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U.S. Supreme Court Strikes Down Public-Sector Union Agency Fees

APPLIES TO

All Public Employers with Unions

EFFECTIVE

June 27, 2018

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The U.S. Supreme Court recently stated that public-sector employees must affirmatively agree to pay union dues; unions may no longer take agency fees from nonconsenting public employees. In Janus v. American Federation of State, County and Municipal Employees, Mark Janus, a public employee in Illinois, refused to join his union because he opposed its positions. However, Illinois state law required non-members to pay an “agency fee” (i.e., a percentage of the full union dues) to cover union expenditures attributable to the union’s collective bargaining activities. Janus sued.

The Court stated that the “First Amendment is violated when money is taken from nonconsenting employees for a public-sector union.” Specifically, requiring public employees to pay agency fees compels them to “subsidize free speech on matters of substantial public concern.” “[N]either an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.” Public-sector unions are now required to obtain affirmative consent from employees to participate in a union, not just provide a mere opt-out option.

Many state public-sector union laws are predicated on a 40-year-old case that permitted imposing such agency fees. Affected states will now be forced to review how they will effectuate union participation without violating Janus. Employers are likely to see a response to this case from state legislatures going forward.

Action Items

  1. Public-sector employers must immediately stop automatic deduction of agency fees from employee wages for employees who have not affirmatively agreed to such deduction
  2. Public-sector employers are recommended to implement authorization verification processes before deducting agency fees from applicable employees.
  3. Public-sector employers are recommended to review this recent ruling with legal counsel for further implications.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

SCOTUS Limits the Definition of “Whistleblower” Under the Dodd-Frank Act

APPLIES TO

All Employers

EFFECTIVE

February 21, 2018

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(888) 378-2456

Recently, the U.S. Supreme Court unanimously stated that a “whistleblower” under the Dodd-Frank Act is someone who reports suspected securities law violations to the Securities and Exchange Commission (“SEC”). The Dodd-Frank Act is a federal law intended to prevent abusive financial service practices, and protects whistleblowers from retaliation for reporting violations.

In Digital Realty Trust, Inc. v. Somers, an employee internally reported possible securities violations, and was fired shortly thereafter. The employee claimed he was retaliated against for whistleblowing. However, because he did not report the alleged violations to the SEC, the Supreme Court stated that he was not entitled to protected whistleblower status under Dodd-Frank.

While this case may seem appealing to employers, companies must still take care to avoid retaliation against employees. Specifically, other federal or state protections may protect internal whistleblower complaints. Additionally, this decision may cause employees to report misconduct to the SEC in order to access the Dodd-Frank Act whistleblower protections, rather than first reporting the issue internally within the company. Ultimately, it is best practice for employers to take all complaints seriously and treat employees fairly.

Action Items

  1. Review internal reporting procedures and retaliation policies for potential exposure.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase