The United States Supreme Court dealt a blow to unions this week, which will further diminish the role and importance of unions for the US labor force in the future.

In 2013 there were 14.5 million members in the U.S., compared with 17.7 million in 1983. In 2013, the percentage of workers belonging to a union was 11.3%, compared to 20.1% in 1983. The rate for the private sector was 6.7%, and for the public sector 35.3%. (per Bureau of Labor Statistics).

Interestingly, and perhaps very telling as a backstory, is that blue states are also the ones with the highest union-membership percentages in the nation (NBC news).  Blue states are also where the strongest economies in the Nation are currently found (Washington State being the top State!).  Limiting the power of public unions has long been a goal of conservative groups. They seemed poised to succeed in the Supreme Court in 2016 and have achieved that goal for the most part with this week’s ruling.

Wednesday’s ruling overruled the court’s 1977 decision in Abood v. Detroit Board of Education, which had made a distinction between two kinds of compelled payments. Forcing nonmembers to pay for a union’s political activities violated the First Amendment, the court said. But it was constitutional, the court added, to require nonmembers to help pay for the union’s collective bargaining efforts to prevent freeloading and ensure “labor peace.”

Given the make up of the Supreme Court now (and how it will move further to the right with Trump’s next appointment) it could be a long time before unions strength swings the other direction towards greater prominence.

Starbucks, like other major companies based in Seattle, opposes the proposed employee-hours tax.  The Company says the city should reform its homelessness programs and show results before it seeks more money — a message the company has sent before.

Starbucks spokesman John Kelly said the tax itself and what it would cost the company are beside the point. He claimed Wednesday not to know how much the coffee giant would pay under the proposal to raise $75 million a year to pay for more affordable housing and homelessness services.

Starbucks has more than 10,000 employees in Western Washington, including its corporate headquarters, but it did not disclose its workforce specifically in Seattle. Large employers would owe $500 per full-time employee in 2018 and 2019 under the proposed head tax or employee-hours tax.

Benjamin Romano of the Seattle Times wrote May 9, 2018 that a number of Seattle companies have lined up against the proposed Head Tax, aimed at addressing Seattle’s out-of-control homeless crisis.  It is easy to argue with the results of the City’s past efforts; one need not do more than simply stroll under the bridges, backroads and green areas to see the number tents, campers, motorhomes (is living in a motorhome still “homeless”?) to see that Seattle’s homeless situation is as bad as any in the Country.

However, I fear that multinational corporations have become so dominant in this City that they can dictate public policy and force political decisions on us despite what our elected officials decide is best.  Power in the hands of the few vs. the many is always a scary proposition.  I guess Boeing has probably pushed its way around here for years (note its exemption from the City B & O tax for out of state sales of tangible goods), but now the gang of Amazon and Starbucks together can probably have things go their way on this and many other issues.  Microsoft and Boeing are largely located outside of the City limits.  It would be “game over” if that wasn’t the case.

Carolyn Elefant writes in Above the Law a reminder that things are a changing’ — and that includes the small law office delivery system of legal services.

Lawyers can now add dry-cleaning to the growing list of casualties of the digital era, which includes carbon paper, fax machines, typewriters, bike messengers, and ugly suburban office parks.  The demise of dry-cleaning is attributable to two primary trends. First, most workplaces — even formally stuffy Biglaw firms — tolerate more relaxed workplace attire that doesn’t require dry-cleaning or allow workers to telecommute several days a week so they can work from home in pajamas. Second, because the price of professional attire has declined, the economics of paying $10 to dry-clean a $40 dress no longer make sense. And while there are still plenty of affordable $2/garment dry cleaners, it’s questionable how much longer all of these stores can survive when with decreased volume.

Similarly, over the past five years, many lawyers handling basic trust and estate or small business matters failed to recognize that the significant improvement of DIY digital tools combined with nearly universal consumer reliance on the Internet would result in a significant loss of business. But not all lawyers are intentionally blind to change. Some simply lack the time or the interest to connect the dots between broader social changes and their specific practice areas. Morale: find a lawyer willing to incorporate newer technologies and methods that meet YOUR lifestyle.  If your lawyer refuses to text, email, have a decent website and invite DIY assistance to the project, find one who will!

As reported in the LA Times, “Aetna claimed this [past] summer that it was pulling out of all but four of the 15 states where it was providing Obamacare individual insurance because of a business decision — it was simply losing too much money on the Obamacare exchanges.

‘Now a federal judge has ruled that that was a rank falsehood. In fact, says Judge John D. Bates, Aetna made its decision at least partially in response to a federal antitrust lawsuit blocking its proposed $34-billion merger with Humana. Aetna threatened federal officials with the pullout before the lawsuit was filed, and followed through on its threat once it was filed. Bates made the observations in the course of a ruling he issued Monday blocking the merger.

‘Aetna executives had moved heaven and earth to conceal their decision-making process from the court, in part by discussing the matter on the phone rather than in emails, and by shielding what did get put in writing with the cloak of attorney-client privilege, a practice Bates found came close to “malfeasance.”

“Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger.”  — U.S. District Judge John D. Bates

‘The judge’s conclusions about Aetna’s real reasons for pulling out of Obamacare — as opposed to the rationalization the company made in public — are crucial for the debate over the fate of the Affordable Care Act. That’s because the company’s withdrawal has been exploited by Republicans to justify repealing the act. Just last week, House Speaker Paul Ryan (R-Wis.) cited Aetna’s action on the “Charlie Rose” show, saying that it proved how shaky the exchanges were.

‘Bates found that this rationalization was largely untrue. In fact, he noted, Aetna pulled out of some states and counties that were actually profitable to make a point in its lawsuit defense — and then misled the public about its motivations. Bates’ analysis relies in part on a “smoking gun” letter to the Justice Department in which Chief Executive Mark Bertolini explicitly ties Aetna’s participation in Obamacare to the DOJ’s actions on the merger, which we reported in August. But it goes much further.

‘Among the locations where Aetna withdrew were 17 counties in three states where the Department of Justice asserted that the merger would produce unlawfully low levels  of competition on the individual exchanges. By pulling out, Aetna could say that it wasn’t competing in those counties’ exchanges anyway, rendering the government’s point moot: “The evidence provides persuasive support for the conclusion that Aetna withdrew from the on-exchange markets in the 17 complaint counties to improve its litigation position,” Bates wrote. “The Court does not credit the minimal efforts of Aetna executives to claim otherwise.”

‘Indeed, he wrote, Aetna’s decision to pull out of the exchange business in Florida was “so far outside of normal business practice” that it perplexed the company’s top executive in Florida, who was not in the decision loop.

“I just can’t make sense out of the Florida dec[ision],” the executive, Christopher Ciano, wrote to Jonathan Mayhew, the head of Aetna’s national exchange business. “Based on the latest run rate data . . . we are making money from the on-exchange business. Was Florida’s performance ever debated?” Mayhew told him to discuss the matter by phone, not email, “to avoid leaving a paper trail,” Bates found. As it happens, Bates found reason to believe that Aetna soon will be selling exchange plans in Florida again.

 

‘As for Aetna’s claimed rationale for withdrawing from all but four states, Bates accepted that the company could credibly call it a “business decision,” since the overall exchange business was losing money; he just didn’t buy that that was its sole reason. He observed that the failings in the marketplace existed before Aetna decided to withdraw, but that as late as July 19, the company was still planning to expand its footprint to as many as 20 states. In April, top executives had told investors that Aetna had a “solid cost structure” in Florida and Georgia, two states it dropped.

‘While the Department of Justice was conducting its investigation of the merger plans but before the DOJ lawsuit was filed, “Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger,” Bates observed. During a May 11 deposition of Bertolini, an Aetna lawyer said that if the company “was not ‘happy’ with the results of an upcoming meeting regarding the merger, ‘we’re just going to pull out of all the exchanges.’”

 

‘Not such a veiled threat? Aetna’s Mark Bertolini tells the DOJ what will happen if it blocks the Humana merger. After the DOJ sued to kill the deal, Aetna cut back even more.

‘In private talks with the DOJ, Aetna executives continually linked the two issues, even while they were telling Wall Street that the merger was “a separate conversation” from the exchange business. Bertolini seemed almost to take the DOJ’s hostility to the merger personally: “Our feeling was that we were doing good things for the administration and the administration is suing us,” he said in a deposition.

‘Bates found “persuasive evidence that when Aetna later withdrew from the 17 counties, it did not do so for business reasons, but instead to follow through on the threat that it made earlier.”

‘The threat certainly was effective in terms of its impact on the Affordable Care Act, since Aetna’s withdrawal has become part of the Republican brief against the law. That it says so much more about Aetna executives’ honesty and integrity probably won’t get cited much by GOP functionaries trying to repeal the law. Aetna is at least partially responsible for placing the health coverage of more than 20 million Americans in jeopardy; that it did so at least partially to promote a merger that would bring few benefits, if any, to its customers is an additional black mark.

‘If there’s a saving grace in this episode, it’s that the company’s goal to protect the merger hasn’t worked, so far. The DOJ brought suit, and Bates has now thrown a wrench into the plan. Aetna has said it’s considering an appeal, but the merger is plainly in trouble, as it should be.”

By a 7-2 vote, the Supreme Court justices sided with Trinity Lutheran Church of Columbia, Missouri, which had sought a grant to put a soft surface on its preschool playground. The church was denied any money even though its application was ranked fifth out of 44 submissions.

The Associated Press wrote about the case here.