Today, the U.S. Supreme Court issued a case that could have – but ultimately did not – have significant implications for labor unions and agency shops in particular.  In Harris v. Quinn, the Court held that in-home service providers in Illinois who are not union members cannot be required to pay the union an agency fee.  While this holding is fairly narrow, the Court’s 5-4 decision provides insight on the high court’s current perception and disfavoring of agency shops.  The bottom line for your agency is that existing agency shop arrangements continue as usual.

Background

Like in many states, Illinois has a program designed to assist individuals who, due to age or medical condition, are unable to live in their own homes without assistance but are also unable to afford the expenses of in-home care.  Under state law, the State provides in-home service providers who are jointly employed by the State who compensates the personal assistants and the “customers” who are the individuals receiving the care.  Illinois law provides that the personal assistants are “public employees” of the State but solely for the purposes of coverage under the state’s public labor law.

Service Employees International Union (SEIU) was the exclusive representative for the personal assistants for purposes of collective bargaining.  The Union and State negotiated an agency shop provision into the collective bargaining agreement requiring all personal assistants who are not union members to pay a “fair share” of the union dues.  Three of the personal assistants objected to this agency fee and sued the State and Union alleging that the agency shop violated their First Amendment rights because they were required to pay a fee to a union that they do not wish to support.  The trial court and Seventh Circuit Court of Appeals found in favor of the State and Union.

Court’s Analysis and Narrow Holding

The Court’s decision heavily criticized the Court’s prior decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977).  In Abood, the Court held that public employees who choose not to join a public-sector union may nevertheless be compelled to pay an agency fee to support union work that is related to collective-bargaining, contract administration, and grievance adjustments, but not for the union’s political or ideological purposes.

The Court distinguished the personal assistants in Illinois from “full-fledged public employees.”  The Court found that personal assistants are almost entirely answerable to the customers, who have the ability to hire, evaluate, establish working conditions, and fire the personal assistants.  In turn, the Court found that the scope of collective bargaining on their behalf is sharply limited.  Courts have upheld the constitutionality of agency fees because the State compels the union to promote and protect the interests of nonmembers in negotiating and administering a collective bargaining agreement and representing the interests of employees in settling disputes and processing grievances.   The Court found that these rationales do not apply to personal assistants because the State requires that they all receive the same pay rate and the union has no authority to represent a personal assistant in a grievance against a customer.

Ultimately, the Court narrowly held that an agency shop is not constitutional for the personal assistants in Illinois because it infringes on their First Amendment rights of speech.  The Court did not, however, find that agency shops are unconstitutional for “full-fledged public employees.”

What Does This Case Mean For Your Agency?

Likely nothing.  The Court’s holding narrowly applies to the personal assistants under the Illinois state program.  Although the Abood case came under heavy fire, the Court did not overturn it.  Consequently, current agency shop arrangements in your collective bargaining agreements remain valid and you should continue to enforce them.

Even for agencies who currently jointly employ in-home service providers, this Court’s rationale may not apply if the agency has more control as an employer than the Court found the State of Illinois had over its personal assistants.  We may anticipate some in-home service providers in California filing similar legal actions challenging agency shops.

For private sector employers, this case also has no direct impact.

There are two potential longer term outcomes of this case.  First, this case provides the arguments and legal foundation for individuals to challenge agency fee provisions in state laws, such as the Meyers Milias Brown Act, Educational Employment Relations Act, Higher Education Employer-Employee Relations Act, and others.

Second, although not the crux of this case, the Court also stated that, under the Pickering balancing test applied in First Amendment retaliation cases, union speech that is germane to collective bargaining addresses matters of public concern and, therefore, may be considered protected speech.  For example, speech in favor of increased wages and benefits for personal assistants would likely mean increased expenditures under the Medicaid program, and the Court stated that Medicaid funding levels are certainly of great public concern.  Although the dissent found that this speech would not be considered protected, we believe the Court’s discussion of this issue may open the door for individuals to file First Amendment retaliation claims on the basis that their speech regarding salaries, compensation, etc. is protected speech.