The U.S. Supreme Court this morning in Janus v. AFSCME (download here) reversed 40 years of labor law precedent and concluded that  requiring public employees to pay “agency fees” for labor unions that they don’t want to belong to violates the First Amendment of the U.S. Constitution.

Previously, prior cases have banned forcing public sector employees from joining a union and paying union dues. But a number of states permitted union contracts that required employees to still pay an “agency fee” to cover the costs of collective bargaining.

In its 5-4 decision, the U.S. Supreme Court rejected this — leaving public sector unions, particularly in states like Connecticut, to potentially lose significant funds from employees who say that they want no part of their salary to go towards unions.

Given that this blog covers more employment law than labor law, and focuses more on private-sector than public sector, I’m not going to do a deep-dive today into the case. The SCOTUSBlog is one good resource. 

But my labor law colleagues at my firm have spending the morning looking into this.  Here’s the quick recap posted this morning on the Employment Law Letter blog and the impact to Connecticut public-sector employers.:

The immediate effect of the Court’s decision is that agency fee (or “fair share” fee) provisions in collective bargaining agreements are invalid. The Court specifically states that agency fees and similar payments may not be deducted from an employee’s pay unless the employee has expressly consented to the deduction.

This statement suggests that employers should stop deducting agency fees unless and until an employee has affirmatively consented.

Because Connecticut law requires express employee consent for payroll deductions, Connecticut public sector employees have likely already consented to the deduction of agency fees.

However, public sector employers should be prepared for employees approaching them and requesting that the agency fee deductions be stopped, effectively withdrawing their consent.

Justice Alito’s decision is emphatic in this point and the significant dollars at stake:

We recognize that the loss of payments from nonmembers may cause unions to experience unpleasant transition costs in the short term, and may require unions to make adjustments in order to attract and retain members. But we must weigh these disadvantages against the considerable windfall that unions have received under Abood for the past 41 years. It is hard to estimate how many billions of dollars have been taken from nonmembers and transferred to public-sector unions in violation of the First Amendment. Those unconstitutional exactions cannot be allowed to continue indefinitely.

Watch my firm’s blog for more details on this critical decision in the public-sector.

Lucan_J_WebMy colleague, Jarad Lucan, returns today to recap a notable labor case that the Connecticut Appellate court decided this week (but officially released on March 24, 2015).  It’s worth a read, even for non-union types, if only to show the importance of consistency in arguments.

A recent Appellate Court case, AFSCME, AFL-CIO, Council 4, Local 2405 v. City of Norwalk et al., reminds us that there are some subtle textual differences between the National Labor Relations Act (NLRA) and the Connecticut Municipal Employee Relations Act (MERA) that municipal employers and labor practitioners should keep in mind.  The case also reinforces the notion that consistency in the arguments a party makes before a court is vital to the potential success of those arguments.

I will give you a bit of a warning though: the decision includes a very technical analysis. But  I will try my best to summarize the key points without losing everyone’s attention.

It is common practice for Connecticut courts and the State Board of Labor Relations (SBLR) to look to the NLRA when interpreting and applying the State’s employee relations acts, including the MERA.  There is certainly nothing unusual about this practice, and given the similarities between the Federal and State acts, it simply makes sense.

For example, Section 8(a)(1) of the NLRA and Section 7-470(a)(1) of the MERA prohibit employers from interfering, restraining or coercing employees in the exercise of their rights guaranteed by either act.  In addition, both Federal and State law prohibit employers from discriminating, harassing, or retaliating against employees who engage in protected activity.  While this later prohibition is specifically set forth in the Section 8(a)(3) of the NLRA, the MERA does not include a statutory analogue.  Instead, the SBLR has interpreted Section 7-470(a)(1) to encompass this prohibition.

Good so far?

When a union raises a claim that an employer has discriminated, harassed, or retaliated against an employee because of his or her protected activity, the central question is whether any adverse employment action taken against an employee was motivated by anti-union animus.   This means that the employer’s intent is generally at issue.

In order to determine the employer’s intent, a burden-shifting framework first established by the National Labor Relations Board (NLRB) in its Wright Line decision is utilized at both the Federal and State level.  Under this framework, the union must make a prima facie showing that an employee’s protected activity was a motivating factor in the employer’s adverse employment action against the employee.

The elements of this prima facie case are (1) the employee engaged in protected activity; (2) the employer knew of the employee’s protected activity; and (3) the employer acted as it did on the basis of anti-union animus.

In contrast, when a union raises a claim that the employer’s actions simply tend to have the effect of coercing or interfering an employees exercise of their rights, whether they are actually coerced or not, the employer’s intent is not at issue and therefore the Wright Line standard is not applicable.  Still with me?

This seems straightforward enough when dealing with claims brought under the NLRA.  Claims that an employer discriminated or retaliated against an employee because of that employee’s protected activities  are brought under Section 8(a)(3) of the NLRA, and all parties understand that the Wright Line standard will apply.  Claims that the employer’s actions simply coerced or interfered with an employee’s exercise of his or her rights (for instance the implementation of a social media policy that prohibits an employee from making disparaging comments) are brought under Section 8(a)(1), and all parties generally understand that the Wright Line standard is not applicable.  In other words, two different sections are in play.

Under MERA — Connecticut’s law — however, both discrimination and retaliation claims and coercion and interference claims are brought under the same statutory section, Section 7-470(a)(1).  Thus, it is up to the parties, particularly the party bringing the complaint, to identify under what theory the case will be litigated.  That is precisely the issue in the City of Norwalk case.  I know it  took us a while, but I think we got there in one piece.

Here’s where the new case gets interesting.  In that case, the Union claimed that the Supervisor of the  City’s Department of Public Works retaliated against employees in the Department because of their protected activities.  Thus, when the Union presented its case to the SBLR, the Union argued that the employer’s intent was at issue and the case should be analyzed under the Wright Line standard.  That is exactly what the SBLR did.  Under that framework, the SBLR determined that the City did not subject the employee to any adverse employment action and therefore the Union failed to establish that the City acted on the basis of anti-union animus.   The SBRLR dismissed the complaint.

The Union appealed the case to the Superior Court, which upheld the SBLR’s decision as being supported by substantial evidence.  On appeal, the Union shifted gears and argued that the SBLR applied the wrong legal standard in deciding whether it met its prima facie burden.  Specifically, the Union contended that it may meet its obligation to prove anti-union animus merely by demonstrating that the employer’s conduct coerced employees from engaging in protected activities.

The Appellate Court rejected this argument stating, “[b]y electing to cast its claims as falling under the Wright Line standard before the [SBLR], the trial court, and this court, the union may not attempt to import a test that is fundamentally inconsistent with the Wright Line standard. . . . The [SBLR] decided the case on the theory on which the union advanced it.  Accordingly, the [SBLR] cannot now be faulted for not applying a standard that is inconsistent with the overall standard the union urged it to use in adjudicating its claim of discrimination.”

For employers and their attorneys, it is critical to understand both the differences in state and federal law and fashion a defense to the particular claim that is being brought. Here, the procedural posture of the case allowed the employer to prevail — merits of the underlying case notwithstanding.