Fair Share Fees In The Public Sector – Are The Tides Turning?
Legal updates
Fair Share Fees In The Public Sector – Are The Tides Turning?
November 2013
A little over a year after the Supreme Court issued its decision in Knox v. Service Employees International Union, Local 100, 132 S.Ct. 2277 (2012), concluding that imposing a mid-term fair share fee hike on public employees without providing a fresh Hudson notice ran contrary to First Amendment principles, the Court has agreed to consider another fair share fee case. This case, out of the Seventh Circuit (covering Illinois, Wisconsin, and Indiana), may very well place mandatory fair share fees on the chopping block. Depending on the High Court’s ruling, the fair share fee tide may turn against public sector unions.
On October 1, 2013 the Supreme Court granted certiorari in Harris v. Quinn, 656 F.3d 692 (7th Cir. 2011). The plaintiffs are represented and unrepresented home care personal assistants that provide in-home care to disabled individuals through Medicaid-waiver programs in Illinois. The employees are challenging mandatory fair share fees they are required to pay to the Union. The plaintiffs include two separate groups: one group consists of plaintiffs that are not members of the Union, but are part of the bargaining unit and, therefore, subject to the collective bargaining agreement which requires them to pay fair share fees; the second group consists of personal assistants that rejected unionization and are not subject to fair share fees, but allege harm by the mere threat of the agreement which requires fair share fees. Together, the plaintiffs presented a two-step argument. First, the plaintiffs contended that they are private, not State employees. Therefore, the case does not fall under the line of Supreme Court decisions which permit public sector fair share fees to support collective bargaining representation. Second, the plaintiffs argued that the fair share fees employees were required to pay under the contract violated their First Amendment rights by compelling association with, and speech through, a Union.
As an initial matter, the Seventh Circuit determined that the personal assistants are State employees “because of the significant control the state exercises over all aspects of the personal assistants’ jobs. . . .” Therefore, the court rejected the plaintiffs’ First Amendment claims, relying on long standing precedent, including Abood v. Detroit Board of Education, 97 S.Ct. 1782 (1977). As for the second set of plaintiffs, the individuals that successfully rejected unionization, the court determined that those employees did not have a claim ripe for ruling.
Nearly four decades ago, the High Court decided the Abood case, involving a group of Detroit teachers who challenged agency shop provisions in a collective bargaining agreement. Through that decision, the Supreme Court gave the green light to local government employers and unions to lawfully enter into agency shop, or fair share arrangements. These types of arrangements provide that every employee that is represented by a union, even though the employee may not be a union member, must nevertheless pay to the union a service or “fair share” fee, not to exceed the union dues charged to members. However, the Court opined that First Amendment principles prohibited public sector unions from requiring the non-members to fund the Union’s political and ideological projects, i.e. these unions could not use fair share funds for such purposes.
In Harris v. Quinn, the Seventh Circuit highlighted that, since the Abood decision, the Supreme Court continued to refine its approach on the appropriateness of collecting fees from non-union members. For instance, in Chicago Teachers Union v. Hudson, 475 U.S. 292 (1982), the Supreme Court outlined the proper procedures to follow to protect non-member fees. In Lehnert v. Ferris Faculty Association, 500 U.S. 507 (1991), the Court pronounced specific activities that may and may not be funded with such payments. Therefore, the Seventh Circuit reasoned, because the Supreme Court “has not wavered from its position that, as a general matter, employees may be compelled to support legitimate, non-ideological, union activities germane to collective-bargaining representation” the State may continue to properly collect fair share fees from the plaintiff employees. Harris v. Quinn, 656 F.3d at 697. However, the Court’s grant of certiorari in Harris v. Quinn, coupled with the outcome and reasoning in the recent Knox v. Service Employees International Union decision, suggests that the Court may, indeed, now be “wavering.”
The July 2012 edition of Ted Clark’s Legal Corner described the significance of the Supreme Court’s Knox decision as being twofold. First, the Court issued a broad opinion, holding that the Union violated non-union members’ First Amendment rights by requiring them to pay additional fair share fees for political activism without giving those individuals additional notice or a chance to object. This was the first time that the Court required public sector, non-union members to “opt-in” instead of “opting-out” of special assessments. The Court noted that “acceptance of the opt-out approach appears to have come about more as a result of historical accident than through the careful application of First Amendment principles.” Now, the Supreme Court will have the opportunity to apply its fresh “opt-out” approach in the context of fair share agreements, generally.
Second, the July 2012 Legal Corner advised that the language in the Knox opinion strongly suggests that some of the members of the Court have become increasingly skeptical of prior holdings concerning the constitutionality of imposing public sector fair share fees. Therefore, even though the Seventh Circuit emphasized the narrow reach of its Harris v. Quinn decision, stating “[w]e hold simply that the State may compel the personal assistants, as employees – not contractors, health care providers, or citizens – to financially support a single representative’s exclusive collective bargaining representation [,]” it may not be farfetched to consider the likelihood that the Supreme Court will issue a broader, more all-encompassing decision. Indeed, one of the issues to be considered is the lower court’s holding that a public sector bargaining agreement requiring non-members to pay fair share fees violates the First Amendment of the Constitution, regardless of the amount of the fees, or how the union uses them. Such a decision just might alter, or even overturn, Abood and over 35 years of public sector fair share fee precedent.
Oral Arguments in this case are set to proceed on January 21, 2014.
* As published in NPELRA Connections Newsletter
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