In 2018 the Supreme Court handed down a few big wins for the small business community. On the labor front we were pleased that the Court agreed with NFIB that the National Labor Relations Act does not prohibit arbitration agreements in employment contracts, and that such agreements are protected by the Federal Arbitration Act. Likewise, we celebrated another major victory with the Supreme Court’s decision in Janus v. AFCME—which held that government cannot compel public sector employees to provide financial support to labor unions. NFIB Small Business Legal Center’s Executive Director, Karen Harned, explained why Janus was such a meaningful decision for the small business community (even though the case concerned public employee unions) in this SCOTUS Blog post.
So, what’s on the docket for 2018?
At present the Supreme Court is set to decide at least three vital cases in 2019—one raising an important issue for small business landowners, another of importance to manufacturers, and another of broad importance to the administrative state. But, so far, the Supreme Court’s labor docket for the 2018-19 term is surprisingly sparse.
Yet there are some interesting issues percolating. And we’ve asked the Supreme Court to take-up a few notable employment/labor cases:
Reliance on Salary History under the Equal Pay Act
We are urging the Supreme Court to grant certiorari in Fresno County Superintended of Schools v. Rizo—a case out of the Ninth Circuit that shocked employers when it held that pay disparities may not be justified by wage or salary history, a decision that triggers unforeseen liabilities on employers throughout the west who have relied, in good faith, on prior case law. We’ve noted that this decision created a major conflict in the court of appeals and put employers in a very difficult position.
Compulsory Public Unionization of Private Service Providers
We filed a brief in Bierman v. Dayton and argued that the Court should grant certiorari to clarify that the First Amendment protects private sector service providers from forced association with public employee unions. This is an increasingly important issue nationwide as more states enact laws seeking to compel unionization of home daycare and Medicaid providers. And now the First, Seventh and Eighth Circuits have upheld these regimes in a manner that would invite similar compulsory union affiliation for any service provider accepting public money as payment, or any other discretionary government benefit for that matter. What is more, states might seek to compel affiliation with public employee unions for private businesses providing services to consumers just as well if there are no meaningful First Amendment protection against compulsory association.
One might ask: what’s the big deal if these guys aren’t being compelled to provide financial support to the unions? But while the Supreme Court’s decision in Janus (and Hill v. SEIU) makes clear that its unconstitutional to require dissenting workers to provide financial support, the question remains as to whether there is a First Amendment problem with a state law requiring that all covered service providers must affiliate with a union. We had thought the Supreme Court’s decision in Hill made clear that it is impermissible to treat private sector service providers as “public employees” for the purpose of compelling their relationship with a public employee union; however, the trend in the lower courts has been to limit Hill strictly to its facts, and to deny First Amendment rights to independent service providers who do not want the union speaking for them.
That is the problem in a nutshell. Regardless of whether a service provider declines union membership and withholds all financial support, Minnesota, Illinois, Massachusetts and other states say that—as a matter of law—the views expressed by the public employee union is attributed to both union and non-union members. This is especially problematic under the First Amendment because public employee unions speak on inherently political matters. Its therefore boggling to the mind to think that First Amendment protections should be denied.
What is more, there are real practical implications here. As we argued in our filing in support of the petition in Bierman, a public employee union may very well take positions adverse to the interests of dissenting members within a compelled exclusive representation group. For example, if New York were to collectivize landscapers providing services to state and local government, the union might well advocate for greater public spending on projects within more urban areas, to the disadvantage of landscaping companies in more rural communities.
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For more on what we are doing on labor issues, check-out our recent post: “Labor Issues Dominate NFIB Legal Center’s 2018 Agenda.”
January 20, 2019
