By Craig P. Alexander, Esq.

On Monday, June 30, 2014 the United State Supreme Court issued its ruling in the important case of Harris v. Quinn. While the case is limited in its ruling and scope, it is a critical one where the Court boxed in the ever expansionist reach of government employee unions.

Background:

Mrs. Pamela Harris is the mother of a severely disabled adult son who needs constant care due to his disabilities.  A federal Medicaid program funds many state run programs that provides financial assistance by paying caregivers for these individuals who reside at home rather than in a more expensive nursing care facility.  Most often it is a family member who is providing this care and who is being paid to do so under this program.  The State of Illinois has such a program and by law declared these caregivers to be state employees but without any right to benefits, not subject to any control as to their time, place or methods of provision of care services (and provides that the caregiver is solely responsible to and is an at will employee of the customer (the disabled person)) and the State is immune from any liability to the disabled customer for any home caregivers negligence or intentional conduct.

In 2003, first by executive order then legislation, the caregivers were forced to join a union, the SEIU, and pay dues, which the State withheld from their Medicaid payments.  Mrs. Harris and others challenged this forced unionization via this case.  She lost at the federal trial court and intermediate appeals court levels with those courts relying on a past U.S.S.C. court case Abood v. Detroit Bd. Of Ed. 431 U.S. 209 (1977).  The Supreme Court, noting the importance of the factual situation described above, ruled in Mrs. Harris favor.

Limited Ruling:

The Court (Justice Alito) performed a detailed analysis of the reasoning behind the Abood case, which upheld the unionization of full time government employees (there teachers) who were directly the employees of the Board of Education.   Justice Alito and the rest of the majority found that full time direct state employees are vastly different factually to what I would call akin to in-home independent contractors and limited the extent of the Abood ruling to full time direct government employees.  Further to extend the finding in Abood upholding required union membership (or agency fee paying) to this situation was a reach to far.  The Court stated:

“If we allowed Abood to be extended to those who are not full-fledged public employees, it would be hard to see just where to draw the line, and we therefore confine Abood’s reach to full-fledged state employees.”

Once the Court found the holding in Abood was not controlling in this situation, it then did an analysis of the facts of this situation under “generally applicable First Amendment standards.”  Relying on cases like Knox v. Service Employees 567 U.S. ___ , 132 S. Ct. 2277 (2012), the Court ruled that the justification of preventing “free riders” benefiting from union negotiations for its members applying to those not paying for union dues / expenses, did not apply in the context of the Harris facts (in-home workers as described above).

Once again, the Court noted several significant differences between the regular full time government employee and the in-home caregivers the Illinois statute attempted to force unionization upon.   For example, one justification cited by the unions is “labor peace” in not having conflicting unions vying for membership in the same union shop locations.  The Court noted that in-home caregivers are not in one place but always in the customers’ homes (which are often the caregivers homes’ as well).  Space does not permit me to go through all of the Court’s reasoning here.  The Court ordered that union dues and agency fees can no longer be withheld from a home caregivers’ Medicaid payments if they object.

Implications from this Ruling:

1. The Court effectively blocked forced government unionization of recipients of funds under government programs like Medicaid where the person receiving the payments is not a true “government” worker where the state agency controls the time, method and means of employment.   This is especially true where the legislature declares the “employee” is not entitled to any typical government employee benefits like pension rights.  The Court was very specific about the limited nature of the “employment” between the State of Illinois and the home caregiver.

2. The Harris decision is not banning forced union membership (or agency payments to a union by those who do not join the union) for traditional full time government workers such as public school teachers, CHP officers, firefighters, etc.   This is not a “right to work” decision for all government employees.

3. However, a close reading of the Harris majority’s analysis of the Abood decision notes the current majority’s concerns that the policy and practical implications of Abood’s approval of closed shop laws for government employees.  Thus the majority justices may be open to a challenge from a more traditional full time government employee.

4. Elections matter – the Harris decision and the Burwell v. Hobby Lobby case (both critically important First Amendment cases decided on the same day) were five to four votes that included the swing vote of Justice Kennedy.  All of the four “liberal” justices voted in the dissent to uphold the forced unionization of the home caregivers in Harris (and to deny religious expression as argued in the Hobby Lobby case).  Thus the outcomes of the elections in the fall for control of the U.S. Senate and the White House in 2016 are critical as the make up of the Court could be the deciding factor on these important issues one way or another in the near future.

To read the Court’s opinion go to: (http://www.supremecourt.gov/opinions/13pdf/11-681_j426.pdf).

Craig P. Alexander, Esq. is an attorney at law whose office is in Dana Point, CA.  Craig has been a member of the California Bar Association since December 1987 and he practices law in the areas of insurance coverage, construction defects, general business litigation and civil litigation.  Craig is a former elected member of the Orange County Republican Central Committee and a form Vice President with the California Republican Assembly.  Craig and his wife Pam enjoy long walks on the beach especially if that beach is located in Hawaii!  He can be reached at cpalexander@cox.net

By Craig P. Alexander, Esq.

Many of you reading this were supporters of Proposition 32 in 2012 which, unfortunately, lost at the polls after the public employee unions outspent our side to defeat this reform of campaign finance regarding unions and corporations taking of their member’s dues for political purposes.   One of the chief architects of the Prop. 32 initiative and campaign is our longtime friend Mark Bucher, Esq.  Not one to withdraw from the fight for fiscal sanity in California or to just accept defeat, Mark joined with others to start the California Policy Center.  One of CPC’s missions is to inform citizens of California of the dangers of unfunded pension liabilities and the huge power of government employee unions over our state and local governments.

An important effort of the CPC (http://californiapolicycenter.org/) is the Transparent California project (http://transparentcalifornia.com/) .  Want to know the compensation of a particular government employee?  Want to know what the average salary and benefits of a particular city or county or special district employees are?  California law provides that the compensation of public employees is public record and members of the public (you and I) are entitled to obtain this information.  Mark and the CPC volunteers and staff have been making public records requests to many cities, counties and special districts under the California Public Records Act Request statutes and obtaining that information.  Because the law (the California Government code and court decisions on that) is so strongly in favor of disclosure, the CPC has been having great success in obtaining this information.  And since it is public record, you can find this information at the Transpartentcalifornia.com web site.

You will be unhappily surprised to find out how, in many, many instances, you are paying “your” public employees both now and when they retire –on the taxpayers’ dime – far more than you might imagine.  From the sampling I have taken, it would appear that there are hundreds of thousands of hard working public employees who will retire with solid but not extravagant retirement salaries and benefits.  However, there are and will be many thousands of retired public employees who will be in what I and others are calling the $100,000 plus club!  And that is only their salary – that does not include health care benefits.

Let me give you some examples:  The South Coast Water District (which covers most of Dana Point and part of San Clemente and South Laguna Beach) had 84 full time employees in 2012.  The average base salary for all 84 full time employees was $79,337.05 and the average pension costs were $13,424 per employee.  The average total compensation for those same 84 employees was $118,743.10.  However, at the SCWD there are 14 employees who are in the $100,000 plus club and their averages are quite different.  The average base salary for the lucky 14 was $132,692.07 and the average pension costs for these management employees was $22,755.00.  The total average compensation was $194,740!

Over at the Orange County Fire Authority the problem is on a much larger scale.  For 2012 there were approximately 1,518 full and part time employees.  Even counting all of the part time employees, the average base salary was $69,634.26.  The average employer paid pension cost was $40,447.12 per employee.  Average per employee health care cost:  $11,351.71.  The average per employee for total compensation was $159,676.99.

But jump to the $100K club at the OCFA and you find there were 285 persons at the OCFA with base salary take home pay (before taxes) of over $100,000.00.  The average base salary for members of the 2012 $100K club was $118,564.58.  The average employer share of these 285 employee’s pensions:  $65,860.82.  The average health care costs in 2012 were $15,282.39.  And the total compensation average for these lucky $100+ club member employees was $260,447.23.

All of these compensation figures do NOT include future payout requirements for retiree costs, especially retire health care costs which, logically, should only rise as retirees grow older needing more health care.

Of course the fundamental problem with all of these defined benefit plans is you and I, the taxpayers, are on the hook for each and every penny of the retirement pay and benefits.  Rather than the public employee having either a say in how their retirement funds are invested (like an IRA or a 401k) or any risk for their good or bad investment choices, the invoice for any shortfalls (including bad investment decisions by “retirement boards”) is on us the taxpayers.

It is hoped that as more of the voting public actually are able to and do look up the particular cost per employee and overall for each public entity, the voters will be alarmed and take corrective action before it is too late.  This has already begun to happen.  In the City of Sierra Madre the City Council placed on the ballot a measure for the citizens to pay an additional tax to support increases in salaries and benefits for firefighters.  Of course the council members tried to sell this additional tax as necessary to keep good firefighters on the force.  However, local citizens, using the Transparent California web page discovered that the city paid health care costs were in excess of many of the citizens’ annual salaries!  When this “uncomfortable” and “inconvenient” fact came to light, the measure was defeated at the polls by voters who said enough is enough!

I encourage you to go to the Transparent California web site (http://transparentcalifornia.com/) and check out the site and find out what some of your publically employed friends receive in salary and benefits.   You might find the answers eye opening and prompt you to have a serious conversation with your locally elected officials – because this problem exists at the local level not just in Sacramento.

Craig P. Alexander, Esq. is an attorney at law whose office is in Dana Point, CA.  Craig has been a member of the California Bar Association since December 1987 and he practices law in the areas of insurance coverage, construction defects, general business litigation and civil litigation.  Craig is a former elected member of the Orange County Republican Central Committee and a form Vice President with the California Republican Assembly.  Craig and his wife Pam enjoy long walks on the beach especially if that beach is located in Hawaii!  He can be reached at cpalexander@cox.net