Law & the Courts

SCOTUS Halts Unions’ ‘Hotel California’ Rules

Big Labor pursued a disingenuous strategy to circumvent 2014’s Harris ruling. No longer.

The Supreme Court’s Janus v. AFSCME decision barred public-sector labor unions from forcing non-members to pay agency fees. What is less well-known is that the decision also mandated prior consent to any fee payments — a so-called “opt-in” requirement that had been missing from the Court’s 2014 opinion in Harris v. Quinn, a case that applied the same forced-fee prohibition to unions representing a special sub-category of public-sector workers.

Before Harris, the unions had been collecting dues from workers, presuming them to be members — unless those workers “opted out” by written request, in which case they still had to pay fees as non-members. Many unions continued this practice after Harris, even presuming that non-members had consented to continue paying fees unless and until they opted out of those separately. This post-Harris union behavior left many workers ignorant of their right to resign and stop paying dues and non-member fees, in effect defying the will of the Court.

The sub-category of unions addressed in Harris comprises “partial public employees” (PPEs) such as home health aides and in-home child-care providers. They are private-sector workers, but they are paid using state benefit funds, and thus in some states they are dubiously considered public employees for collective-bargaining purposes. Because of the peculiar nature of PPE unions and the fact that the state automatically deducted dues and fees from workers’ paychecks, many workers did not even know they had been unionized. The opt-out procedure didn’t require the unions to enlighten them, and the unions didn’t. In fact, they did the opposite, and much more, in order preserve the flow of dues and fees into union coffers.

A review of the misbehavior of PPE unions since 2014 makes clear why it was so important for the Court to mandate “opt-in” for all public-sector unions in Janus.

Most PPE unions were created through manifestly political maneuvering, mainly through executive orders by Democratic governors mandating a union election be conducted with only the loosest of rules. In Maryland, for instance, the SEIU was certified to represent about 10,500 child-care providers on the strength of 1,350 yes votes out of only 1,700 cast. With such low participation, few knew they’d been unionized.

SEIU 775’s machinations proved remarkably successful.

In Washington State, SEIU 775 collected dues from about 36,000 in-home health aides, despite the fact that thousands had not signed union cards. Then, in reaction to Harris, the SEIU adopted a cunningly circular logic, according to Max Nelsen of the Freedom Foundation in Washington. The union amended its bylaws to classify anyone paying dues as a “member” — and thus as someone from whom, under Harris, the union could continue to collect money. So workers were “members” because they paid dues, and the union was entitled to their dues because they were “members.” And all this transpired without most workers’ knowledge.

Then, SEIU 775 tightened resignation rules to lock in those who might become aware of their Harris rights. A member could resign, and a non-member could opt out, only by giving written notice to both the union and the state within 15 days after his anniversary date of joining the union. Behold SEIU’s Hotel California rules.

The Freedom Foundation, which advocates “individual liberty, free enterprise and limited, accountable government,” decided that workers should know their rights. It requested a list of workers — contact information only, nothing personal — under Washington’s public-records law.

SEIU sued in state court to block the release of the list. It lost, appealed, lost again, appealed, and lost yet again when the state supreme court refused to hear the case. However, during the two years all this took, the courts stayed release of the list pending the outcome of the case. During those two years, SEIU pursued a parallel legislative strategy, only to have two bills restricting release fail.

Then, in 2016, having exhausted all other options, SEIU 775 spent $2 million on a successful ballot initiative exempting PPE contact information from Washington’s public-records act. Leading newspapers in Washington and nationwide condemned the initiative for its deceptive language and for its provision granting an exception to just one non-governmental party: The union can still get a list. Even PPEs themselves cannot obtain contact information for fellow PPEs if, say, they want to collect the signatures required to call for a new union election.

Not surprisingly, a group of PPEs filed suit in federal court to challenge the law resulting from the ballot initiative. The case, Boardman v Inslee, is pending in the Western District of Washington.

SEIU 775’s machinations proved remarkably successful. Two years after Harris, it retained 94 percent of its membership, according to data the Freedom Foundation obtained from the state. Contrast this with the experience of SEIU 775’s sister union representing child-care providers in Washington, SEIU 925: It adopted an opt-in policy immediately after Harris and lost 60 percent of its membership over the next two years.

The lesson for unions would seem to be that non-transparency pays. Janus correctly foreclosed this option. And PPE unions nationwide may still face a reckoning for their prior behavior.

The original Harris case included a claim for damages for as many as 80,000 home health aides in Illinois. The claim was not decided as part of Harris in 2014 and is still pending under the new title Riffey v Rauner. The union (SEIU Healthcare Illinois & Indiana) has prevailed so far, but if it loses, it will be on the hook for as much as $32 million to refund agency fees extracted from non-members from 2008 through 2014, when the SEIU unit complied promptly with Harris and ceased taking fees from non-members. Riffey reached the Supreme Court during the just-concluded term, on the last day of which the Court sent it back down to the Seventh Circuit Court “for further consideration in light of Janus.

Unions have proved that they can develop unscrupulous tactics to nullify court decisions, so there’s no reason to believe they won’t attempt to evade the opt-in requirement.

If Riffey goes against the union, it could set precedent exposing SEIU and AFSCME nationwide to hundreds of millions of dollars in refund obligations to home health aides and child-care workers. This exposure is especially grave for SEIU 775 and other units that used opt-out practices to circumvent Harris after it was decided. Indeed, even if the SEIU unit prevails in Riffey, these other unions may still be exposed, because Riffey pertains only to pre-Harris fees.

The national leadership of the SEIU and AFSCME may come to rue the day that they sought to expand their fiefdoms by claiming that private-sector workers, including business owners (such as many child-care workers), could be considered public employees “for collective bargaining purposes only” — and thereby be subject to public-sector unionization and forced to pay union dues.

Huge refund obligations might chasten union leadership, but maybe not. Indeed, in anticipation of a defeat in the Janus case, unions have already locked in public-sector union members by having them sign cards that commit them to staying in the union and offer narrow options for resigning later. (For regular public-sector unions, as opposed to PPE unions, it is questionable whether an affirmative consent given before Janus is valid: How could informed consent be given before a member could know of his newfound right under Janus?) And last May, New Jersey’s new Democratic governor, Phil Murphy, signed legislation to protect Garden State public-sector unions from a mass exodus. It includes everything in Washington’s law, including the exemption from public-records law, as well as mandatory union orientation sessions for new employees and much more.

Unions have proved that they can develop unscrupulous tactics to nullify court decisions, so there’s no reason to believe they won’t attempt to evade the opt-in requirement. Their future tactics will likely trigger more litigation, but the better alternative would be for the courts to enlist allies in monitoring compliance. The best way to do this is to strike down the barriers that unions and their political enablers have erected to prevent other parties from communicating directly with public-sector workers. The Washington District Court might begin with the Boardman case, which could enable the Freedom Foundation to communicate directly with SEIU 775 members and offer another source of information and another perspective.

There’s more work to be done to dismantle labor’s Hotel California.

Red Jahncke is the president of Townsend Group International, a business consultancy in Connecticut, and a freelance columnist who writes on public-policy issues.


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