Wyatt Employment Law Report

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Supreme Court Concludes Offer of Judgment Cannot Moot Class Actions

By Douglas L. McSwain and Michael D. Hornback

Every business would like to avoid class actions. Even if an individual class plaintiff’s damages are small, aggregated damages across a sizable class can be staggering.  Of late, businesses have utilized a defense strategy to offer the individually named class plaintiff(s) all of the relief requested (via an “offer of judgment”), prior to the class being certified by the court.  Several courts within the Third, Fourth, and Sixth Circuit Courts of Appeals have held offers of judgment for the full relief sought by the individual class plaintiff, even if not accepted, moots the entire class action, and deprives the court of further jurisdiction to hear the case.  By offering all the relief requested by the class plaintiff, the business could avoid the class action entirely.  The First, Second, Fifth, Seventh, and Eleventh Circuit Courts of Appeals have not bought this defense, and so the United States Supreme Court took up the case of Campbell-Ewald Co. v. Gomez, 577 U.S. ___ (2016), this term to resolve the conflict between the circuits.

On January 20, 2016, the Supreme Court rendered its decision in Campbell-Ewald, holding that an unaccepted offer of judgment has no force and effect, and does not Continue reading

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Supreme Court Allows Certain Public Employees to Refuse to Pay Union Dues or Fees

By George J. Miller

Today, in a 5-4 decision, the U.S. Supreme Court held in Harris v Quinn, 573 U.S. ___ (2014) that it is a violation of the First Amendment for a group of home health care providers (personal assistants or PAs) working in the State of Illinois’ Medicaid program to be required to pay an “agency fee” to a union (the Service Employees International Union Healthcare Illinois and Indiana (SEIU)) which represents them for purposes of collective bargaining, but which they do not want to join or support. To hold otherwise, according to the majority opinion, “would approve an unprecedented violation of the bedrock principle that, except perhaps in the rarest of circumstances, no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support.” (Emphasis added). The Court held that the legislative goals of labor peace and the welfare of the PAs advocated by the State of Illinois and the SEIU were not proven to be accomplished by the challenged law and were not compelling enough to overcome this bedrock principle.

An important factor in the Court’s decision is that thePAs are not “full-fledged public employees.” Under Illinois law, the homecare recipients (designated “customers”) and the State both play some role in the employment relationship with the PAs. Customers control most aspects of the employment relationship, including the hiring, firing, training, supervising, and disciplining of PAs; they also define the PAs duties by proposing a “Service Plan.” Other than compensating PAs, the State’s involvement in employment matters is minimal. The State’s employer status was created by execu¬tive order, and later codified by the legislature, solely to permit PAs to join a labor union and engage in collective bargaining under Illinois’ Public Labor Relations Act (PLRA). The Illinois legislature emphasized that PAs are not state employees for any other purpose, “including but not limited to, purposes of vicarious liability in tort and purposes of statutory retirement or health insurance benefits.” Pursuant to this scheme, the SEIU was designated the exclusive union representative for PAs in the State’s Medicaid Rehabilitation Program. The SEIU then entered into collective-bargaining agreements with the State that contained an agency-fee provision.

In basing its ruling on the employment status of the PAs, the Court did not overrule—though it discussed the limitations of—existing precedent (Abood v. Detroit Board of Education, 431 U.S. 209 (1977)) that permits public sector employers and labor unions in states where public sector collective bargaining is permitted to enter into collective bargaining agreements that require public employees covered by the agreements to pay the union an agency fee, even if they do not wish to join or support the union. The Court left this precedent in place by distinguishing between the status of the PAs in this case and full-fledged public employees. Some commentators feared that the Court might overrule Abood and outlaw this practice altogether, which it was feared would be a near fatal blow to public sector labor unions. Consequently, it appears that the Court’s opinion may be limited to the PAs in this case, or perhaps to home health workers and other similarly situated employees in other states that have a system like Illinois’. The practice of requiring payment of agency fees to labor unions by public sector employees they represent appears to have survived.