Illinois home-based child care providers who refused to join a union designated by the state of Illinois to represent them, yet were compelled by the state for years to pay so-called “fair share” fees to that union to negotiate on their behalf, should not be able to force the union to pay them their money back, even after the state government and union agreed the law that forced them to pay the fair share fees should be considered unconstitutional, a federal judge has ruled.
On Dec. 20, U.S. District Judge Manish S. Shah ruled in favor of the state of Illinois and the Service Employees International Union, dismissing the class action lawsuit brought by plaintiffs Sandy Winner and Laura Baston on behalf of all non-union child care providers in the state, which had argued child care providers should be due more than $20 million in refunds for the fees, which they alleged were unconstitutionally withheld for nearly nine years from checks they received from the state on behalf of parents with children in their care.
Shah said the union should not be made to repay the money, despite the unconstitutional nature of the collections, because it had collected the fees from the providers relying on a state law it believed was constitutional based on legal precedents which had established the constitutionality of the collection of such fair share fees, or fees collected from non-union members working within a recognized bargaining unit, and whose pay and benefits were governed by a collective bargaining agreement negotiated by a union.
“SEIU’s reliance on relevant precedent was reasonable,” Shah wrote. “Any subjective belief it could have had that the precedent was wrongly decided and should be overturned would have amounted to telepathy.”
The case centered on a 2005 executive order, signed by former Gov. Pat Quinn, a Democrat, which was later used to modify state law to include independent child care providers and other care providers, who received payment from the state on behalf of people to whom they provided care through subsidized care programs, among the ranks of “state employees” and which designated the SEIU as the union to represent them in negotiations before the state. While the executive order and state law did not explicitly authorize the collection of fair share fees from those which did not choose to join the union, the union began collecting the fees under existing state law and legal precedent, which authorized unions representing “state employees” to collect such fees.
However, the arrangement, which had also included home-care personal assistants for those with disabilities, was later challenged in court, and in 2014, the U.S. Supreme Court, in the case of Harris v. Quinn, ruled such compulsory fees for the independent care providers were unconstitutional.
Following that ruling, the state of Illinois and SEIU agreed to also apply the Harris decision to child care providers, as well, and ceased collecting fair share fees from non-union child care providers in July 2014.
In August 2015, Winner and Baston filed suit, demanding the union repay them and all other non-union child care providers the nearly decade’s worth of fees the union had collected, as it turned out, unconstitutionally. In their lawsuit, the women estimated they had lost 2-4 percent of their income per year to the fees.
The SEIU, however, argued it should be allowed to keep the money because it had collected the fees in reliance on the state law and case law it believed recognized the fees as constitutional.
Shah agreed with the union, saying, in this case, it would be acceptable to allow the union to escape liability for continuing to hold onto the money because the union likely acted in “good faith,” based on the assurances of state officials who secured the fees for them and the union’s own understanding of federal case law.
“Plaintiffs argue that Harris put SEIU on notice that collecting fair-share fees was improper and the fact that SEIU ‘is stubbornly holding onto money which the Supreme Court told it was seized in violation of Plaintiffs’ constitutional rights is the essence of bad faith,’” Shah wrote. “This argument is flawed to the extent it argues that SEIU should have known, before Harris, that collecting fair-share fees from individuals who were not full-fledged state employees was unconstitutional.
“… SEIU did not act with an understanding that its conduct was improper.”
Winner and Baston were represented in the action by attorneys with the firms of Quantum Legal LLC, of Highland Park, and The Howard Law Firm LLC, of Chicago.
SEIU was represented by the firms of Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich, of Chicago, and Altshuler Berzon LLP, of San Francisco.
The state of Illinois was represented by the Illinois Attorney General’s Office.