A Bad Day for Labor

by Erica Intzekostas on June 30, 2014

In two 5-4 decisions today, the Supreme Court chipped away at the rights and power of employees and public sector unions. Both decisions, although narrowly drawn, will likely open the door to additional lawsuits that will attempt to further weaken labor rights.

In the Hobby Lobby case, the Court created another exemption to the Affordable Care Act, holding that closely-held corporations can refuse to cover birth control as part of their employee group healthcare plans for religious reasons, essentially extending first amendment religious freedom protections to corporations through their owners. Although the Supreme Court attempted to make its decision apply to a very narrow set of circumstances, it will likely serve as a pathway to further exemptions (and possibly even in areas other than healthcare) based on the religious beliefs of the owners of a company. Some of the other ACA exemptions include prisoners, undocumented immigrants, Native Americans, very low-income individuals, and employers with fewer than 50 employees.

In Harris v. Quinn, the Court ruled that a group of non-union home health care employees in Illinois could not be forced to pay fees to cover the cost of collective bargaining (often called “agency fees”), as required by Illinois law, even though they financially benefited (quite significantly) from the collective bargaining agreements that were made possible by the union who represented their interests. Although the rationale used by the Court in reaching its decision was that forcing these individual employees to pay violates their first amendment freedom of speech and association rights (and thus seemingly protecting the rights of individual laborers), it ultimately undermines the power of the union that represents them because it chips away at the union’s power to collectively bargain. The Illinois law, which made possible by a 1997 Supreme Court case, Abood v. Detroit Board of Education, prevents non-union member public sector employees from being able to essentially get a free ride (i.e. not paying dues but benefiting from the higher wages bargained for by the union — because the law requires unions to cover all employees in their collective bargaining agreements). A majority of states have similar laws. The Supreme Court did not go so far as reversing the 1977 case by saying that such state laws are unconstitutional. Rather, the Supreme Court held that the particular group of employees that were the plaintiffs in this case were not actually public sector employees because they are hired by individual patients and work inside those patients’ homes. That said, the opinion leaves little doubt about the majority’s disdain for the Abood case. It will not be surprising if the ruling, and Justice Alito’s harsh criticism of the Abood case expressed in the majority’s opinion, encourages anti-union groups to seek other ways to further undermine unions.

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