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Door Open for Challenges to Required "Fair Share" Fees for Public Employee Unions

Posted on Wed, Jul 30, 2014 @ 07:46 AM

by Jack B. HarrisonJack B. Harrison

In addition to its Hobby Lobby decision, the Supreme Court issued another decision on the last day of its term that may have implications for unions and employers going forward.  In Harris v. Quinn, the Supreme Court was faced with the question of whether certain Illinois partial-public employees could be required to pay “fair share” fees when they elected not to join the public employees union.  While the Supreme Court’s decision in this case is narrow, it does lay the groundwork for future challenges to “fair share” fees for all public employees.

The plaintiffs in Harris were “personal assistants” who provided homecare services under the Illinois’ Home Services Program.  Under this program, eligible individuals may receive Medicaid funding for homecare services from a personal assistant.  Under the terms of this program, while the state pays the salary for the personal assistant, the individual who receives the care from the personal assistant is deemed to be the employer.  In 2003, the Illinois Legislature adopted a statute under which personal assistants were deemed to be “public employees” solely for the purpose of collective bargaining under the Illinois Public Labor Relations Act.  The statute specifically did not provide any benefits normally available to public employees to personal assistants.  Following the passage of the statute, the SEIU, the relevant public employees’ union, entered into a collective bargaining agreement with the state under which personal assistants that chose not to join the union were required to pay “fair share” fees.  These fees were automatically deducted from the personal assistants’ Medicaid payments.

In Harris, personal assistants alleged that the “fair share” fees were unconstitutional, arguing that the fees violated their First Amendment rights by requiring them to support a union against their wishes.  In addressing this issue, both the district court and the court of appeals rejected this First Amendment argument, relying primarily on the prior decision of the Supreme Court in Abood v. Detroit Board of Education, 431 U.S. 209 (1977). In Abood, the Supreme Court held that even where public employees choose not to join a union, they may still be required to pay “fair share” fees.

In Harris, the Supreme Court reversed the decision of the lower court, refusing to apply the reasoning of Abood to the personal assistants in this case.  Writing for the Court, Justice Alito noted that, in this case, the personal assistants at issue were not full-fledged public employees, but rather were deemed public employees solely for the purposes of collective bargaining.  The Court concluded that the “fair-share” fee requirement violated the personal assistants’ First Amendment rights, in that the state had not met its burden of showing that the fee requirement served a compelling government interest in the least restrictive manner.

Most importantly, however, the Court strongly criticized the reasoning underlying its prior decision in Abood.  While the Court did not overrule Abood, it certainly provided a framework for future challenges to “fair share” fees.  In dissent, Justice Kagan attempted to create a firewall against future challenges to the reasoning of Abood, pointing out how “deeply entrenched” the rule from Abood has become and noting that the Courts own “precedent about precedent makes it impossible for this Court to reverse that decision.”

Like its decision in Hobby Lobby, the Supreme Court’s decision in Harris, while intentionally narrow, opens the door to future challenges to required “fair share” fees in the public employee context.  It will be important for employers and unions, particularly those in the public sector, to continue to monitor this issue.

Tags: US Supreme Court

Does the Hobby Lobby Supreme Court Ruling Invite Future Challenges?

Posted on Tue, Jul 15, 2014 @ 09:24 AM

by Jack B. HarrisonJack B. Harrison

On the final day of the term, the United States Supreme Court issued its much anticipated decision in Burwell v. Hobby Lobby.  In Hobby Lobby, the Supreme Court ruled in favor of Hobby Lobby and two other entities, holding that closely held, for-profit entities who had objections to certain aspects of the birth control mandate imposed by the Affordable Care Act ("the ACA") based on religious beliefs could invoke the protections of the Religious Freedom Restoration Act (RFRA) to avoid complying with the mandate. 

Hobby Lobby involved three closely held companies, Hobby Lobby Stores, Inc., Conestoga Wood Specialties Corporation, and Mardel, Inc., all of whom sought exemption from the birth control mandate contained in the ACA.  In its decision, the Supreme Court held specifically that:

(a) for-profit, closely held corporate entities are "persons" authorized to bring claims under RFRA;

(b) the ACA's birth control coverage mandate with respect to the four specific forms of birth control at issue in the case placed a substantial burden on the religious beliefs of the entities seeking the exemption; and

(c) while agreeing with the government’s position that providing corporate employees free access to these four forms of birth control was a matter of compelling interest to the federal government, the ACA's coverage mandate was not the least restrictive means of achieving that goal.

Justice Ginsburg, joined in full by Justice Sotomayor, authored a very strong dissent in which she clearly articulated her disagreement with all three of these holdings by the majority.  Justices Breyer and Kagan also dissented, refusing to reach a conclusion as to whether for-profit corporations had standing to bring claims under RFRA, but joining in the remainder of Justice Ginsburg’s dissent.

While the decision is expressly limited to the specific birth control mandate of the ACA, the forms of birth control specifically objected to in the case, and the specific corporate structure (i.e. closely held, for-profit entities) before the Supreme Court in Hobby Lobby, it is likely that language in the decision will spawn litigation over religious objections to generally applicable federal laws, including non-discrimination laws. 

The majority stated in its opinion the following:

The principal dissent raises the possibility that discrimination in hiring, for example on the basis of race, might be cloaked as religious practice to escape legal sanction. Our decision today provides no such shield. The Government has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.

It can be argued that this statement by the Supreme Court should be read narrowly, applying only to federal statutes that prohibit discrimination based on race.  Presumably, those taking such a position would argue that because race based discrimination is specifically prohibited by the Constitution, federal statutes implementing the Constitutional prohibition are beyond the reach of RFRA.  Arguably, it would then follow that federal statutes prohibiting discrimination on other categories, such as gender or sexual orientation / gender identity would be subject to religious objections under RFRA.  It is unlikely that the Supreme Court meant for its language to be read so narrowly.  However, this language certainly opens the door for future challenges.

Prudent employers, particularly closely held, for-profit entities whose corporate documents and practices express strong religious beliefs, should review this decision and its implications for them.  However, such employers should continue to comply with all federal, state, and local laws prohibiting discrimination, giving consideration to the public relations problems that might be created by openly seeking to defy non-discrimination laws based on religious beliefs, no matter how strongly held they may be.

Legislation has already been introduced in the Congress to reverse the impact of this decision.  Introduced on July 9, 2014, the Protect Women’s Health from Corporate Interference Act of 2014 (H.R. 5051, S. 2578), specifically seeks to overturn the decision in Hobby Lobby.  According to the sponsors of this legislation, the “bill exempts federally mandated health services from RFRA while keeping in place the existing exemption for religious employers (e.g., houses of worship) and accommodation of religious non-profits who do not wish to provide contraceptives.”  The intent of this legislation is to “explicitly prohibit for-profit employers that maintain a group health plan for its employees from using religious beliefs to deny employees coverage of contraception or any other vital health service required by federal law.” 

Thus, employers should continue to monitor developments following Hobby Lobby, both in the courts and in the Congress.  Cors & Bassett will continue to provide updates as developments occur.

Tags: US Supreme Court