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Posts Tagged ‘union’

Supreme Court Ends Compulsory Union Payments for Government Employees – So What’s Next?

Posted on: July 5th, 2018

By: Brad Adler & Matt Weiss

On Wednesday June 27, the United States Supreme Court reached a landmark 5-4 decision in Janus v. American Federation of State, County, and Municipal Employees Council 31 wherein it ruled that the Constitution’s First Amendment prohibits public sector unions from collecting fees from non-union members.   While the scope of the impact of this ruling will be unknown for years, there is no doubt that Janus weakens the ability of public sector unions to raise money.

In Janus, an employee with the Illinois Department of Healthcare and Family Services sued the American Federation of State County, and Municipal Employees Council 31 (“AFSCME”) to challenge an “agency fee” that he was required to pay to the union under the Illinois Public Labor Relations Act.  The Act provided that, if a majority of employees in a bargaining unit voted to be represented by a union, the union was designated as the exclusive representative of all employees and, even though employees were not obligated to join the union, they were required to pay the agency fee, a percentage of union dues for “chargeable expenditures,” i.e., the portion of union dues attributable to activities germane to the union’s duties as a collective bargaining representative.  The agency fee excluded “nonchargeable expenditures,” which funded the union’s political and ideological projects.  This distinction between chargeable and nonchargeable expenditures was the framework created by the Supreme Court in its 1977 decision Abood v. Detroit Board of Education, 431 U.S. 209.

The Supreme Court elected to use Janus as a vehicle to overturn Abood and hold that the Illinois law that required nonunion public employees to pay an agency fee to a public union constituted a violation of their First Amendment right to free speech, even if the fees only consisted of chargeable expenditures.  The Court assessed the agency fees under an exacting standard, which required a showing that “a compelled subsidy must serve a compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms.”  Applying the standard, the Court declined to identify a “compelling state interest” and found that public-sector unions could no longer extract agency fees from nonconsenting employees.

The Court’s ruling in Janus very likely will have a direct effect on 5 million public employees in 22 states, including California, New Jersey, New York, and Pennsylvania, who are no longer required to pay agency fees for a union in which they are not a member.  However, the impact of this decision is less direct in states where agency fees and, in some cases, public sector collective bargaining, are either non-existent or prohibited.  Nonetheless, even in these states, the Supreme Court’s basic holding in Janus, that the government cannot compel its employees to make payments for causes with which they disagree, could be applied in a variety of other contexts such as mandatory contributions to government pension funds.

Whether the Supreme Court will expand on this newly identified First Amendment right of government employees and non-union members remains to be seen, especially in light of Justice Kennedy’s retirement announcement.  The one certainty is that public unions in cities and counties in nearly half the states in the country will no longer be able to require non-union employees to contribute union fees.  And very few doubt that this new legal reality will reduce (in some capacity) the power of public unions by shrinking their financial base of support and by potentially reducing their membership.

But lawmakers in some states already are rallying to pass statutes that will allow unions to limit the services they provide to only those employees that pay union dues.  As a result, it is important for employers to keep informed on any new Janus-induced union laws in states in which they operate.  In fact, in anticipation of an adverse ruling, on April 12, New York passed legislation that relieved unions from representing the interests of non-members in different areas.

The Janus decision is only the latest chapter in a long and unfinished story written about the constitutionality of certain activities of public sector unions.  More to come in the years ahead. . .

If you have any questions or would like more information, please contact Brad Adler at [email protected] or Matt Weiss at [email protected].

High Court OKs Employers’ Use of Class Waivers

Posted on: May 23rd, 2018

By: Paul Derrick

Class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA), says the U.S. Supreme Court in a much-anticipated decision.

The Supreme Court’s long-awaited decision resolves a circuit split on whether class or collective action waivers contained in employment arbitration agreements violate the National Labor Relations Act (NLRA). By a 5-4 margin, the Court ruled that, under the FAA, arbitration agreements providing for individualized proceedings, rather than class or collective actions, are enforceable.

Arbitration agreements that require employees to pursue work-related claims in arbitration, rather than in court, have long been enforced pursuant to the FAA. Six years ago, however, the National Labor Relations Board decided that employers violate the NLRA when they require employees, as a condition of employment, to agree that they will resolve workplace disputes individually pursuant to an arbitration provision containing a class or collective action waiver.

The Supreme Court’s opinion makes it clear that the Board and various courts were wrong in believing that the NLRA trumps the FAA.  It noted that that nothing in a class or collective action waiver interferes with an employee’s right to participate in a union or engage in collective bargaining.

So, what does the Court’s ruling mean for employers right now?

First, they should look at their arbitration agreements and consider modifying them to include class action waivers if they are not already included.

Second, they should consider including an arbitration agreement and class waiver provision as part of their onboarding paperwork (but remember such clauses should not be included within the text of an employee handbook).

Finally, employers should expect that there is more litigation yet to come as employees and unions angle for ways to get around the Supreme Court’s decision.  Especially in states such California, there are other avenues by which employees can still maintain class and collective actions as a means of redressing their workplace disputes.  Despite these anticipated end-run attempts, employers should rest better knowing that the Supreme Court has explicitly approved the use of class action waivers in arbitration agreements.

If you have any questions or would like more information about this or any other labor law issue, please contact Paul Derrick at [email protected].

Farmworker Union Sues to Overturn NC Law That Nixes Dues Checkoff and Voids Agreements Requiring Farmers to Sign Union Contracts

Posted on: November 20th, 2017

By: Paul H. Derrick

For years, the Farm Labor Organizing Committee, a small Ohio-based union that is the only labor organization representing farmworkers in the State of North Carolina, has used actual and threatened lawsuits as a means of getting farmers in the state to voluntarily recognize and bargain with it. The state’s Farm Act of 2017 contains provisions aimed at stopping that coercive tactic, and FLOC is making good on its promise to fight back.

The Farm Act makes it a violation of the state’s public policy for farms, most of which are small, family-owned operations, to collect membership dues from employees and forward them along to a union, even if the union and the farm have executed a collective bargaining agreement that requires such dues collection. The law also makes it a violation of public policy for a union to require that a farm enter into a union contract as a means of settling a lawsuit or avoiding litigation in the first place.

Represented by civil rights lawyers from the American Civil Liberties Union, the Southern Poverty Law Center, and the North Carolina Justice Center, the union and two individual migrant farmworkers, both of whom previously brought legal actions against their non-union employers, have filed a lawsuit in federal court against Governor Roy Cooper and the director of the North Carolina court system. The lawsuit claims that the Farm Act impedes their First Amendment right to participate in union activity and is racially discriminatory (i.e., because most of the state’s farmworkers are Latino). It demands that the court declare portions of the Farm Act to be unconstitutional and also asks that preliminary and permanent injunctions be entered to restrain state officials from enforcing those provisions of the law.

North Carolina farmers employ about 100,000 workers annually, and FLOC claims to have almost 5,000 dues-paying members among that workforce. Because there are no federal or North Carolina laws that give agricultural workers a right to demand a union election, FLOC insists that the only way it can organize workers is by actual or threatened lawsuits over issues such as alleged wage and hour violations, where part of the settlement demanded includes farmers voluntarily recognizing the union as the bargaining representative of their employees and collecting dues from the workers on behalf of the union.

A copy of FLOC’s lawsuit can be found here. We will continue to keep you apprised of developments in this area as they occur. In the meantime, if you have any questions or would like more information, please contact Paul Derrick at [email protected].