Client Bulletin #486
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Yesterday, amid massive protests in Lansing, Michigan became the 24th right-to-work state. Republican Governor Rick Snyder signed two1 right-to-work bills into law, continuing a trend that began earlier this year with Indiana.
Opponents, most notably the President and some union leaders, have blasted the legislation. President Obama, visiting the Detroit suburb of Redford on Monday, said that right-to-work laws "give you the right to work for less money." Jim Hoffa, General President of the International Brotherhood of Teamsters, said in a webcast, "We're in the first round of a long fight. . . . We are going to get rid of right-to-work for life, forever." State Rep. Tim Greimel (D-Auburn Hills), who will become the Democratic leader of the state House next year, called the legislation "an attack on Michigan's middle class."
The Michigan right-to-work law generally will make it unlawful for labor unions and most private sector employers to include provisions in collective bargaining agreements that require labor union membership as a condition of employment. In other words, Michigan private sector employees generally will retain all of their existing rights under the National Labor Relations Act and any collective bargaining agreement between their employer and union representative, but under the new law, the agreements cannot bind employees to the many facets of union membership, including payment of union dues and assessments; union rules; or union fines, penalties or punishment, including union discipline or fines for working during a strike or crossing picket lines. It will be up to the employee to decide whether to join a union. Unions and their political supporters vigorously oppose right-to-work laws, and the new Michigan law is no exception. Unions and their supporters argue that employees should not be permitted to be "free riders," getting the benefits of union representation without paying dues or the financial equivalent for membership.
The Michigan Law and Its Relationship to Federal Labor Law
Section 8(a)(3) of the NLRA prohibits employer "discrimination in regard to hire or tenure of employment … to encourage or discourage membership in any labor organization." A proviso to that section specifically provides that nothing in the NLRA "shall preclude an employer from making an agreement with a labor organization … to require as a condition of employment membership therein on or after the thirtieth day following the beginning of … [an employee's] employment." That proviso allows collective bargaining agreements with "union security" or "maintenance of membership" clauses requiring union membership (with some judicially carved-out exceptions) as a condition of employment after the 30th day of an employee's employment.
In 1947, Congress enacted the Taft-Hartley amendments to the NLRA. Section 14(b) of the Taft-Hartley Act allows states to prohibit union security or maintenance of membership clauses that would otherwise be lawful under Section 8(a)(3) of the NLRA.
Michigan's new right-to-work law is expressly enacted to protect employees' right to work "in a manner consistent with section 14(b)" of the Taft-Hartley Act. The Michigan law provides in pertinent part that
(1) An individual shall not be required as a condition of obtaining or continuing employment to do any of the following:
(a) Refrain or resign from membership in, voluntary affiliation with, or voluntary financial support of a labor organization.
(b) Become or remain a member of a labor organization.
(c) Pay any dues, fees, assessments, or other charges or expenses …to a labor organization.
(d) Pay any charitable organization or third party an amount that is in lieu of …dues, fees, assessments, or other charges or expenses required of members of or employees represented by a labor organization.
(2) An agreement … that violates subsection (1) is unlawful and unenforceable. This subsection applies only to an agreement … that takes effect or is extended or renewed after the effective date of the 2012 amendatory act that amended this section.
The new Michigan law apparently applies only to collective bargaining agreements that become effective more than 90 days after the current state legislative session ends. In other words, agreements already in place are not affected until the agreements expire.
The right-to-work law was part of an appropriations measure, which may shield it from a public referendum and, instead, may require legislative action for repeal. A court challenge by opponents is possible.
The new Michigan law, as well as Indiana's recent enactment of a similar law, have been the subject of heated political and economic debate. Proponents argue that employees have a fundamental right to choose whether or not to join a union and that right-to-work laws create a better economic environment for job creation. Opponents contend that right-to-work laws are an attack on unions and an attempt to drive down wages.
In fact, in right-to-work states, the NLRA and other laws continue to protect employees against violations of employee rights by employers or unions. Collective bargaining relationships remain intact. Unions are free to solicit more members and organize more and smaller bargaining units under the recently relaxed rules of the National Labor Relations Board as currently constituted. Although contractual "union security" and "maintenance of membership" clauses are unlawful and unenforceable under a right-to-work law, unions can continue to fulfill their representational role and convince the employees whom they represent that union membership is worth the price.
No doubt employers with employees in Michigan will face questions about the new law and its impact. Here are a few:
What is the new law's effect on a union dues check-off authorization card that was executed by the employee under a valid "maintenance of membership clause" that becomes unlawful and unenforceable under the new law?
Probably none. Typically, it will be necessary to read the specific language of the dues check-off authorization card to determine whether (1) the check-off authorization automatically becomes void when the employee resigns from the union; or (2) the employee even can revoke the check-off authorization at that specific time.
What other rights do employees gain in a right-to-work state, such as Michigan (once the law takes effect and is applicable)?
Employees in states with right-to-work laws such as Michigan's generally have a right to resign from union membership at any time and thereby avoid any post-resignation union fines or union discipline for conduct that violates the union's internal rules.
Would this reduce the union's power in the event of a strike?
Unions exercise power not only through the financial means gained from union dues, but also through their power to strike. Union power to discipline and fine members for working during a strike and crossing picket lines is a valuable tool in the union's kit. This power is potentially reduced if employees can resign from membership and thereby avoid post-resignation union penalties. Unions in Michigan may have to temper their strike conduct and bargaining positions in response to the effects of the new right-to-work law.
Does this law have anything positive for unions?
Unions may benefit if the law attracts more employers to Michigan – thus giving the unions more organizing targets and prospective members, in a state where union organizing has historically been high. But the unions will have to "sell" employees on their value now.
What's likely to happen next?
No doubt there will be a continuing uproar from organized labor and its supporters in the days to come, but it is doubtful that any significant legislative developments will occur before the 2014 Michigan elections. In the meantime, expect both proponents and opponents to be citing economic data and anecdotes about the success and hardships that they contend are attributable to the new law.
If you have any questions about this issue, please contact any member of Constangy's Labor Relations Practice Group, or the Constangy attorney of your choice.
1 Michigan also enacted a separate right-to-work law applicable to certain public sector workers. This article deals only with the Michigan law applicable to private sector employers and their employees. The private-sector law dealt with in this article does not apply to employees covered by the Railway Labor Act, employees of federal, state or local entities and agencies, or employees of labor organizations.
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