Union-Backed Law Threatens $1 Billion in Penalties for Telling Public Employees About Constitutional Opt-Out Rights 

Portland, Oregon — The Freedom Foundation filed a federal lawsuit challenging Oregon House Bill 3789, a law that hands public-sector unions the power to sue the organization into oblivion for doing what it’s done for years: informing public employees about their constitutional rights.

The lawsuit, filed in U.S. District Court for the District of Oregon on December 31, names Oregon Attorney General Dan Rayfield, the Oregon Employment Relations Board, and five major public-sector unions—including SEIU Local 503, Oregon Education Association, and Oregon AFSCME Council 75—as defendants. The Freedom Foundation asked the court to immediately block the law before it took effect January 1, 2026, and to strike it down permanently as unconstitutional.

HB 3789 lets public-sector unions sue the Freedom Foundation for $6,250 per piece of mail sent to workers explaining their right to opt out of union membership under the Supreme Court’s Janus v. AFSCME decision. One mailing to Oregon’s public employees equals approximately $1 billion in potential liability for the Freedom Foundation.

The unions wrote this law. The legislature passed it. The governor signed it. And it targets one organization.

“We’ve helped more than 35,000 Oregon workers exercise their Janus rights over the past seven years,” said Aaron Withe, CEO of the Freedom Foundation. “Those workers have saved—and their unions have lost—over $100 million in dues. Instead of making their case to workers, Oregon’s unions lobbied for a law designed to silence us. We’re not going to let that happen.”

The lawsuit argues HB 3789 violates the First Amendment by discriminating based on content and viewpoint, targeting political speech, forcing speakers to alter their messages, and operating as an unconstitutionally vague threat. The law gives unions the power to bankrupt their most effective critic while leaving unions free to send unlimited recruitment mail to the same workers.

“Oregon already has fraud laws on the books,” said Eric Stahlfeld, the Freedom Foundation’s Chief Litigation Counsel. “This law hands unions the power to bankrupt their most effective critic—the Freedom Foundation—through lawsuits. The First Amendment protects the Foundation’s speech, and we’re confident the court will strike this law down.”

Since the Supreme Court’s 2018 Janus decision struck down forced union dues as unconstitutional, the Freedom Foundation has helped hundreds of thousands of public employees nationwide understand they have a choice about union membership. The organization’s mailings explain how the opt-out process works and what it means financially for workers. If Oregon succeeds in enforcing HB 3789, it could become a model for other blue states across the country.

The Wall Street Journal editorial board weighed in on the controversy, writing that Oregon’s approach raises serious constitutional concerns about government suppression of speech.

“The Supreme Court ruled in 2018 that government can’t force workers to fund unions they don’t support,” said Mark Janus, the Illinois child support specialist whose case led to that landmark decision. “Oregon’s law does exactly what the Court said states can’t do. It lets unions punish anyone who tells workers their constitutional rights exist.”

The Freedom Foundation has already had to change its communications and delay mailings because of HB 3789’s threat. Without a court order blocking the law, the organization faces a choice: stop informing Oregon workers about their rights or risk bankruptcy.

The lawsuit asks the court to declare HB 3789 unconstitutional and block Oregon from enforcing it.