representing nine government worker plaintiffs and a class of more than 2,700 workers in the lawsuit, which aims to set a precedent that could apply to all public-sector unions.

"We're putting the band back together," Liberty Justice Center President Patrick Hughes told Fox News. "The argument is once something is deemed to be unconstitutional [in the civil context] -- agency fees -- then they're deemed to be retroactively unconstitutional. ... We're taking the position that those fees should be refunded to those nonmembers."

Prior to Janus, Hughes argued, workers were faced with a "false choice" -- they could pay full membership dues and become a union member, or pay a substantial amount of those dues and not become a member. The Supreme Court validated Hughes' reasoning last June, holding not only that public unions violated the First Amendment by taking money out of unwilling workers' paychecks to fund collective bargaining, but also that employees must "clearly and affirmatively consent" before any fees or dues are collected.

Hughes emphasized that workers should be able to join unions if they want. But that decision, he said, should be made free from the external pressures created by mandatory agency fees.

AFSCME and other unions, Hughes acknowledged, can be expected to fight the lawsuit "tooth and nail," given the amount of money at stake. He predicted that unions would offer a "good faith" defense, and assert that they are entitled to retain the dues from before the Janus decision because they believed their position to be legally sound.

"The problem is the Supreme Court has never found the good-faith doctrine applies in this context -- and the more fact-specific [problem] is that the public sector unions were well aware" that pending legal challenges to mandatory agency dues had merit, Hughes said.

The complaint, obtained by Fox News, noted that on Feb. 9, 2015, then-Illinois Gov. Bruce Rauner, a Republican, "issued an executive order that recognized the State’s agency fee requirements were likely unconstitutional and that called for the fees to be placed in escrow 'so that each such State Employee will receive the amount deducted from his or her wages upon the determination by any court of competent jurisdiction that the Fair Share Contract Provisions are unconstitutional.'"

However, AFCME did not "agree to have agency fees escrowed while their constitutionality was resolved," the complaint asserts.

AFCME did not respond to Fox News' request for comment. The organization has called the Janus case a "blatantly political and well-funded plot to use the highest court in the land to further rig the economic rules against everyday working people."

In addition to class certification, Wednesday's lawsuit seeks for "plaintiffs and class members actual damages in the full amount of fees and any assessments seized from their wages from May 1, 2017 to June 27, 2018, plus interest, for violations of their First Amendment Rights."

Illinois' statute of limitations prevents the workers from obtaining a refund going back more than two years, but Hughes told Fox News that other states have longer statutes of limitations.

Mark Janus sued because he didn’t want a certain fee deducted from his paycheck to go toward a union just because he worked for the state. (Reuters/Leah Millis)

The lawsuit was slated to be formally announced Wednesday afternoon at a press conference in Chicago. Mark Janus, the plaintiff in Janus v. AFSCME, is scheduled to appear. He is seeking a refund of some $3,000 in agency fees.

“Refusing to return unlawfully seized union fees to these workers and in a growing number of cases across the country represents a blatant disregard for the law,” said Mark Mix, president of the National Right to Work Legal Defense Foundation. “AFSCME union officials in this case stand in utter defiance of the Supreme Court’s Janus decision. This case proves, once again, that union officials will do whatever it takes to keep the coffers brimming with forced dues and fees at the expense of the workers they claim to ‘represent.’ Keeping hundreds of millions of dollars taken from workers in violation of their First Amendment rights is outrageous.”

While Wednesday's lawsuit is the first by LJC to demand a refund for paid agency fees, and its first class-action case, the group said it expects to file more litigation given the alleged resistance of unions to comply with Janus.

According to an April 17, 2019 letter from the National Union of Healthcare Workers to a California union employee -- provided to Fox News by LJC -- some employees have been threatened with termination if they failed to join a union. That letter, while unrelated to the Illinois litigation, highlights ongoing problems with Janus enforcement, Hughes said.

In a March lawsuit also handled by LJC, two University of California system employees claimed they were effectively being held "against their will" and forced to pay monthly union dues.

On July 25, 2018, "upon learning of the Janus decision of June 27, 2018," one of the plaintiffs resigned from her union by letter and also wrote to University of California, Santa Barbara (UCSB) requesting that it stop deducting union dues from her paycheck.

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In response, the plaintiff said, the union informed UCSB that it should continue withholding money from her paycheck, and the university complied. The union said that, under the terms of the collective bargaining agreement, the plaintiff could eventually opt out of the fees -- she would just need to wait until around March 31, 2022.