by John E. Motylinski (Fall 2019)

Last year, the United States Supreme Court struck down Illinois’ “fair share” law, which mandated public employees pay a part of their wages to a union—even if they disagreed with the union’s political stances—in Janus v. Am. Fed’n of State, Cty., & Mun. Employees, Council 31, 138 S. Ct. 2448 (2018). The Supreme Court reasoned that forcing employees to fund an inherently political entity with which they did not agree was coerced speech that violated the First Amendment.

In an attempt to test the limits of Janus, a local union recently filed a lawsuit against the Illinois Municipal Retirement Fund (IMRF) in Sweeney v. Illinois Mun. Ret. Fund, 2019 WL 1254925 (N.D. Ill. Mar. 19, 2019). The union argued that investments in corporations that fund politically-adverse lobbying groups were similarly unconstitutional. The court, however, disagreed and dismissed the case.

The court concluded that IMRF’s investments (and, by extension, investments made by Article 3 and 4 pension funds) in politically active corporations do not amount to coerced speech that would run afoul of Janus and the First Amendment.

Background: Janus v. AFSCME

The Supreme Court’s decision in Janus brought a sea change in how Illinois public employers and bargaining units handle union dues. Previously, Illinois public employers were required by law to impose a “fair share” fee on employees who affirmatively opposed joining the bargaining unit’s union. This was to avoid a free-rider problem.

Technically, bargaining units are separate and apart from the unions that represent them. Therefore, even though an employee is not a member of the union, he or she could still reap the benefits that came along with being a bargaining unit member. If, for instance, the bargaining unit got a raise (based on the efforts of the union during contract negotiations), so too would the union non-member. The result was that employees had no incentive to join and financially support the union.

The Supreme Court had recognized this free-rider dilemma and had previously blessed the imposition of fair share fees, which sought to compensate the union for their efforts. In Janus, the Supreme Court reversed its precedent on fair share fees. There, the plaintiff refused to join the union that represented his bargaining unit because he disagreed with many of the union’s political and collective bargaining positions. When he was charged a fair share fee, he sued the State of Illinois (his employer) alleging that the State was forcing him to support a cause he did not support in violation of the First Amendment.

The Supreme Court ultimately agreed with him and held that the State’s law requiring that he subsidize an organization with which he disagreed (i.e., the union) was unconstitutional coerced speech.

Sweeney v. IMRF: The Facts

The Janus decision was viewed as a sweeping blow to public sector labor unions.1 Recently, however, a local chapter of the AFL-CIO labor union tried to use Janus as a tool of its own to challenge IMRF’s ability to invest in corporations that supported the American Legislative Exchange Council – a lobbying group commonly referred to as “ALEC.”

ALEC lobbies for the adoption of “model bills” focusing on issues including weakening labor unions and public pension funds. Such model bills often propose increasing employee contributions, raising the retirement age and number of years of service required for vesting, and moving from defined benefit plans (such as public pensions) to defined contribution plans (such as 401k or 457 plans).

For its part, IMRF is a multi-employer public pension fund that administers disability, retirement, and death pension benefits for employees of local governments in Illinois. Created by the Illinois General Assembly (40 ILCS 5/7-101 et seq.), IMRF consists of more than 410,000 members and approximately 3,000 participating units of local government. IMRF is funded by mandatory member contributions, as well as employer contributions, and investment returns. IMRF has the power—and duty—to make investments to maximize its assets. (40 ILCS 5/7-201.)

According to the complaint, many of the publicly traded companies in which IMRF has invested, including AT&T, Exxon Mobil, Pfizer, UPS and Anheuser-Busch, provide financial support to ALEC.

Sweeney v. IMRF: The Court’s Decision

Finding IMRF’s indirect funding of ALEC to be abhorrent, the union sued IMRF for allegedly violating their First Amendment rights. Indeed, the union argued that IMRF’s use of employee’s mandatory contributions to invest in ALEC-supporting companies was the same compelled speech that was stricken in Janus.

However, the court disagreed that Janus applied and ultimately dismissed the case. The court framed the key issue as whose speech, if any, the union was forced to subsidize. Critically, unlike in Janus where the employee’s contribution went to a private entity (the union), the union members’ contributions in Sweeney went to IMRF. Therefore, IMRF’s speech had to be the operative subject of the union’s challenge – not, as the union suggested, the speech of the corporations that IMRF invested in or that of ALEC.

With IMRF’s speech fixed as the proper subject of inquiry, the court quickly disposed of the union’s free speech claim. For one, the court expressed doubt that IMRF’s investments were speech capable of being challenged in the first instance; rather, they were more akin to free market transactions seeking profit. In essence, the court did not think that investments alone constituted IMRF putting words in the union’s mouth.

Even if IMRF’s investments were speech, however, it was non-actionable governmental speech. Unlike speech by private individuals, the First Amendment’s Free Speech Clause does not restrict what a government says. See Pleasant Grove City, Utah v. Summum, 555 U.S. 460, 467 (2009). As such, the court concluded that, as long as Illinois’ law authorizing IMRF to make investments was “viewpoint neutral” (i.e., it does not on its face express a political opinion), it is acceptable. Because IMRF had lawful authority to invest and did so without making any sort of political comment, it could not be liable under the First Amendment.


The Sweeney case illustrates that pension board trustees need not fear First Amendment challenges when it comes to investments. When a pension board makes investments, it is not “speaking” in a manner that is capable of being challenged under the First Amendment. To the extent that a particular investment is otherwise allowable by law, trustees need not concern themselves with the politics of the corporations in which they invest. Accordingly, the Janus’ ruling will not extend to the affairs of pension funds that are merely operating to fulfil their fiduciary duties.


1See, e.g., In a Blow to Unions, Government Workers No Longer Have to Pay Fair Share Fees, Chicago Sun Times (July 1, 2018),