This morning the Supreme Court issued its long-awaited opinion in Janus v. AFCSME , holding that requiring public sector employees to pay fair share fees to unions violates the First Amendment. As we discussed in our prior posts , a fair share fee (sometimes called an agency fee) is a fee that non-union members must pay to the union to cover the expenses incurred by the union while representing bargaining unit employees.

Until this morning, fair share fees were legal under most state laws, and required by many collective bargaining agreements. This was true despite the fact that the employees paying the fees had intentionally opted not to join the union, because the union still had a legal obligation to represent all employees within the bargaining unit, regardless of whether the employee is a member of the union. These laws became common after the Supreme Court issued its 1977 opinion Abood v. Detroit Bd. of Educ., which held that fair share fees were constitutional and maintained labor peace by preventing “free riders.”

In recent years, there have been increasing challenges to the constitutionality of fair share fees and the validity of Abood. Back in 2014, we discussed the Supreme Court’s ruling in Harris v. Quinn. The Court in Harris began to question the validity of Abood and its supporting rationale. As we noted, the Court came close to overruling Abood but ultimately decided Harris on its specific facts. It held that collection of the fair share fees in the specific context (personal assistants in Illinois) violated the First Amendment. In 2016, another challenge made it to the Court, but we got a 4-4 split decision, due to Justice Scalia’s passing shortly after oral argument

Now, with Justice Gorsuch on the bench, as was foreshadowed in Harris, the Court ruled that fair share fees violate public sector employees’ right to free speech. As a basic premise, the Court recognized that the right to free speech includes the right to refrain from speaking at all. Thus, “[c]ompelling individuals to mouth support for views they find objectionable violates the cardinal constitutional command, and in most contexts, any such effort would be universally condemned.” Accordingly, forcing employees to pay fair share fees (i.e., compelling employees to speak in support of the union when they may otherwise remain silent) violates the First Amendment. Finally, the Court overruled Abood, dissecting and dismantling its labor peace and free rider justifications.

The end result of the Court’s holding is clear: “States and public-sector unions may no longer extract agency fees from nonconsenting employees. . . . Neither an agency fee nor any other payment to the union may be deducted from a non-member’s wages, nor may any other attempt be made to collect such payment, unless the employee affirmatively consents to pay.”

The Court recognized that the loss of these fair share payments would cause unions to “experience unpleasant transition costs in the short term,” but it did not think that such a challenge justified continued constitutional violations. Rather, it pointed out that such a disadvantage must be weighed against the considerable windfall that unions received in fair share fees for the 41 years after Abood.

Surely, there will be many questions that follow and we will be here to help our public sector clients navigate this new territory.

We have been talking about the National Labor Relations Board’s assault on Employee Handbooks, policies and rules for years now.  Frankly, precious few of these posts have contained good news for employers.  See for yourself!

Then, yesterday, in a 3-2 vote (split along party lines) a Republican majority overturned the NLRB’s 2004 Lutheran Heritage standard governing facially-neutral workplace rules, policies and handbooks.  Under the old standard, the Board could find that an employer violated the National Labor Relations Act simply by maintaining a policy that could be “reasonably construed” by an employee to prohibit the exercise of rights protected by the Act – even if the employer never applied it to restrict employee rights!  What the Board put in that “reasonably construed” category did not seem reasonable to many, many employers and, in my opinion, was extremely one-sided.

In announcing the new standard, in a decision involving the Boeing Company the majority announced that it was providing greater clarity and criticized the prior Board for invalidating “common sense rules and requirements” under the Lutheran Heritage standard.

Not only is there more clarity, there is balance.  Rather than considering only how the facially-neutral policy, rule or handbook provision could be “reasonably construed” the Board will consider two things:

  1. The nature and extent of the potential impact on employee rights protected by the NLRA and
  2. The employer’s legitimate justifications associated with the rule

The Board also categorized the rules:

  1. Category 1. Lawful rules, where the rule does not expressly prohibit or interfere with NLRA rights or the potential adverse impact on protected rights is outweighed by the employer’s justifications for the rule.  Examples offered by the Board in this category are the no-cameras in the workplace rules and the civility rules.  Remember this one on courtesy?  Please and thank you (you can say that now)!
  2. Category 2. Rules which require individualized scrutiny to determine whether any adverse impact on NLRA rights is outweighed by the employer’s legitimate justifications.
  3. Category 3. Unlawful rules that prohibit protected conduct and the impact on those employee rights is not outweighed by employer justification.  Here, is where the policies prohibiting employees from discussing wages and benefits would fall.

This is good news, for union and non-union employers alike.  Seems that the NLRB will be focusing less on policing innocuous handbook policies and, perhaps, the pendulum will begin swinging back.

In City of Allentown, the Pennsylvania Supreme Court ordered the City to implement an interest arbitration award which contained (among modifications to wages, sick leave, vacation, pension and overtime) a minimum staffing requirement of 25 firefighters per shift.

As every public sector employer and practitioner knows, a municipality has no obligation to bargain with a union representing police officers or firefighters over inherent managerial policy (overall budget, standards of service, organizational structure, selection and direction of employees).  I mean, it says so, right there in the Pennsylvania Labor Relations Act!  The PLRA is forever linked to Act 111, which makes it mandatory for municipalities to bargain with police and fire unions over the terms and conditions of employment (compensation, hours, working conditions, other benefits).

Act 111 also provides the mechanism for municipalities and unions to submit their disputes to binding interest arbitration, but only those disputes which concern mandatory subjects of bargaining.  An arbitration panel that issues an award on a topic that is a managerial prerogative exceeds its powers.

But, what happens when a dispute concerns both a mandatory subject (i.e. it is rationally related to the terms and conditions of employment) and a managerial policy (i.e., budget or direction of personnel)?  Well, then the question is whether bargaining with the union over the issue would unduly infringe on the municipality’s essential managerial responsibilities.  That is the analysis that the Supreme Court applied to the minimum staffing dispute facing the City of Allentown and the International Association of Fire Fighters Local 302.

Prior case law left us with this:  the total number of firefighters that a municipality employs is a matter of managerial prerogative and a municipality need not bargain over that number.  An arbitration award that mandates a total complement number is illegal.  Prior case law also left us with this:  the number of firefighters actually assigned to a particular station or to a piece of fire equipment is a mandatory subject of bargaining, as it is rationally related to the safety of firefighters, i.e. a working condition.  So, an arbitration award that mandates the minimum crew on each rig is perfectly legal.

Confused?  Citing safety concerns and relying heavily on arbitration testimony that increased staffing leads to a safer working environment and a decrease in injuries and physical stress, the Court concluded that minimum staffing had a “direct and significant impact on firefighter health and safety” and did not unduly infringe on the City’s financial burdens.

More directly, the Court (currently comprised of 1 elected Republican, 5 elected Democrats and 1 Republican appointed by a Democrat Governor) did little more than pay lip service to how minimum staffing leads to increased overtime, or how increased overtime leads to increased pension expenses, or how increased pension expenses lead to unfunded pension liabilities, or how unfunded pension liabilities are crippling so many municipalities across the Commonwealth.

So what now? It appears that the overall complement is still a decision left for the public employer; however, once that number is set, then the parties must negotiate regarding the number of employees assigned to each shift.  Certainly, this leaves many questions unanswered.  And certainly, the impact on municipal budgets, already strained and struggling, will be significant.

Remember this one about the employee fired for legal drug use? How about this one? It seems that we have been talking more about the impact of legal marijuana use on employment since 2012, when voters in Colorado and Washington lit up (pun intended) the blogosphere, with their landmark votes to legalize its recreational use.  Since then, many states have legalized both recreational and medicinal use.

The Colorado Supreme Court on Monday (in a 6-0 decision) ruled in favor of Dish Network LLC, finding that the Company did not violate the state’s “lawful activities statute” when it terminated a quadriplegic in 2010 for a positive drug test, because the employee’s medical use of marijuana was lawful under state law.  That’s good news for national employers that, like Dish Network, are committed to complying with federal drug statutes.

Legalization hasn’t hit Pennsylvania just yet.  Last month, the Pennsylvania Senate overwhelmingly approved Senate Bill 3, which would allow registered patients to use medical cannabis and to safely access it from regulated dispensaries.  If passed in its current form, SB3 would prohibit discrimination in employment against a cannabis access cardholder and an employer could take that status into account “only if the employer can prove the employee is abusing or misusing the employee’s medical cannabis on the premises of the place of employment during ordinary hours of employment or if failure to do so would cause an employer to lose a licensing benefit under Federal law or regulation.”

So far, we haven’t recommended that Pennsylvania employers abandon their zero-tolerance drug testing policies.  Instead, we have cautioned that where an employee’s use of the substance is lawful (recreational or medicinal), there may be a challenge if the employer elects to proceed with termination. The good news is, for now, some early challenges are being turned back.

Again, in its current form, SB3 provides that a positive drug test “may not be considered by an employer unless the individual unlawfully used, possessed or was impaired by the medical cannabis while on the premises of the place of employment or during the hours of employment.”  So, it seems that a positive test result (pre-employment or random) would trigger a need for further investigation, or an interactive process akin to that under the Americans with Disabilities Act.  The employer would need to ascertain whether the applicant or employee is a “cannabis access cardholder” and whether the employee was impaired while on the premises or during working hours.

Stay tuned . . .