Short of an open government
employment amendment to PERA, the Legislature could subject government employee
unions to stricter financial oversight. The rationale for such oversight is
entirely straightforward: Since the government effectively guarantees union
dues when it signs a collective bargaining agreement with an agency-fee clause,
it can rightfully insist on an accounting for how those funds are used.
Making union spending
information available to union members and the public should prove useful to watchdogs
both inside and outside of government unions and help prevent fraud. Currently,
the coverage of financial reporting laws is spotty with regard to government
employee unions. Some state and international union bodies are required under
the Labor Management Reporting and Disclosure Act to file financial reports
known as “LM-2” or “LM-3” forms with the U.S. Department of Labor. The
requirements, however, do not apply to all unions and do not apply at all to
local unions that represent government employees exclusively.
At a minimum, all government
employee unions should be required to file LM-2 or LM-3 forms, just as their
private-sector cousins are required to do. It would be even better if union
officials were required to file reports that were independently audited,
something that is still not required for LM-2 reports.
Improved union reporting might
also contribute to better “Hudson enforcement” law. As noted earlier, in the
vast majority of unionized local government workplaces in Michigan, workers who
refuse to join a union are still obligated to pay the union an agency fee. A
line of U.S. Supreme Court decisions culminating in Chicago Teachers Union v.
Hudson has established that government employees who pay an agency fee can have
that payment limited to their pro-rata share of the costs of the union’s core
workplace representation duties: collective bargaining, contract administration
and grievance representation. In other words, nonmembers have a
right to withhold money from union political activism.
Nevertheless, the current
procedure for enforcing Hudson rights leaves much to be desired. There is
reason to believe that dues reductions granted by unions to Hudson objectors
vastly understate the extent of union political activism. For instance, our
analysis of LM-2 reports filed by the Michigan Education Association and the
National Education Association indicates that less than a third of that
teachers union’s dues are spent on core representation, while the MEA can
insist that Hudson objectors pay more than two-thirds of regular member dues.
A complete and audited record of union spending might resolve that discrepancy
and ensure that workers who oppose union politics are not forced to pay for
The rights of Hudson objectors
could be more completely vindicated if the state allowed agency feepayers to
appeal a union’s Hudson determinations to the Michigan Employment Relations
Commission or to the state courts. Legislators should also shift the burden of
proof so that the union is obligated to show by clear and convincing evidence
that agency fees cover only expenditures related to representation. Because the
union ultimately controls its own records and can document its own activities
far better than an employee can, this is not an unreasonable legal burden.
Caution is in order, however:
Whatever their legal prerogatives and privileges might be, unions remain
private institutions. A complete reckoning of union political activity would
require close state scrutiny of the day-to-day activities of union employees,
and such scrutiny could set troubling precedents in terms of civil liberties.
Furthermore, in a sense, all activities of government employee unions are
“political.” When a union negotiates performance standards and working
conditions for government employees, it is influencing government operations,
and when it negotiates over wages and benefits, it is affecting government
spending. The line between political activism and representation is likely to
be especially blurry in the realm of government employee unions.
While enhancing the enforcement
of employees’ Hudson rights deserves exploration, lawmakers will be on more
solid ground if they prohibit agency-fee clauses outright and leave both union
support and union oversight to union members.