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| Ronald J. Kramer |
The Decision
In Harris, the plaintiffs provided in-home health care services in Illinois for people with varying levels of disabilities and other health needs. While Illinois paid the salaries of these personal assistants, provided health insurance, set certain employment qualifications, conducted performance reviews and described services that assistants may provide, the person receiving the care — the customer — essentially controlled most aspects of the employment relationship, and by regulation was designated as the employer of the personal assistants.
As the state was not the sole employer of the personal assistants, at one time they had no collective bargaining rights under the Illinois Public Labor Relations Act. In 2003, the law was amended to designate “personal care attendants and personal assistants working under the Home Services Program” as state employees for purposes of collective bargaining. Some 20,000 Rehabilitation Program assistants thereafter voted to be represented by the Service Employees International Union. The Rehabilitation Program assistants’ contract included a union security clause that required all assistants who were not union members to pay their “fair share” of fees for the costs of actual bargaining and non-political contract administration activities. Illinois law permits such fair share fee provisions in collective bargaining agreements.
The plaintiffs (a group of potentially affected employees) sued, challenging the constitutionality of the fair share fee requirement. They claimed that the fair share fee requirement violated the First Amendment by compelling their association with, and speech through, the union. The plaintiffs asserted infringement even though, by paying only “fair share” fees, ostensibly they were only paying for the union’s representation of them for bargaining and administrative (not political) purposes.
The district court and then the Seventh Circuit rejected the plaintiffs’ claims. Finding the personal assistants were state employees, at least with regard to collective bargaining, the Seventh Circuit found the union's collection and use of fair share fees was permitted by almost 60 years of prior Supreme Court jurisprudence, especially Railway Employees' Department v. Hanson,[1] where the court found the Railway Labor Act preempted the state constitution and thus a union shop provision in a contract was lawful, and Abood v. Detroit Board of Education,[2] where the court held it was not a First Amendment violation to require non-union public teachers under the “agency shop” clause of their collective bargaining agreement to financially support the union's collective bargaining, contract administration, grievance-adjustment procedures and other activities “germane to its duties as collective-bargaining representative.”
In reversing the Seventh Circuit, the Supreme Court's majority, in a decision written by Justice Samuel Alito, noted that Illinois was seeking to significantly expand Abood to apply, “not just to full-fledged public employees, but also to others who are deemed to be public employees solely for the purpose of unionization and the collection of an agency fee.” The court examined its earlier reasoning in Abood, and found its analysis to be “questionable on several grounds.” The court criticized the decision for, among other reasons, simply assuming that the court previously had decided such fair share payments were constitutional in the public sector, and for failing to appreciate the difference between core union speech involuntarily subsidized by dissenting public-sector employees, where wages and benefits also were political issues, and core union speech involuntarily funded by their private sector counterparts.
Given Abood’s “questionable foundations,” and because personal assistants are quite different from full-fledged public employees, the court refused to extend Abood to cover what it termed “partial-public employees” — a concept which is novel and undeveloped in public sector employee jurisprudence. (Elsewhere in its decision, the court also referred to “quasi-public employees.”) The terminology appears to be short-hand for the employees of joint employers (i.e., persons jointly employed by both a public entity and a private entity). The court sidesteps, however, exactly when an employee will be considered a partial-public employee.
The Supreme Court then analyzed the constitutionality of the payments compelled by Illinois law under applicable First Amendment standards. The high court held that the agency fee provisions could not satisfy the test used in Knox et al. v. Service Employees International Union, Local 1000,[3] specifically that the provision does not serve a compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms. The court rejected claims that agency fee provisions promoted “labor peace” — in its view, a critical rationale supporting agency fees in the private sector — given the union’s status as exclusive bargaining agent was not inextricably linked to such fees, and any threat to labor peace was diminished in this situation given personal assistants do not work at a common facility (with potentially conflicting labor groups), but instead work in private homes. That the union might be an effective advocate for personal assistants further was insufficient to warrant the restriction in employee rights.
In a strenuous dissent written by Justice Elena Kagan, the four dissenting Justices argued that Abood controlled the outcome of this case and that, as such, the agency fees provision should be upheld. The dissent agreed with the Seventh Circuit that the fact the personal assistants might be jointly employed by both the state and the individual customers should make no difference to the analysis. The dissent considered the terms over which the state exercised control to be primarily those that would be subject to bargaining, and that the fact that the scope of bargaining is circumscribed given the customer’s authority over individualized employment matters like hiring and firing to be irrelevant, given that states often limit the scope of permissible public-sector bargaining.
The dissent further noted that, despite the majority’s “potshots” at the decision, even it declined the invitation to overturn Abood, and that the court’s “precedent … fairly understood and applied, makes it impossible for this court to reverse that decision.” The dissent spent considerable time explaining why the court should not overturn Abood as it is stare decisis, and explained Abood was properly decided in the first place.
The Impact
The short-term and long-term impacts of Harris remain to be seen. One immediate impact is that 20,000 personal assistants in Illinois no longer may be subject to fair share fees. How many actually are fair-share fee payers versus full union members is unclear. How far this decision extends to other “partial-public” employees depends in large part as to how the courts ultimately determine which employees are partial-public such that they cannot be required to pay fair share fees. Among the important questions left unsettled by Harris include:
- How many traditional collective bargaining subjects (e.g., wages, benefits, discipline, working conditions, etc.,) must employees be permitted to negotiate with the state to constitute “full” public-sector employees — and potentially outside of the scope of Harris? (As the Supreme Court itself noted, it is unclear at what point, short of “full-fledged” public employment, Abood — and now Harris — should apply).
- Would a follow-up case to Harris be different if there was established empirical support (which the Harris Court found lacking in Abood) that agency fees are essential to “labor peace?”
- Would a follow-up case to Harris be different if the union could show that agency fees are necessary for it to have achieved benefits for the bargaining unit in general? The court noted that no such showing was made in Harris.
- In particular, that the court has left open a clear determination of the tipping point between “partial-public sector” employees (governed by Harris) and “full-fledged” public-sector employees (governed by Abood) means there will be creative attempts by state actors to fall on one or other side of the now-blurry line, and further litigation undoubtedly will ensue.
The long-term viability of Abood in light of Harris may depend upon the future makeup of the Supreme Court. While Harris technically is limited to the so-called partial public employees, the majority’s blistering attack and critique of Abood does raise questions as to whether the current majority would vote to uphold Abood if it faced a case involving full-fledged public-sector employees.
A potential future test case involving California teachers presently is winding its way through the courts. On the one hand, the majority had the opportunity to do so if it wanted to, and yet passed. But it also did not reaffirm Abood. The dissent’s declaration of victory over Abood may be wishful thinking. If the Supreme Court is later faced with a case directly on point, the current majority may overturn Abood.
This fear should be of grave concern to the labor movement. Public-sector employees constitute almost half of the unionized workforce, even though many states limit or prohibit public-sector unions. Indeed, according to the Bureau of Labor Statistics, in 2013 approximately 38.7 percent of the public-sector workforce was organized (whether union members or not), a percentage five times higher than the private sector workforce (7.5 percent). As the majority recognized, in states where public-sector employees are legally permitted to organize they have become very powerful politically. If public-sector employees who have been forced to pay fair share fees for years to organizations they do not support are no longer required to pay such fees, it might deliver a critical blow to the clout of public-sector unions.
Taking this one step further, were the Supreme Court to overturn Abood, would the right of private sector parties to negotiate “union shop” provisions be at risk? This appears unlikely. In attacking Abood, the high court repeatedly distinguished the circumstances of public-sector employees from private-sector employees. Nevertheless, it is important to remember that in Hanson, the case in which the court upheld the validity of union shop provisions under the Railway Labor Act, the court did find without much discussion that the existence of the union shop was the result of governmental action, at least since the RLA took away a right employees had previously enjoyed under state law.[4] Abood further noted as much, declaring that plaintiffs’ claims in Hanson failed not because there was no governmental action, but because there was no First Amendment violation.[5] If Abood should fall, there is a risk, however slight, that private-sector union shop provisions might also be at risk.
Time will tell what the full impact of Harris is, but at a minimum the Supreme Court created more questions than it answered.
—By Ronald J. Kramer and Joshua L. Ditelberg, Seyfarth Shaw LLP
Ronald Kramer and Joshua Ditelberg are partners in Seyfarth Shaw's Chicago office.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] 351 U.S. 225, 76 S. Ct. 714 (1956).
[2] 431 U.S. 209, 97 S. Ct. 1782 (1977).
[3] __ U.S. __, 132 S. Ct. 2277 (2012).
[4] Hanson, 351 U.S. at 232 & n.4.
[5] Abood, 431 U.S. at 226.