On March 21, 2023, and along party lines, the Michigan Legislature advanced a bill to the Governor’s desk to repeal the state’s 2013 right-to-work. The Governor signed the bill on March 23, 2023. The new law is expected to go into effect in April 2024.
The Legal Development. Under the current right-to-work law, it is illegal for employers to condition employment on employees paying union dues or service fees. Prior to this law, and now going forward due to its repeal, such conditions may be imposed through the collective bargaining process, at least with respect to private sector employees. Such conditions are commonly known as “union shop” conditions. Due to federal constitutional precedent, union shop conditions cannot be imposed on public sector employees.
Impact on Union Negotiations. Importantly, such a requirement is not automatically imposed, at least with the exception of union agreements that do not have provisions which automatically resurrect a formerly agreed to union shop provision. Instead, unions must negotiate such requirements into their collective bargaining agreements with employers, presumably when their current contracts are due for renegotiation. Absent an agreement conditioning employment on paying union dues or fees, the status quo of there being no such requirement continues.
Options for Responding to Union Shop Proposals. For these reasons, employers should carefully evaluate the terms of new union shop provisions as they are proposed by unions. They need not agree to the terms from the pre-right-to-work era, nor agree to the terms that unions may propose to include such conditions in collective bargaining agreements. Union-shop-type provisions can include a number of caveats, caveats that were uncommon in contracts negotiated decades ago. For instance, union shop provisions can be crafted to:
- Still respect a degree of employee choice and their ability to opt out for religious or other reasons;
- Utilize more employee-friendly dues deduction authorization forms, forms allowing union membership and dues obligations to be rescinded at any time;
- Better address the timing and handling of dues that are deducted;
- Address the burden on the employer of administering dues deductions for unions; and
- Indemnify employers with respect to administering their obligations and disputes relating to the administration and application of their obligation to deduct union dues and fees.
Employers who are dealing with this at the bargaining table should understand that they have no obligation to agree to a union shop on the union’s terms, or for that matter, to agree to any union shop provision. There is no “cookie cutter” solution. The details depend on many factors, all of which are subject to negotiation on the same basis of all other terms of the union contract. The best approach is to proceed with care and seek the advice of counsel on the best approach for the given bargaining unit.
Will this Repeal be Short-Lived? Members of the Legislature are considering options to effectively repeal the repeal through a ballot referendum. Their success in this regard may be subject to making it over some significant legal hurdles in light of a provision in the repeal legislation authorizing a $1,000,000 expenditure for the state to educate the public on its terms. Laws which include such token appropriations have been regarded as not being subject to repeal by voter initiative. Thus, the repeal will likely go into effect until either the State enacts a new right-to-work law, or the voters amend the Michigan Constitution to reinstate right-to-work. In the meantime, the repeal will stand for at least the foreseeable future and unions will quickly attempt to restore union shop throughout the state’s private sector.
For more information about the information in this alert, please contact Rob Boonin (734-214-7650 or [email protected]), your Dykema relationship attorney, or any of the attorneys in Dykema’s Labor and Employment practice group.