Thomas R. McCarthy and Samuel B. Gedge are attorneys at Wiley Rein. They were counsel to a group of home care workers as amici supporting the petitioners.
Not surprisingly, most of the crowd before the Supreme Court Monday morning gathered in anticipation of the Court’s decision in Burwell v. Hobby Lobby. The case has been a magnet for commentary, culminating with Justice Alito’s announcement that the Affordable Care Act cannot require certain closely held corporations to provide their employees with contraception coverage. Justice Alito’s “other” opinion on Monday – Harris v. Quinn – may have flown below the radar both because of the public focus on Hobby Lobby and because the Court opted for a middle course rather than the more aggressive steps sought by the parties. But notwithstanding its modest approach, Harris may have a much broader impact on a much larger class of workers across the nation than Hobby Lobby.
The issue in Harris was whether public-sector unions may exact “agency fees” from non-union workers who are not lodged squarely in the public sector – or, as the Court put it, people who are not “full-fledged public employees.” In keeping with Justice Alito’s Knox v. SEIU decision two Terms ago, the First Amendment rights of non-union workers took center stage. Requiring nonunion employees to subsidize unions raises “important First Amendment questions,” the Court reiterated.
Acknowledging that agency fees infringe associational rights is nothing new. For decades, the Court has recognized the First Amendment concerns that arise when the government coerces people who have opted against joining unions to pay money to support those same unions (termed “fair-share” or “agency” fees). As a matter of first principles, requiring individuals to financially support an organization trenches on associational freedom. But in 1977, the Court upheld public-sector agency fees against a First Amendment challenge. In Abood v. Detroit Board of Education, the Court identified two state interests sufficiently compelling to justify mandatory union fees – “labor peace” and the related interest in preventing nonunion workers from free-riding on the union’s statutorily mandated duty to represent all unit members fairly.
Since Abood, the bulk of the Court’s labor decisions have focused on what procedures are used to exact fees from nonunion workers and how those fees are ultimately used by the union. Until yesterday, the Court had not analyzed whom public-sector unions can target for support. Because plaintiffs typically have not disputed their status as public employees, “Abood has been a given.” And in the absence of guidance from the Court regarding the “who” question, states and unions have pushed the envelope on the classes of workers they designate as public employees (and thus expose to unionization and agency-fee provisions). At the same time, a majority of the Supreme Court has voiced extreme skepticism with the foundational principles in Abood. Two Terms ago, the Court in Knox – speaking through Justice Alito – gave exceptional weight to non-union workers’ associational rights and discounted Abood’s counterbalance “free rider” theory as “something of an anomaly.”
As presented by the parties, these two competing forces came to a head in Monday’s decision. The plaintiffs are personal assistants (or “PAs”) in Illinois, each caring for a medically impaired customer (often a family member) who would otherwise be institutionalized. Like many states, Illinois funds the services of such personal assistants through a Medicaid-waiver program. But by any reasonable measure, personal assistants are the private employees of their customers. By law, the customer “control[s] all aspects of the employment relationship with the PA,” including, for example, hiring, training, supervising, disciplining and, if necessary, firing the PA. The state’s role, by contrast, is circumscribed. The state disburses program funds to qualified PAs and aids customers in certain aspects of the employment relationship. But, at base, the state’s main role is ensuring that government funds aid Illinois residents in keeping with governing law. The employment relationship is fundamentally a relationship between the PA and customer.
Nonetheless, in 2003, Governor Rod Blagojevich designated personal assistants “public employees” – but only for purposes of collective bargaining. Following a vote, the SEIU was appointed the exclusive representative of all Illinois personal assistants. And the resulting collective-bargaining agreement required all those assistants – union and non-union alike – to hand over part of their Medicaid payments to the union.
Arriving at the Supreme Court, each party pressed for an aggressive change in labor law. Illinois and the unions (backed by the United States as an amicus curiae) urged an unprecedented expansion of Abood: Given its involvement in the personal-assistant program, they argued, the state could plausibly be viewed as a “joint employer” and bind objecting personal assistants to the full range of agency-shop obligations. This notwithstanding the absence of a plausible need for a collective-bargaining agent to mediate the largely statutory relationship between PA and state.
The personal assistants, on the other hand, sought as a primary matter that Abood be overruled in its entirety; public-sector unions could never coerce non-union workers to pay into the union pot, public employees or no. As a secondary theory, the PAs argued that whatever legitimate scope Abood might have, it surely didn’t extend to the tenuous state-individual dealings at issue in Illinois. In fact, given the Court’s increasingly suspicious view of Abood, overruling the decision wholesale would probably have been less drastic than extending its suspect rationale to spheres of functionally private employment relationships.
The Court opted against adopting either party’s more aggressive arguments and embraced the PAs’ back-up position. While expressing grave doubts about Abood’s reasoning and seemingly setting Abood up for overruling the next time the Court confronts the case, the majority left Abood standing. Instead, the majority recognized that Illinois’s personal assistants are fundamentally different from the full-blown public employees contemplated in Abood. The relationship between personal assistants and the state has little in common with that of public employee and public employer. Perhaps more importantly, the rationales purportedly supporting public unions in Abood find little purchase with regard to home care workers. “Labor peace” gave little concern, for example, because each PA works in isolation, often at her own home or that of her client. As the Court put it, “any threat to labor peace is diminished because the personal assistants do not work together in a common state facility but instead spend all their time in private homes.” And given the limited scope of state involvement with personal assistants, the union’s role in negotiating with the state is similarly limited. By statute, in fact, the state is categorically excluded from interfering in the lion’s share of employment issues that might arise between PA and customer. In turn, the significance of non-members’ free riding on union-secured benefits is also open to question. Indeed, there is little risk of free-riding given the minimal benefits that unions are authorized to bargain for. (Our client, amicus Albert Contreras, works under a similar regime in Oregon and reported seeing an actual decrease in the Medicaid funds available to his clients following union-state negotiations.) In short, given the ill fit between Abood’s already weakened rationales and the private-in-every-sense-but-public-union-dues employees here, the Court’s decision not to extend Abood to Illinois home care workers was relatively simple (notwithstanding the dissenters’ insistence that they could shoehorn this case into Abood).
Though the Court took only a modest step in Harris, this step is of great practical impact. Although the dissenters proudly announced that “Abood remains the law,” and public unions no doubt cheered their survival, the decision nonetheless has been described as a “devastating blow to public unions.” [The Supreme Court Just Dealt a Devastating Blow to Public Unions,] And for good reason. Organizing home-care workers has been a centerpiece of public unions’ recent efforts to restore their dwindling membership. This strategy had been quite successful, as unions successfully lobbied not only Illinois, but numerous other states, to recognize home-care workers paid through the state as public employees. These organizing efforts translated into millions of dollars in compulsory membership dues for public unions. (For example, Illinois’s PAs alone were obliged to pay $3.6 million into the SEIU’s coffers annually.) But Monday’s decision vindicated the First Amendment associational rights of Illinois’s PAs, thereby ensuring that “hundreds of thousands of home caregivers—in Illinois and in other states—will be free to stop paying union membership dues.” Accordingly, whether they object to unionism as an ideological matter or simply want to keep more of the money they earn in their own pockets, those hundreds of thousands of home caregivers now have the right to withhold financial support of public unions. Even if only a small fraction of these home caregivers opt to exercise that right, the aggregate drop in membership dues will have a serious financial impact on public union treasuries. And of course, that impact will only be magnified if Harris ultimately leads to the overruling of Abood, as many are predicting.
[Disclosure: Kevin Russell of Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, was among the counsel on an amicus brief in support of the respondent in Harris. However, the authors of this post is not affiliated with that firm.]