Michigan on Track to Become 24th Right-to-Work State

On December 6, 2012, the Michigan Senate passed two bills (SB 116 and HB 4003) and the House passed one bill (HB 4052), making Michigan poised to become the 24^th state with a right-to-work law. These bills would prohibit any requirement that employees be forced to join a union or pay an agency fee to a union as a term or condition of employment. SB 116 and HB 4052 are identical and apply to private sector employees. While HB 4003 applies to public sector employees, it creates an exemption for police and firefighters from the right-to-work provisions. Even though it was passed by the House, HB 4052 has not been reported to the Senate for procedural reasons. Nevertheless, the House is expected to pass SB 116 and HB 4003, as amended by the Senate, and Governor Rick Snyder has indicated that he will sign the bills if they reach his desk.

Presently, Michigan’s labor relations laws specifically protect the ability of unions and employers to include requirements that employees either join the union or pay an agency fee, which represents the employee’s pro rata share of the union’s cost to represent employees but excludes money spent by the union for political causes. If these bills become law, employees will be able to choose whether or not they want to be dues-paying members of a union.

Specifically, these bills prohibit any term or condition of employment that requires an employee to 1) join a union; 2) refrain from joining a union; or 3) pay union dues, agency fees, or money to a third party in lieu of such dues or fees. If an employer and a union enter into any agreements containing provisions in violation of the amendments, such agreements would be unlawful and unenforceable. A person, employer, or union violating the new subsection would be liable for a civil fine of up to $500.

The bills also proscribe using force, intimidation, or unlawful threats to attempt to influence an employee’s decision whether to join or refrain from joining a union. A person violating this requirement would also be liable for a civil fine of up to $500. Finally, the bills create a cause of action for a person who suffers an injury as the result of a violation of the new restrictions. Such an individual may bring a civil action for damages and/or injunctive relief. If successful, the courts will be required to award reasonable costs and attorneys’ fees to the prevailing plaintiff.

If SB 116 and HB 4003 are approved, they will be effective 90 days after they are signed. However, the new requirements will not affect any collective bargaining agreements (CBAs) that are in existence at the time of the effective date. Any agreements that take effect, are extended, or renewed after the effective date will be bound by the provisions of the bills. Thus, unions that currently have CBAs requiring the payment of dues or agency fees will only be guaranteed those fees until their current CBAs expire. Any similar provisions contained in a new CBA will be unenforceable. Even if the parties agree simply to extend or renew an existing CBA, those terms requiring dues payments will cease to be effective upon the expiration of the current CBA as well.

Legal challenges to the bills and political action in 2014 by union groups are expected. The legal process will likely run its course more quickly than usual because the bills provide exclusive original jurisdiction in an expedited manner to the Michigan Court of Appeals for any action challenging the validity of the sections containing the most controversial changes. In the meantime, employers may experience protests and civil disobedience, given organized labor’s strong opposition to the bills. In a deft legislative maneuver, the bills also provide for appropriations to the Michigan Department of Licensing and Regulatory Affairs in order to inform the public about its rights under the bills and to implement their new requirements. By including specific appropriations in these bills, they cannot be repealed by a voter referendum, unless a court finds a defect that would allow submitting the bills to the referendum process.

SB 116 and HB 4003 represent a significant change in labor relations policy in the state of Michigan, shifting from a policy of union protectionism to one of individual rights. The imminent passage of these bills provides an opportunity for Michigan employers to reassess their relationships with the unions that represent their employees. With a thoughtful and well-developed strategy and careful counseling, employers should be able to take advantage of this policy shift.