West Coast caregivers take legal action to end union dues skimming from Medicaid

West Coast caregivers take legal action to end union dues skimming from Medicaid
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West Coast caregivers take legal action to end union dues skimming from Medicaid

A group of 10 West Coast home caregivers — five from California, three from Oregon and two from Washington — today took legal action to end the deduction of union dues and political contributions from their Medicaid payments.

With joint legal representation from the Freedom Foundation and National Right to Work Legal Defense Foundation, the caregivers filed a motion to intervene in federal litigation brought by a coalition of states — including California, Oregon, Washington, Connecticut and Massachusetts — against the U.S. Department of Health and Human Services (HHS) in the Northern District of California.

“The determination of these caregivers is truly inspiring,” said Maxford Nelsen, the Freedom Foundation’s director of labor policy.

“It takes a lot of guts,” he said, “to stand up to the repeated attempts of thuggish unions like SEIU and AFSCME and their political cronies to bully and exploit those selflessly caring for the most vulnerable among us. Yet caregivers continue to courageously fight back.”

The underlying lawsuit was filed by the California-led coalition after HHS in May formally repealed an illegal regulation that sought to allow states to divert money to unions from Medicaid payments to home caregivers serving elderly and disabled clients.

It marked the 50th lawsuit California’s Attorney General, Xavier Becerra, has filed against the Trump administration.

Since 1972, federal law has prohibited states from making payment for Medicaid services to anyone but the providers of those services. Beginning in the 1990s, however, certain states allowed the unionization of home caregivers and subsequently began deducting union dues and political contributions from their Medicaid payments.

In 2017, at least eight states deducted $147 million in union dues from the Medicaid payments of nearly 360,000 caregivers. Between 2000 and 2017, about $1.4 billion was diverted to unions in this manner.

While the U.S. Supreme Court in 2014 struck down states’ mandatory union dues requirements for home caregivers in its Harris v. Quinn ruling as an unconstitutional “scheme,” states and unions subsequently implemented additional coercive schemes to continue withholding funds from caregivers’ Medicaid reimbursements against their will.

For instance, each of the caregivers filing to intervene currently has union dues and/or political contributions skimmed from their Medicaid payments against their will and has had their requests to cancel the deductions rejected by their union.

Many of the caregivers only authorized the deductions in the first place after being misled or pressured by union organizers at state-mandated, captive-audience meetings.

Other caregivers have had their signatures forged on membership forms by union organizers, triggering nearly irrevocable dues deductions from their Medicaid payments. In Washington, SEIU 775 in April paid $30,000 to settle a federal lawsuit brought by a caregiver after a union organizer forged her signature.

If the court grants their motion to intervene, the caregivers will contend the 2014 administrative regulation adopted by HHS was illegal to begin with because it contradicted a clear federal statute prohibiting the “reassignment” of Medicaid provider payments to third-parties like unions that provide no services to Medicaid clients.

They will further seek to defend HHS’s decision to rescind the regulation.

On the other side, two unions — SEIU Local 503 in Oregon and United Domestic Workers/AFSCME Local 3930 in California — and nine caregivers (mostly current or former union officers) from various states have moved to intervene on behalf of the state coalition and seek to preserve states’ ability to divert funds from providers’ Medicaid payments to unions.

If states and unions are forced to stop skimming funds from caregivers’ Medicaid payments via payroll deduction, nothing will prevent caregivers from choosing to pay union dues via credit/debit card, check or electronic funds transfer, just as most Americans pay most bills and memberships.

During the public comment period last year, the Freedom Foundation submitted formal comments in support of HHS’s proposal to remove the illegal regulation and helped dozens of West Coast caregivers do the same.

“It’s heartening to see federal regulators finally taking action to put a stop to the coercive and illegal practices enabled by payroll deduction of union dues from Medicaid payments,” said Nelsen.

“Assuming federal courts find the law means what it says and HHS takes meaningful action to enforce it,” he added, “caregivers will soon have more control over their money and taxpayers can have greater confidence that Medicaid dollars are serving the intended beneficiaries and not subsidizing special interest groups.”

The regulation at issue is slated to be formally repealed on July 5.


Maxford Nelsen
Director of Labor Policy
(360) 956-3482
Olympia, WA

Ashley Varner
Vice President of Communication and Federal Affairs
(434) 326-4183
Washington, D.C.

Director of Research and Government Affairs
As the Freedom Foundation’s Director of Research and Government Affairs, Maxford Nelsen leads the team working to advance the Freedom Foundation’s mission through strategic research, public policy advocacy, and labor relations. Max regularly testifies on labor issues before legislative bodies and his research has formed the basis of several briefs submitted to the U.S. Supreme Court. Max’s work has been published in local newspapers around the country and in national outlets like the Wall Street Journal, Forbes, The Hill, National Review, and the American Spectator. His work on labor policy issues has been featured in media outlets like the New York Times, Fox News, and PBS News Hour. He is a frequent guest on local radio stations like 770 KTTH and 570 KVI. From 2019-21, Max was a presidential appointee to the Federal Service Impasses Panel within the Federal Labor Relations Authority, which resolves contract negotiation disputes between federal agencies and labor unions. Prior to joining the Freedom Foundation in 2013, Max worked for WashingtonVotes.org and the Washington Policy Center and interned with the Heritage Foundation. Max holds a labor relations certificate from the University of Wisconsin-Madison and graduated magna cum laude from Whitworth University with a bachelor’s degree in political science. A Washington native, he lives in Olympia with his wife and sons.