Wednesday, February 11th, 2015

A Shot Heard Round the World — Governor Rauner’s Executive Order 15-13

Earlier this week, Governor Bruce Rauner made national news by signing Executive Order 15-13 directing the Illinois Department of Central Management Services (“CMS”) to “cease enforcement of [union contract] Fair Share provisions” and prohibiting all state agencies from collecting fair shares under union contracts.

Fair Share provisions are provisions in union contracts that require the employer to deduct a fair share fee from state employees’ paychecks even if these employees choose not to join the union. Pursuant to the Illinois Public Labor Relations Act, employees have the right to refrain from participating in union activities. However, employees may be required, pursuant to the terms of the union contract, to pay a fee which “shall be their proportionate share of the costs of the collective bargaining process, contract administration and pursuing matters affecting wages, hours and other conditions of employment.”

The Executive Order also directs CMS and all state agencies to place all “fair share” deductions in an escrow account for as long as such deductions are required under any contracting union’s collective bargaining agreement and to maintain an accounting of such fees until a court determines whether or not fair share provisions are constitutional. Coupled with Executive Order 15-13, Governor Rauner is also filing a lawsuit in federal court seeking a declaration that fair share provisions in union contracts to which the State is a party violate the First Amendment by compelling employees to engage in political speech.

Governor Rauner cites two United States Supreme Court decisions in the text of his Executive Order, namely the cases of Abood v. Detroit Board of Education (1977) and last year’s Harris v. Quinn decision involving home-care personal assistants. In Abood, the plaintiffs, public school teachers in Detroit, filed class actions against the Detroit Board of Education and the public teacher union representative in Detroit, after the two entered into a collective bargaining agreement that contained an agency-shop clause that instituted “fair share” contributions from nonmember teachers. The complaint claimed that the union was engaged in activities that plaintiffs did not approve. The nonmember teachers sought to have the agency-shop clause declared invalid as a deprivation of their freedom of association protected by the United States Constitution. Although the agency-shop clause was found to be valid, the Supreme Court held that plaintiffs could prevent the union’s spending a part of their required service fees to express ideological views unrelated to its duties as exclusive bargaining representative.

In Harris, the Supreme Court held that “fair share” provisions requiring nonmember Medicaid-funded home-care personal assistants to pay “fair share” fees to the union violated the First Amendment. The Illinois Department of Human Services Home Services Program, a state-run Medicaid program, allowed participants to hire personal assistants. These assistants were deemed State employees under the Illinois Public Labor Relations Act. As a result, they were required to pay a “fair share” of the union dues pursuant to the union contract between the State and the union. The Court in Harris analyzed the Abood decision, characterizing it as an “anomaly” and “questionable on several grounds,” and determined that the First Amendment prohibited the collection of a fee from personal assistants who did not join the union. In the decision, the Court limited the Abood decision to “full-fledged state employees” which did not include personal assistants.

Governor Rauner, through Executive Order 15-13 and the filed lawsuit, wishes to extend the rationale in Harris to all state employees and overrule Abood based on the belief that Illinois state employee unions are “using compelled ‘fair share’ fees to fund inherently political activities to influence the outcome of core public sector issues, such as wages, pensions, and benefits.”

Whether or not Governor Rauner is ultimately successful remains to be seen. Certainly, unions in Illinois will not sit idly by and allow the Governor’s federal lawsuit to run its course; they will go on the offensive and take other steps in State courts and/or before the Public Labor Relations Board to prevent the implementation of Executive Order 15-13. While the Governor’s action is limited to the state unionized labor force impacting a reported 6,500 out of an estimated 42,000 state employees, any court decision regarding the validity of “fair share” provisions will certainly have far-reaching consequences for the nation’s public employers, unions and employees.


Carlos S. Arevalo

Author: Carlos S. Arevalo