Union Agrees to $3.2 Million Settlement in Dispute Over Fees

A public sector labor union has agreed to pay about $3.2 million to home care workers in Washington state who have argued in court that their constitutional rights were violated under a system that took union dues and fees from their pay without their explicit consent. 

Over 55,000 workers who provide in-home care to people who are elderly and disabled could be eligible for payments, which would take place under a legal settlement a federal judge preliminarily approved this week. The settlement would resolve a lawsuit that began in 2014.

“When considering the cost of ongoing litigation and the rightward tilt of the U.S Supreme Court, we decided to settle this case,” said Adam Glickman, secretary-treasurer of Service Employees International Union 775, the union that is the defendant in the lawsuit.

Lawyers for the workers who brought the case did not immediately respond to a request for comment on Friday.

U.S. District Judge  Marsha J. Pechman signed an order on Oct. 1 granting a motion by both parties in the case for preliminary approval of the settlement.

Since the case—Routh v. SEIU 775—was initially filed, the U.S. Supreme Court has handed down two decisions that are related to it.

The first came in June 2014 in Harris v. Quinn. The high court concluded that the First Amendment bars states from collecting “fair-share” or “agency” fees from workers who don’t want to join or support a union and are not “full-fledged public employees.”

These sorts of fees were paid in the past by workers who opted not to join public sector labor unions that represented the other employees in the workforce that they belonged to.

The idea with the fees was that, even though the employees were not union members, they benefited from collective bargaining and other union activities and should help pay a portion of those costs. The fees were not supposed to go toward union political efforts.

Home care aides in the Washington case that’s now nearing the settlement fell into the category of workers that the Harris v. Quinn precedent applied to. The state’s social and health services department pays the aides to provide care to people who qualify for it.

Once the Harris ruling was issued, the state and SEIU 775 stopped deducting dues from any home care worker who objected to financially supporting the union.

Between 2014 and June of 2018, there was a process where SEIU notified new in-home care workers that they weren’t required to join or pay money to the union. But if the worker didn’t opt-out, they were treated as a full union member and dues were taken from their pay.

As long as they didn’t sign a union card, they could stop paying the fees at any time.

Then, in June of 2018, the Supreme Court ruled in Janus v. American Federation of State, County, and Municipal Employees, Council 31 that state and local public workers who choose not to join a union in their workplace cannot be required to pay agency or fair share fees.

Under that ruling, government employers and unions can only deduct dues or fees from non-members with the worker’s express consent to do so. The union and the state ended the opt-out system for paying union fees for home care workers after the court decided Janus.

As court documents explain, this meant that the only major issue left outstanding in the Routh case were the workers’ claims seeking refunds for money that was deducted from their checks, without their explicit consent, prior to the Janus ruling.

After Janus, the union and the workers jointly sought to resolve the Routh case through mediation, which got underway last fall in Seattle.

The settlement reached through that process covers a class of workers who paid dues or fees between February 2011 and February of this year to SEIU 775, through payroll deductions made by the state, where the worker had not signed a union dues authorization card.

That overall class of workers is broken into two subgroups, according to court filings. One that includes employees who actively objected to union membership or paying money to SEIU, and another that includes people who paid the dues without making any objections.

SEIU estimates that there are about 5,340 people in the “objector” subgroup, and about 49,820 in the one that includes “non-objectors.” Under the terms of the pending agreement, $1 million would be allotted for the objectors and about $2.2 million for the non-objectors.

About $812,000 of attorneys fees, along with other smaller costs would be deducted from the overall settlement amount.

A staff member with a group that has litigated a number of cases against public sector unions called the settlement a “big legal win.” 

"This is validation for what we've been saying for years, that this automatic deduction of dues from people who had never authorized it, violated the constitutional rights of these caregivers,” said Maxford Nelsen, the director of labor policy for the Freedom Foundation.

While the organization wasn’t directly involved in the Routh case, it has helped mount other lawsuits against labor groups over fee deductions and other issues.

The Freedom Foundation estimates that between the Harris decision in June 2014 and the end of the opt-out deduction framework in August 2018, SEIU 775 collected $11 million to $15 million from home care workers who hadn’t given clear consent for the deductions.

Following the Janus ruling workers, along with activist groups that often clash with unions, have pressed for agency and fair share fee refunds in court. But, as of this spring, courts in at least a dozen of these cases had rejected efforts to claw back the money.

Labor groups fending off the lawsuits have cited a legal principle known as the “good-faith defense,” which is grounded in the idea that parties are shielded from liability for past actions that were in compliance with the law as it stood at that time.

SEIU has pointed to other court rulings that it says bolster its good faith defense in the Routh case, but the union still faced counter arguments from the worker plaintiffs.

The joint motion the workers and the union filed asking the judge to preliminarily greenlight the settlement says that rather than spend years litigating the case in federal appeals court the parties instead decided to negotiate a compromise and end the litigation.

The issues in play in the Routh case are somewhat different from those in cases filed after Janus, which involve full-fledged public employees seeking agency fee refunds. This is because the home care workers were covered by the earlier Harris decision.

"The court already ended compelled payments for these folks five years ago,” Nelsen said.

The Freedom Foundation is involved in a separate, related lawsuit involving Washington home care workers who are seeking refunds and other damages for fees they paid to SEIU 775. It is before the same federal judge who is overseeing the Routh case.

That case was filed in July of last year, in the days after the Supreme Court issued the Janus decision, but was put on hold last October, pending further developments in the Routh dispute. 

Nelsen said the plaintiffs in the case would now have the option to go along with the settlement in the Routh case or to continue fighting the separate lawsuit.