Current Updates and Legal Developments Fall 2018

PUBLIC SECTOR UNIONS CANNOT IMPOSE FEES ON NON-MEMBERS, SUPREME COURT RULES

PUBLIC SECTOR UNIONS CANNOT REQUIRE NON-MEMBERS to contribute to expenses related to union business, the U.S. Supreme Court ruled, overturning a 41-year-old decision. Janus v. AFSCME, Council 31, 2018 U.S. LEXIS 4028 (June 2018). In a 5-4 ruling, the high court held that the imposition of socalled agency fees on public sector employees violates the First Amendment of the U.S. Constitution. The fees, usually based on a percentage of the dues paid by union members, are meant to cover costs incurred in the collective bargaining process.

The ruling came in a suit brought by Mark Janus, an employee of the Illinois Department of Healthcare and Family Services, against the American Federation of State, County and Municipal Employees, which represents public employees in Illinois. Janus, who was not a member of the union and therefore did not pay union dues, was assessed an agency fee of approximately $535 per year.

The U.S. District Court for the Northern District of Illinois dismissed the suit in Rauner v. AFSCME, 2015 U.S. Dist. LEXIS 65085 (N.D. Ill. May 19, 2015), citing the U.S. Supreme Court’s ruling in Abood v. Detroit Bd. of Educ. (431 U.S. 209 (1977), which upheld the right of unions to require non-members to contribute toward activities related to the unions’ “duties as collective-bargaining representative.” The U.S Court of Appeals for the Seventh Circuit affirmed. Janus v. AFSCME, Council 31, 851 F.3d 746 (7th Cir. 2017). The Supreme Court subsequently granted Janus’ petition for review.

Reversing, the court overruled the holding in Abood, saying, “The state’s extraction of agency fees from nonconsenting publicsector employees violates the First Amendment. Abood erred in concluding otherwise and stare decisis cannot support it. Abood is therefore overruled.”

The court acknowledged the financial impact of its ruling on unions, but said that factor must be weighed against “the considerable windfall that unions have received under Abood for the past 41 years.” Although the ruling applies only to public sector unions, related concerns about imposition of fair share fees in the private sector will likely come to the forefront.

Justice Samuel A. Alito Jr. wrote the majority opinion, in which Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Clarence Thomas, and Neil Gorsuch joined. Justice Sonia Sotomayor filed a dissenting opinion. Justice Elena Kagan also filed a dissent, in which Justices Sotomayor, Stephen G. Breyer Jr., and Ruth Bader Ginsburg joined.

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SUPREME COURT RULES IN FAVOR OF CLASS WAIVERS IN EMPLOYMENT CONTEXT

THE U.S. SUPREME COURT HAS HELD IN EPIC SYS. CORP. v. Lewis, 138 S. Ct. 1612 (2018), that agreements requiring employees to arbitrate claims against employers on an individual, rather than collective or class action, basis do not violate the National Labor Relations Act (NLRA).

The 5-4 ruling came in three cases consolidated for argument before the high court to resolve a conflict among federal circuit courts on the question. At issue was the National Labor Relations Board’s (NLRB) position, set forth in In re Horton, 357 NLRB No. 184 (January 2012), that the NLRA guarantees the right of employees to act collectively to address employment claims and that requiring employees to waive that right is a violation of the statute.

The U.S. Court of Appeals for the Seventh Circuit in Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016), and the U.S. Court of Appeals for the Ninth Circuit in Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016), agreed with the NLRB’s stance, while the U.S. Court of Appeals for the Fifth Circuit in Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015), rejected the NLRB’s position.

Writing for the majority, Justice Neil M. Gorsuch said, “The NLRA secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum. This Court has never read a right to class actions into the NLRA—and for three quarters of a century neither did the National Labor Relations Board. Far from conflicting, the Arbitration Act and the NLRA have long enjoyed separate spheres of influence and neither permits this Court to declare the parties’ agreements unlawful.”

Chief Justice John G. Roberts and Justices Samuel A. Alito, Anthony M. Kennedy, and Clarence Thomas joined in the majority opinion, with Justice Thomas writing a separate concurrence.

In a dissent, Justice Ruth Bader Ginsburg cited the history of the NLRA. In enacting the statute, she said, “Congress acted on an acute awareness: For workers striving to gain from their employers decent terms and conditions of employment, there is strength in numbers. A single employee, Congress understood, is disarmed in dealing with an employer. The Court today subordinates employee-protection labor legislation to the Arbitration Act.”

Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan joined in the dissent.

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SUPREME COURT UPHOLDS TRUMP ADMINISTRATION’S TRAVEL RESTRICTIONS

PRESIDENT DONALD J. TRUMP ACTED WITHIN THE AUTHORITY granted to him by the Immigration and Nationality Act (INA), 8 U.S.C.S. §1101, et seq., in issuing an executive order restricting the entry of certain foreign nationals into the United States, the Supreme Court ruled. Trump v. State of Hawaii, 2018 U.S. LEXIS 4026 (2018).

In a 5-4 ruling, the high court vacated an injunction prohibiting enforcement of Proclamation 9645 (The Proclamation), entitled “Enhancing Vetting Capabilities and Processes for Detecting Attempted Entry Into the United States by Terrorists or Other Public Safety Threats”. 82 Fed. Reg. 45,161 (Sept. 17, 2017).

The Proclamation, signed by President Trump on Sept. 24, 2017, sought to restrict citizens of Chad, Iran, Libya, North Korea, Syria, Venezuela, Yemen, and Somalia from entering the United States because of deficiencies in the countries’ “identity-management and information-sharing capabilities, protocols, and practices.” Chad was later removed from the Proclamation in recognition of its updated identity-management procedures.

The State of Hawaii filed suit on Oct. 17 in the U.S. District Court for the District of Hawaii, seeking an injunction against enforcement of the order. The court granted the injunction in Hawaii v. Trump, 265 F. Supp. 3d 1140 (D. Haw. 2017). The government appealed; the Ninth Circuit affirmed in part, Hawaii v. Trump, 878 F.3d 662 (9th Cir. 2017), limiting the injunction to “persons who have a credible bona fide relationship with a person or entity in the United States.” The government successfully petitioned for review by the Supreme Court.

In an opinion written by Chief Justice John G. Roberts Jr., the high court held that issuance of the Proclamation was a valid exercise of the president’s authority under §1182(f) of the INA.

“By its plain language, §1182(f) grants the President broad discretion to suspend the entry of aliens into the United States,” the majority said. “The President lawfully exercised that discretion based on his findings—following a worldwide, multi-agency review—that entry of the covered aliens would be detrimental to the national interest. And plaintiffs’ attempts to identify a conflict with other provisions in the INA, and their appeal to the statute’s purposes and legislative history, failed to overcome the clear statutory language.”

The majority rejected the plaintiffs’ argument that the Proclamation is aimed at banning the entry of Muslims into the country in violation of the Establishment Clause of the First Amendment of the U.S. Constitution, citing prior statements made by President Trump both before and after his election.

“The Proclamation is expressly premised on legitimate purposes: preventing entry of nationals who cannot be adequately vetted and inducing other nations to improve their practices,” the Court said. “The text says nothing about religion.”

Justices Anthony M. Kennedy, Clarence Thomas, Samuel A. Alito Jr., and Neil Gorsuch joined in the majority opinion, with Justices Kennedy and Thomas filing concurring opinions. Justice Stephen G. Breyer filed a dissenting opinion in which Justice Elena Kagan joined. Justice Sonia Sotomayor filed a dissenting opinion in which Justice Ruth Bader Ginsberg joined.

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