Category Archives: Public Sector

Agency Fees and the First Amendment

Source: Benjamin I. Sachs, Harvard Law Review, Forthcoming, Date Written: September 22, 2017

From the abstract:
Agency fees are mandatory payments that certain employees are required to make to labor unions. In recent years, the Supreme Court has moved closer to declaring these fees an unconstitutional form of compelled speech and association and may soon invalidate them entirely. The Court – and the scholarship on agency fees – proceeds from the assumption that such fees are employees’ money that employees’ pay to a union. This article argues, however, that this is the wrong way to understand agency fees and for two sets of reasons. One, the Court treats agency fees as employees’ money because fees pass through employee paychecks on the way from employers to unions. But this is simply an accounting formalism required by labor law. Because employees have no choice but to pay the fees, the fact that the fees pass through paychecks is irrelevant for purposes of First Amendment analysis. Instead, under the First Amendment, agency fees are – and must be treated as – payments made directly by employers to unions. And payments made by employers to unions raise no compelled speech or association problems for employees. Two, irrespective of the accounting regime, the article shows why agency fees ought to be treated as union property rather than as the property of individual employees. Unionization, by allowing employees to negotiate collectively, produces a premium for employees covered by union contracts. Agency fees are a small fraction of this union premium. Because it is the union that produces the premium out of which agency fees are paid, and because individual employees would never earn the premium as individuals, the premium and the fees that come out of it should be treated – under the Court’s own cases – as the property of the union that secured them. The article thus provides two sets of arguments with the same fundamental implication: agency fees are not properly understood as payments made by employees to unions, and there is accordingly no compelled speech or association problem with agency fees.

Janus, Agency Fees and the First Amendment
Source: Benjamin Sachs, On Labor blog, October 5, 2017

Can Labor Still Use the Wagner Act?

Source: Joseph A. McCartin, Dissent, Fall 2017

…. Eighty years after the Wagner Act’s validation, the triumph of collective bargaining in mass production industries seems as ancient as Exodus, and Cox’s optimism as quaint as greeting card poetry. Whereas the industrial Midwest once throbbed with demands for industrial democracy, today its depleted cities continue to bleed jobs and its hinterlands struggle with rampant opioid addiction. Flint, once home to a mobilized working class capable of taming General Motors, is today a desperately impoverished city lacking in decent jobs, whose residents continue to suffer from the aftermath of lead poisoning. Whereas sit-down strikers were protected by Governor Frank Murphy in 1937, today’s Michigan is a “right-to-work” state presided over by Governor Rick Snyder, a venture capitalist whose efforts to wrest local control away from distressed communities led directly to Flint’s poisoning. Little remains of the industrial union movement born in 1937, as private-sector union membership rates today dip toward 6 percent.

Nor is there reason to suppose the Supreme Court will help matters as it did eighty years ago. Today’s Court instead seems bent on interring the last legal vestiges of the New Deal labor order. In the case of Janus v. AFSCME, which the Court will decide in the coming term, the right of public-sector unions to collect “agency fees” from the workers they represent is being challenged. Opponents argue that government workers’ unions are merely political vehicles, and therefore granting them the right to collect agency fees infringes on the rights of workers who might not share the politics of the union that represents them. The case threatens to overturn a forty-year-old precedent, Abood v. Detroit Board of Education (1977), which recognized the unions’ rights to collect such fees in the interest of orderly workplace governance wherever state law allowed the practice…..

Coverage on Janus Cert. Grant

Source: Maddy Joseph, On Labor blog, September 29, 2017

The Supreme Court decided yesterday to hear Janus v. AFSCME. The Court seems poised to hold that agency-fee agreements for public sector workers are unconstitutional. Since the order, reports and commentaries have analyzed Janus‘s threat to public sector workers, and its stakes for U.S. organized labor.

The Chicago Tribune explains that the case began when Illinois’ Republican Governor Bruce Rauner, a former private equity executive, attempted to stop the state from dispensing agency fees to unions, clashing with the state’s Attorney General. The Governor eventually filed the suit that would become Janus, asking a federal court to rule that his actions were valid and that fair-share agreements are unconstitutional. When Gov. Rauner was dropped from the case, Mark Janus and other state employees took over as plaintiffs. The Tribune also has an editorial that supports the union’s argument only on the “narrow” point that “[s]omeone who benefits from a union’s contract negotiations should pay for collective bargaining activities, if not for the union’s political activities.” It notes that an AFSCME loss in Janus would lead to a decline in union membership, like the decline seen “in Wisconsin, with Gov. Scott Walker leading the charge.” ….


Janus and the Private Sector
Source: Benjamin Sachs, On Labor blog, September 29, 2017

Maddy’s excellent wrap-up of yesterday’s Janus news includes a clip from Slate’s piece “Solidarity’s End.” There, Mark Joseph Stern provides a very useful synopsis of agency fees law, but he also suggests that a Janus decision finding agency fees unconstitutional could easily be exported to the private sector. Here’s how he puts it:

One last point: Janus involves only public-sector unions, or unions composed of state employees. But there is no obvious reason why its logic should not apply to private-sector unions as well.

But of course there is a very obvious reason why the logic of a public-sector holding would not apply to private-sector unions: that logic is the state action doctrine, which limits constitutional restrictions to state actors….

A Primer on the Supreme Court Case That Teachers’ Unions Have Been Fearing
Source: Liana Loewus, Ed Week blog, September 28, 2017

Today, the U.S. Supreme Court officially agreed to review a case on public-employee union fees that could potentially deliver a harsh blow to the nation’s teachers’ unions. You may find yourself asking: Wait, haven’t we been through this? Wasn’t someone named Friedrichs involved? And why is this coming up again? All good questions. Let’s take a look at what’s at stake, and how we got here. ….

Janus v. American Federation of State, County, and Municipal Employees, Council 31
Source: SCOTUSblog, 2017

Issue: Whether Abood v. Detroit Board of Education should be overruled and public-sector “agency shop” arrangements invalidated under the First Amendment…..

Judgment Day for Public Unions
Source: Matt Ford, The Atlantic, September 28, 2017

The U.S. Supreme Court has agreed to hear a case that could deal a serious blow to American organized labor.

Neil Gorsuch Has Web of Ties to Secretive Billionaire
Source: Charlie Savage, Julie Turkewitz, New York Times, March 14, 2017

….With the Senate Judiciary Committee set to take up Judge Gorsuch’s nomination next week, Democrats have based much of their criticism of him on the argument that his judicial and economic philosophy unduly favors corporations and the wealthy. But his relationship with Mr. Anschutz, 77, whose fortune is estimated by Forbes to be $12.6 billion, has received scant attention. The Federalist Society and the Heritage Foundation, which developed the list of potential Supreme Court nominees from which Mr. Trump selected Judge Gorsuch, receive funding from Mr. Anschutz. ….

Bradley Foundation Bankrolls Attacks on Unions
Source: Mary Bottari, Center for Media and Democracy, May 8, 2017

Documents examined by the Center for Media and Democracy (CMD) expose a national effort by the Milwaukee-based Lynde and Harry Bradley Foundation to defund and dismantle unions, the most significant force for higher wages and better working conditions in America. Publicly, the Bradley Foundation spins this agenda as “employee rights.” Behind the scenes, newly disclosed Bradley documents detail an aggressive political agenda….

Gorsuch speech at Trump hotel attracts protests
Source: Josh Gerstein, Politico, September 28, 2017

….Gorsuch spoke as part of a 50th anniversary celebration for the Fund for American Studies, a charitable group that sponsors scholarships and study programs. The organization’s goal, according to its website, is “to win over each new generation to the ideas of liberty, limited government and free markets.” The fund is supported by a wide array of foundations, most of them with a conservative or libertarian bent, including the Lynde and Harry Bradley Foundation and the Charles Koch Foundation…..

The Supreme Court’s Anti-Democratic Feedback Loop
Source: Scott Lemieux, The Atlantic, September 29, 2017

The GOP installs Supreme Court justices over the will of voters. The Supreme Court helps the GOP remain in power. Rinse, repeat.

Quarterly Survey of Public Pensions: Second Quarter 2017

Source: Melinda Caskey, Deron Pope, and Gritiya Tanner U.S. Census Bureau, Report Number: G17-QSPP2, September 2017

From the tip sheet:
This survey provides national summary data on the revenues, expenditures and composition of assets of the largest defined benefit public employee pension systems for state and local governments. The report produces three tables: Tables 1 and 3 include data on cash and security holdings, and Table 2 provides data on earnings on investments, contributions and payments.

The President’s House Is Empty: Losing and Gaining Public Goods

Source: Boston Review, Forum III, 2017
(subscription required)

Many of the critical issues of our time—from clean water to health care to schools—are about public goods, things that are owed to the members of a democratic society. In the United States, these goods are endangered and access to them is constricted by class and race. Against this background, Trump’s nearly empty White House stands as a symbol of the crisis our democracy faces. In this Forum we consider public goods: what they are, how to provide them, how to ensure equitable access. The debate about public goods is at heart a debate about what it means to be an American. What is at stake is not only what we owe to each other but who we are.

Articles include:
Losing and Gaining Public Goods
K. Sabeel Rahman

To build a tangible, inclusive, meaningful, and durable community, we must begin with public goods….

Free College for All
Marshall Steinbaum

The movement for free college has gained considerable momentum in the past year, in no small part thanks to the sad state in which many college graduates currently find themselves. …. The United States has never had free, high-quality college education. But that does not mean we can’t. In the past, we have included world-class public education in our understanding of public goods, and we have successfully expanded public education on the premise that society as a whole benefits from a well-educated population. Previous generations and social movements fought hard to create good educational institutions at public expense. The current generation is discovering why that matters. ….

A Public Good Gone Bad: On Policing
Tracey Meares

….However, the best way to solve the epidemic of police violence against black Americans is far from obvious, and it should not be surprising that the solutions advanced by communities of color often run counter to conventional solutions. In some communities marked by extreme levels of violent crime—those one would think most in need of police—residents are calling for a complete and total end to policing….

Draining the Swamp: On Mar-a-Lago
Julian C. Chambliss

….Mar-a-Lago is the apotheosis of the Florida Dream in which wealthy interests degrade the environment and hollow out prospects for the poor. But as Hurricane Irma shows, this dream was never sustainable….

The Third Rail
Elaine Kamarck

….Although we are a long way from the pioneer era, a nation’s DNA dies hard. A substantial number of Americans still glorify the individual and believe that it is everyone’s responsibility to work hard and take care of their own. It’s why, for instance, America has never had a successful socialist party while Europe has. Progressive or liberal policy that ignores this strain in the public consciousness will always be vulnerable to the argument that government that takes from those who work and gives to those who do not is illegitimate. Fortunately policy that is constructed with an understanding of this tension can stand the test of time…..

Saving the Commons from the Public
Michael Hardt

Sabeel Rahman’s argument against the privatization of public goods and services contributes to a rich stream of contemporary critiques of neoliberalism that rightly focuses on how privatization creates and maintains forms of exclusion and hierarchy. In response to privatization, Rahman calls to make public goods public again—that is, to design and bolster government programs that foster social inclusion and equality, broadening both our conception of public goods and the populations whose membership grants them access to those goods. Rahman’s argument, however, rests on a notion of the opposition between public and private that obscures the full range of political possibilities. …. Fortunately the private and the public are not our only options. The common—defined by open access to, and shared democratic management of, social wealth—provides an alternative. ….

All Good Things
Jacob T. Levy

….What do we want in the provision of a good? Is it sufficiency, equality, progress, or simply more? Different answers to these questions call for genuinely different kinds of responses. If we want sufficiency, as we do with dignity goods and necessities, very often we should not pay much attention to the provision of the goods themselves; we should pay attention to the problem of poverty, and worry about economic growth, barriers to entering the labor market, redistribution and poverty relief, or some combination of these. (Direct public provision of food, or indirect provision through food stamps, is certainly not better for recipients’ dignified membership in the community than their having enough money to be able to simply afford food.)….

Naming the Villain
Lauren Jacobs

Sabeel Rahman’s essay is a call to action. Progressives should take seriously the coming political struggle over public goods generally and infrastructure specifically. They should also be better skilled in the administration of government and learn how to use the tools available to incrementally transform the material conditions of our current system. But as a lifelong organizer, dedicated to the dignity and economic security of all workers, I know that this is not enough. It is also critical that we see the big picture: the corporate power and its accompanying dogma of the supremacy of profit that brought us to this brink. They are the enemies we face. And they must be named. From fairy tales such as Rumpelstiltskin, to J. K. Rowling’s Harry Potter series, many of the stories of our childhood teach us the same lesson: we must name the villain before we stand any chance of defeating it. Any discussion of public goods is ultimately a discussion of values. How we define who is included in the notion of a “public”—and what we think is in the best interest of that public—are inherently political and therefore always contested. Those definitions live at the intersection of race, wealth, gender, and work….

A Beautiful Public Good
Joshua Cohen

Sabeel Rahman’s democratic conception of public goods is founded on the idea of a public responsibility for ensuring the essentials of a democratic society. Public goods are among those essentials. They answer to the basic needs of persons, conceived of as free and equal members of a democratic society. What those public goods are and the best methods for providing them vary across time and circumstance. In our time and circumstance, public goods should include clean water and air, good schools, broadband Internet access, and quality health care. Discharging the responsibility to provide those goods is not only a core public responsibility, Rahman says. It will also help to foster a sense of commonality—of a we with a common fate. Rahman calls this dimension of public provision the “constitutive” aspect of public goods.
I agree with much of Rahman’s view, but found his account of this constitutive aspect surprisingly thin. In a collaborative spirit, I propose to thicken this aspect of the democratic conception with a story about how the ambition to foster democracy and democratic sensibilities helped to shape the design of Central Park, one of the country’s truly great public goods…..

The Last Word
K. Sabeel Rahman

Throughout this forum, the idea of public goods has been linked to water, housing, parks, and more. Taken together, the thoughtful responses highlight two crucial questions about our understanding of public goods. First, what types of goods qualify as “public” in a democratic conception? Or, more precisely, what makes a good “public,” as opposed to merely ordinary? And second, what kinds of policy tools—including but not limited to direct state provision—can we employ to ensure more equitable and inclusive access to these goods?….

Hawaii Adds New Tool to Monitor State Pension Fund – Regular stress testing will help track fund’s fiscal health

Source: Greg Mennis and Tim Dawson, The Pew Charitable Trusts, September 11, 2017

Hawaii is the latest state to require regular analysis of the potential impact of future economic swings on its public pension funds. Known as stress testing, such calculations can help states monitor the fiscal strength and sustainability of these funds.

This spring, the Legislature unanimously approved a bill requiring the analyses, and Governor David Ige (D) signed it into law July 5. California, Virginia, and Washington already require extensive and routine sensitivity analyses on their public pension plans. Typically, these tests provide estimates of the future financial position of these funds under various economic and investment return scenarios. Interest among other states appears to be growing as well. ….

Investment Return Volatility and the Pennsylvania Public School Employees’ Retirement System

Source: Yimeng Yin and Donald J. Boyd, Nelson A. Rockefeller Institute of Government, Pension Simulation Project Policy Brief, August 2017

The Rockefeller Institute of Government released a report that examines the potential implications of investment return volatility for the Pennsylvania Public School Employees’ Retirement System (PSERS) using the Institute’s state-of-the-art Pension Simulation Model. It also examines the implications of a recent reform that created a hybrid pension plan for new employees. PSERS was selected for study as part of the Rockefeller Institute of Government’s ongoing analysis of risks related to public pension systems.

PSERS is a defined benefit retirement plan for public school employees of the Commonwealth of Pennsylvania. The state and individual school districts are participating employers. As of June 30, 2016, PSERS had over 257,000 active members and approximately 225,000 retirees and other beneficiaries who receive over $476 million in pension and health care benefits each month. PSERS has an uncommon approach to funding under which some employees share partially in the plan’s investment risk, in certain circumstances.

PSERS is deeply underfunded and faces greater challenges than other pension funds we have examined recently. At the end of the 2016 fiscal year, it had a market-value funded ratio of 50 percent and an unfunded liability of approximately $50 billion.

PSERS currently uses a 7.25 percent earnings assumption. Recently it has fallen short of this assumption: its one-year, three-year, five-year, and ten-year annualized rates of return were 1.29 percent, 6.24 percent, 6.01 percent, and 4.94 percent, respectively, for periods ending on June 30, 2016.

In an effort to improve the overall fiscal health of the fund and reduce risks to employers, Pennsylvania lawmakers recently changed the retirement benefit structure available to new state employees. New members of PSERS hired on or after July 1, 2019, will be offered three options for retirement benefits: two hybrid benefit options that include a defined contribution component in addition to a defined benefit component, and a pure defined contribution option. The defined benefit options will provide lower benefits than the current defined benefit plan for existing workers.

The reform is intended to shift part of the funding risk, which is almost entirely borne by the state and school districts under the current defined benefit structure, to new employees…..

Decisions, Decisions: An Update on Retirement Plan Choices for Public Employees and Employers

Source: Jennifer Brown, Matt Larrabee, National Institute on Retirement Security (NIRS) and Milliman, August 2017

From the summary:
Public employees with retirement plan choice overwhelmingly choose defined benefit pension plans over defined contribution 401(k)-type individual accounts.

Decisions, Decisions: An Update on Retirement Plan Choices for Public Employees and Employers, finds that public sector employees with retirement plan choice overwhelming choose defined benefit (DB) pension plans over 401(k)-type defined contribution (DC) individual accounts.

Among the eight states studied that offer employees such a choice, the DB pension take-up rates in 2015 were 80 percent or higher in six states. Two of the plans studied had pension take-up rates higher than 95 percent, while Florida and Michigan had take-up rates of 76 percent and 75 percent, respectively. Importantly, the research finds that even when the retirement plan default option favors a DC plan, most employees still select a DB pension plan.

For example, in Washington the default retirement plan is a combination DB/DC plan. Employees must affirmatively act to elect to participate in the DB pension plan instead, and they do. The majority of newly-hired employees – six out of every ten new hires – actively choose a pension plan.

Read the press release here.
Watch a webinar replay here.
Download a PowerPoint here.

Government Employee Religion

Source: Caroline Mala Corbin, University of Miami – School of Law, Legal Studies Research Paper No. 17-23, August 5, 2017

From the abstract:
Picture a county clerk who refuses to issue a marriage license to an LGBT couple or a city bus driver who insists on wearing a hijab. The clerk is fired for failing to fulfill job responsibilities and the bus driver for violating official dress codes. Both claim that their termination violates the First Amendment speech and religion clauses.

There is a well-developed First Amendment government employee speech jurisprudence. Less developed is the doctrine and literature for First Amendment government employee religion. The existing Free Exercise Clause jurisprudence usually does not specifically account for the government employee context. This Article attempts to fill that gap by developing a government employee religion doctrine based on the existing government employee speech doctrine.

Part I summarizes government employee speech doctrine. Part II imagines a parallel government employee religion doctrine and applies it to the opening hypotheticals. It concludes that government employees who are religiously opposed to an aspect of their job would lose their religion claims for multiple reasons. In contrast, employees who wish to wear religious garb have much stronger claims. Part III addresses two concerns with my proposed government employee religion doctrine. One criticism is that government employee speech doctrine is too flawed to serve as a model. Another is that speech and religion are too dissimilar to base one on the other.