Tuesday, February 19, 2008

More on Today's Supreme Court Certs: Karass & DuPont

4united_states_supreme_court_112904 Ross Runkel provides this great backgrounder on the union security fees case that the U.S. Supreme Court granted cert in today, Locke v. Karass:

The Maine State Employees Association (MSEA) is the exclusive bargaining agent for certain state workers, and collects compulsory "agency fees" from non-members who are in the bargaining unit. Some of these fees are transferred to Service Employees International Union (SEIU), MSEA's national affiliate. MSEA included in its calculation of chargeable expenditures those costs of litigation (by both itself and SEIU) that was germane to collective bargaining. This meant that nonmembers contributed, through their service fees, to some litigation that was not undertaken specifically for their own bargaining unit, but rather was conducted by or on behalf of other units or the national affiliate, sometimes in other states. Included within this general category of expenditures were the salaries of SEIU's lawyers, and other costs of providing legal services to bargaining units throughout the country. Costs of litigation that was not related to collective bargaining, however, were not included in the service fees assessed to MSEA's nonmembers. The 1st Circuit held that MSEA may lawfully charge non-members for this "extra-unit litigation" so long as it is germane to the union's collective bargaining duties.

This is a Court that has already shown itself to be suspicious of union security fees that must be paid by non-members in the recent Davenport case, but this case seems closer to the  union's non-political interests of providing services to its members and non-members. I am concerned for the labor movement that the Court thought this case cert. worthy.

Ross has this backgrounder on the other case granted cert. today, the ERISA anti-alienation case of Kennedy v. Plan Administrator for Dupont Savings and Investment Plan:

William Kennedy's ERISA plan contained a no-alienation provision. William designated his wife Liv as the sole beneficiary. Upon their divorce, Liv agreed to be divested of all her rights. However, there was no Qualified Domestic Relations Order (QDRO). The 5th Circuit held that an ERISA Qualified Domestic Relations Order is the only valid way a divorcing spouse can waive her right to receive her ex-husband’s pension benefits under ERISA.

This case takes us back to the designated beneficiary days of Egelhoff, but this case does not appear to be about preemption but whether there is an exception to the general rule of non-alienation of pension benefits in the divorce context. Generally, A qualified domestic relations order would be necessary, but the Court might find that although the employee cannot be divested without a QDRO, a spouse can.

Both of these cases will likely be argued in the Fall.



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