248-409-1900 dburke@mi-worklaw.com

Recess Appointment Ruling Limits Presidential Power 

By:  Rhonda Armstrong – 7/1/14

          Another example of President Obama pushing his pro-union agenda by non-traditional means (as I last mentioned in a blog article dated 6/19/14), was highlighted last Thursday. Specifically, in NLRB v Noel Canning, No. 12-1282 (June 26, 2014), a much anticipated decision, the Supreme Court of the United States decided that three recess appointments made by President Obama to the National Labor Relations Board were invalid. In short, the high court found that the Senate was not really on “recess” (it being only a 3-day hiatus between sessions) and that President Obama “lacked the power” to make the appointments.

          Obama’s recess appointments drew immediate scrutiny when first made. Obama failed to get three nominees (Sharon Block (D), Richard Griffin (D), and Terence Flynn (R)) confirmed under the usual process which requires Senate approval. Despite that failure, Obama named the same three as recess appointments on January 4, 2012. As is inevitably the case with a Democratic President, the Board is controlled by a Democratic majority. The recess appointments stacked the Board with members that were ready and willing to push Obama’s pro-union/employee agenda farther than in recent memory.

          So, what does the Noel Canning decision mean? Unfortunately, it is not a HUGE victory for employers. Here is why:

          On the one hand, since the Board must have a three-member quorum to issue decisions, any opinions where the invalid appointees joined the majority and decisions which required the presence of one or more of the invalid appointees for the necessary quorum will likely be nonbinding. The good news is that this includes some very controversial cases, such as:

  • Social Media. The NLRB issued its highly controversial case finding an employer’s social media policy prohibiting, among other things, defamation as overly broad. See: Costco Wholesale Corp., 358 NLRB No. 106 (2012).
  • Confidentiality policies. Costco, supra, also found a rule overly broad which prohibited employee discussions of “private matters of members and other employees.”
  • Workplace investigations. The NLRB found an employer violated the NLRA by asking an employee who was the subject of an internal investigation to refrain from discussing the investigation with other employees in Banner Health System, 358 NLRB No. 93 (2012).
  • Off-duty access rules. Several decisions were issues regarding access rights, including Sodexo America LLC, 358 NLRB No. 79 (2012), which found a rule prohibiting employees from coming onsite when off duty (absent management approval) was unlawful.
  • Dues Check-Off. In WKYC-TV, Gannett Co., 359 NLRB No. 30 (2012), the NLRB reversed longstanding authority and held an employer’s duty to collect union dues from employees pursuant to a dues check-off provision continues even after the expiration of the collective bargaining agreement.

          The bad news, in my opinion, is that this minor victory will be short-lived because all of the now current NLRB members have been formally confirmed by the Senate (since July 2013) and their political inclinations mirror those of the invalid Board. Therefore, decisions over only a very short period will be invalidated, and worse, recent cases from the confirmed Board replicate some of the prior holdings:

  • Hoot Winc, Inc., 2014 NLRB LEXIS 373 (May 19, 2014), applied Costco, and found employer’s workrules overbroad;
  • MCPc, Inc., 2014 NLRB LEXIS 80 (February 6, 2014), found employer’s confidentiality rule overbroad;
  • William Beaumont Hosp., 2014 NLRB LEXIS 77 (January 30, 2014), found employer’s directive to not discuss investigation violated the Act, citing Banner Health Systems;
  • Pajara Valley Golf Club, 2014 LEXIS 4743 (June 12, 2014), found employer violated the Act by discontinuing dues check-off at contract expiration.

          Additionally, the controversial quickie election rules (which greatly favor unions in NLRB elections) cannot be challenged on the same basis. These rules were re-issued months after the newest Board was confirmed.

          The main victory to be found in Noel Canning is the limitation upon Presidential power at a time when the President seeks to push a pro-union agenda that Congress is unwilling to support.

 Harris v Quinn Ruling Defunds Union Cash Cow

By:  Bill Pilchak – 7/1/14

In Illinois, Michigan and most states, parents, children and grandparents caring for catastrophically injured or severely disabled persons are eligible for federal Medicaid funds because the cost of home care is usually lower than institutional care.

P&C has represented such a family caregiver when a former bookkeeper hired to keep track of funds sued. We know that mothers/fathers or sons/daughters generally have no choice but to abandon career paths to meet the awesome responsibilities thrust upon them by genetic fluke, birth trauma or a freak accident that renders a loved one wholly dependent upon others to survive. The Medicaid funding allows them some economic means while fulfilling this role.

The Medicaid funds flow through the state to the caregivers. Most states created a mechanism to pass the money through to those providing care. The Service Employees International Union (SEIU), which is by far the single biggest donor to Democratic political campaigns, hatched a nationwide plan to impose union dues on families providing home care, although the union could do almost nothing to help them: The SEIU cannot bargain with the state to increase compensation to home caregivers, since that Medicaid allocation is decided by the federal government. A family member does not need protection against unfair discharge or working conditions.

Democratic state officials were very willing to pour money into their benefactor, even if at the expense of their states’ most vulnerable citizens.

          In Michigan, the Granholm administration could not have simply declared the home caregivers employees to be state employees without triggering hearings before the Civil Service Commission and alarm that 40,000 employees were being added to the state payroll. Instead to legitimize “employer” status, the administration, through the Department of Community Health, joined the Tri-County Aging Consortium and created a shell corporation, the “Michigan Quality Community Care Council” to “employ” the caregivers.

          In Illinois, the state statute initially made the “customer,” i.e., the disabled person, the employer of the caregiver, though Illinois pays the caregiver’s salary, subsidized by the federal funds. The Illinois Labor Relations Board initially ruled that the state did not have the requisite control over the home caregivers for them to be considered the state’s employees. However, much like President Obama evades Constitutional and legal constraints, then-Governor (and now prison inmate) Rod Blagojevich simply issued an executive order recognizing the union as the bargaining agent for the caregivers. The Illinois legislature later codified that recognition and declared the caregivers to be employees for purposes of union membership, but not for other purposes such as the cornucopia of benefits and the vicarious liability that would usually come along with employer status. Moreover, Illinois has a “free rider” statute requiring individuals who choose not to join a union to pay union dues, lest they enjoy the benefits of union membership gratis. There is simply no rationale for these measures other than to enrich the Democrat’s biggest contributor.

          In both Michigan and Illinois, the state public employee relations agency simply mailed ballots to family members who knew nothing of the SEIU’s plan to skim dues from their compensation, were not expecting the ballots and who had no idea as to their significance. In Michigan, only 20% responded, and that 20% was undoubtedly salted with SEIU sympathizers, as the union was voted in. Suddenly, in both Illinois and Michigan, family caregivers found that a portion of their Medicaid funding was being diverted to the SEIU. The Mackinac Center estimates that $30 Million has been taken from Michigan caregivers and handed over to the SEIU. The Mackinac Center’s recap of the legal and political gambits that ended the SEIU’s money grab after eight years in 2013 is worth reading. http://www.mackinac.org/18590 However, Illinois home care workers had to appeal to the Supreme Court to end their nightmare.

          Injustice alone is not sufficient to bring a case before SCOTUS; one must find a Constitutional basis to overturn state law.   Harris v Quinn did so on the basis of First Amendment rights of association and to not fund speech with which one disagrees. “An agency-fee provision imposes a significant impingement on First Amendment rights, and….cannot be tolerated unless it passes exacting First Amendment scrutiny.” While Abood v Detroit Board of Education found a sufficient compelling state interest in the form of labor peace and eliminating free riders to support an agency fee provision for full time regular public employees, Harris has now held those interests did not support an infringement on First Amendment rights in the context of home caregivers. Accordingly, the Harris ruling will likely defund the SEIU’s massive influx of funding.

          Will the Harris opinion reverberate beyond home health care workers? Possibly. For the second time in recent years, Justice Alito has stated that Abood’s foundation is shaky. It is not impossible that the Court will eventually hold that public sector union members do not have to pay union dues that support speech to which they object – essentially making all public employment “right to work” employment. Moreover, one would certainly like to see a lawsuit seeking repayment of the dues illegally taken from family caregivers.


Hobby Lobby Decision Affirms A Corporation’s Religious Rights

By:  Bill Pilchak – 7/1/14

          In 1993, President Clinton signed the Religious Freedom Restoration Act of 1993 (RFRA) which prohibits the “Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicabil­ity” unless the Government “demonstrates that application of the burden to the person—(1) is in furtherance of a compelling govern­mental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.”

          Yesterday, Burwell v Hobby Lobby, consistent with decades of decisions holding that corporations are “persons” for most purposes under the law, held that a closely held corporation was a “person” for purposes of RFRA, and cannot be compelled under the Affordable Care Act to fund contraceptives that violate the owner’s legitimate religious beliefs. While, a number of businesses can claim the same status, Burwell mainly stands out as an affirmation of religious rights in a society that seeks to stamp out religion.