Public-sector unions largely owe their growth to their authority to force non-joining workers to put money in their coffers. The Supreme Court believes this authority needs some restraint. By a 5-4 margin, the Court ruled on Monday, June 30, in Harris v. Quinn that nonunion private-sector home health workers cannot be required to support a public employee union even if their wages come from state Medicaid funds. The class-action suit originated in 2010 when several home care workers sued the State of Illinois and two unions, challenging two executive orders issued, respectively, in 2003 and 2009 classifying thousands of these service providers as state employees. The orders, wrote Justice Samuel Alito, violated worker freedom of speech. At the same time, the ruling did not overturn the 1977 decision that justified the public-sector union shop and applied it to non-members.
Union Corruption Update discussed this case at length last November. The previous month the Supreme Court had agreed to hear an appeal by a group of eight private home care providers in Illinois. The lead plaintiff was Pamela Harris, a Chicago-area housewife and primary caregiver for her developmentally disabled young adult son, Josh Harris. She had taken action when she realized that a sizable portion of her monthly stipend very likely could wind up with the Service Employees International Union (SEIU) under the guise of “fair share” payments. About a half-year ago, she explained: “One penny, one dollar taken out of [the stipend] is taken out of support or services for Josh. Being in a union is incompatible, intrusive, and going to interfere with the care I provide. The union is there to protect the union worker, so I don’t see how Josh benefits.”
There were a great many caregivers who had found themselves in a similar situation. These service providers had been reclassified as state employees because they were paid, in part or in full, out of an Illinois state-funded Medicaid program of the sort that many states operate. Eligible service providers include parents/guardians and independent contractors. It ought to be intuitive that being compensated by government is not the same thing as being employed by government. But organized labor, especially the Service Employees, believed the two are effectively the same. Thanks to the State of Illinois, the SEIU gained a material interest in such a classification.
Back in March 2003, Illinois Democratic Governor Rod Blagojevich issued an executive order designating the Service Employees International Union as the exclusive bargaining agent of personal home care providers under a Medicaid-funded state program. The move was a political gift. The SEIU had contributed about $800,000 to his successful run for governor the previous year. At a February 2003 victory rally, SEIU state coordinator Tom Balanoff, a close friend of Blagojevich, declared: “We couldn’t have a better ally supporting us. We elected a person who is going to be with us through thick and thin.” The Illinois legislature codified the executive order that July, designating private-sector home care providers as “public employees” explicitly for union membership purposes. Some 20,000 persons potentially stood to be covered by a union contract. The State of Illinois and Service Employees Local 880 wasted little time in signing an agreement mandating that the State deduct dues from provider wages and put them into the coffers of the Chicago-based union. This scheme would take $750 per year in fees from each non-member worker. Thanks to this arrangement, the union now generates an extra $10 million annually. A portion of this inevitably goes toward re-electing political supporters.
SEIU Local 880 was a natural choice for this sweetheart deal. The union has been a central player in Chicago-area Leftist activism since its beginnings in the mid-1980s as a project of the Association of Community Organizations for Reform Now (ACORN). Through aggressive organizing and political networking, the union now represents about 93,000 workers. But 37,000 of them – more than a third – are “agency fee payers.” That is, though covered by union contract, they are not actual members. To the union, these workers are “free riders” unless they pay agency fees. Several years ago, Local 880 began operating as SEIU Healthcare Illinois Indiana. The name may be different, but the mission and the style remain the same.
Gov. Blagojevich’s penchant for overplaying his political hand, of course, would come back to bite him. As Union Corruption Update has described in detail, he was arrested in December 2008 on a number of corruption charges following a lengthy federal probe. Most important among them were those relating to his attempt to sell the U.S. Senate seat vacated by President-Elect Barack Obama to the highest bidder in return for re-election campaign cash. The Illinois legislature voted to remove him from office in January 2009. Federal prosecutors eventually would file two dozen criminal charges. “Blago” chose to take the case to trial. Initially, he made out well, achieving a hung jury on virtually all charges. Determined to get their man, prosecutors secured a second trial – and this time got the desired result. In June 2011 a jury convicted Blagojevich on 17 of 20 charges, including all 11 related to his solicitation of bribes for the vacant Senate seat. He is now doing a 14-year stretch in Denver federal prison.
Blagojevich’s successor, Patrick Quinn, Blago’s lieutenant governor, was cut from the same cloth. Indeed, by this past spring he had received nearly $5 million in SEIU contributions during his political career. Back in June 2009, only in office for several months, Gov. Quinn issued Executive Order 15, reclassifying about 4,500 home care providers as “state employees” because they received income from a Medicaid program. This program was separate from the one for which Blagojevich had issued his order, but the rationale was the same. SEIU Local 713 petitioned the National Labor Relations Board to hold an election to represent the workers. AFSCME District Council 31 intervened as a rival for representation. But the balloting, conducted in October 2009, didn’t go as planned for either union. By a wide margin, the affected workers voted to reject representation by either entity.
The issue did not rest. More to the point, it was set up not to rest. Under Quinn’s executive order, the unions retained the authority to request elections or conduct card checks to win representation. Caregivers could face nonstop union drives until they capitulated. Understanding the threat to their liberty, Mrs. Harris and seven other home care providers on April 22, 2010 filed suit in U.S. District Court for the Northern District of Illinois against the State of Illinois, the SEIU and AFSCME. The intent was to invalidate the Blagojevich and Quinn executive orders. Aided by the Springfield, Va.-based National Right to Work Legal Defense Foundation, the workers alleged that routing a portion of their paychecks to a union would violate their freedom of speech. The union position represented coercion taken to a new level. Even Abood v. Detroit Board of Education, the Supreme Court decision of 1977 that established the constitutionality of the public-sector union shop and its application to non-members for core representation functions, did not attempt to justify conversion of private employees to public-employee status.
The executive order proved resistant to challenge. Following an attempt by the defendants to dismiss, the court reassigned the case to U.S. District Judge Sharon Johnson Coleman, an Obama appointee. In November 2010, Judge Coleman dismissed the case on its merits. She reasoned that the rationale for public-sector monopoly bargaining contained in Abood extended to nonmember workers paid out of state funds. The plaintiffs filed an appeal the following month. They met with further frustration. In September 2011, a three-judge panel with the U.S. Court of Appeals for the Seventh Circuit upheld the lower court. The decision read: “The plaintiffs feel burdened fighting to prevent what they view as an unconstitutional collective bargaining agreement. But many individuals and organizations spend considerable resources fighting to prevent Congress or the state legislatures from adopting legislation that violate the Constitution. The courts cannot judge a hypothetical future violation in this case any more than they can judge the validity of a not-yet-enacted law, no matter how likely its passage.”
Harris and the other dissenters weren’t about to give up. In November 2011 they filed an appeal with the U.S. Supreme Court. Getting an audience, however, was a tough act. The defendants didn’t want to risk losing what they had won. The State of Illinois initially waived its right to respond, but on February 29, 2012 the Supreme Court ordered the State to file a response. The State complied in April. The Obama administration wasn’t eager for this case to happen either. The Court in June 2012 invited the Solicitor General of the Justice Department to file a brief. After a long wait, the Solicitor General filed a brief in May 2013, arguing against review. The case was listed for conference at least four more times during the 2012-13 term, each time to no avail. The Supreme Court adjourned without issuing an order. But luck turned months later on the eve of the new term. The Court relisted the case for a September 30, 2013 conference. The following day, October 1, the Court granted certiorari. Oral arguments were presented this past January 21.
Having lost at the district and circuit levels, the plaintiffs seemed a long shot to win. But working to their advantage was the fact that the U.S. Supreme Court over the years had liberalized its interpretation of public-sector labor law. The recent ruling in Knox v. SEIU was especially encouraging. In that case, a group of nonmember workers in California challenged the authority of a Service Employees local to deduct fees for political and lobbying purposes. The Supreme Court sided with the plaintiffs in June 2012. With Harris v. Quinn, the stakes were higher. Here the plaintiffs and their Right to Work attorneys were challenging forced fee payments even for basic union representation functions. A growing number of observers, some with enthusiasm and others with dread, believed a victory for Harris would overturn Abood, effectively relegating the public-sector union shop to the dustbin.
The outcome was highly anticipated, arguably as much so as any Supreme Court decision of the 2013-14 term. On June 30, the ruling came down: By 5-4, the Court ruled that home health care workers in Illinois could not be compelled to pay agency fees to a union that they didn’t wish to join or otherwise support. The Right to Work principle had won the day. Yet the scope of the ruling was not expansive. Writing for the majority, as he had in Knox, Justice Samuel Alito, while expressing reservations about mandatory public-sector representation, stopped short of finding it unconstitutional. In so doing, the majority left Abood standing.
Concerning Governor Blagojevich and Quinn’s executive orders, Alito, supported by Justices Kennedy, Roberts, Scalia and Thomas, wrote that reclassifying home care providers as public employees rested on the faulty premise that receiving state Medicaid funds translates into state employment. These service providers, he argued, should be considered “partial” rather than “full-fledged” government employees. And these partial workers already had voted against unionization. Forcing them to contribute agency fees to the SEIU, AFSCME or any other union constituted a violation of their freedom of speech. Justice Alito opined: “If we accepted Illinois’ argument, we would approve an unprecedented violation of the bedrock principle that, except perhaps in the rarest of circumstances, no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support.”
That a collective bargaining contract benefits nonmembers as well as members is not a justification for imposing fees upon the former, Alito argued. This principle especially holds for the home care industry because very often it is the states, not the unions, who set wages. Indeed, unions don’t necessarily even engage in collective bargaining on behalf of these workers. In rejecting the “free rider” argument, Alito emphasized that partial public employees are different from standard public employees:
Unlike full-fledged public employees, PAs (partial public employees) are almost entirely answerable to the customers and not to the State; do not enjoy most of the rights and benefits that inure to state employees; and are not indemnified by the State for claims against them arising from actions taken during the course of their employment.
This wasn’t an outright rejection of Abood, but it came close. That 1977 decision, he said, only should apply to full-fledged public employees such as police, firefighters and teachers. Alito called Abood “something of an anomaly” based on “questionable foundations.” It’s worth noting that the case more than likely will be remanded to a lower court to determine the refund of dues and fees that had been deducted from paychecks under the 2003 Illinois law.
Justice Elena Kagan provided a dissent:
The good news out of this case is clear: The majority declined that radical request. The Court did not, as the petitioners wanted, deprive every state and local government, in the management of their employees and programs, of the tool that many have thought necessary and appropriate to make collective bargaining work. The bad news is just as simple: The majority robbed Illinois of that choice in administering its in-home care program.
Kagan has a rather odd definition of rights. She is arguing that by opting out of union coverage, home care providers are inhibiting the freedom of workers who do want representation. This is a reversal of reality. It is unions, enabled by the State of Illinois, who are denying home-based health care providers an opportunity to devote as much income as possible to provide the best possible care for their charges.
Union leaders were more caustic in their opposition. AFL-CIO President Richard Trumka, always good for an overheated sound bite, did not disappoint. He stated:
The extreme views of today’s Supreme Court aimed at home care workers aren’t just bad for unions – they’re bad for all workers and the middle class. But the attacks on the freedom of workers to come together are nothing new. They are part of an onslaught from anti-worker organizations hostile to raising wages or improving benefits for millions of people. These attacks are a direct cause of an economy in which middle-class families can’t get a break because their wages have stagnated and their incomes have declined.
SEIU President Mary Kay Henry sounded much the same note: “No court case is going to stand in the way of home care workers coming together to have a strong voice for good jobs and quality home care. At a time when wages remain stagnant and income inequality is out of control, joining together in a union is the only proven way home care workers have of improving their lives and the lives of the people they care for.” American Federation of Teachers President Randi Weingarten, meanwhile, pledged to redouble organizing efforts.
While the Supreme Court did not overturn the public-sector union shop, it came close. And that has opened the door to future rulings that could invalidate Abood. Mark Neuberger, a labor attorney with the Detroit law firm of Foley & Lardner, explains the situation: “In the short run, the decision is fairly limited. However, what should have every union officer grabbing for a bottle of antacids is the thought process revealed by the majority of the justices in the decision today. They view compulsory union membership as a restraint of free speech.” Michael Lotito, a labor lawyer for the San Francisco-based firm of Littler Mendelson, likewise says the ruling “sets the table for more challenges to agency fees down the road. And this fact will not make unions sleep any easier.”
Public-sector unions, most of all the Service Employees, have good reason to fear the consequences of the Harris v. Quinn decision. One need only look to Michigan for evidence. In 2012 the legislature passed a bill, signed by Republican Governor Rick Snyder, excluding home care workers from the definition of public employees. This was seven years after then-Democratic Governor Jennifer Granholm in 2005 had declared more than 40,000 home care workers eligible to be unionized. SEIU Healthcare Michigan won a collective bargaining agreement with the state later that year. And it would realize a windfall thereafter. During 2006-12, the union raked in more than $34 million in dues and fees from home care workers. According to union reports filed with the U.S. Labor Department, SEIU Healthcare Michigan was up to 55,265 members in 2012. But in 2013, after the 2012 law went into effect, membership fell to 10,918, or by 80 percent. Total collections of dues and agency fees during 2012-13 declined from about $12.1 million to $7.1 million. The enactment of Right to Work legislation by Michigan late in 2012, making union membership voluntary for public-sector employees (save for police and firefighers), should reinforce this tendency more generally.
In the larger context of things, it is important to realize that unions, like employers, are creatures of self-interest. Labor officials may assert solidarity with “working families,” but in the end they promote the welfare of their institutions first and everyone else second. Like any type of organization, they seek money and power. It is their right to seek these things. But it is not their right to do so at the expense of those unwilling to join. Moreover, government should not intervene on behalf of a union unless it has a compelling public interest. Where was the compelling interest in the 2003 Illinois executive order and subsequent law that redefined 20,000 private home care providers as public-sector employees for the purpose of being unionized? Where was the compelling interest in Governor Quinn’s 2009 executive order that did likewise for another 4,500 home care providers? Keeping “labor peace” is not a justification for government intervention on behalf of unions, themselves well-versed in the art of coercion in the workplace – talk about a self-fulfilling prophecy. Forcing “free riders” into union membership or fee-paying is not a justification either. Even if non-joining workers do enjoy union-negotiated benefits, they may also see themselves as bearing high costs in the process. It is their right to withdraw support.
Public- as well as private-sector employees should have the right to say “no” as well as “yes” to a union. The promotion of labor peace refers to creating and enforcing agreed-upon procedures by which employers and employees can negotiate the terms of employment. It also means defining the procedures by which a union may attract and retain members. What it does not mean is government going to bat for a given union because that union’s membership, bank account and political influence seem to be on the low side. In affirming this principle, though not fully, the U.S. Supreme Court ruled correctly in Harris v. Quinn.