Under Michigan law, if a union has been established in a school district, it becomes "the exclusive representatives of all the public employees in such unit for purposes of collective bargaining in respect to rates of pay, wages, hours of employment or conditions of employment ..." (emphasis added).[165]

Exclusive representation means that individual teachers or groups of teachers independent of the union may not negotiate their own contractual terms. Moreover, an employer also violates its duty to bargain in good faith when it bypasses the union, since direct bargaining between an employer and its employees would undermine the authority of the union.[166]

In addition, Michigan law provides that the unions and the school district may require that "as a condition of employment that all employees in the bargaining unit pay to the exclusive bargaining representative a service fee equivalent to the amount of dues uniformly required of members of the exclusive bargaining representative" (emphasis added).[167]

Accordingly, most collective bargaining agreements, if not all, contain provisions that require the payment of union fees as a condition of employment. This is known as a union security clause, a contractual paragraph that requires employees either to join the union and pay dues or to pay the union a lesser "agency fee" and forgo the other benefits of union membership.

A union security clause, where the school board and union have chosen to include one, establishes what is often described as an "agency" or "union" shop. Generally, these clauses also require the school board to agree to fire any employee who fails to join the union and pay dues, or refuses to pay the agency fee — unless their religious beliefs bar such participation, in which case they have to pay a dues-equivalent fee to charity (see "Religious Liberty and Compulsory Unionism" on Page 53). Even tenured teachers may be summarily terminated for failure to pay mandated fees to the union, despite the Teacher Tenure Act’s requirement for a prior hearing.[168]

Union security clauses are not without consequence. As Hoxby has noted:

"Laws permitting agency and union shops facilitate assertive collective bargaining because they greatly weaken the position of teachers in a district who oppose the union. The tools an individual teacher has to oppose the union are withholding of financial support and withholding of political support. Union and agency shops weaken these tools."[169]