Tag Archive: Supreme Court

Mar 06

The Neil Gorsuch Effect on SCOTUS Labor Law Jurisprudence

By Michael C. DeBenedetto III.
Judge Neil Gorsuch of the Tenth Circuit of the United States Court of Appeals was recently nominated to the Supreme Court by President Donald Trump to replace the late Antonin Scalia. In this commentary, I address the questions of how Judge Gorsuch would likely lean over questions surrounding the major cases of Abood v. Detroit Board of Education[1] and Friedrichs v. California Teachers Association[2] if such cases appeared again. Friedrichs builds off Abood, which was recently heard by the Supreme Court, but resulted in a deadlock decision, thus binding the circuit court decision.

In Abood, the Court held that nonunion members had the freedom to opt out of union political donations if they chose not to support the union’s endorsed candidate. However, the Court explained, “Insofar as the service charges are used to finance expenditures by the Union for collective-bargaining, contract-administration, and grievance-adjustment purposes, the agency-shop clause is valid.” The Court further explained that nonpolitical activities relating to union representation do not violate First Amendment rights, and the union would maintain the right to collect from nonunion members for the purpose of these resources.

Friedrichs addresses some of the issues raised in Abood, most notably in terms of payment of union dues and the “free-rider” concept. In Friedrichs, plaintiffs were public school teachers who resigned their union membership and objected paying the nonchargeable portion of their yearly agency fee. They believed that being required to pay the fee, even though they were no longer union members, violated their rights to freedom of speech and association under the First and Fourteenth Amendments to the Constitution. The court explained, “in Abood, the Supreme Court upheld the constitutional validity of compelling employees to support a particular collective bargaining representative . . . .” The Ninth Circuit affirmed the judgment of the district court.

Some of Judge Gorsuch’s cases may be revealed in his leanings on potential union dues cases and free speech. The cases are Laborers’ International Union Local 578 v. NLRB[3] and Hobby Lobby v. Sebelius[4]. After reviewing these cases, I believe it is likely he would lean towards the employee side and reject the system compelling nonunion members to pay agency fees kept intact by Friedrichs.

Laborers’ International Union Local 578 concerned a union that forced an employer to discharge an employee because of his failure to pay union dues. The Tenth Circuit heard this case on appeal. Judge Gorsuch, writing for the majority, explained that the standard to invoke a union-security clause that allowed for an adverse action to be taken against an employee was not met. It required the union to: (1) provide the employee with actual notice of the precise amount due, including the months for which dues are owed; (2) explain how it computed the amount due; (3) give the employee a reasonable deadline for payment; and (4) explain to the employee that failure to pay will result in discharge.

The letter communicated to the employer concerning the dismissal of the employee did not meet the above requirements. Judge Gorsuch cited the NLRA and explained that the failure to meet these elements “restrains or coerces” the employee from his right to refrain from union membership. When considered with the Friedrichs facts, if a reasonable basis is established, one may foresee Judge Gorsuch siding with the rights of the employee to not be compelled to pay the agency fees.

A viable counterargument, however, could be found later in the opinion where Judge Gorsuch emphasizes the importance of his philosophy of judicial restraint and likens the role of the court as an “instant-replay booth in football: the call on the field presumptively stands and we may overturn it only if we can fairly say that no reasonable mind could, looking at the facts again, stand by that call.” In considering Abood and Friedrichs, Judge Gorsuch may be hesitant to impose his personal opinion on what he views as the optimal status of the employee and union relationship because of the settled Abood and Friedrichs law. However, I find his clear prioritizing of the rights of the employee will be more heavily considered if given the chance to address the question of agency fees.

The question of free speech also ties into the conflict over agency fees. Raymond J. Nhan and David Dewhirst have discussed, in “Friedrichs Redux,” that Judge Gorsuch’s opinion in Hobby Lobby—when it was at the circuit level—may also give insight into his leanings regarding subsidizing speech.[5] In Hobby Lobby, Judge Gorsuch concurred in the decision granting freedom for closely held owners of Hobby Lobby Corporation from having to subsidize certain categories of abortifacients and contraceptives for their employees. He explained, “As the Greens [owners] describe it, it is their personal involvement in facilitating access to devices and drugs that can have the effect of destroying a fertilized human egg that their religious faith holds impermissible.” It is important to focus on Judge Gorsuch’s emphasis on the terms “personal involvement in facilitating access.” He is favoring the rights of the individuals in these facts. It is not unreasonable to consider he might be open to the personal decisions and rights of the employees to reject paying agency fees as nonunion members considering they do not want to be a part of the union.

In short, based on his opinions in Local 507 and Hobby Lobby, Justice Gorsuch would likely side against unions over payment of agency fees at the Supreme Court level.

[1] 431 U.S. 209 (1977).

[2] 136 S Ct 1083 (2016), reh denied 136 S Ct 2545 (2016).

[3] 594 F3d 732 (10th Cir 2010).

[4] 723 F3d 1114 (10th Cir 2013).

[5] Raymond J. Nhan & David Dewhirst, Friedrichs Redux, The Federalist Society Blog                (February 2, 2017),    http://www.fed-soc.org/blog/detail/friedrichs-redux.

Apr 12

Friedrichs v. California Teachers Association

By Ross Pollack.

On March 29, 2016, the Supreme Court issued a divided 4-4 opinion in Friedrichs v. California Teachers Association, thus upholding the decision of the Ninth Circuit Court of Appeals. The one sentence opinion belies the importance of the case, which only two months earlier appeared as though it would nearly certainly cripple public sector unions’ ability to collect funds. At issue in the case was whether a public sector union could charge agency fees (the equivalent of Union Dues) to employees who elected not to join the Union. The teachers who brought the case argued compulsory agency fees violated their first amendment rights to use money as free speech because the Union might spend the money on political or ideological causes the employees did not support. In its 1977 decision, in Abood v. Detroit Board of Education, the Supreme Court ruled that compulsory agency fees were constitutional. Following this precedent in Friedrichs, the Ninth Circuit found that the Union was allowed to charge compulsory agency fees. Since the Supreme Court did not issue a majority opinion, that ruling and the Abood precedent stand.

However, the outcome in Friedrichs does not mean the debate over the legality of compulsory agency fees has been resolved. The two previous Supreme Court cases illustrated that several Justices would like to change the current precedent. In 2012, writing for the majority opinion in Knox v. Service Employees International Union, Local 1000, Justice Alito suggested that with regard to compulsory agency fees, “our prior decisions approach, if they do not cross, the limit of what the First Amendment can tolerate.” Next, in the 2014 Harris v. Quinn decision, Justice Alito used even stronger language to voice opposition to the precedent on agency fees: “Abood failed to appreciate the difference between the core union speech involuntarily subsidized by dissenting public-sector employees and the core union speech involuntarily funded by their counterparts in the private sector.” Union opposition groups took these decisions as a signal that the time was ripe to find a case that directly challenged the Abood precedent on First Amendment grounds.

Friedrichs became that case. The Supreme Court granted certiorari to hear arguments on whether compulsory agency fees violate the free speech rights of non-member public employees. Justice Scalia was considered to be the swing vote in this case until reports emerged that the questions he asked during oral arguments indicated he did not support the Abood precedent. The New York Times even ran the headline, “Supreme Court Seems Poised to Deal Unions a Major Setback.” However, after Justice Scalia’s sudden passing in February, the remaining justices were left deadlocked on the issue. Rather than let the case sit indefinitely until a new justice was appointed, the Court issued a divided 4-4 opinion, which by default lets the Abood precedent stand.

However, the issues of whether compulsory agency fees are constitutional has not been definitively settled. In confirmation hearings for the new justice, the public should expect to hear Senators asking questions that allude to this first amendment issue. Also, expect a case with similar facts to arrive on the Supreme Court’s docket once a new justice is appointed.

Apr 04

TYSON FOODS, INC. v. BOUAPHAKEO

By Courtney Sokol.

On March 22, in Tyson Foods, Inc. v. Bouaphakeo, the U.S. Supreme Court, in a 6-2 decision, upheld an Eighth Circuit ruling that certified a group of workers at Tyson Foods as a class under both a Rule 23(B)(3) class action and a Fair Labor Standards Act of 1938 (FLSA) collective action. Tyson Foods did not pay its employees for time spent “donning and doffing” necessary protective gear. The employees argued that Tyson Foods violated FLSA and the Iowa Wage Payment Collection Law by not paying appropriate compensation for time spent putting on and taking off the protective clothing at the beginning and end of the day and lunch break. While the central issues addressed by the Court address certification of a class with non-identical members, of which many were uninjured, the decision offers broader implications for the strength of worker protections.

Delivering the opinion of the Court, Justice Kennedy noted the grueling and dangerous conditions that Tyson’s workers experienced along with the necessity of such gear. Until 1998, the workers were paid under a system called “gang-time,” where employees were compensated for time spent only at their workstations. This time did not include when they were required to put on or take off protective gear. In response to a federal-court injunction, Tyson in 1998, began to pay all employees for an additional 4-minute period called “K-code time.” The four-minute period is the time estimated by Tyson for how long employees needed to put on their gear. However, in 2007, Tyson stopped K-code time, and instead only paid some employees beyond their gang-time wages for time spent dressing and undressing.

In response to this change, the employees filed suit in the United States District Court for the Northern District of Iowa, alleging FLSA violations. FLSA requires that a covered employee who works more than 40 hours a week receive excess time worked “at a rate not less than one and one-half times the regular rate at which [the employee] is employed.” 29 U.S.C. §207(a). Additionally, FLSA requires employers to pay employees for activities which are integral and indispensable to their regular work, even if the work does not occur at the work station.

Here, the employees argued that putting on and taking off their protective gear were integral and indispensable to their hazardous work, and therefore, compensation for such is required by FLSA. The employees raised the same claim under the Iowa Wage Payment Collection Law, which includes FLSA mandated overtime.

At trial, the employees had to prove that they worked 40 hours or more per week in order to qualify for FLSA overtime. Respondents proposed to bifurcate proceedings by requesting that the District Court address first, whether the time spent preparing their protective gear was compensable under FLSA and how long the activity took on average; and second, a statistical methodology be used to determine how much each employee would recover.

Tyson Foods did not move for a hearing regarding either of the above issues raised by the employees, but instead challenged the class certification under FRCP Rule 23(B)(3) and FLSA collective action. Tyson Foods argued that the varying amounts of time it took employees to don and doff different protective equipment made the lawsuit too speculative for class-wide recovery.

The Court turned to its decision in Anderson v. Mt. Clemens to explain that when employers violate their statutory duty to keep proper records, which prevents employees from establishing how much time they spent doing uncompensated work, the “remedial nature of [FLSA] and the great public policy which it embodies . . . militate against making” the burden of proving uncompensated work “an impossible hurdle for employee[s].”

The court held that the class members were joined under a common question, which satisfies the requirements for a class-action suit irrespective of differences among the members. Although the case was decided on procedural grounds, Kennedy’s majority opinion put great emphasis on the danger of the Respondent’s profession paired with the necessity of the protective gear. In evoking the remedial nature of FLSA, the Court is seemingly united behind pro-labor sentiment.

Mar 07

Supreme Court Upholds ERISA Preemption of State Recording Laws

By Ross Pollack.

On March 1, in Gobeille v. Liberty Mutual Insurance Co., the U.S. Supreme Court upheld a Second Circuit decision finding that a Vermont law requiring self-covered entities to report healthcare information was preempted by the Employee Retirement Income Security Act of 1974 (“ERISA” or the “Act”). At issue in the case was whether states could require self-funded and self-insured healthcare plans covered by ERISA (“covered entities”) to submit members’ information regarding healthcare claims and services for inclusion in a statewide database. After Vermont demanded this information from a third party insurer, Liberty Mutual, a plan covered by ERISA, asserted that the law should be preempted by ERISA.

Delivering the opinion of the Court, Justice Kennedy first noted the sweeping nature of the statute’s language, which explicitly preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” 29 U. S. C. §1144(a). He then moved to the Court’s recent jurisprudence, which limits the potentially all-encompassing statute to state laws that either (1) directly reference ERISA plans or (2) indirectly interfere with the core functions of ERISA plans. See, e.g., New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 650 (1995) and Egelhoff v. Egelhoff, 532 U.S. 141, 148 (2001).

Next, the Court held that because ERISA requires covered entities to submit similar types of data to the Secretary of Labor, such reporting is “central to, and an essential part of, the uniform system of plan administration contemplated by ERISA.” Thus, the Court ruled that Vermont’s law was preempted because it interfered with a core function governed by ERISA. Justice Ginsburg dissented, arguing that the law was not burdensome enough on covered plans to be preempted by ERISA.

The most intriguing part of the case was the concurrence written by Justice Thomas. He argued that ERISA’s preemption clause may be entirely unconstitutional. He contended that §1144(a) of the Act violated the Constitution’s Supremacy Clause because it regulates matters that are not interstate commerce even though they relate to ERISA. Should the Court adopt this view in future ERISA preemption cases, there could be a dramatic shift in the regulation of covered plans.