Employers Gain Support For Additional Defense to Class Actions After Court Denies Certification for Union Members Due to “Individualized Questions”
Employers recently gained support for one of their defenses to class claims, and in a case against a union no less, after a federal court in Illinois found that union members’ claims may require individualized questions and therefore were not appropriate for class treatment. See Riffey v. Rauner, et al., 10-cv-02477 (N.D. Ill. June 7, 2016).
The dispute stemmed from SEIU Healthcare Illinois & Indiana’s practice of deducting “fair share” union dues from home health aides’ Medicaid reimbursements. Previously, SEIU received more than $32 million in dues from approximately 80,000 current and former home health aides from 2008 to 2014. However, in 2014, the Supreme Court declared that the collection arrangement was unconstitutional as a violation of individuals’ First Amendment rights. It held the health aides and child-care workers weren’t “full-fledged” public employees and couldn’t be compelled to pay dues to a union recognized by the state as their bargaining agent. See Harris v. Quinn, 134 S. Ct. 2618 (2014).
Based upon the ruling in Harris, a prospective class action was created in which workers sought to claw back the $32 million paid to SEIU. The plaintiffs moved for class certification under Rule 23. The Court denied the motion, stating that certification was not appropriate because the plaintiffs sought to represent thousands of union members who supported SEIU and would have voluntarily paid their “fair share” dues. Additionally, the Court determined that too many individualized questions existed, such as the fact a large percentage of the prospective class likely was not injured by the conduct, and for those that were harmed, individualized determinations predominated over common questions. As a result, the Court ruled class certification was inappropriate. Plaintiffs have stated they plan to appeal this decision to the Seventh Circuit Court of Appeals.
While the ultimate outcome of this case is yet to be determined, this decision highlights the importance of fighting overbroad class definitions when defending class actions, especially when dealing with potentially thousands of class members. Although unionized employers still need to meet their requirements under the applicable collective bargaining agreement, employers can use this case when defending against class certification for the proposition that certification should be denied because, even if all class members are in the same union, all union members “are not equal” and may not suffer the same injury based upon a common policy or procedure. Watch this space for further developments.