"Project labor agreements" reduce competition and cause discrimination against non-union employees and in favor of union membership.
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Michigan's image as a place to do business has improved in recent years
as the state has made progress toward reducing burdensome regulatory costs and
taxes, but one major roadblock to consolidating and expanding those improvements
remains: an unfriendly labor climate. Sometimes unfairly, but often with good
reason, Michigan is perceived in other parts of the country as a place where
labor unions wield inordinate and harmful influence. But improving the labor
climate in Michigan is more than a positive economic policy approach: It is
necessary to thwart abuse of the rights of Michigan workers. The following ten
recommendations will help enforce Michigan workers' moral and legal rights as
well as have a positive impact on the state's labor climate.
3. Enforce the "Beck" rights of Michigan workers and enact
Under a 1988 ruling of the United States Supreme Court in Communication
Workers of America v Beck, workers are entitled to a refund of any union
dues that are used for purposes not related to collective bargaining activities,
contract administration, or grievance processing. Unfortunately, these
"Beck" rights have gone largely unrealized because workers are unaware
of them and governments have shown virtually no desire to enforce them. The
result is that labor unions routinely spend half or more of their members'
dues on causes and candidates that many of those members personally oppose.
Either by act of the Legislature or by executive order of the Governor,
Michigan should act to protect the freedoms of speech and association of workers
by enforcing the Beck decision. Requiring the posting of Beck
information notices in all private-sector firms that contract with the state
would be a step in the right direction. An April 1996survey of 1,000 union
members nationwide revealed that 78 percent were not aware of their right to
have an independent accounting of how their unions spend their dues money and to
secure a refund for that portion spent for noncollective bargaining activities
"Paycheck protection" for all Michigan workers would put real teeth
in the effort to enforce Beck rights by requiring that unions which
compel dues and fees secure from each worker a prior, annual, voluntary, written
authorization to use any dues for noncollective bargaining activities. Workers
could automatically shield their money from noncollective bargaining activities
up-front when dues are collected, instead of having to jump through hoops to
recover those dues after they have been extracted.
Details about the Beck decision and suggestions for specific wording
of an order to enforce it in Michigan are provided in the Mackinac Center for
Public Policy study, Compulsory Union Dues in Michigan4.
Information about paycheck protection is provided in the Mackinac Center report,
Paycheck Protection in Michigan.5
4. Enact a right-to-work law.
Twenty-one states protect the right of every worker to abstain from union
membership without fear of losing his or her job. Michigan, unfortunately, is
not one of those states.
Adjusting for the cost of living, including taxes, families in the 21
right-to-work states earn $2,852 more in real income per year than do their
counterparts in Michigan and the other 29 states that lack right-to-work laws
(See Chart 2). Between 1960 and1993, the number of
manufacturing jobs in the 21 right-to-work states rose by 77 percent, far in
excess of the other states. The evidence is clear and compelling: Right-to-work
really means the right to work for more-more individual freedom, more
jobs, and more income in real terms.
Nothing could do more for worker rights and Michigan's image and economic
development than a right-to-work law. The only thing union leaders have to fear
from right-to-work is the free choice of the very workers they are in business
5. Repeal the Prevailing Wage Act.
Imagine a law that subsidizes the well-off, discriminates against large
segments of the work force, wastes tens of millions of dollars every year, and
hurts the competitiveness of Michigan businesses. Unfortunately, there is no
need to imagine such a law: Those are precisely the effects of the Prevailing
Wage Act of 1965. It is a classic case of special interest legislation that
benefits a narrow few at the expense of the many.
The Act, which covers construction projects in Michigan that receive full or
partial funding from the state, requires workers on those projects to be paid
"prevailing" wages and benefits. That invariably means the rates fixed
in local collective bargaining agreements-in other words, union wages and
benefits. The competitive compensation packages established by non-union
contractors and their employees-who make up almost two-thirds of Michigan's
construction workforce-are not considered under the law for purpose of
determining "prevailing" rates. So less expensive workers who are
otherwise competent and qualified, but not unionized, are effectively frozen out
of work on a host of projects from school construction to road repair, allowing
labor unions to foist tens of millions of dollars in needless costs on Michigan
taxpayers every year.
The Prevailing Wage Act has been challenged in the courts in recent years,
found to be pre-empted by federal law at one point, and then later reinstated.
Between December 1994and June 1997, when the law was inactive, an estimated
11,000 additional construction jobs were created in Michigan. The Legislature
needs to settle the prevailing wage issue on behalf of common sense and sound
economics and repeal this costly special interest legislation immediately. At
the very least, it should follow the example of the Ohio Legislature, which in
1997 exempted public schools from having to pay the excessive costs mandated by
that state's counterpart to Michigan's Prevailing Wage Act.
6. Amend the Public Employment Relations Act (PERA) to provide a
"Teacher Bill of Rights."
This recommendation would make exclusive representation optional for each
individual teacher in Michigan, and remove the unions' duty of fair
representation obligation toward a teacher who opts out of his workplace union.
The monopoly bargaining privilege of the Michigan Education Association(MEA)-afforded
by the existing PERA law-is the basis of the MEA's power to prevent teachers
from negotiating their own individual terms of employment. As the exclusive
representative, school employee unions such as the MEA inevitably end up
bargaining education policy with local school boards and state government. The
interests and objectives of individual teachers are often subordinated to the
"collective whole" even when the individual teacher's employment
opportunities may suffer as a result.
Many Michigan teachers want professionalism, not unionism. Accordingly,
current legal requirements of mandatory union memberships or dues as a condition
of employment should be repealed. The law should be further amended to permit
the teacher union to represent only those teachers who affirmatively elect such
representation in writing. Employees who do not affirmatively select such
representation may represent themselves. Governor Engler, in a major address to
the Legislature in October 1993, stated that no teacher in Michigan should be
coerced into joining and paying dues to a union, and the Mackinac Center agrees.
Under a "teacher bill of rights" arrangement, unions will owe no
duty of fair representation to any teacher who elects independent
(non-collective bargaining) status. Unions would, however, be prevented from
discriminating against any teacher regarding his terms and conditions of
employment solely on the basis that he has elected to not join or be represented
by a union. This avoids the so-called "free rider" argument.
7. Amend PERA to recognize the unconditional and immediate right of
employees to resign their union memberships.
Employees in the private sector have an unconditional right to resign from
union membership at any time. A line of United States Supreme Court cases
recognizes this right as essential to preserving the integrity of the First
Amendment's guarantees of free speech and free association. As a result,
private-sector union constitutions and bylaws clauses that limit the timing of
an employee's resignation from the union are unconstitutional. Additionally,
it is a violation of a union's duty of fair representation under the National
Labor Relations Act to refuse to honor an individual's unconditional
withdrawal from the union.
PERA as written provides an option to government employees who are
exclusively represented: They may either become members of the union, or else
they may be non-member" agency fee payers."6 Some Michigan
public employee unions place limitations on the rights of members to resign in
order to secure non-member agency fee-payer status. Unfortunately, there is no
right afforded by Michigan statute to protect an employee's unconditional
right of union resignation, contrary to federal labor law regarding the
individual's First Amendment right of free association. This can be remedied,
and government employees' rights could be easily protected, by amending PERA
to include a clause specifically prohibiting any unreasonable restrictions on
any government employee's right to resign from his union.
8. Amend PERA to permit employees to determine by majority vote whether
they will be required to contribute money to a union to retain their jobs before
a union security clause is added to any contract.
Union security clauses are contractual agreements between employers and
unions that obligate employees to either join a union and pay union dues or else
refrain from joining but pay agency fees, which are usually equivalent to the
dues of a full union member. Security clauses are the primary source of funding
for unions, and they carry the compulsory force of law so union negotiators will
routinely sacrifice employees' economic benefits for the right to compel every
employee to pay dues or fees. Management often agrees to the security clause,
regarding it as a throwaway concession to the union. Ultimately, the employee
pays in the form of reduced compensation and freedom to choose otherwise.
The inherently abusive nature of the security clause is a ripe opportunity
for employee-friendly labor reform. An amendment to PERA requiring prior
employee approval-by way of a majority vote on the union security
clause-would augment employees' freedom by giving them the ability to accept
or reject an obligation to pay dues or fees before it is included in the
contract and becomes legally binding. This is a matter of democratic governance
and simple fairness.
9. Amend PERA to provide that no collective bargaining contract can be
implemented without the prior approval-determined by a secret ballot
election-of a majority of the employees covered by the agreement.
As written, PERA does not require that all of the employees in a bargaining
unit be allowed to vote by secret ballot on whether to accept or reject the
collective bargaining agreement their union has bargained for them. Nor is
employee ratification of contracts a uniform practice among unions. Those unions
that are progressive enough to provide for ratification do not necessarily
provide for a secret-ballot vote. With no ratification procedure in place, union
officials can trade direct employee benefits-such as wage increases-for
items which benefit the union's interest, such as paid time off for union
officials or free office space.
As the workers' representative, the union has a legal and ethical
obligation to advance the interests of its members, and not the interests of the
organization. As written, PERA does not even ensure that union members can vote
on whether the contract negotiated by their representative meets their needs.
These are fundamental economic workplace issues that bind all of the employees
in the bargaining unit, regardless of their membership status. This gaping hole
in the law should be plugged immediately to protect the interests of bargaining
PERA should be amended to introduce union accountability to the employees
that unions represent. The amendment should provide that each bargaining unit
employee-regardless of his union membership status-may vote on the
acceptance of any contract offer submitted by the employer, including collective
bargaining agreements that affect wages, benefits, and working conditions. The
amendment should further provide for a secret ballot procedure during the
ratification process, in order to limit the occurrence of employee intimidation
and assure an untainted protected ballot.
10. Amend PERA to provide that upon filing of an unfair labor practice
charge by an individual against an employer or union, the Michigan Employment
Relations Commission (MERC) shall investigate the merits of the charge to
determine whether a complaint shall be issued.
Existing MERC procedures for pursuing unfair labor practice charges place an
insurmountable burden on individual employees attempting to enforce their rights
through the agency. MERC does not investigate the merits of an unfair labor
charge before issuing a complaint-it is the charging party's responsibility
to gather sufficient facts, affidavits, and other evidence in support of the
charge. Employees pressing charges with MERC usually do not have the benefit of
counsel and must conduct this investigation independently.
If the charge appears to state a claim, then a complaint issues and a formal
hearing occurs. Without counsel, an employee in a hearing is left to navigate a
maze of unfamiliar formal procedures entirely his own. These are significant
disincentives for the individual employee contemplating a MERC charge against
his union or employer. As a result, relatively few employees pursue their rights
successfully with MERC.
MERC should be accessible to unions, employers, and individual employees
alike. PERA should be amended to authorize MERC to investigate charges and
prosecute complaints on behalf of individual charging employees. A MERC attorney
should investigate charges as they are filed, taking affidavits from the
charging party and relevant witnesses. He should then determine whether there is
reasonable cause to believe that the law has been broken and if so, a complaint
should issue. Upon issuance of a complaint, the case should be assigned to a
MERC trial attorney, who prosecutes the case on behalf of the employee free of
11. Remove the state government's ability to act as a union collection
agent for union political funds.
If workers' wages are the source of union funding, then employers are the
faucets that control the flow of funds to labor organizations. The payroll
deduction is a convenient and popular method of funds collection that springs
from a contractual provision between the union and the employer. Without such an
agreement, unions would bear the burden of collecting funds from their
membership after the money has made its way into workers' pockets. This would
not only involve additional time and expense for the unions-it would also
require union collection agents to persuade members to consciously and
voluntarily part with their hard-earned money.
The state has a compelling interest to remove partisan politics from
government workplaces. One solution, the banning of wage check-offs for
political purposes, has withstood judicial scrutiny in the Circuit Court
covering Michigan. Political action committee (PAC) funding is already regulated
in Michigan: Public Act 117 of 1994'sban of "reverse check-offs"
(which stipulate that a worker must take action if he does not want
political contributions deducted from his paycheck) and requirement for annual,
worker consent of PAC payroll deduction authorizations were significant steps
toward greater worker freedom and union accountability. After union legal
challenges resulted in Public Act 117 being upheld in court, worker
contributions to union PACs declined in 1998 (see Chart 3). The Legislature should build on these reforms by
prohibiting government collection of all political funds via a payroll
Prohibiting political payroll deduction would serve three additional
purposes. First, it would afford greater protection of workers' free speech
rights by returning direct control over disbursement of union political funds to
the wage earner before it goes to union coffers. Second, it would compel unions
during collection periods to persuade their members that the unions' political
expenditures properly represent the political views of their memberships. Third,
it would save Michigan taxpayers the cost attendant to the government acting as
the tax collector for unions, which are private business enterprises. The funds
could be used for more worthwhile purposes.
12. Outlaw the use of "project labor agreements" on any building
construction using state funds within the state of Michigan.
"Project labor agreements" (PLAs) mandate that all contractors must
employ members of a designated union for all labor performed on a particular
site. These "union-only" agreements are frequently agreed to by state
and local governments in Michigan in order to guarantee labor peace during the
life of a given contract, but the premium paid for this peace also permits union
discrimination and non-competitive bidding to persist.
As a matter of public interest, the Legislature should intervene in this area
to ensure that Michigan's public construction awards are consistent with
existing state public bidding policies designed to foster competition in
government contracting. The purpose of the many Michigan bidding laws is to
protect the public by placing bidders on an equal footing and to ensure that
competition will eliminate the possibility of fraud, extravagance, or favoritism
in the expenditure of public funds. But PLAs reduce competition and cause
discrimination against non-union employees and in favor of union membership.
This has potentially severe detrimental effects on non-union employees and
employers, including a substantial number of minority-owned construction firms
(who are routinely denied union status and union labor for reasons of racial
PLAs severely limit the number of contractors and subcontractors that are
available to perform work: In 1997, over 80 percent of construction workers were
not unionized, according to the Bureau of National Affairs. Through the
use of PLAs, this vast majority of construction workers and contractors is
effectively removed from the bidding process, leaving only a small fragment of
unionized workers to compete for the project. PLAs are bad public policy because
they represent a costly and discriminatory favor to a narrow special interest,
and they ought to be eliminated.