Fair Share: The Legal Battle Over Public Sector Union Dues

Apr 1, 2014

Outside the U.S. Supreme Court, Flora Johnson, chairwoman of Executive Board of SEIU Healthcare Illinois & Indiana, in January answers questions about Harris v. Quinn.
Credit SEIU Healthcare Illinois & Indiana

Editor's Note 2/10/2015: Since the original publication of this article, the U.S. Supreme ruled in favor of Pam Harris, who is paid through the Medicaid program to care for her disabled son at home. The opinion categorized some home caregivers as “partial public employees,” whom the court said could not be required to pay dues if they opted not to join a union. The ruling was seen as narrow at the time because it did not overturn the 1977 opinion Abood v. Detroit Board of Education, which allowed public sector unions to charge nonmembers for representation as long as the fees did not cover political activities.

The SCOTUS Blog wrote of the Harris ruling at the time: “It remains possible that in a later case the court will overturn its prior precedent and forbid requiring public employees to contribute to union bargaining. But today it has refused to go that far. The unions have lost a tool to expand their reach. But they have dodged a major challenge to their very existence.” Gov. Bruce Rauner laid down that legal challenge on Monday when he signed an executive order cutting off “fair share” dues from all nonunion public workers and setting up a court battle with unions. Rauner cited the Harris v. Quinn ruling as legal justification for his actions.

On the docket of the U.S. Supreme Court this year is an Illinois case that raises the question of whether the justices should scrap rules that have governed public employee unions for 36 years.

The case, called Harris v. Quinn, could strike at the heart of collective bargaining rights for government workers by ending the so-called fair-share payments nonmembers pay to unions that represent them in contract negotiations. Indeed, that is what the challengers who filed the case are hoping will happen.

But even if the Supreme Court does not go that far, its decision could still have far-reaching effects. The dispute is about two groups of in-home workers who help thousands of disabled Medicaid recipients stay out of nursing homes. The Service Employees International Union, which represents one of those groups, says the lives of some 30,000 disabled people in Illinois would suffer if their union is weakened.

For public labor unions like the SEIU, the case tests the criteria of who should be counted as a state employee for purposes of collective bargaining. Where the justices draw those lines could either boost or dampen labor recruiting efforts.

The workers who filed the lawsuit against the state of Illinois see the dispute as one over their First Amendment rights.

“It’s a very big case,” says Gov. Pat Quinn, a Democrat who is named as a defendant. “It has a lot to do with the right of everyday people to form a union and improve their wages and working conditions. That has happened in Illinois. Hopefully, we’ll prevail.”

Labor opponents say workers in the collective bargaining units should not be forced to pay money to support views they do not agree with.

“A number of these health care workers don’t want to be part of the union,” says Andrew Kloster, a legal fellow at the conservative Heritage Foundation in Washington, D.C., who has studied the case.

“Really all that’s happening is that [Medicaid] dollars are being siphoned off, and these folks think that they’re getting no benefit at all.” The case takes on increased significance because of the debate raging throughout the country about the proper role of organized labor, in both the private and public sectors.

Michigan, the cradle of the labor movement, recently became a “right-to-work” state, meaning employers there cannot force their employees to join a union. In a closely watched contest, autoworkers at a Volkswagen plant in Tennessee in February rejected an effort by the United Auto Workers to represent them. The move dashed the hopes of many labor advocates who had hoped to establish a foothold in the South, where anti-union sentiment is the highest of any region in the country.

Union membership has been declining in the private sector for decades. Last year, only 6.7 percent of private-sector workers belonged to unions, compared to 35.3 percent in the public sector.

Government employees now make up nearly half of all unionized workers in the country. As they have grown in importance to the labor movement, they increasingly have become targets, too.

The marquee example came in Wisconsin, the home of the nation’s first government workers’ union. Gov. Scott Walker, a Republican, signed a law in 2011 to strip those same unions of much of their power. One of the law’s many provisions ended public sector unions’ ability to collect the same type of fair-share fees at issue in the Harris case.

Wisconsin’s legislation triggered massive protests in Madison when it was first proposed; several years later, the law has led to a precipitous drop in the number of government employees there who belong to a union.

A 2012 decision by the U.S. Supreme Court raised the possibility that the justices could rewrite the rules governing public sector unions. In the case of Knox v. SEIU, a 5-4 majority held that a California union could not impose a higher fee on nonunion workers to fight anti-union ballot measures, unless those workers “opted in” to the higher fees.

The opinion, written by Justice Samuel Alito, raised the possibility that all fees for nonunion workers — not just special assessments — would require those workers to affirmatively opt in before paying fees to a union that represented them in contract negotiations.

The Illinois case now before the high court raises that exact question. (The same public interest law firm that represented the California challengers in Knox also represents the Illinois challengers in Harris.)

But the Harris case is not clear-cut. The complexities of the case could prevent the justices from ever reaching the big issues that have drawn so much attention.

Pam Harris cares at home for her son Joshua, who has a rare genetic syndrome that causes severe intellectual and developmental disabilities. She sued the state of Illinois, which had sought for her to join SEIU.
Credit The National Right to Work Legal Defense Foundation

But the Harris case is not clear-cut. The complexities of the case could prevent the justices from ever reaching the big issues that have drawn so much attention.

Judges on appellate courts, after all, routinely tout the virtues of a narrow ruling, especially when they are trying to assemble a majority.

The biggest source of complexity in the Harris case is that the eight named plaintiffs fall into two distinct categories. Their work is similar, but their relationship with the state is very different.

If the oral arguments before the high court were any indication, even the justices have a hard time keeping the two groups straight.

The biggest difference between the two groups is that one is unionized and the other is not. About 27,000 home workers in Illinois’ Home Services Program — known in the case as the “rehabilitation program” — have been represented in collective bargaining negotiations by SEIU’s Healthcare Illinois & Indiana local since the early days of Democratic Gov. Rod Blagojevich’s administration.

The union began organizing personal assistants in the program, though, in 1985, when the workers were paid less than minimum wage and routinely received their monthly checks a month or two late, says Keith Kelleher, the president of the SEIU local. The workers made their case, most famously by staging a sit-in in the governor’s office, and gradually strengthened their position with the state.

In fact, Kelleher says, the three Republican governors who preceded Blagojevich had informal “meet-and-confer” agreements with the local. The agreements fell short of full collective bargaining rights, but they helped the union get better pay and conditions for the personal assistants.

Blagojevich issued an executive order in March 2003 allowing the home care workers to choose a collective bargaining representative. The legislature overwhelmingly passed a bill a few months later to codify the move.

A week after Blagojevich signed the law, Illinois recognized SEIU Illinois & Indiana as the representative for the personal assistants. The move raised eyebrows because SEIU had given more than $820,000 to the governor’s campaign. The personal assistants pay SEIU more than $3.6 million a year.

But Kelleher stresses that the workers themselves voted to be represented by SEIU. “We had been out fighting for a union for 25 years prior to Blagojevich,” he says.

Since the union became the collective bargaining agent, hourly wages for personal assistants in the program have gone from $7 an hour to a scheduled $13 an hour later this year. The state now provides safety gloves and health insurance coverage, pays for worker training and established a grievance procedure. The union agreed to a no-strike provision.

Advocates for the disabled Medicaid recipients served by the workers praised the changes because they reduced what had been rampant turnover among the personal assistants. The program is strong now, says Gary Arnold, a spokesman for Access Living, a Chicago disability rights and service organization.

The group, along with two dozen others, filed a friend-of-the- court brief supporting the union in Harris. “There is a fear that the program could be weakened, and as a result, that could threaten the independence of people with disabilities,” Arnold says.

The second group of personal assistants in the Supreme Court case, by contrast, voted against unionizing in 2009.

The 4,500 providers in the Home Based Support Services Program — known in the case as the “disabilities program” — were asked whether they wanted to select a collective bargaining agent after Quinn cleared the way in an executive order for them to unionize.

The decision became a three-way contest. A separate SEIU local competed with the American Federation of State, County and Municipal Employees Council 31 for the right to represent the new workers.

But other workers, including Pam Harris, campaigned to keep the unions out. Harris cares for her son, Joshua, who has a rare genetic syndrome that causes severe intellectual and developmental disabilities. She worried that the union’s fair-share fees would hurt her ability to care for Joshua. “I need that money for my son,” Harris told the Chicago Tribune in 2009.

“I am not an employee of the state,” she told the Tribune. “I work from my home. I don’t want the union in my home. I can Norma Rae with the rest of them.”

Harris’ side won the election, and no union was selected. But she wanted to cement her victory, and so she sued the state to prevent personal assistants in the program from ever being unionized.

Also joining in the lawsuit were four other personal assistants in the same disabilities program as Harris, and three workers in the rehabilitation program who had to pay fair-share fees to SEIU.

The heart of their argument is that the requirement to pay fair-share, or agency, fees to public employee unions violates their First Amendment rights. In essence, they say, they are forced to pay money for labor groups to lobby the government to enact policies they oppose. That is especially problematic because the high court has often equated spending money for political purposes with political speech.

But lower courts rejected those arguments. They said Harris and the other workers in the disabilities program could not claim any injuries because they have not had to pay the fair-share fees.

A Chicago-based appeals court also ruled that Illinois could withhold fair-share fees for nonunion workers in the rehabilitation program. It relied on a 1977 Supreme Court case, Abood v. Detroit Board of Education, that cleared the way for the collection of fees to support “legitimate, nonideological union activities germane to collective bargaining representation.”

The Supreme Court heard arguments in the case in January. William Messenger, the lawyer representing the challengers, said public union activities to boost pay for their workers amounted to lobbying. Nonunion members should not have to support those efforts, he said.

“It would be very little different than if the American Medical Association was asking for higher Medicaid rates for doctors or for nurses,” he said.

Messenger works for the National Right to Work Legal Defense Foundation, a group that fights what it calls “the abuses of compulsory unionism.” He told the justices the problem was not with the specifics of what the union was lobbying for in its contract negotiations. The flaw, he said, was the whole concept of the fair-share fees for government employees.

“Our position is that in the public sector, when the government is involved, compulsory fees are illegal under the First Amendment,” he argued.

Justice Anthony Kennedy seemed especially sympathetic. Public employee unions often push to hire more workers or spend more money, and that always raises questions about the appropriate size of government, he said.

“Is not the size of government a question on which there are fundamental political beliefs — fundamental convictions that are being sacrificed if a nonunion member objects to this policy?” he asked.

But SEIU’s Kelleher says fair-share fees are not used to pay for lobbying or political work because the U.S. Supreme Court has prohibited it. Indeed, he says, that is the whole point of the reduced fees. Auditors figure out how much the union spends on political work, so they do not charge people paying the fair-share fees for that activity.

For example, a nonunion member would not pay to support SEIU’s advocacy to raise the state’s minimum wage, even though, Kelleher argues, that worker may eventually benefit if it passes.

Patrick Semmens, a spokesman for the right-to-work group, sees it differently. “The union can call it ‘negotiating’ but really they are asking the state to change its policies about how it distributes Medicaid funds, which is just another name for lobbying,” he says.

“If given a choice, most would likely spend the money that the SEIU seizes from them for its lobbying activities on nonpolitical activities — like buying groceries or paying the rent,” Semmens says.

Workers could object to the “diversion” of Medicaid money to pay for the union’s health care trust fund and training center, along with a requirement that all new providers attend SEIU orientations, he adds.

Slightly more than half of the rehabilitation workers belong to SEIU. Full union dues for a worker in Illinois’ rehabilitation program come out to 3.3 percent of that worker’s gross wages, up to a maximum of $75 a month.

The fair-share fees are lower. They come out to 2.5 percent of gross wages, with a minimum of $20.47 each month and a maximum of $56.88 per month.

When SEIU negotiates a contract with the state, the costs of providing the wages and benefits are generally included in the governor’s budget, Kelleher says.

Before the high court, the plaintiffs only discussed the fair-share fees paid by people who disagreed with the union. But Donald Verrilli, the U.S. solicitor general who supported Illinois in the case, told the justices that fair-share fees do not discriminate between workers who disagree with the union and free riders who just do not want to pay the extra money to join the union.

“Once the state has imposed a duty of fair representation, then everybody’s got an incentive to free ride, whether you’re a union supporter or not, because, by operation of law, you’re going to get the benefits,” he said.

Another wrinkle in the case is the possibility that the high court could allow fair-share fees to continue generally but still block them in the case of the Illinois workers by holding that the personal assistants are not employees of the state. That is the fallback position of the challengers.

The state can impose more restrictions on its employees than it can on the public at large. A supervisor at a state agency, for example, could fire an employee for making a derogatory remark toward a constituent, an act that would be protected under the First Amendment.

So one of the big questions about the Harris case is whether the two sets of plaintiffs are employees of the state, employees of the disabled people they serve or both.

One of the big impediments to the rehabilitation workers’ unionizing in the 1980s was an Illinois State Labor Relations Board decision that held that the workers were not state employees because they were under the control of the Medicaid recipients they served.

Even when the Illinois General Assembly voted to allow the workers to organize, it deemed them employees of the state only for purposes of collective bargaining.

But, Justice Ruth Bader Ginsburg noted in oral arguments that the state treated the personal assistants as employees with the way it paid them in their twice-monthly paychecks. “It looks just like they are an employee of the government, being paid by the government, and the government doing things that an employer does: withhold income tax [and] pay in part the FICA tax,” she said.

Messenger, the lawyer for the right-to-work group, countered that patients could hire and fire the assistants. “The state is acting as pay agent. And so while the money is coming from the state, the state is doing it as a pay agent for the person with disabilities, who is truly the employer,” he argued.

Medicaid recipients in the disabilities program have far more control over their personal assistants than those in the rehabilitation program.

The recipients in the disabilities program (whose workers are not unionized) get a certain amount of money a month, which they can spend on equipment and on care from personal assistants, says Mike Claffey, a spokesman for the Illinois Department of Healthcare and Family Services. The recipient and the personal assistant negotiate how much the assistant gets paid under that program. The rates for personal assistants in the rehabilitation program are negotiated with the state.

But there is also a good possibility the justices will not rule on the disability program, just as lower courts have declined to do, because those workers have not paid fair-share fees.

Messenger, the lawyer for the right-to-work group, told the justices that eliminating the fair-share fees would have little effect on the contracts public workers negotiated with their employers.

“The main difference is just the compulsory unionism clause in the agreement would be gone. But otherwise, the agreements would be the same,” he said.

Arnold, the disability rights advocate, disagreed. “If the system were to weaken in any way, it could potentially force people out of the program and back into the institutions. The whole point of the [programs] is to give people independence and allow them to live and be productive in their own communities rather than in nursing homes or other types of institutions,” he said.

The Supreme Court is expected to rule in the case by the end of June. 

Daniel C. Vock is a reporter for Washington, D.C.-based Stateline.org.

Illinois Issues, April 2014