SCOTUS Preview: Is the End in Sight for Public Employee Unionism (and Fair Share Fees)?

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Does a collective bargaining agreement that requires nonunion home-care workers to pay a fee to a union representative violate the First Amendment of the U.S. Constitution? In the next few days the Supreme Court of the United States will decide this question in a case challenging a state law requiring workers who provide in-home care to disabled individuals through Medicaid-waiver programs to pay “fair share fees.” The case, Harris v. Quinn, will determine the constitutionality of an Illinois law that requires these workers to accept and financially support a union as their exclusive representative to petition the state for greater reimbursements from its Medicaid programs. The Court will also rule on whether the claims brought by some employees who have rejected unionization and are not subject to fair share fees are ripe for judicial review.

The case was filed by two groups of workers who provide in-home care through Medicaid-waiver programs run by the Illinois Department of Human Services: (1) workers who are part of the Home Services Program administered by the Division of Rehabilitation Services (the Rehabilitation workers); and (2) workers who are part of the Home-Based Support Services Program administered by the Division of Developmental Disabilities (the Disabilities workers). The workers sign employment agreements directly with their patients. However, the terms of the agreements are set by the State of Illinois, which sets wages, pays the workers, and withholds Social Security, federal, and state taxes.

In 2003, the Illinois Public Labor Relations Act was amended to designate personal care attendants as state employees for purposes of collective bargaining and former Illinois governor, Rod Blagojevich, issued an executive order directing the state to recognize an exclusive representative for the Rehabilitation workers pursuant to a majority vote. In the same year, the Rehabilitation workers voted in favor of designating SEIU Healthcare Illinois & Indiana as their collective bargaining representative with the state. The union and the state negotiated a collective bargaining agreement, which included a union security clause. This “fair share” provision (so called because, theoretically, it distributes the costs of negotiating and administering a union contract among all those who benefit from it) required all Rehabilitation workers who were not part of the union “to pay their proportionate share of the costs of the collective bargaining process, contract administration and pursuing matters affecting wages, hours and other conditions of employment.” In 2009, the Disabilities workers rejected representation by both SEIU Local 713 and AFSCME Council 31.

In 2010, both the Rehabilitation workers and the Disabilities workers filed suit against the Illinois governor and three unions. The Rehabilitation workers claimed that imposition of the fair share fees violated the First Amendment of the U.S. Constitution by compelling their association with, and speech through, the union. The Disabilities workers argued that although they did not pay the fees, they were harmed because they might have to pay them in the future if workers voted in favor of union representation. The U.S. District Court for the Northern District of Illinois dismissed both claims.

With respect to the Rehabilitation workers, the Seventh Circuit Court of Appeals held that imposition of the fair share fees does not violate the First Amendment. In arriving at this conclusion, the court considered Supreme Court precedent approving of collective bargaining agreements that compel nonunion members to financially support the costs of representation and related costs—even in the public employment context—but not political candidates, political views, or other ideological causes. Importantly, the Seventh Circuit found that the employment relationship between the home-care workers and their patients did not preclude a finding that the workers were also state employees, given the state’s “significant control over virtually every aspect of a personal assistant’s job.” As a result, the court concluded that the imposition of the fair share fees did not violate the First Amendment. The Seventh Circuit also ruled that, with respect to the Disabilities workers, the court lacked jurisdiction because the workers were not presently subject to mandatory fair share fees.

The Supreme Court heard oral arguments from both sides in January of 2014. The workers’ lawyer argued that by requiring the deduction of a fair share fee, the unions coerced the home-care workers into supporting a union as it sought to “petition the government” in ways that some of those workers might oppose. With regard to this issue, Justice Kennedy advocated for open public debate on union issues unhindered by a union’s representation of employees and their views. Justice Alito expressed similar concerns with the possibility that workers would be coerced into siding with a particular view.

During the arguments, the justices also heard arguments for and against overruling Abood v. Detroit Board of Education—the landmark case from 1977 on public employee unionization. The Seventh Circuit cited Abood—which will likely prove to be pivotal to the outcome of Harris v. Quinn—for the proposition that a collective bargaining agreement’s agency shop clause could require nonunion workers to financially support the union’s collective bargaining and other activities “germane to its duties as collective-bargaining representative.”

At one point in oral argument, Justice Breyer raised serious concerns about whether public employees have the right to unionize at all. Whether Harris v. Quinn will signal the end of public employee unionization remains to be seen.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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