Wyatt Employment Law Report

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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.

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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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NLRB Orders Re-Run Election in Largest Mail Ballot Election Ever Conducted

By Edwin S. Hopson

On August 10, 2011, the National Labor Relations Board issued an order that will lead to a re-run of a mail ballot election held in the fall of 2010 involving some 43,000 employees of Kaiser Permanente in California.  This was the largest mail ballot election ever conducted by the NLRB.  The employees were voting on whether to remain represented by their current union — United Healthcare Workers, affiliated with the SEIU, or to select the National Union of Healthcare Workers (NUHW), a new union which had been created by former SEIU officials.  The other option on the ballot was to select “no union.”

In the first election last fall, a majority of employees voted to retain the SEIU affiliated union.  Objections were filed by NUHW after the election and, in July, 2011, NLRB Administrative Law Judge Lana Parke issued a report following a hearing on objections, sustaining some of the objections and recommending the original election results be set aside and a new election conducted. 

The Board’s order was signed by Chairman Wilma B. Liebman and Members Brian Hayes and Mark Gaston Pearce, with Member Craig Becker recused.