The Other Janus and the Future of Labor's Capital

By Webber, David H. | Vanderbilt Law Review, November 2019 | Go to article overview

The Other Janus and the Future of Labor's Capital


Webber, David H., Vanderbilt Law Review


Introduction

When corporate lawyers and scholars discuss "the Janus case," they usually mean Janus Capital Group v. First Derivative Traders, a 2011 U.S. Supreme Court opinion that limited who could be sued for making false statements in violation of Rule 10b-5^ But another Janus, a labor case, may have greater implications for the corporate world than its more familiar namesake.2 In the 2017 decision Janus v. American Federation of State, County, and Municipal Employees, Council 31, the Court overturned more than forty years of precedent to strike down "fair share fees" on First Amendment grounds.3 "Fair share fees," or "agency fees," were required fees public employees paid to public-sector unions to compensate the unions for the benefits they secured for workers via collective bargaining.4 Long-standing precedent held that workers could not be forced to join public-sector unions, or to support union political activities, but they could be required to pay "fair share fees."5 Under collective bargaining rules, unions were required to represent all workers in a unionized workplace, even those who chose not to join them.6 In the absence of fair share fees, the requirement that unions represent all workers could have led to worker free riding, one of the express rationales for upholding such fees under long-standing Supreme Court precedent in 1977's Abood v. Detroit Board of Education.7

Forty years later, Mark Janus brought suit to directly challenge Abood after Justice Alito invited such a challenge in Harris v. Quinn, asking whether it was time to revisit that holding.8 Janus was a childsupport specialist who worked for the Illinois Department of Healthcare and Family Services.9 He was not a member of the local American Federation of State, County, and Municipal Employees ("AFSCME") union that represented him and workers like him in negotiating wages, benefits, and workplace conditions with the State of Illinois.10 He objected to the forty-five-dollar-per-month "fair share fee" he was required to pay to the AFSCME local to compensate it for negotiating on his behalf, arguing that the fee violated his First Amendment rights.11 Janus characterized union negotiations with the government over salaries, pensions and benefits as speech.12 The Supreme Court agreed.13 Writing for the 5-4 majority, Justice Alito stated: "In simple terms, the First Amendment does not permit the government to compel a person to pay for another party's speech just because the government thinks that the speech furthers the interests of the person who does not want to pay."14 Mark Janus's negative-value legal claim was financed by the Liberty Justice Center (part of the conservative think tank Illinois Policy Institute) and funded by organizations like Donors Trust, the Charles Koch Institute, and the Ed Uihlein Family Foundation.15

The Janus holding has both direct and indirect implications for labor as a shareholder. The direct implication is that the reasoning in Janus might apply directly to public pension funds themselves. Just as public-sector workers were once required to pay fair share fees, so they are required to contribute to public pension plans.16 Could the reasoning in Janus apply to these plans? In an era in which environmental, social, and governance investing has risen to prominence, at what point do a public pension's investment choices implicate the First Amendment, thereby mandating opt-out rights to dissenters?17 And if so, will Janus hasten the demise of the traditional defined-benefit pension in favor of the 401(k), following the path taken in the private sector decades ago?18

Even if the Janus holding does not directly apply to the financing and structure of public pension funds-and there are good reasons to believe it does not-the case is likely to have indirect effects on labor's shareholder activism.19 To the extent that the Janus holding reduces funding for public-sector unions, those unions will have fewer resources to deploy for shareholder activism and to defend public pensions from the unrelenting legal and political attacks they face from the same forces that financed Janus. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Other Janus and the Future of Labor's Capital
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.