Michigan Right-to-Work Legislation

As you are now no doubt aware, on December 11, 2012, Governor Snyder signed Public Act 349 of 2012 ("PA 349"), which amends the Public Employment Relations Act ("PERA") by incorporating "Right-to-Work" provisions. The purpose of this brief memorandum is to share with you our initial assessment of this legislation.

• The most significant impact of "Right-to-Work" legislation is that employees cannot be required to pay either union membership dues or alternate "service fees" as a condition of obtaining or maintaining their employment. In most Michigan school districts and intermediate school districts, collective bargaining agreements include what is known as an "agency shop" provision, which has been permissible under PERA since the early 1970's. An agency shop contract provision requires each member of the union's bargaining unit, as a condition of employment, either to join the union and pay union membership dues or to pay an alternative service fee. Public Act 349 (when it becomes effective) will prohibit "agency shop" arrangements.
• Public Act 349 did not receive "immediate effect". Under the Michigan Constitution, the law becomes effective 90 days after the end of the current legislative session. It is anticipated that the effective date of PA 349 will be in late March 28, 2013.
• Nothing in Public Act 349 means that employees who elect not to support the union financially are removed from an existing bargaining unit or that a school district can negotiate individual terms and employment conditions with those persons. We recommend that school districts exercise caution in responding to employee questions about the impact of the Right-to-Work legislation as such conversations could be interpreted (correctly or not) as attempts to influence an employee's choice either to financially support the union or to decline to do so.
• If your school district currently has a collective bargaining agreement in effect which contains an agency shop provision, that arrangement remains valid and enforceable until the expiration of that collective bargaining agreement.
• If your school district currently has an expired collective bargaining agreement with an agency shop feature, your district must continue to comply with the agency shop requirements until PA 349 becomes effective.
• If your district's collective bargaining agreement will expire in 2013 and you are commencing negotiations for a successor contract, there is presently no prohibition over bargaining "agency shop" arrangements before the effective date of Public Act 349. If a school district and union ratify a new collective bargaining agreement before the effective date of Public Act 349, it is our present opinion that an "agency shop" arrangement within that contract would be valid until that contract expires.

We caution that this "exception" apparently applies only to the validity of "agency shop" provisions in existence on the effective date of PA 349 and is not applicable to another section of the same enactment which prohibits any individuals from using "force, intimidation or unlawful threats" to compel (or to attempt to compel) public employees to become or remain members of a labor organization or to refrain from joining, financially supporting, or becoming affiliated with a labor organization.

• If a school district is engaged in bargaining over the agency shop arrangements with any of its unions before the effective date of Public Act 349, any concessions made by the school district in this context should be part of a carefully developed strategy that also considers the school district's bargaining needs and priorities.
• Earlier this year the Legislature enacted Public Act 53 of 2012 which prohibited public school employers from deducting union dues or service fees.

As we have previously reported to you, Public Act 53 was enjoined by a federal court and is currently not operative. If that injunction is later dissolved or reversed, (i.e., Public Act 53 again becomes operative) school districts will not be able to deduct union dues or service fees even when those payroll deductions are made on an entirely voluntary basis. An exception applies to school districts making these deductions pursuant to collective bargaining agreements which were in effect on March 16, 2012.

• Public Act 349 does not prohibit school districts from making voluntary payroll deduction of union dues or service fees.

If voluntary payroll deductions continue to be permissible and are made for school employees covered by a collective bargaining agreement, we advise that there be:

(1) a specific provision within the collective bargaining agreement recognizing that such payroll deductions can only be made on a voluntary basis; and

(2) an accompanying individual written authorization signed by the employee specifically consenting to the wage deductions for union membership dues or service fees. In our opinion, employees signing these authorizations should be able to revoke them, in writing, at any time.

• After the effective date of PA 349 (i.e., late March 2013), agency shop arrangements will be "prohibited" bargaining subjects and any contracts entered into after the effective date of Public Act 349 should not contain language embodying those arrangements.

We anticipate that during the next several months there will be litigation challenging the constitutionality of Public Act 349. We will continue to monitor those developments.

Should you have further questions regarding the impact and implementation of Public Act 349, please contact a labor/employment attorney at our firm.