Supreme Court Issues Decisions that Change Employment Law Landscape

The U.S. Supreme Court wrapped up its 2013 session by handing down three decisions that may significantly affect recent controversial rulings by the National Labor Relations Board, Affordable Care Act mandates on employer birth control coverage and union fees imposed on certain government employees.

NLRB

In National Labor Relations Board v. Noel Canning, the Court invalidated President Barack Obama’s recess appointments in 2012 to the five-member Board, an administrative agency that decides whether an employer engaged in unfair labor practices.  The Court held the President’s appointment of three members to the Board was unconstitutional because the Senate, which normally advises and consents on such appointments, was not in a sufficiently long enough recess to invoke the Recess Appointments Clause of the Constitution. 

The Noel Canning decision means that the NLRB did not have a quorum when it decided more than four hundreds labor cases between January 2012 and August 2013.  This includes a number of controversial cases in which the Board either modified or overruled past Board precedent on social media policies, employer confidentiality rules, off-duty employee access rules, employer withholding obligations, and discipline policies. The parties in those case may request a review by the current board, which has a full contingent of five members all confirmed by the Senate.  Because the Board has a 3-2 Democratic majority, it is likely that many of the previous orders will be confirmed but some may not.  It also means that many decisions based on these NLRB cases may be questionable.

Patient Protection and Affordable Care Act of 2010

In Burwell v. Hobby Lobby Stores, Inc., the Court held that an Affordable Care Act regulation requiring for-profit companies to offer birth control coverage to their employees violates a federal law that protects religious freedom.  The Court, in a 5-4 vote, held that Religious Freedom Restoration Act of 1993 applies to family-owned companies like Hobby Lobby, which has a sincere Christian belief that life begins at conception and that the regulation would violate their religion by facilitating access to contraceptive drugs or devices that operate after conception. 

The Court held that the contraceptive requirement ‒ to furnish “preventive care and screenings” for women without “any cost sharing requirements” with employees ‒ placed a substantial burden on those companies’ religious liberties and the government had not chosen the least restrictive means to further a compelling governmental interest, the most demanding test in constitutional law.  Had the three closely held corporations involved in the case lost, they could have been subject to more than $500 million in penalties collectively for refusing to provide contraceptive coverage or more than $25 million in penalties collectively if they dropped health care coverage altogether.

Illinois Home Health Care Workers

In Harris v. Quinn, the Court held that partial public employees do not have to pay fees to unions representing them if they do not want to join the union.  But the Court declined to strike down a decades-old precedent that required many full-fledged public sector workers to pay union fees. 

The case was brought by eight non-union home health care workers in Illinois who objected to paying union fees for things like collective bargaining activities under an agreement the state entered into with the union.  The Court found that the home health care workers are different that full-fledged public employees.  While paid through state Medicaid,  they are almost entirely answerable to the residents they care for, do not enjoy most of the rights and benefits that other state employees do, and are not indemnified by the state for claims against them during employment. The Court noted that extending the requirement of full-fledged public workers to pay union dues to partial public employees “would invite problems” because there would be no clear line on which workers would have to pay dues and which would not.

Additional Information

For additional information, please contact Mike Buck, Chair of Benesch’s Labor & Employment Practice Group, at mbuck@beneschlaw.com or 216.363.4694.

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