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November 24, 2014

Bye-Bye, Big Labor? What Michigan’s “Right to Work” Law Means for Employers

Michigan’s new right to work law, which endorses the right to engage in or refrain from collective action and prohibits the closed shop, analogous to right to work laws in many other states, is not well received by labor unions.  Why do unions hate right to work laws, particularly when they change the way things have been for decades?  Because unions lose – they lose revenue because employees can no longer be forced to pay dues or agency fees to the union in order to keep their jobs.  Unions also lose power – they can no longer fine employees who violate the union’s rules.  The union continues to have the obligation to represent all employees in the bargaining unit equally, but will likely get paid less (in dues) for doing so.

The Michigan right to work law will not be effective immediately for everyone.  The new right to work law only applies to an agreement, contract, understanding or practice that takes effect or is extended or renewed after the effective date, approximately March 28, 2013.

On December 11, 2012 Michigan enacted a right to work law.  Governor Snyder signed House Bill 4003, which applies to the public sector, and Senate Bill 116, which applies to the private sector, into laws.  This legislation will prohibit an individual from being required as a condition of obtaining or continuing employment to do any of the following:

  1. Refrain or resign from membership in, voluntary affiliation with, or voluntary financial support of a labor organization.
  2. Become or remain a member of a labor organization.
  3. Pay any dues, fees, assessments, or other charges or expenses of any kind or amount or provide anything of value to a labor organization.
  4. Pay to any charitable organization or third party an amount that is in lieu of, equivalent to, or any portion of dues, fees, assessments, or other charges or expenses required of members of or employees represented by a labor organization.

If an agreement, contract, understanding or practice between or involving an employer and a labor organization violates the above provisions it is unlawful and unenforceable.  Therefore, Michigan private sector employees will retain all of their existing rights under the National Labor Relations Act and any collective bargaining agreement between their employer and union representative, should they choose to retain their union representation.  The new law will prohibit agreements from binding employees to the different 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.  Ultimately, the employee will now have the ability to decide whether to join a union.

Current collective bargaining agreements are “grandfathered” and this prohibition only applies to an agreement, contract, understanding or practice that takes effect or is extended or renewed after the effective date, approximately March 28, 2013.  Therefore, employees have to abide by the current contracts until they expire.  A recent NLRB decision stated that an employer’s obligation to check off union dues continues after the expiration of a union contract establishing such arrangement.  In light of this decision, it would be prudent for employers, if a current agreement expires or is extended after March 28, 2013, to tread carefully when providing employees an opportunity to opt out of the union or payment of union dues.  Employers should ensure they are lawfullycommunicating with their employees whose contracts expire after March 28, 2013 when providing information or resources to them about how to opt out.

The future of big labor is uncertain.  Unions stand to lose massive numbers of members and large sums of money when employees are given a choice to decline membership.  This isn’t the entire story, though.  The National Labor Relations Board has in recent years been heavily pro-union and only stands to get stronger through appointments from President Obama.

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About this Author

Partner

Mark D. Nelson is a partner in the Labor & Employment Practice Group. Mark has represented management in labor relations and employment discrimination law for 25 years. He has extensive experience representing employers in a wide variety of industries in labor matters, including union avoidance, union organizing campaigns, labor disputes and unfair labor practice proceedings.

Mark also has considerable experience representing employers in arbitration hearings on issues such as discharge, discipline, contract interpretation and management rights. He has...

(312) 569-1326
Associate

Alejandra Lara is an associate in the firm's Labor and Employment Practice Group.

312-569-1336