Tag Archives: SCOTUS

A truly Epic failure for workers

He just turned 50 last year…

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Free speech in the workplace has been discussed heatedly in the wake of the cancellation of “Roseanne”and a new rule prohibiting NFL players from kneeling during the national anthem. Parties on both sides in the culutrue war have argued that employees don’t have freedom of the speech on the job. While that is generally true, the National Labor Relations Act gives employees some rights of speech and associationon the job. But a recent Supreme Court case could have paired back those rights.

In Epic Systems v. Lewis the United States Supreme court held in a 5-4 decision that neither the National Labor Relations Act  nor the savings clause of the Federal Arbitration Act  prevents enforcement of arbitration clauses that preclude class or collective actions against employers by their employees.

As many commentators and the dissent pointed out, the Epic decision will make it more difficult for workers to band together to address wage and hour violations. Individually, even with attorney fees available, it is not economical for employees to pursue individual cases of wage theft if those individual cases amount to a relatively small amount. An example of such a case were the so-called “donning and doffing” cases pursued against various meat packing plants in the Midwest.

Employers have won some major victories in the area of wage and hour law this Supreme Court term. Epic follows on the heels of a decision making it easier for employers to prove they are exempt from the overtime provisions of the Fair Labor Standards Act

But Epic could impact labor and employment law beyond just wage and hour law. Here are a few ways Epic could impact more than just wage and hour law. This list is not inclusive and Epic is probably worth more discussion, but I wanted to discuss the broader implications of this case and bring up lesser discussed but important implications of this case.

What is a protected concerted activity?

The National Labor Relations Act protects protected concerted activity for the mutual aid of co-workers that goes to the terms and conditions of employment. The employees argued that participating in a collective action case under the Fair Labor Standards Act. Justice Neil Gorsuch, writing for the five Justice majority, disagreed. Gorsuch wrote that the NLRA only covered activities that employees do for themselves, not class action litigation. What concerned me more, was Gorsuch’s  use of a “canon”of statutory construction to hold that seemingly broad language in the NLRA about it employees being able to engage in collective activity for “mutual aid and protection” only applied to forming labor unions and other activities related to formal collective bargaining.

This conclusion concerned me because I have long advocated for non-unionized employees to engage in collective self-help on the job to address issues like bullying  or even accommodation of a disability.  But, as the dissent points out, association rights on the job are also protected by the Norris-LaGuardia Act (NLGA) NLGA expressly provides for a right to self-organization among employees. Though the Epic court rejected NLGA as a basis for overcoming an arbitration clause, it’s broader language could still be the basis for workplace speech and assocation rights than a paired down NLRA.

That Norris-LaGuardia would serve as backstop for employee association rights would assume the Roberts/Gorsuch court is merely following some rules of statutory construction rather than imposing their own economic preferences into the law. That might not be a fair assumption. The Federal Arbitration Act explicitly excludes employment contracts from coverage. In 2001, the Supreme Court limited that exclusion from workers in the transportation industry.  Epic would appear to further limit that exclusion in contradiction to plain and clear statutory language to the contrary.

 

Can Epic be made to benefit workers?

Epic may benefit some employees. One impetus behind using arbitration clauses to prevent class action claims is to defeat class action claims on retirement plans under ERISA. However ERISA also governs short-term and long- term disability policies. Currently, short-term and  long-term disability policies very difficult to win because courts defer to insurers on how the plans are interpreted. Some employee-benefit attorneys believe that employees will have a better chance of disability claims in arbitration.  Union-side labor lawyer, Moshe Marvit has also speculated that Epic might make it easier for employees to form unions.

Many management-side attorneys are also skeptical of arbitration  which could also prevent employers from adopting arbitration clauses.

Constitutional perspectives

So how is it that the Supreme Court can ignore seemingly plain language about the Federal Arbitration Act not applying to employment disputes? The Circuit City decision from 2001, provides one clue. In Circuit City the Supreme Court used a narrow interpretation of interstate commerce to hold that the FAA only applies to transportation employees. This holding is consistent with other holdings from the Rehnquist and Roberts courts that limit that power of the federal government to regulate through the commerce clause. (12)

Though Epic doesn’t discuss state police powers under the 10th Amendment much of the case law relied upon in Epic has to do with how the FAA pre-empts state laws preventing arbitration in certain cases. Essentially the so-called “contracts clause” which prevents laws that impair the obligation of contract.  This includes state laws enacted under 10th Amendment police powers. The Supreme Court took up a contracts clause case, Sveen v. Melin, this term.  That case could also have implications in the world of employment law depending on the language of the decision and any possible concurring opinions from the likes of Justices Gorsuch, Alito or Thomas.

NPR: Is It Fair To Have To Pay Fees To A Union You Don’t Agree With?

Today’s post comes from guest author Kristen Wolf, from Causey Law Firm.

Worth thinking about –  this upcoming SCOTUS decision could have a big impact on unions/union workers.  Reposting from NPR.org. – kw

Listen to the Morning Edition article here:

It’s the showdown at the Supreme Court Corral on Monday for public employee unions and their opponents.

Union opponents are seeking to reverse a 1977 Supreme Court decision that allows public employee unions to collect so-called “fair share fees.”

Twenty-three states authorize collecting these fees from those who don’t join the union but benefit from a contract that covers them.

The decision later this year will have profound consequences not just for the California teachers in Monday’s case, but for police, firefighters, health care workers and other government workers across the country.

To understand what is at stake, here is a primer in how the labor law works in states that have authorized these fees.

If a majority of the public employees at a given site vote to be represented by a union, that union becomes the exclusive bargaining agent for the workers. In California, some 325,000 teachers in more than 1,000 school districts are represented by the California Teachers Association and, to a lesser extent, the California Federation of Teachers.

Of those, 9 percent have not joined the union, but under California law, any union contract must cover them too, and so they are required to pay an amount that covers the costs of negotiating the contract and administering it. The idea is that they reap the bread-and-butter benefits covered by the contract — wages, leave policies, grievance procedures, etc. — so they should bear some of the cost of negotiating that contract.

They do not, however, have to pay for the union’s lobbying or political activities; they can opt out of that by signing a one-page form.

In addition, the state Legislature has carved out certain hot-button matters that are not subject to bargaining at all. Specifically, the union can’t bargain over pensions or tenure.

In 1977, the Supreme Court upheld mandatory fees for non-union members as constitutional. The court said they were justified by the state’s interest in maintaining labor peace and eliminating “free riders” who gain benefits without paying their “fair share.”

But in recent years, five Supreme Court justices have signed on to opinions strongly hinting that they were ready to overturn that precedent. Indeed, Justice Samuel Alito, the author of two key opinions, all but invited the challenge posed by Monday’s case.

The Face Of The Case

Rebecca Friedrichs is the public face of the lawsuit that bears her name. After 28 years on the job, she is currently a third-grade teacher in Buena Park near Anaheim, Calif.

“The union’s supposed financial benefits aren’t worth the moral cost,” she said. “They protect teachers who are no longer effective in the classroom … and they’re more focused on self-preservation than they are on educating little children.”

Friedrichs is a strong opponent of the $650 in yearly fees she says she is forced to pay, arguing that everything the union does is political.

The fees are “used to promote the union’s political agenda,” Friedrichs said, contending that they violate her First Amendment right of free speech and association.

Eric Heins, the current president of the California Teachers Association, counters that what is purely political is the Friedrichs case.

“It’s really about an agenda to weaken and destroy unions,” he said.

Heins added that he in fact got involved with the union because of concerns about teaching — especially No Child Left Behind and its “incessant” testing.

Heins said the union contract has allowed him to advocate for “good teaching” for his students “without fear of retaliation.”

He compares the case against fair-share fees to a group of four people going out to dinner. Three vote for one restaurant, the fourth for another. The group goes with the majority; they enjoy the meal, but when the bill comes, the guy who wanted another restaurant tells his friends, “the rest of you have to pick up the tab” because the restaurant wasn’t my choice.

The Arguments

In the Supreme Court on Monday, lawyer Michael Carvin, representing the challengers, will tell the justices that what are technically called “agency fees” are unconstitutional.

“You’re forcing the employee to subsidize somebody else’s speech,” Carvin said. Negotiating a public employee union contract, he maintains, is different from negotiating one for workers in the private sector.

“When we’re talking about public unions,” he said, “everything they do is inherently a matter of public concern, because every time they get pension, health care and salary benefits, that comes out of the public fisc … so every dollar you spend on health care or salary is a dollar you can’t spend on roads or children.”

Lawyer David Frederick, representing the union, counters that what the challengers are seeking is a free ride on the union’s back.

“No one is precluding the right of teachers to speak publicly about their beliefs concerning merit pay, to lobby the Legislature” or express their views on important issues related to education, he said. “All we’re talking about here is an efficient means for the government to determine what its contract with its workforce is going to be.”

The union and the state of California are on the same page in this case. They say that agency fees give the union the resources to be able to make some hard deals, as they did in California during the Great Recession when they negotiated teacher furloughs and some reductions in pay so that more teachers could keep their jobs.

The union and the 23 fair-share states say that if the court were to overturn its 1977 decision, it would trample on states’ ability to govern their own affairs. And more importantly, it would inevitably weaken unions. They would have to raise dues, pitting those who do pay against those who don’t, and the unions would likely have to dig in their heels unreasonably in negotiating to prove their mettle.

Lawyer Frederick pointed to New York City and state in the 1960s and ’70s, a time when agency fees were not authorized.

There were “literally hundreds of work stoppages in the public sector — we’re talking about the subway system … firemen, police, teachers — who went out on strike,” he noted. “And just one week of a strike of the transit workers in New York could cost a billion dollars to the economy.”

There were on average 20 public-sector strikes a year in New York state in the 15 years prior to the Supreme Court’s 1977 decision. Many of them lasted a month or more and closed down schools and other public services, from senior centers to garbage collection.

Even laws imposing harsh penalties for public employee strikes were ineffective.

But after the Supreme Court upheld agency fees, the state quickly passed a law permitting them, and the rate of strikes plummeted by well over 90 percent to fewer than two per year.

In Monday’s case, the union and nearly half the states urge the Supreme Court not to risk that kind of chaos again.

Politics At Play

The unions have seen the consequences quite recently when Republican-dominated state governments eliminated fair-share fees. In 2012 union membership in Michigan declined by 7 percent, and “free-riding” more than doubled, after the state enacted a public-sector right-to-work law and prohibited school districts from collecting union dues by payroll deduction, according to the Economic Policy Institute, a left-leaning think tank.

But the challengers’ Michael Carvin dismisses such justifications outright:

“The proof is in the pudding. Most states don’t require agency fees. The federal government doesn’t require agency fees. And those unions do fine in that environment.”

But, he added, in a moment of puckish clarity:

“It may impede their ability to become the largest political contributors to the Democratic Party.”

The court’s 1977 decision is so wrong, he contends, that it is time to reverse it.

The union, the state of California, 21 other states and the District of Columbia warn that if that happens, it would unsettle tens of thousands of union agreements across the country, an assertion that Carvin also dismisses.

There is a second issue brought by the challengers — a secondary spear, as it were, aimed at the union’s heart. The challengers contend that the opt-out provision authorized by state law is also unconstitutional.

Under that provision, the union is required to send all nonmembers a one-page form allowing them to check a box and automatically be exempt from sharing the expense of the union’s lobbying and ideological activities. The challengers want to reverse the process, and be automatically exempt unless they opt in. The union contends that would require a far more costly canvassing process.

Both the union and the state argue that the opt-out process is an administrative choice made by the state, and that there is no need to “constitutionalize” it.

Monday’s arguments promise to range from lively to ferocious, with a decision expected by summer.

 

Photo Credit: Mark Ralston/AFP/Getty Images via NPR.org