Five states are pushing back against the latest Republican-led assault to weaken unions across the country, which targets in-home caregivers who work with Medicaid beneficiaries.
On Monday, attorneys general representing California, Connecticut, Oregon, Massachusetts, and Washington filed a lawsuit against the Trump administration challenging a new rule, announced earlier this month, that impedes home care workers from paying union dues through their Medicaid-funded paychecks. The rule, which goes into effect in July, will impact more than half a million workers in California alone, and several hundred thousand more in 10 other states.
The case was brought against the Department of Health and Human Services and its secretary, Alex Azar, and filed in San Francisco federal court. The plaintiffs argue that the defendants have illegally reinterpreted federal law “in service of anti-union objectives.” The new rule, they say, disrupts long-settled arrangements that allow seniors and individuals with disabilities — who work with state governments to set wages, benefits, and terms of service for their providers — to direct their own health care. More than 700,000 individuals across the five plaintiff states currently use consumer-directed Medicaid programs.
The lawsuit against the Trump administration rule, which was finalized by the Centers for Medicare and Medicaid Services, or CMS, comes the same week as two major developments for home care workers in the United States. In Washington state, Democratic Gov. Jay Inslee signed into law the nation’s first publicly funded long-term care benefit, a hard-fought victory by advocates including SEIU 775, which represents 45,000 home care workers in Washington and Montana. National advocates say they will use Washington’s policy as a model to push for in other states.
Also this week, the U.S. Supreme Court denied a petition to review a case led by a group of Minnesota home care workers who argued that a state law that made Service Employees International Union, or SEIU, their bargaining agent violated their First Amendment rights. The plaintiffs pointed to Janus v. American Federation of State, County, and Municipal Employees; the 2018 case struck down public sector unions charging fees to non-dues paying workers. The same conservative legal groups that supported Janus also helped the Minnesota home care providers, though this time their efforts failed.
This week’s lawsuit against HHS is a proactive effort to get the courts to defend the rights of unionized workers.
While the high court’s ruling marks a setback to conservatives seeking to leverage free speech laws against union power, there are still dozens of other Janus-inspired lawsuits winding their way through federal courts, with two more lawsuits filed in the last month. This week’s lawsuit against HHS is the opposite of that — a proactive effort to get the courts to defend the rights of unionized workers.
The plaintiffs argue that HHS and Azar have violated the Administrative Procedures Act, the law governing how federal agencies can propose and implement regulation. Their complaint says the new rule “abruptly and without any sound rationale or conversations with affected states” overturns an Obama-era rule that confirmed the practice of taking direct deductions from home care workers’ paychecks. The Trump administration has been repeatedly accused of violating the APA, issuing new rules and mandates, and repealing old ones, often outside the bounds of established protocol.
“With this rule, the Trump administration is not only harming Medicaid skilled home care workers who have joined unions, but the millions of seniors and people with disabilities who depend on these indispensable workers,” said California Attorney General Xavier Becerra in a statement.
SEIU, which represents most home care workers, released a statement calling the rule “racist” — noting that 90 percent of home care workers are women, more than half are women of color, and a quarter are immigrants. “The administration’s attempt to silence home care workers reflects a long history in the United States of double-standard policies that deny working people of color like home care workers and domestic workers basic legal protections and rights, including protections for minimum wage and overtime pay, and the right to organize and form strong unions,” the union said. Without a union, SEIU added, independent home care workers earn a median wage of just $10.49 an hour, with no paid sick time or health care benefits. On Wednesday night, eight unionized home care workers, seven of whom are in SEIU, joined the multi-state lawsuit.
The federal Bureau for Labor Statistics projects that demand for home care workers will increase by 41 percent between 2016 and 2026, as the baby-boom generation continues to get older. Union membership gives home care workers an incentive to stay on the job, according to a 2017 survey by the National Employment Law Project of more than 3,000 home care workers, of which one-third were union members. The researchers found that unionized respondents were more likely to expect to be a home care worker a year from now, less likely to be looking for other jobs outside of home care, more likely to receive benefits, and had higher wages on average.
The Trump administration announced last August that it was considering scrapping the Obama-era rule that affirmed home care workers could deduct union dues from their Medicaid-funded paychecks. This practice has been criticized by conservatives who argue that in-home caregivers shouldn’t be able to “skim” government funds away to union coffers and that doing so “damages the integrity” of the Medicaid program.
Mark Mix, the president of the National Right to Work Legal Defense Foundation, which files lawsuits in favor of banning unionized workplaces from requiring dues for bargaining representation, praised the Trump administration’s new rule in a statement, calling it a “long-overdue rule [that] closes the illegal loophole created by the Obama Administration that has provided union officials with legal cover to siphon hundreds of millions of dollars in Medicaid funds into union political and lobbying activities.”
In 2014, thanks to a lawsuit backed by Mix’s group, the U.S Supreme Court ruled in Harris v. Quinn that Illinois home care workers could not be required to pay union agency fees. Mix said the Trump administration’s new rule represents “another important step forward in protecting the rights of home care worker from rapacious union officials” and pointed to the 2014 Supreme Court decision, describing it as a situation where “[National Right to Work] Foundation attorneys freed homecare workers” from making payments.
CMS Administrator Seema Verma has denied their new rule is about making it harder for workers to be in unions; she said it’s simply to ensure that any diversion of Medicaid payments is truly lawful.
Last April, the Senate Committee on Homeland Security and Government Affairs — which is tasked with investigating “the efficiency, economy, and effectiveness” of all government agencies — wrote to Verma requesting that she look into this alleged “dues skimming” and cited rising Medicaid costs. The letter, authored by committee chairman Sen. Ron Johnson, R-Wisc., said allowing unions to take dues from home health care providers saps $200 million annually from Medicaid recipient care. Johnson asked CMS to review the practice “and determine whether changes to law or regulation are necessary to ensure Medicaid funds are provided to the program’s intended beneficiaries.”
“The effect of this final rule is the elimination of one method of getting payment from A to B,” the final rule states. “It in no way prevents healthcare workers from purchasing health insurance, enrolling in trainings, or paying dues to a union or other association.”
Critics say the Trump administration’s rationale makes no sense, pointing out that eliminating the ability to directly deduct union dues does nothing to curb Medicaid spending.
“Just because the source of these workers’ wages is Medicaid dollars doesn’t mean they don’t have the right to choose how to spend it.”
Caitlin Connolly, the director of social insurance at the National Employment Law Project, a union-backed legal advocacy group, told The Intercept the argument put forward by the Trump administration and its Republican allies is misleading because the money spent on dues is taken from workers’ wages, who get to decide how to spend the money that they earn.
“When I look at my paycheck, I get my wages and I decide, thanks to the convenience of my right as an employee, to allocate some of that money to a retirement account, some to a health savings account, and some to my union dues,” she said. ‘It’s my money, and I get to choose how to spend it. Just because the source of these workers’ wages is Medicaid dollars doesn’t mean they don’t have the right to choose how to spend it.”
And since workers are still able to take their wages and spend it on union dues, just without the convenience of direct paycheck deduction, Connolly said this shows the point is to create more hurdles for workers to jump through to exercise their union rights.
“I think there are locals working with members to see how they can handle dues payments in a way that would reduce the burden if direct deposit were restricted, and I think workers are sharing with them ideas on what would be helpful, but there’s nothing easier than saying, ‘I don’t have to think about this, I agree to this, and please take care of it,’” Connolly said.
Update: May 16, 2019, 12:32 p.m. ET
This piece has been updated to include that eight unionized home care workers joined the lawsuit on Wednesday night.