Supreme Court: Private contractors not obligated to pay public union fees

The Supreme Court in Washington, DC, November 6, 2013. SAUL LOEB/AFP/Getty Images

In a split decision, the Supreme Court ruled on Monday that under the First Amendment, private health care contractors are not obligated to pay public sector union dues even if they are paid by public health care programs.

The 5 to 4 decision does not eviscerate the "fair share" fees that public unions collect from all public sector workers, regardless of whether they are in the union or not. However, it does potentially cut off public unions from tapping into the growing market of private contractors who work in public health care systems.

Monday's decision, written by Justice Samuel Alito, pertained to Illinois home-care workers who objected to pay "fair share" fees to a union for the cost of representation. Currently, public sector unions must bargain on behalf of all workers, whether those workers have joined the union or not. The unions collect dues from members, but they are also allowed to collect "fair share" fees from non-union workers to compensate for the cost of negotiating on their behalf. The "fair share" fees cannot pay for any political activity.

The Illinois home-care workers in this case are not technically public employees -- they are private home-care workers employed in a Medicaid-funded system.

Alito wrote that the personal assistants in this case are "much different" than full-fledged public employees. The Illinois legislature, he noted, has taken pains to specify that personal assistants are public employees for one purpose only: collective bargaining.

"Consistent with this scheme, under which personal assistants are almost entirely answerable to the customers and not to the State, Illinois withholds from personal assistants most of the rights and benefits enjoyed by full fledged state employees," Alito wrote. "As we have noted already, state law explicitly excludes personal assistants from statutory retirement and health insurance benefits."

Revoking the right to collect "fair share" fees entirely would have been devastating for public unions -- if that were to happen, workers could simply reap the benefits of the union system without contributing to it.

It's unclear exactly how the limited ruling will the home-care worker system in states outside of Illinois, but it could have a large economic impact. There are currently an estimated 2 million home-care workers across the nation, according to the National Employment Law Project, and a large number are funded through public dollars. That number will only grow as Medicaid expands under Obamacare. Projections put the home-care workforce at about 3 million in the next decade.

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