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IU expert: Supreme Court labor decision will lead to more lawsuits

June 30, 2014

FOR IMMEDIATE RELEASE

BLOOMINGTON, Ind. -- The Supreme Court's decision today that home-health workers can't be required to pay fees to unions that represent them "opens up vast avenues for future litigation," according to Kenneth Dau-Schmidt, a labor law expert at the Indiana University Maurer School of Law.

The decision in Harris v. Quinn left intact the current basic precedents on collective bargaining but created a new exception for workers who are not “full-fledged” public employees and perhaps for public employees who don’t have access to full collective bargaining rights.

"Not only will the parties have to litigate who are 'full-fledged' public employees with full collective bargaining rights and who is not, but also what rights and responsibilities are owed to this new category of public employees," Dau-Schmidt said.

Under state and federal law, unions have an obligation to fairly represent all employees in their bargaining unit. To allow unions to recoup their expenses, current law generally allows unions to negotiate “fair-share agreements” in which nonmembers can be required to pay costs of representation. The agreements cannot require payments to support political activities.

The Supreme Court held in the 1977 Abood case that such fair-share agreements were constitutional in the public sector because they promoted the state’s interest in stability and industrial peace in its negotiations with its employees and because the agreements were limited to nonpolitical expenses.

Today, the court left the Abood precedent intact but decided it did not apply to the challenge brought by Illinois home-health employees because they were not “full-fledged” public employees. The employees are hired by their customer, but they are controlled by the customer and the state and paid by the state, with parameters for wages and benefits set in statute.

"An important development in the court’s opinion was the treatment of public sector collective bargaining as political speech worthy of full First Amendment protection," Dau-Schmidt said. "In the past the court had distinguished between union expenditures for mundane wage and benefits collective bargaining and those for political purposes, giving full First Amendment non-associational protection only to the latter. This development opens the door to possible future litigation over whether the union’s duty to fairly represent nonmembers is unconstitutional compelled association and whether state limitations on the subjects of collective bargaining and public employee picketing and collective action are unconstitutional infringements on First Amendment rights."

Dau-Schmidt said today's decision "has fanned the flames of judicial regulation" that the court lit with its 2012 Knox v. SEIU decision, which limited the ability of unions to raise political funds.

"Federal and state judges have historically proven a poor forum for making labor policy because they know little of the subject and cannot create the comprehensive regulatory scheme necessary to help ensure productive labor relations and collective bargaining," he said. "Today’s opinion is one more step back from the legislative system of labor relations that we have created over the last 80 years and one step toward piecemeal regulation of collective bargaining and labor relations by the courts."

Dau-Schmidt is the Willard and Margaret Carr Professor of Labor and Employment Law at the Maurer School. He can be reached at 812-855-0697 or kdauchm@indiana.edu.