High Court Docket: Unions, Overtime

The Supreme Court's decisions on two upcoming employment-law cases could end up weakening unions, legal experts say.
By: | December 6, 2017 • 5 min read

Legal experts say the Supreme Court’s upcoming decisions in two employment-law cases involve a pair of hot-button topics: labor unions and overtime.

The first case, Janus v. American Federation of State, County and Municipal Employees, Council 31, challenges the constitutionality of public employees being forced to pay union dues even if they don’t support or join unions. The other case, Encino Motorcars, LLC v Navarro, focuses on whether service advisors at auto dealerships are exempt from overtime.

The plaintiff in the first case, a public-sector worker, refused to join the union but was still required to pay 84 percent of full members’ dues, which excludes fees for the union’s political activities, says employment-law attorney Ann Fromholz, founder of The Frumholz Firm in Pasadena, Calif.

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“Employees have the right to decide whether to join the union and can be required to pay a fee even if they elect not to be a member,” she says. “There’s no doubt in my mind that the Supreme Court will rule in favor of the worker and against the union. This could be a big blow for public employee unions.”

This isn’t surprising considering that Justice Gorsuch, who filled Justice Scalia’s seat following his sudden death, is likely to support his predecessor’s conservative views.

If the high court rules in favor of workers, Fromholz says, union membership may dwindle, resulting in less dues and power to negotiate contracts. Such a decision could also create HR quagmires as well. For example, if a union negotiates worker benefits that would not have been otherwise offered, should nonunion members receive those same benefits? Likewise, would nonunion employees be required to pay a portion of their health insurance premiums while employers pay the entire premium for union workers?

“It’s hard to say [if this is fair] because employees do benefit from the work of unions,” says Fromholz. “If there are environments where the union is weak and doesn’t negotiate much beyond what the employee would get, it’s probably not overly fair to ask everyone to contribute.”

Other HR problems would involve worker protections, she says. For example, union employees can only be fired for cause and must receive progressive discipline before termination. However, nonunion employees at the same workplace would be employed at will and not guaranteed those same rights.

This sets the stage for possible instances of inequity, says Fromholz, and opens the door for employers to scale back benefits to ensure consistency between the two employee groups.

“Workers may be unhappy if those protections are stripped away,” she says, adding that benefits such as retirement, however, would remain intact. “That would be an issue HR would need to manage.”

Regarding the second employment-law case, Encino Motorcars, LLC v. Navarro, the U.S. Supreme Court in June rejected a 2011 final rule issued by the U.S. Department of Labor that stated that service advisors at auto dealerships are not exempt from overtime. This final rule contradicted DOL’s 1978 opinion letter, which concluded that service advisors (along with salesmen, partsmen or mechanics, according to the Fair Labor Standards Act) were exempt from overtime.

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