Viewpoint: Any Janus Solution That Ignores Free Riders Is Star-Crossed and Unfair

The direct reimbursement proposal would require public employers to reimburse unions for all of their bargaining-related costs—the same costs that could previously be charged to all workers in a fair share fee. Photo: Karla Cote, CC BY-ND 2.0.

Chris Brooks has written an important critique of the direct reimbursement proposal that I and others have suggested as a way for progressive states to neutralize the Supreme Court’s ruling in Janus v. AFSCME. I’m writing this response to clarify some misperceptions that I think may be at the root of his argument and to suggest that we agree in the end on the critical role of union organizing.

After Janus: A Debate

This piece is a response to the Slingshot by Labor Notes staff organizer Chris Brooks, “Boss Can’t Be Janus Fix,” from the August 2018 issue of Labor Notes.

For more takes on how unions should (or shouldn’t) be responding to the free-rider problem after the Janus decision, check out our debate, “How Should Unions Deal with Free Riders?”.

And visit labornotes.org/openshop for our “Rebuilding Power in Open-Shop America: A Labor Notes Guide.”

In its most basic form, the direct reimbursement proposal would require public employers to reimburse unions for all of their bargaining-related costs—the same costs that could previously be charged to all workers in a fair share fee. Brooks’s concerns are three-fold: direct reimbursement would turn unions into a puppet of management; it would leave unions unprepared to collect dues if reimbursement were to go away; and it would weaken a union’s responsiveness to the workers it represents.

EMPTY THREATS

Starting with the first concern, I completely agree that unions must retain independence from the employers against whom they negotiate. That’s why the direct reimbursement approach would make reimbursement a mechanical process free of employer-interference. Just like the process used before Janus to calculate agency fees, unions would set their budgets with member approval, calculate their bargaining-related expenses, and submit them to the employer. The employer would then be required by law to reimburse those expenses. The employer could not threaten to reduce the reimbursement amount as a way of threatening the union, just as employers had no power to threaten to reduce agency fees charged before Janus.

Still, Brooks quotes Cornell Professor Kate Bronfenbrenner, who worries that “what the employer gives out, it can take away.” I take this to mean that a hostile employer could threaten to eliminate a reimbursement clause from a future bargaining agreement to extract some concession on worker wages or benefits. But that was equally true of fair share clauses, too: in all but a few states, employers could (and sometimes did) threaten to eliminate them in exchange for other cuts. The defense against that tactic has been to sue, alleging a violation of the state law duty to engage in good faith bargaining. But of course that defense would apply equally to reimbursement clauses. So if Brooks and Bronfenbrenner are worried about employers threatening to renege on a reimbursement clause in a future contract, they need to explain why that same worry didn’t undermine the fair share system that operated before Janus.

In any case, their legitimate concerns can be addressed through legislative drafting. State law should be amended to give workers the choice whether to require public employers to reimburse their unions via a majority vote. That would eliminate the employer’s coercive influence over reimbursement clauses in future contracts. California’s law governing local public employee organizations included such a provision for fair share clauses, and incorporating it into the reimbursement arena would make good sense.

STILL DO DUES

As to Brooks’s second concern regarding member dues, he misunderstands what I am suggesting. (In fairness to him, my take on member dues is on pages 73-74 of this full-length article, so he’s not the only one to miss it.) Even in my approach, unions would continue to collect member dues. Those dues would be needed to fund the union’s day-to-day expenses on negotiations, contract administration, and grievance proceedings. Then, when the employer reimburses the union for those costs at the end of the year, the union would rebate the pro rata portion of that reimbursement back to each member. The implication should be clear: to the extent unions are fighting for reimbursement for bargaining-related expenses, what they are really fighting for is reimbursement of each member’s costs of sustaining a bargaining representative. Direct union reimbursement, in other words, is really union member reimbursement.

That brings me to Brooks’s third concern: that direct reimbursement will cut workers out of the equation. I hope the foregoing makes clearer that I don’t envision that at all. The whole proposal depends on keeping union members in the drivers’ seat, from choosing whether their union should accept reimbursement in the first place to making the real destination of the employer’s reimbursement a check that is sent to each member to recoup her dues.

So what, then, is the reimbursement workaround really about? It’s about financing unions in a way that overcomes the free-rider problem. For what Brooks doesn’t mention is that any solution that depends solely on organizing workers as a way to stem losses in voluntary membership remains an approach that gives free riders a better deal than union members: the free riders get all the benefits of the contract without any of the costs of securing it. As long as that is the case, organizing—as crucial as it is—will face a stiff headwind. (Incidentally, Brooks also doesn’t mention that the reimbursement approach enriches all workers through a federal tax cut worth $200 for a single worker earning $50,000 per year.)

FREE-RIDER SOLUTION

The direct reimbursement approach solves the free-rider problem. Here’s how: After Janus, free riders receive union benefits without paying for the costs of collective bargaining; those costs are instead shouldered by union members alone. But under the reimbursement approach, members would receive the same union benefits and get refunded for their costs of supporting the union. The result would be to restore a basic sense of fairness for members and non-members alike.

In that sense, the greatest irony in Mr. Brooks’s analysis is that the task he (correctly) deems fundamental to fighting back against Janus—member organizing—is actually advanced by the reimbursement model. For the greatest selling point of the reimbursement workaround may be its ability to strengthen the hand of union organizers.

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After all, from the union organizer’s standpoint, which of the following pitches is an easier sell? Without reimbursement, the argument is to join the union and pay dues—perhaps around $1,000 per year—because even though one can get the benefits of membership without paying a penny, paying voluntarily is the right thing to do. With reimbursement, the argument is more attractive: join the union and pay only the political portion of member dues—likely closer to $200 a year, because the union has fought for a clause guaranteeing reimbursement of each member’s bargaining-related costs—because it’s the right thing to do.

The space between Brooks and me is thus much smaller than he thinks. We both agree that unions must “get down to the hard work of organizing.” I just think there are ways for progressive lawmakers to help lighten the load.

Aaron Tang is a law professor at the University of California, Davis.

Comments

marianswer | 07/31/18

Convoluted and Misguided
Marian Swerdlow, UFT member since 1989
Professor Tang’s reimbursement proposal seems disturbingly convoluted. It obscures who is paying for what the union does. It appears to be the boss, although it isn’t. (Members and non-members will pay with lower wages and salaries and/or loss of workplace or union rights.) This appearance will tend to increase workers’ cynicism about the union. The people most likely to be misled and confused by this, however, are probably union staff and officers.

The greater weakness is the view that the free rider problem is a fiscal one. First and foremost, it’s a problem of consciousness. All the “solutions” that view the free rider problem this way - changes in duty of fair representation, members-only unionism, etc. - mostly address the symptom rather than the deeper, more destructive, underlying cause: the union’s failure to convince a potential member to get involved. Fair share payments widely “solved” the financial free rider problem for years, allowing many union leaders to ignore the deeper problem of consciousness. Now that the fair share crutch is being yanked away, that problem threatens union finances and suddenly many union leaders are searching for answers.

On money and organizing: Of course, union activities require finances. But unions will never be able to match the boss for material resources. To succeed in organizing, the mainstay for unions has to be people power, one on one, face to face relationships among workers. The CTU repurposed money from top leaders’ salaries to hire organizers from the rank and file. Even more important, it made every workplace activist an organizer. The recent red state teachers strikes were launched with little or no union financing, although later they certainly benefitted from material aid from nation wide unions.

Finally, framing union membership as a “deal” the union offers the worker, that s/he will take if it is a “better deal,” casts it as transactional, or a commodity. What is really needed is a union culture in which the member feels empowered and self-realized by union activity, and dues are only one way a member contributes. In such a union culture, the free rider would be the subject of peer pressure and maybe even pity. Much of “Labor Notes” work is about the hard work of building such a culture.

Rich Gibson | 07/31/18

I am saddened that LN would carry a piece that obviously seeks to create a company union in order to suck more dues from people. It's bad enough that so many labor bosses promote "Partners in Production," or the "Team Concept." That rotten, company union, idea culminated in the UAW hacks robbing the ranks, taking bribes from Chrysler, and ramming through rotten multi-tier contracts. As a speaker at the first LN conference, I never would have guessed that LN would entertain such a vile proposal in print.

Dan DiMaggio | 07/28/18

Labor activist Steve Downs asked me to post this comment for him, as he was having technical difficulties with our site:

Professor Tang's proposal for direct reimbursement creates what economists call a 'perverse incentive' for union members who would otherwise stick with the union to, instead, resign from it.

A member who understands that it's important to have union representation, but who is not particularly active, doesn't attend meetings or rallies, and may not always vote (that is, many members), might decide to resign from the union knowing that this won't result in the union losing any money. The member keeps the money that would have been spent on dues and direct reimbursement restores those lost dues to the union's treasury.

This will, obviously, weaken the bond between the union and its members. At best, it creates one more hurdle for union reps to overcome when trying to convince members to maintain their membership.