Labor & Employment Law Daily Denial of class certification for caregivers seeking refund of ‘fair share’ fees affirmed again
Monday, December 10, 2018

Denial of class certification for caregivers seeking refund of ‘fair share’ fees affirmed again

By Ronald Miller, J.D.

On remand from the Supreme Court, the Seventh Circuit concluded that the High Court’s decision in Janus v. AFSCME, which barred unions from imposing agency fees on public employees who are not union members, did not require a different result on the narrow question of whether a class action was the proper device for home health care assistants to use in seeking refunds of fair share fees. Accordingly, the appeals court once again affirmed the decision of a district court declining to certify the requested class. Judge Manion filed a separate opinion concurring in the judgment (Riffey v. Rauner, December 6, 2018, Wood, D.).

Around 2008, a majority of the home health care assistants in Illinois’ Rehabilitation Program voted to designate SEIU as their collective bargaining representative. Those who did not wish to be union members were entitled to pay a “fair share” fee that only represented the cost of collective bargaining, grievance processing, and the like, and excluded political activities with which the person may not agree. In 2009, the then-governor, issued an executive order directing the state to recognize an exclusive bargaining representative for assistants in the state’s disabilities program, if a majority of those assistants voted in favor of a union. Following a mail-ballot election, a majority of the disabilities assistants voting rejected representation by either of two unions.

Challenge to fair share fees. This action followed, with the rehabilitation assistants arguing that the fair share fees violated their First Amendment rights, and the disabilities assistants lodging a facial challenge against the law. The district court dismissed both claims, and the appeals court affirmed. However, the Supreme Court granted certiorari and reversed with respect to the rehabilitation assistants’ claim. It held that under Harris v. Quinn, the First Amendment does not permit a state “to compel personal care providers to subsidize speech on matters of public concern by a union that they do not wish to join or support.” The Harris decision questioned the continuing vitality of the Supreme Court’s 1977 ruling in Abood v. Detriot Bd. of Educ.

On remand, the assistants sought certification of a class of “all non-union member assistants from whom fair share fees were collected.” The proposed class included some 80,000 members, and class representatives asserted that the total amount to be refunded was approximately $32 million. A district court denied certification because the class definition was overly broad; the named plaintiffs were not adequate representatives; individual questions regarding damages predominated over common ones; there were serious manageability issues; and a class action was not a superior method for resolving the dispute.

Thereafter, the Seventh Circuit ruled in its initial review, Riffey v. Rauner, that since Harris had resolved the question of whether fair share fees were compatible with the First Amendment, there were only individualized issues left, so that the proposed class failed to meet the requirements under Rule 23(b)(3) that issues common to the class predominate and that a class action be a superior mechanism for resolving the dispute.

Rejection of class treatment. The decision whether to certify a class is one that depends on a careful assessment of the facts, of potential differences among class members, of management challenges, and of the overall importance of the common issues of law or fact to the ultimate outcome. Rule 23 gives the district courts broad discretion to determine whether certification of a class action lawsuit is appropriate. Here, the appeals court saw nothing approaching an abuse of discretion in the district court’s decisions that whatever common questions remained among the proposed class members did not predominate, and that “a class action is [not] superior to other available methods for fairly and efficiently adjudicating the controversy.”

The appeals court agreed with the district court that the question of whether damages are owed for many, if not most, of the proposed class members could be resolved only after a highly individualized inquiry. Further, the union would be entitled to litigate individual defenses against each member. This suggested not only that individual questions predominated, but also that it would be difficult to manage the litigation as a class. Thus, the district court was well within the bounds of its discretion to reject class treatment.

Disharmony in the class. Additionally, the union presented evidence of disharmony within the class: some assistants supported the union and had no desire for a refund, while other were eager to get their money back; and once there was no longer an intermediate option of paying an agency fee, some assistants moved to join the union, while others severed all ties to the union. Further, the central question of how much money each individual class member was entitled to recoup was particularly ill-suited for class treatment.

Lastly, the district court made clear that it was not averse to considering a more targeted class. However, the assistants spurned the opportunity to suggest a narrower class in favor of a “go-for-broke” strategy. In doing so, they overlooked the substantial difference the appeals court gives to a district court’s decisions about predominance and manageability.

Finding that nothing in Janus speaks to the suitability of class treatment of the issues under the unusual circumstances of this case, the Seventh Circuit concluded that the district court acted well within its authority when it declined to certify a class action.

Concurrence. Judge Manion wrote separately to emphasize that a union’s expropriation of fees from a nonmember without his or her consent amounts to a First Amendment injury on that basis alone, regardless of whether the employee subjectively opposed the fee. Nonetheless, he agreed with the court that Janus did not affect the narrow grounds affirming the court’s previous denial of class certification.

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