Tag Archives: collective bargaining agreements

Will Abood v. Detroit Board Of Education Survive?

Contributed by Carlos Arévalo

In June 2014, the Supreme Court issued a decision impacting “fair share” provisions in public sector collective bargaining agreements. By a 5-4 vote, the justices ruled in Harris v. Quinn that home health care workers in Illinois could not be compelled to financially support a union they did not want to join. Writing for the majority, Justice Samuel Alito noted that the “primary purpose of permitting unions to collect fees is to ‘prevent nonmembers from free-riding on the unions’ efforts, sharing the employment benefits obtained by the union’s collective bargaining without sharing the costs incurred.” The Harris ruling, however, was narrow insofar as the home health care workers at issue were not deemed “full-fledged public employees.”

Now comes Friedrichs v. California Teachers Association¸ one of five cases to watch in the Court’s 2015 term according to Washington’s The Hill newspaper. In Friedrichs, the issue is whether public employees may be compelled to pay union dues as a condition of their employment. The case stems from a California law that allows school districts to require public school teachers, as a condition of employment, to either join the union or opt out. The teachers are nevertheless required to still pay a portion of the union dues.

HandshakeBWMany observers anticipate that the court’s conservative majority will overturn its 1977 opinion in Abood v. Detroit Board of Education. In Abood, the Supreme Court upheld “fair share” provisions in union contracts where a group of public school teachers in Detroit had sought to overturn the requirement that they pay fees equivalent to union dues on the grounds that they opposed public sector collective bargaining and objected to the union’s ideological activities of the union. The court, nevertheless, found that non-union members could be charged dues for “collective bargaining, contract administration, and grievance adjustment purposes” so long as their dues were not used for other ideological or political purposes. In Harris, Justice Samuel Alito questioned the Abood court and its understanding of precedent. He was also critical of the court’s failure to appreciate the conceptual difficulty of distinguishing what are chargeable versus non-chargeable union expenditures in the public sector. Finally, Justice Alito criticized the Abood court’s analysis as resting on “an unsupported [unwarranted] empirical assumption, namely, that the principle of exclusive representation in the public sector is dependent on a union or agency shop.”

Writing for the dissent, Justice Elena Kagan noted that the “Abood rule is deeply entrenched, and is the foundation for not tens or hundreds, but thousands of contracts between unions and governments across the nation. Our precedent about precedent, fairly understood and applied, makes it impossible for this court to reverse that decision.”

If the Supreme Court does overturn Abood, such a decision will have a profound impact, across the Country’s twenty five states that permit compulsory “fair share” for teachers, firefighters, police and other public workers as unions will not flourish if they cannot compel non-members to contribute toward their efforts. Friedrichs truly is a case to watch.

 

The Illinois Supreme Court Ruling Expands the Pension Protection Clause to Cover Health Care Benefits

Contributed by Julie Proscia

On July 3, 2014, the Illinois Supreme Court issued its decision in Kanerva v. Weems, 2014 IL 115811, reversing the circuit court’s dismissal of four lawsuits, Bauer v. Weems, No. 12–L–35 (Cir. Ct. Randolph Co.); Kanerva v. Weems, No. 12–L–582 (Cir. Ct. Sangamon Co.); Maag v. Quinn, No. 12–L–162 (Cir. Ct. Sangamon Co.); and McDonal v. Quinn, No. 12–L–987 (Cir. Ct. Madison Co.). One of the claims raised in each of the four cases was the constitutional validity of amendments to the Illinois State Employees Group Insurance Act instituted by the general assembly that impacted the amount retired state employees and their survivors had to contribute for health care benefits. Kanerva v. Weems, 2014 IL 115811

The Circuit Court of Sangamon County had previously dismissed the four consolidated complaints from those cases, in part based on its determination that the Pension Protection Clause of the Illinois Constitution only protected traditional pension benefits and did not encompass the state’s obligations to contribute toward the cost of health care benefits for retired state employees and their survivors. Id.

In reversing the circuit court’s decision the Supreme Court addressed only one of the questions raised on appeal, whether health insurance subsidies are constitutionally protected under the Pension Protection Clause. Id. The Court determined that even though health-care benefits for the public employees in question were controlled and set forth in different statutes, the “eligibility for all of the benefits is limited to, conditioned on and flows directly from membership in one of the State’s various public pension systems.” Id. at  ¶40.  The Court further rationalized that “giving the language of article XIII, section 5, its plain and ordinary meaning, all of these benefits, including subsidized health care, must be considered to be benefits of membership in a pension or retirement system of the State and, therefore, within that provision’s protections.” Id. at ¶40.

In only addressing the question regarding what the Pension Protection Clause covers, the Court refused to address other issues raised on appeal, including contract clause claims and the merits of the Pension Protection Clause claims. As recognized by Justice Burke in her dissent, by not expressing any opinion as to the merits of the Pension Protection Clause claims, contract claims or other claims, there is no clear answer whether they are even viable and either party may still ultimately prevail in those claims. Thus, while the Illinois Supreme Court ruling in Kanerva v. Weems does not completely cut the legs out from under the Illinois General Assembly’s steps towards pension reform, it has increased the likelihood that the General Assembly may have to look to other ways to address the pension problems, including increasing income through taxes.

Additionally, it potentially impacts cities, municipalities and other public entities whose collective bargaining agreements and retirement programs may be subject to the Pension Protection Clause.  If a city, municipality or other public entity has a collective bargaining agreement or retirement program that provides health care benefits to retirees, under the Supreme Court’s decision any modification to current retirees’ health care benefits could potentially be challenged as a violation of the Pension Protection Clause. To address such, cities, municipalities and other public entities should be careful in drafting collective bargaining agreements and other documents in which health care benefits are provided to avoid any presumption that such benefits are guaranteed or would vest for the life of the employee or retiree.