Appeals panel: Despite Janus decision, still no class actions vs unions over illegally collected fees

By Jonathan Bilyk | Dec 7, 2018

Former Illinois Gov. Pat Quinn was endorsed by SEIU in 2009.   Youtube screenshot

A federal appeals panel in Chicago has again rejected an attempt by a group of home caregivers to bring a class action lawsuit against the labor union they say used an Illinois state law to unconstitutionally grab $32 million in fees from their pay, as the judges said the decision holds up even when reevaluated in light of a recent Supreme Court decision further restricting unions’ abilities to force non-union public workers to pay such fees.

On Dec. 6, a three-judge panel of the U.S. Seventh Circuit Court of Appeals said the U.S. Supreme Court’s decision in the case of Janus v American Federation of State County and Municipal Employees (AFSCME) did not change anything in its prior findings, upholding the ruling of a federal district judge who shot down the class action attempt against the Service Employees International Union (SEIU).

“The judge here came to a defensible – indeed, sensible – decision on these points,” wrote Seventh Circuit Chief Judge Diane P. Wood, emphasizing the caregivers are free to sue for the return of the illegal fees individually. “Nothing in Janus speaks to the suitability of class treatment of these issues under the unusual circumstances of this case…”

Late last year, the Seventh Circuit upheld the ruling of U.S. District Judge Manish Shah, whose decision had shielded the SEIU from the putative class action.

The lawsuit had centered on approximately $32 million the plaintiffs said the state had improperly seized from their pay and transferred to SEIU from 2008-2014. During that time, the state, under then-Gov. Pat Quinn, a Democrat backed by SEIU, had used a law to declare all in-home personal care assistants for people in Illinois with disabilities, who had been paid through state subsidies, to be state employees, subject to representation by the SEIU.

While caregivers could decide whether to formally join the union and pay dues, the state subtracted so-called “fair share fees” or agency fees, from the checks sent to non-union caregivers, ostensibly to offset the union’s bargaining costs.

However, in 2014, the U.S. Supreme Court struck down that regime, declaring in Harris v. Quinn such compulsory fees to be an unconstitutional infringement on the rights of personal assistants and child care providers who were not on the state payroll and never had asked to be represented by the SEIU or any other union.

That decision was followed by other action, including the attempted class action against the SEIU and the state of Illinois.

While they agreed, under the Harris decision, the state and SEIU had improperly seized the fees in the first place, the judges said they believed a class action could not be allowed because the 80,000 caregivers potentially included in the class were too diverse to be grouped together.

Judge Shah and the Seventh Circuit said, for instance, they believed it would be impossible to accurately determine which caregivers may or may not have supported the union during the time the fees were being unconstitutionally deducted.

However, the plaintiffs appealed the decision to the U.S. Supreme Court, arguing the decision, if left to stand, would incentivize unions to “keep seizing fees from nonmembers until a court forces them to stop, because the unions will be able to retain most of the illegally seized monies.”

In the meantime, the Supreme Court decided the Janus case, in which the 5-4 majority found states trample the speech and association rights of their non-union employees in forcing them to pay the “fair share” fees. Associate Justice Samuel Alito, who authored the Janus decision, particularly noted such fee payments had resulted in “billions of dollars … taken rom nonmembers and transferred to public-sector unions in violation of the First Amendment.”

After the Janus decision, the Supreme Court granted the petition of the plaintiffs in the class action against SEIU, vacating the prior ruling in the case and sending it back to the Seventh Circuit for reevaluation in light of the Janus ruling.

However, the Seventh Circuit panel said the Janus ruling had changed nothing, their prior decision had only barred the caregivers from demanding refunds in a class action. Individually, they were free to sue for a refund of the fees they had paid, Judge Wood wrote.

Judge Wood noted the named plaintiffs in the class action case had agreed to a final judgment “that granted them all the individual monetary relief they were seeking and permanently enjoined the state and the Union from applying any fair-share or agency-fee requirement to personal assistants.”

“The latter is precisely the relief that Janus contemplated,” Judge Wood wrote.

“Individual assistants who wish to pursue refunds are free to seek to do so,” Wood wrote. “We make no comment on such cases or the defenses the Union may endeavor to raise in them.”

Seventh Circuit Judge Daniel Manion, however, in a special concurring opinion, said he believed the decision did not do enough to counter two of Judge Shah’s contentions, including the notion that not all caregivers suffered “a First Amendment injury” when the state took their fees, because “some might not have been opposed to the fair-share fees.”

“Silence, in this context, is not golden,” Judge Manion wrote. “The injury occurs in extracting fees without first obtaining affirmative consent.

“… This injury is suffered regardless of whether the non-member employee opposed supporting the union through fair-share fees, so long as he or she had no opportunity to express consent to such fees.”

The plaintiffs in the case have been represented by attorney Anastas Shkurti, of the firm of Veverka, Rosen & Haugh, of Chicago; attorney Michael Austin Haugh, of Glenview; and attorneys with the National Right to Work Legal Defense Foundation, of Springfield, Va.

Defendant SEIU Healthcare of Illinois & Indiana was defended by attorneys with the firms of Altshuler Beron LLP, of Chicago, and Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich, of Chicago.

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Organizations in this Story

Dowd, Bloch, Bennett, Cervone, Auerbach & Yokich National Right to Work Foundation Seiu Healthcare Illinois Indiana Service Employees International Union State of Illinois U.S. Court of Appeals for the Seventh Circuit U.S. District Court for the Northern District of Illinois U.S. Supreme Court Veverka Rosen & Haugh

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