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Friday, February 21, 2014

Outrage in Illinois

Many of my FEE-related friends know that my son is disabled. All readers of my FEE articles and columns know that I have a strong antipathy to American-style labor unions. Imagine, then, how outraged I would be if I lived in Illinois, if I provided in-home care to my disabled son, and if my son received Illinois Medicaid funds to pay for his care. Under those circumstances I would be declared an employee of the state of Illinois, and I would be compelled to pay union dues to the Service Employees International Union (SEIU).

I am not making this up. But help may be on the way, and not just for victims in Illinois.

In 2003 then-governor (and now-inmate) Rod Blagojevich issued an executive order declaring that home caregivers who are paid by their clients with state Medicaid money are state employees and therefore, under the 1977 Supreme Court case Abood v. Detroit Board of Education, may unionize and may be forced to pay union dues.

Soon thereafter the SEIU obtained certification as the monopoly bargaining agent for all Illinois home caregivers on the basis of a “card check.” That is, union persuaders visited the caregivers in their homes and “requested” that they sign cards declaring their support of the SEIU as their monopoly bargaining agent. Union signature gatherers undercover in individual homes are not known for their tender mercies.

Upon certification the SEIU forced the caregivers to pay union dues out of the money their clients paid them for their services. Even family members who paid care expenses out of Medicaid funds received by their disabled relatives were forced to pay the union dues. Family caregivers were simply assumed to be paid at the same official Medicaid rate received by non-relative caregivers, and their dues were assessed accordingly even if they received no actual pay.

Governor Pat Quinn, who succeeded Blagojevich, issued his own executive order in 2009 to continue this legalized theft. And the theft was substantial. According to the Illinois Policy Institute, between 2008 and 2013 the SEIU received $52 million from their home caregiver victims.

Harris v. Quinn

On January 21, 2014, the U.S. Supreme Court heard oral arguments in the case of Harris v. Quinn, brought by Pamela Harris and other Illinois home caregivers against this outrage. The case has two issues—one narrow, and the other possibly revolutionary. The narrow question is whether home caregivers can reasonably be classified as state employees for union-related purposes. The bombshell question is whether the 1977 Abood case was correctly decided. If Abood is overruled, all state and local government unionization may be overturned.

On the narrow question, I think the answer is obvious. Home caregivers are employees of the disabled clients they serve. The state pays those clients; it does not pay the caregivers. Moreover, employers typically hire, supervise, and fire employees. The state doesn’t do any of those things with respect to home caregivers. If the fact that caregivers are paid out of subsidies given to the disabled by a government is sufficient to make caregivers employees of that government, does that mean that physicians who receive Medicaid money for treating indigent patients are also government employees who can be forced to pay union dues? What is the limiting principle?

The Abood question is not so easily answered. In that case teachers who wished to remain union-free argued that unionization of government employees endangered their First Amendment rights of freedom of association and free speech. The First Amendment (and the entire Bill of Rights, which by the Fourteenth Amendment also applies to state governments) guarantees certain human rights against trespass by government. In government employment, unlike in private employment, governments are directly involved in all collective bargaining processes and outcomes.

One feature of American-style unionism is exclusive representation: A union that gets 50 percent plus one of the votes in a certification election among employees who are the targets of union organizers becomes the sole or monopoly bargaining agent for all the employees who were eligible to vote. This includes those who voted in favor of the union, those who voted against the union, and those who refrained from voting. It is a winner-take-all outcome. Individuals are even forbidden to speak for themselves on the terms and conditions of their employment. An employer who bargains with an individual employee is guilty of an “unfair labor practice.” Unfair, that is, to the union, not to the employee.

Think about that in the context of government employment. Government employee unions are private organizations of private individuals. They are not a fourth branch of government. Monopoly bargaining in government employment means that a government forces all involved employees to be represented by a private third party.

Representation of one by another is a form of association between them. Exclusive representation is forced association, and in government employment it is government doing the forcing. I think this is a clear violation, by government, of the First Amendment.

Government-imposed exclusive representation also violates workers’ free speech rights on public policy. It prohibits individual government employees from speaking for themselves on the terms and conditions of their employment. But terms and conditions of government employment are all matters of public policy. They involve the expenditure of taxpayer money and the scope of government activity. Our First Amendment free speech right means that government may not shut us up on questions of public policy. Exclusive representation tells covered government employees to shut up on related questions of public policy.

Another feature of American-style unionism is “union security,” which means that monopoly bargaining agents can force all the employees they represent, not just their voluntary members, to pay union dues or fees. This is justified by the specious “free rider” argument—which asserts that all who get benefits from union representation must be forced to pay for those benefits. If they weren’t forced to pay, they would be free riders.

I have explained elsewhere why the free rider argument is stuff and nonsense. Here, however, consider union security in the context of government employment. It amounts to a government employer forcing its employees to pay tribute to a private third party as a condition of continuing government employment. The union then uses that money to support its own political preferences, which may greatly differ from the political preferences of individual dues-and-fees payers. This, too, since government is directly involved, violates freedom of association and free speech.

The Abood Decision

The majority opinion in Abood skipped over the broad questions involving possible infringement of the First Amendment by exclusive representation and union security in government employment. The majority asserted that previous court opinions had found that the government’s interest in maintaining “labor peace” outweighed First Amendment concerns and therefore justified monopoly-bargaining unionism. But those previous cases concerned unionism under the Railway Labor Act (which covers unionism in the railway and airline industries), not government employment.

In an amicus brief  in the Harris case, the Cato Institute pointed out that the “labor peace” argument in the earlier cases had nothing to do with the First Amendment. Rather, it was based on Congress’s constitutional authority to regulate interstate commerce. The brief argued that the Abood court mistakenly applied the “labor peace” argument, without any discussion, to government employment. The Harris case provides an excellent opportunity for the first time to give First Amendment concerns regarding government-sector unionism careful consideration.

The majority opinion in Abood gave only a faint nod to the First Amendment. On free speech grounds, the majority declared that none of the forced dues extracted from dissenting government employees could be used for partisan political or ideological activities of any union receiving the loot. Dissenting workers could only be forced to pay for the collective bargaining “services” of government employee unions.

Justice Lewis Powell concurred with his colleagues on the limited protection of First Amendment rights, but in a statement joined by Chief Justice Warren Burger and Justice Harry Blackmun, he scolded the court for not going further to protect those rights:

I agree with the Court as far as it goes, but I would make it more explicit that compelling a government employee to give financial support to a union in the public sector regardless of the uses to which the union puts the contribution impinges seriously upon interests in free speech and association protected by the First Amendment (emphasis added).

In other words, any coerced employee payments to unions in government employment are suspect on First Amendment grounds. Powell even raised doubts about monopoly bargaining in government employment:

For the Court to sustain the exclusivity principle in the public sector in the absence of a carefully documented record is to ignore, rather than respect, “the importance of avoiding unnecessary decision of constitutional questions.”

Clearly, Abood did not answer all the questions arising out of the tensions between government-sector collective bargaining and the First Amendment.

More recently, in its 2012 decision in Knox v. SEIU, the court suggested it may now be open to a more thorough examination of those tensions. Writing for the majority, Justice Samuel Alito averred, “Our prior decisions [including Abood] approach, if they do not cross, the limit of what the First Amendment can tolerate” and “free rider arguments . . . are generally insufficient to overcome First Amendment objections.”

What Will the Court Decide in Harris?

During oral arguments before the court on January 21, Justices Anthony Kennedy and Samuel Alito seemed most eager to reexamine Abood from top to bottom. According to the Wall Street Journal, Chief Justice John Roberts and Justice Clarence Thomas may be willing to join Alito and Kennedy, and Justice Antonin Scalia may be the swing vote.

It is almost impossible to forecast Supreme Court decisions on the basis of oral argument. My own guess is that the court will decide in favor of Harris and the other plaintiffs on the narrow question of whether home caregivers can reasonably be considered employees of the state government. Supreme Court justices are generally averse to overturning past decisions, even bad ones. I think Abood will stand.

  • Charles Baird is a professor of economics emeritus at California State University at East Bay.

    He specializes in the law and economics of labor relations, a subject on which he has published several articles in refereed journals and numerous shorter pieces with FEE.