Hypocrisy on Agency Fees: Why the CMS Home Care Rule is Arbitrary and Capricious

Published July 13th, 2018 -  - 07.13.1866


In Janus, the Supreme Court held that agency fees amount to compelled speech that violates the First Amendment. As I’ve explained, the underlying premise of this theory is that agency fees are employees’ money that employees pay to a union. Because the fees belong to employees in the first place – because they come out of employees’ wages – if a state requires an employee to pay a fee to a union, the state is compelling the employee to spend her money on something she disagrees with in contravention of the First Amendment. This theory – the theory on which Janus is based – therefore depends on rejecting the idea that agency fees are actually state money paid by the state to the union. If the fees were state money – that simply flowed through employee paychecks on the way from the government to the union – then there could be no colorable argument that the employees were compelled to do or say or fund anything.

But now, in a display of profound (if unsurprising) hypocrisy, the Trump administration is trying to have it both ways. In the context of independent homecare providers – homecare workers who provide care to individuals in the individual’s home – agency fees have worked the same way they work in other contexts: the state pays the worker (with Medicaid funds) and then the worker pays the union a small percentage of this income in the form of an agency fee. Under the holding of Janus, therefore, agency fees in the homecare setting would be treated like agency fees anywhere: as payments of employee property made by the employee to the union.

Since the Court’s holding in Harris v. Quinn, of course, mandatory agency fees have been impermissible in the homecare setting, so unions are collecting only voluntary dues paid through traditional check-off mechanisms. If fees which a public sector employee must pay to the union are to be treated as the employee’s property, then dues which a public sector employee voluntarily pays to a union must even more assuredly be treated as the employee’s property. This is the obvious logic of Janus.

In a new proposed rule, however, the Center for Medicaid & Medicare Services (CMS) would prevent homecare workers from paying dues to their union on the theory that the dues are, in fact, state money! And because, under the Medicaid statute, state medicaid funds cannot be paid by the state to anyone other than the person providing the service, CMS contends that union dues in the homecare context amount to state Medicaid funds being paid by the state to the union.

Notice: the only way there could be a Medicaid problem with dues payments by homecare workers is if we treat the money that becomes dues as the state’s money. But this we cannot do. The holding of Janus (and Harris for that matter) requires that we treat dues as employee property that employees pay to the union. If we were to treat dues payments as state money paid by the state to the union, then Janus and Harris would be wrong and there would be no constitutional problem with agency fees in the public sector. Sadly, we know that is not the law.

I could put the point more directly. Janus holds that agency fees are compelled speech. This depends on a determination that money that flow from states through employee paychecks to unions is employee property; that once state money is paid to the employee, it becomes the employee’s property, even if the employee is required to turn some of that property over to the union. Janus therefore dictates that when a state pays Medicaid funds to a homecare worker, and then the worker pays some portion of that money to a union, it is the worker making a payment to the union not the state making a payment to the union. There is accordingly, under the Supreme Court’s rule in Janus, no Medicaid problem with dues check off in the homecare setting.

That makes the proposed CMS rule arbitrary and capricious.

 

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