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High Court Expands Employer Rights; Restricts Union Dues

Posted on June 30, 2014

The United States Supreme Court ruled this morning that public-employee unions cannot compel non-members to pay union dues and that some companies with religious objections may opt out of the contraceptive requirement of federal health reform.

The twin 5 to 4 decisions on the final day of the Court session are broadly seen as beneficial for employers and a major setback to fast-growing public labor unions.

The Court ruled in Burwell versus Hobby Lobby that the government may not require closely held corporations where owners maintain religious objections to contraception to provide contraception coverage to employees as part of their insurance benefit. The government may, the justices ruled, provide that coverage itself.

Religious employers, such as churches, and religious non-profit organizations that object to contraception are already exempt from the contraceptive mandate of the Affordable Care Act (ACA). Such accommodation require the insurance issuer to exclude contraceptive coverage from the employer’s plan and provide plan participants with separate payments for contraceptive services without imposing any cost.

“(The Religious Freedom Restoration Act)’s text shows that Congress designed the statute to provide very broad protection for religious liberty and did not intend to put merchants to such a choice,” Justice Samuel Alito wrote for the majority.

“It employed the familiar legal fiction of including corporations within RFRA’s definition of “persons,’ but the purpose of extending rights to corporations is to protect the rights of people associated with the corporation, including shareholders, officers, and employees. Protecting the free-exercise rights of closely held corporations thus protects the religious liberty of the humans who own and control them.”

The decision on union dues came in a case out of Illinois called Harris versus Quinn.

The Court ruled that the First Amendment prevents the Service Employees International Union (SEIU) from charging a fee to home services personal assistants who choose not to join the union. The decision turned on the fact that the personal assistants are not full-fledged state employees, but rather answer to the customer.

“PAs are almost entirely answerable to the customers and not to the State, do not enjoy most of the rights and benefits that inure to state employees, and are not indemnified by the State for claims against them arising from actions taken during the course of their employment,” the Court wrote.