On June 27, 2018, the United States Supreme Court declared that fees charged to dissenting employees pursuant to a union agency shop arrangement violates the First Amendment. In a 5-4 vote in Janus v. AFSCME, Council 31, No. 16-1466, the court found in favor of Mark Janus, an Illinois public employee who refused to join the union yet had so-called agency or "fair share" fees taken from his paycheck every month, adding up to more than $500 each year.
An employer cannot refuse to hire an individual because of a religious practice that the employer could reasonably accommodate without hardship. In EEOC v. Abercrombie & Fitch Stores, Inc., the Supreme Court addressed the issue of whether an employer must have actual knowledge of the need for an accommodation.
In Noel Canning v. NLRB, the Supreme Court issued a labor law decision most surprising because of its unanimity. The Supreme Court held on June 26, 2014, that President Obama's controversial January 2012 appointments of three members to the National Labor Relations Board (Sharon Block, Terence F. Flynn, and Richard Griffin) were invalid exercises of his office under the Constitution. The NLRB in that case had ruled against an employer in an unfair labor practice charge. The employer appealed, asserting that because three of the nation's five Board members had been placed on the Board by the President as "recess appointments" during a time when the Senate was not actually in recess, the Board lacked authority to issue any ruling at all.
The Affordable Care Act requires health plans to cover "preventive services" at no cost to participants. The federal government has identified 20 forms of contraception that are required to be included as part of preventive services. Various "for-profit" companies have challenged ACA's birth control coverage requirement in about 50 lawsuits now pending across the country. Many of these employers are family owned, closely held or controlled companies whose owners object to the provision of contraceptive coverage on faith-based grounds.
The Supreme Court is issuing labor law decisions at a fast and furious pace this week. Today's decision, Harris v. Quinn, struck down an Illinois law that had previously required non-union Medicaid homecare providers to pay fees equivalent to union dues to the Service Employees International Union (SEIU), a public employee union. The rationale had been that such employees should be required to pay fees to help cover the union's costs of collective bargaining. Although it invalided the Illinois regulation, the Supreme Court did not go so far as to overturn wholesale a long-standing precedent allowing other unions to impose fees on non-union workers.
In December the Sixth Circuit Court of Appeals issued an opinion in Rochow v. Life Insurance Company of North America. Rochow, the president of a company, began experiencing short- term memory loss and other symptoms of illness in 2001 which led to him being demoted. The symptoms continued to interfere with his performance and he was forced to resign in 2002. Rochow filed a claim for long-term disability benefits and the Life Insurance Company of North America ("LINA") denied his claim and three appeals. Finally, Rochow filed a complaint in court against LINA and stated two claims under ERISA: one to recover benefits due and one to remedy the alleged breach of fiduciary duty. The district court found for Rochow concluding that LINA acted arbitrarily in denying his claim for disability benefits. After the Sixth Circuit affirmed the district court's decision in 2007, the district court awarded Rochow the unpaid benefits and found that LINA must disgorge of approximately $3.8 million in profits supposedly earned from the money that LINA failed to pay Rochow.
In U.S. v. Jones, the U.S. Supreme Court ruled that the Fourth Amendment (protecting a person's reasonable expectation of privacy and against unreasonable search and seizure) was violated when law enforcement inserted a Global Positioning System (or GPS) device in a vehicle, without a valid warrant, and tracked the vehicle's every move on public streets for a month. Although Jones is a criminal case involving the U.S. Constitution which prohibits unreasonable searches by government actors, the decision may have a ripple effect on private employers who use GPS and other tracking devices to monitor employees' whereabouts.
New York implemented a law that imposes sales tax collection duties on some out-of-state retailers that are not physically present in the state. The law requires out-of-state retailers engaged in "affiliate marketing" to collect sales tax. Affiliate marketing occurs when the retailer enters a contract with a third party (the affiliate) who operates an independent website. Under the contract, the affiliate agrees to provide on its website a link that directs readers to the retailer's website in exchange for a percentage of the sales made to readers who use the link.
The Supreme Court agreed on November 26, 2013 to hear the religious challenges of Hobby Lobby Stores and Conestoga Wood Specialties Corp. to the contraceptive coverage requirements of the Affordable Care Act. While not on the Supreme Court website calendar yet, the latest information indicates the cases will be heard in March. The Court has consolidated the two cases and scheduled only one hour of argument for both cases.
As discussed in an earlier blog post, the Patient Protection and Affordable Care Act ("ACA") created a controversy about whether for-profit corporations have religious freedom. The issue concerns the requirement under ACA that health insurance sufficient to avoid penalties must include coverage for certain forms of birth control. Businesses closely held by families with strong religious convictions are objecting to this requirement as an infringement of religious freedom.