Mackinac Center Launches Public-Interest Law Firm, Files Suit Against DHS to Prevent Illegal Siphoning of So-Called ‘Union Dues’ From State Child Care Assistance Payments to Home-Based Day Care Providers

Suit seeks to end pretext that these independent day care providers are government employees

For Immediate Release
Wednesday, Sept. 16, 2009

Contact: Patrick Wright
Director, Mackinac Center Legal Foundation
or
Michael Jahr
Director of Communications
989-631-0900

LANSING — The Mackinac Center Legal Foundation, a newly created public-interest law firm, today filed suit against the Michigan Department of Human Services in a case where a “shell corporation” was established to shanghai more than 40,000 home-based day care business owners into a government employees union. On behalf of two owners, Sherry Loar and Dawn Ives, the MCLF filed an action at the Michigan Court of Appeals seeking to stop the DHS from improperly siphoning “union dues” out of state subsidy checks meant to provide assistance to low-income parents.

“The DHS, UAW and AFSCME have devised a scheme to siphon $3.7 million into union bank accounts,” said Wright. “They’ve done this by concocting a new government entity that they allege transforms 40,000 home-based private contractors into government employees and union members. If Sherry and Dawn are government employees simply because a few of their customers receive government aid, then doctors, landlords and independent grocers can’t be far behind.”

To achieve this massive increase in government employees, the DHS and unions appear to have created a shell corporation using an interlocal agreement between the agency and Mott Community College, a move that Wright criticized as extraconstitutional.

“If the state is determined to place these day care providers in a union, it needs an act of the Legislature,” said Wright. “Two government agencies cannot conjure up the power to change the law simply because they are working together.”

Both plaintiffs enjoy running their own businesses, and both provide an important service to parents and children in their community. They do not work for the state of Michigan, and aside from the parents who hire them, they do not work for an employer. Although they describe themselves as long-time union supporters, Loar and Ives were shocked last year when they received notification in the mail that they were considered dues-paying members of the Child Care Providers Together Michigan union.

“I’m not opposed to unions; everything has a place,” said Loar. “But when we enter my door, this is my home.”

A video that tells Loar and Ives’ story, as well as the complaint, legal brief, a backgrounder and other information related to the case, can be found at www.mackinac.org/9051.

The Mackinac Center Legal Foundation is a public-interest law firm that advances individual freedom and the rule of law in Michigan. Wright, who will continue as the Center’s senior legal analyst, explained that the Legal Foundation “will build upon the Center’s prior work of filing amicus briefs in strategic cases that allow the Mackinac Center to directly fight improper and illegal government activity.”

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