Wednesday, October 7, 2015

The Supreme Court Case That Employers Should Watch This Term

The U. S. Supreme Court began its new term this last Monday. That’s always accompanied by a great deal of pomp and circumstance and anticipation of change. 

In one very key employment case, the Court will address the issue of whether or not it is constitutional to require bargaining unit members of public employee unions who choose not to join the union to pay “fair share” dues.  If the Court decides that “fair share” dues are unconstitutional, such a decision could be a major blow to public sector unions.  The case before the Court, Friedrichs v. California Teachers Association, is brought by a group of California teachers who contend that, by compelling them to pay “fair share” dues, the union is violating their rights to free speech.

In recent years, labor union membership has been declining in the private sector.  During this same period, public sector unions have grown tremendously.  Data released by the Bureau of Labor Statistics for 2014 indicates that 35.7% of public-sector workers are union members compared to just 6.6% in the private-sector.

The dispute in California arises over the fact that a group of public school teachers have alleged that, by compelling the payment of “fair share” dues, unions are forcing their beliefs upon those who disagree.  The premise behind the teachers’ argument is relatively clear.  The teachers have taken the position that their union advances political views and uses the funds collected from dues to support the advancement of those views. They argue that the First Amendment to the United States Constitution provides for freedom of speech, meaning that a person or persons are free to express their own views and opinions and are not compelled to support the views and opinions of others with whom they disagree.  Such expression may come in many forms, but one such form is the right to provide financial support to a group that advances a person’s own views or ideas.

The unions argue that the fair share dues are also used to support collective bargaining initiatives as well as grievances which monitor and enforce contract compliance. These activities benefit even non-union members whose job titles are union represented. To prohibit fair share fees, according to unions, is giving non-members a free ride and discourages union membership. 

The controversy around fair share dues has gained momentum in states over the last few years. On February 9, 2015, Illinois 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. A few years back, former Indiana Governor Mitch Daniels executed a similar order, which was ultimately upheld by the 7th Circuit Court of Appeals.

A ruling in favor of the California Teachers Association could virtually gut public employee unions, who rely on fair share dues, and serve as a bellwether of significant change to private sector unions as well.