Organized labor case goes in front of Supreme Court

Law Journals

The Supreme Court is hearing arguments in a case that could deal a painful financial blow to organized labor.

All eyes will be on Justice Neil Gorsuch Monday when the court takes up a challenge to an Illinois law that allows unions representing government employees to collect fees from workers who choose not to join. The unions say the outcome could affect more than 5 million government workers in 24 states and the District of Columbia.

The court split 4-4 the last time it considered the issue in 2016. Gorsuch joined the court in April and has yet to weigh in on union fees. Organized labor is a big supporter of Democratic candidates and interests. Unions strongly opposed Gorsuch's nomination by President Donald Trump.

Illinois government employee Mark Janus says he has a constitutional right not to contribute anything to a union with which he disagrees. Janus and the conservative interests that back him contend that everything unions representing public employees do is political, including contract negotiations.

The Trump administration is supporting Janus in his effort to persuade the court to overturn its 1977 ruling allowing states to require fair share fees for government employees.

The unions argue that so-called fair share fees pay for collective bargaining and other work the union does on behalf of all employees, not just its members. People can't be compelled to contribute to unions' political activities.

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Workers’ Compensation Subrogation of Administrative Fees and Costs

When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.

In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.

In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.