Wyatt Employment Law Report

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Supreme Court Says Union Violated First Amendment Rights of Non-Members

By George J. Miller

In a case that glaringly showed how unions are willing to advance their political agenda at the expense (literally!) of the employees they represent, today the U.S. Supreme Court sided with the employees.  The case is Knox v. Service Employees International Union, Local 1000.  The Court held that the First Amendment prohibits a public-sector union from requiring objecting non-members to pay a special fee for the purpose of financing the union’s political and ideological activities.

In this case, the union represented a bargaining unit of California state employees. In 2005, then Governor Schwarzenegger called a special election on two measures which the union opposed. The union wanted to raise $12 million to use in opposing these ballot measures, including “television and radio advertising, direct mail, voter registration, voter education, and get out the vote activities.”  The union raised the money by imposing a special assessment on the employees it represented, including both members of the union and non-members. The union did not seek advance approval from employees for the assessment, and employees did not have a choice whether or not to pay it. Unhappy about this, a group of non-union employees who paid into the fund sued, alleging a violation of their First Amendment rights.

Writing for the majority, Justice Samuel Alito said: “This aggressive use of power by the SEIU to collect fees from nonmembers is indefensible . . . .  Therefore, when a public-sector union imposes a special assessment or dues increase, the union . . . may not exact any funds from nonmembers without their affirmative consent.”

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Supreme Court Rules Drug Company Sales Employees Are Not Entitled to Overtime Pay

By Edwin S. Hopson

In Christopher et al. v. SmithKline Beecham Corp., d/b/a Glasxosmithkline, 567 U.S. ___ (2012), No. 11-204, decided June 18, 2012, the U.S. Supreme Court, in a 5-4 decision, ruled that certain drug sales employees are to be treated as “outside salesmen” under the Fair Labor Standards Act (FLSA) and therefore are exempt from the overtime requirements of the law.  The drug sales employees had filed a private action against their employer under the FLSA seeking unpaid overtime pay.  The U.S. Department of Labor had filed an amicus brief supporting the employees’ claims.

The court’s opinion was authored by Justice Alito, who was joined by Chief Justice Roberts, and Justices Scalia, Kennedy and Thomas.  Justice Breyer wrote a dissenting opinion that was joined in by Justices Ginsburg, Sotomayor and Kagan.

The majority, after rejecting any deference to the Department of Labor’s interpretation, reviewed the FLSA and its regulations and concluded that the drug sales employees were exempt even though they only obtained non-binding commitments from doctors to prescribe their drugs to their patients (who actually were the purchasers in most cases).  The statutory provision in question, 29 U. S. C. §203(k), states that “‘[s]ale’ or ‘sell’ includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.” [Emphasis added].  The majority seized upon the “or other disposition” phrase and ruled for the drug company defendant, pointing out, “Petitioners—each of whom earned an average of more than $70,000 per year and spent between 10 and 20 hours outside normal business hours each week performing work related to his assigned portfolio of drugs in his assigned sales territory—are hardly the kind of employees that the FLSA was intended to protect.” Slip Opinion Page 22.