Governor Takes On "Fair Share"

On February 9, 2015, Governor Bruce Rauner issued Executive Order 15-13, entitled “Executive Order Respecting State Employees’ Freedom of Speech”.  The Executive Order directed the State Department of Central Management Services (“CMS”) and all other State agencies to cease enforcing “fair share” provisions of collective bargaining agreements covering State employees.  At the same time, the Governor has filed a pre-emptive “declaratory judgment action” in federal court, asking the court to declare the fair share provisions of the Illinois Public Labor Relations Act (IPLRA) to be unconstitutional, at least as applied to State employees working under the ultimate direction of the Governor. It is interesting to note that a few years back, former Indiana Governor Mitch Daniels executed a similar order. In response to a union challenge, the 7th Circuit, which is the same court that may ultimately hear the present case, upheld Daniel’s action as constitutional.

Under IPLRA, “fair share” is a statutory provision permitting a union and a public employer to include a provision in a collective bargaining agreement whereby the union charges and the employer deducts and remits to the union a “fair share fee” from the paycheck of any member of the bargaining unit who does not authorize the payment of union dues.  “Fair share fees” are considered to be payment to the union for contract negotiation and administration and are generally supposed to be calculated as union dues minus costs associated with internal union activities and union political activities.

Fair share fees assessed against public employees were upheld in the face of a constitutional challenge by the United States Supreme Court in the case of Abood v. Detroit Board of Education, 413 U.S. 209 (1977).  Recently, however, the Supreme Court ruled by a 5-4 majority in Harris v. Quinn, 134 S.Ct. 2618 (2014) that the Abood decision could not be extended to Illinois home health care aides (“personal assistants”), a category of workers who by state law are considered to be State employees for collective bargaining purposes only.

Executive Order 15-13 is founded on the Harris decision, and particularly on criticisms of the Abood decision contained in the opinion of the Court wherein the Court labeled the Abood decision an “anomaly” and called the analysis supporting it “questionable on several grounds”.  Based on the Governor’s reading of Harris, the Executive Order contends that fair share fees are a violation of the “bedrock principle” embedded in the First Amendment “that ‘no person in this country may be compelled to subsidize speech by a third party that he or she does not wish to support’ because ‘compelled funding of the speech of other private speakers or groups presents the same dangers as compelled speech’.”

Predictably, Illinois public sector unions have criticized the Executive Order as “a blatantly illegal use of power”, and have suggested that the Governor is simply seeking leverage at the bargaining table in upcoming negotiations with unions representing State employees.  The Governor, however, said that he was “doing the right thing – the fair thing for the people of Illinois”.

The Executive Order affects State employees, but not local government employees who are covered by IPLRA or IELRA.  Therefore, local government employers must continue to honor collective bargaining provisions requiring them to collect and remit fair share fees, although a court decision affecting fair share fees for State employees ultimately may affect the legality of fair share fees for local government employees.

It is unknown how long it may be before a definitive court decision is reached on fair share fees.  It seems highly likely, at this very early stage of proceedings, that the case concerning the legality or illegality of the Executive Order ultimately will be presented to the United States Supreme Court.  And it also seems reasonable to predict that the outcome of the case will depend on the composition of the Court at the time the case is presented.

Rauner has not hidden his opinion that the power of public employee unions must be restricted as one step in repairing the dire financial situation of the state. It’s no secret that he will likely take a page from Scott Walker’s book in Wisconsin as well as from Michigan and Indiana in attempting to restrict the bargaining rights of public employees to save money. His Executive Order may be the easiest step in that quest though as he would have to break the long and close bond between Illinois legislators and unions to achieve his goal. It’s going to be an interesting four years.