Public-Sector Unions and Gifts of Public Funds

The Supreme Court’s decision in Janus v. AFSCME prohibits states from allowing public employee unions to dock non-union members’ wages to support collective bargaining and other political activities.

The ink had barely dried on that decision before experts began proposing workarounds. For example, First Amendment scholar Eugene Volokh and others suggest that states could reduce public employee salaries by the amount needed by the union to engage in collective bargaining, and then allocate that amount of public funds directly to the union.

On its face, this proposal seems plausible, because courts offer taxpayers little recourse in making First Amendment free speech challenges to public expenditures.

But there’s a big problem: all state constitutions contain a Gift Clause that prohibits the government from making a gift of public funds to a private organization. Originally these clauses were added to prevent states from gifting public lands to railroads, but recently taxpayers have made Gift Clause challenges to state funds provided to public employee unions.

For example, many state and local governments agree to union collective bargaining agreements that give certain employees “release time” -- basically, excusing them from their normal duties so they can spend their days doing union work. In Rozenblit v. Jersey City Education Association, a case pending in the New Jersey appellate court challenges a release time provision that pays classroom teacher salaries and benefits to the teachers’ union president and vice president while they spend every working hour for the union.

When Jersey City taxpayers sued, arguing that the release time was an unconstitutional gift of public funds to the teachers’ union, the trial court disagreed on the theory that the union officials engaged in “peacemaking” activities (dealing with grievances and such) that justified the use of taxpayer funds. Yet shortly after the lower court decision, teachers in this very same union walked out on an illegal strike. Peacemaking, indeed!

Release time challenges brought under Gift Clause provisions have yet to succeed. The Arizona Supreme Court in Cheatham v. DiCiccio (2016) narrowly rejected a claim brought by taxpayers who objected to paying for six full-time and 35 part-time employees of the Phoenix police department who worked for the benefit of the union -- including lobbying activities. But the decision was 3-2, and the lower appellate court had ruled in favor of the taxpayers, suggesting this argument may be gaining traction among judges.

Public employee unions in California face a particularly high hurdle because, in addition to the state constitution’s Gift Clause, a state statute prohibits the “waste of public funds.” In 1990, the Supreme Court held in Keller v. State Bar of California that attorney members of a mandatory bar association could not be forced to subsidize the State Bar’s political and ideological activities. To ensure compliance with that ruling, Ventura County District Attorney Michael Bradbury sued the Bar to assert his ability to withhold those political subsidies when he used public funds to pay the bar dues for the attorneys in his office.

Bradbury invoked a California law that allows taxpayers to challenge any “waste of public funds” and argued that public employers could not pay for the Bar’s political activities or they would risk lawsuits under that law. In County of Ventura v. State Bar of California, an appellate court agreed, equating payments to support Bar politicking to a “direct contribution by the agency, on its employee’s behalf, to a political party or candidate or an ideological organization,” which “would be worse than totally unnecessary or useless or without public benefit -- it would be a wholly inappropriate encroachment by government into the political arena, and thus a waste of public funds.” The court acknowledged that public employees can make political contributions as they choose, “but government should have no part of it.”

This bring us to Janus’s holding that there’s no constitutional distinction between “political and ideological” union activities and activities related to collective bargaining -- all involve matters of substantial public concern and all are therefore inherently political. As a result, the Ventura decision would apply, rendering any direct allocation of taxpayer funds to the union’s collective bargaining an illegal waste of public funds.

Rather than seeking a legislative end-run around public workers’ First Amendment rights, public sector unions should turn their focus inward and find ways to increase their value to workers, who would then choose to join and support the union voluntarily. This not only protects, but enhances, all workers’ speech rights.

Deborah J. La Fetra is a Senior Attorney with Pacific Legal Foundation, which filed amicus briefs in Janus, Rozenblit, and Cheatham, and she directly represented Michael Bradbury in Ventura.

The Supreme Court’s decision in Janus v. AFSCME prohibits states from allowing public employee unions to dock non-union members’ wages to support collective bargaining and other political activities.

The ink had barely dried on that decision before experts began proposing workarounds. For example, First Amendment scholar Eugene Volokh and others suggest that states could reduce public employee salaries by the amount needed by the union to engage in collective bargaining, and then allocate that amount of public funds directly to the union.

On its face, this proposal seems plausible, because courts offer taxpayers little recourse in making First Amendment free speech challenges to public expenditures.

But there’s a big problem: all state constitutions contain a Gift Clause that prohibits the government from making a gift of public funds to a private organization. Originally these clauses were added to prevent states from gifting public lands to railroads, but recently taxpayers have made Gift Clause challenges to state funds provided to public employee unions.

For example, many state and local governments agree to union collective bargaining agreements that give certain employees “release time” -- basically, excusing them from their normal duties so they can spend their days doing union work. In Rozenblit v. Jersey City Education Association, a case pending in the New Jersey appellate court challenges a release time provision that pays classroom teacher salaries and benefits to the teachers’ union president and vice president while they spend every working hour for the union.

When Jersey City taxpayers sued, arguing that the release time was an unconstitutional gift of public funds to the teachers’ union, the trial court disagreed on the theory that the union officials engaged in “peacemaking” activities (dealing with grievances and such) that justified the use of taxpayer funds. Yet shortly after the lower court decision, teachers in this very same union walked out on an illegal strike. Peacemaking, indeed!

Release time challenges brought under Gift Clause provisions have yet to succeed. The Arizona Supreme Court in Cheatham v. DiCiccio (2016) narrowly rejected a claim brought by taxpayers who objected to paying for six full-time and 35 part-time employees of the Phoenix police department who worked for the benefit of the union -- including lobbying activities. But the decision was 3-2, and the lower appellate court had ruled in favor of the taxpayers, suggesting this argument may be gaining traction among judges.

Public employee unions in California face a particularly high hurdle because, in addition to the state constitution’s Gift Clause, a state statute prohibits the “waste of public funds.” In 1990, the Supreme Court held in Keller v. State Bar of California that attorney members of a mandatory bar association could not be forced to subsidize the State Bar’s political and ideological activities. To ensure compliance with that ruling, Ventura County District Attorney Michael Bradbury sued the Bar to assert his ability to withhold those political subsidies when he used public funds to pay the bar dues for the attorneys in his office.

Bradbury invoked a California law that allows taxpayers to challenge any “waste of public funds” and argued that public employers could not pay for the Bar’s political activities or they would risk lawsuits under that law. In County of Ventura v. State Bar of California, an appellate court agreed, equating payments to support Bar politicking to a “direct contribution by the agency, on its employee’s behalf, to a political party or candidate or an ideological organization,” which “would be worse than totally unnecessary or useless or without public benefit -- it would be a wholly inappropriate encroachment by government into the political arena, and thus a waste of public funds.” The court acknowledged that public employees can make political contributions as they choose, “but government should have no part of it.”

This bring us to Janus’s holding that there’s no constitutional distinction between “political and ideological” union activities and activities related to collective bargaining -- all involve matters of substantial public concern and all are therefore inherently political. As a result, the Ventura decision would apply, rendering any direct allocation of taxpayer funds to the union’s collective bargaining an illegal waste of public funds.

Rather than seeking a legislative end-run around public workers’ First Amendment rights, public sector unions should turn their focus inward and find ways to increase their value to workers, who would then choose to join and support the union voluntarily. This not only protects, but enhances, all workers’ speech rights.

Deborah J. La Fetra is a Senior Attorney with Pacific Legal Foundation, which filed amicus briefs in Janus, Rozenblit, and Cheatham, and she directly represented Michael Bradbury in Ventura.