The Proposed Article I, Section 28(4), states that “no existing or future law” of the state or local government may “impair, restrict or limit the negotiation and enforcement of any collectively bargained agreement” as it relates to the financial support of a union by employees. In other words, no state law could relieve unionized employees of a contractual duty to pay money to a union.
This provision has two major consequences. The first involves the process of handling money that employees owe or have pledged to a union.
In many cases, an employer will withhold that money from a unionized employee’s paycheck and then forward the amount directly to the union. In this case, the money never actually reaches the employee.
Michigan lawmakers currently regulate this transaction, in both government-employee unionization and in the small-scale private-employee unionizations covered by the Labor Relations and Mediation Act. State law can prevent employers from withholding dues or other monies owed to the union, thereby leaving the union to collect the money directly from the employees themselves. In the context of government employers, such a prohibition on withholding union monies from employee paychecks has been justified on grounds of preventing the government from becoming entangled in the gathering of money for political purposes.
The proposed Article I, Section 28(4), however, would prevent such state regulations, allowing collective bargaining agreements to determine how such monies would be collected. Government employers could be required to collect money intended, for example, for union political action committees.
The second major consequence of the proposed Article I, Section 28(4), involves what monies a union can claim to begin with. When a union is certified as a collective bargaining representative in the workplace, it gains a monopoly right to become the “exclusive representative” of all of the employees during collective bargaining. Employees who support the union’s presence may choose to formally join the union, in which case, they would owe membership dues to the union. But in many states, including Michigan, a union also gains the legal power to demand payment from all employees for its negotiations during collective bargaining and “grievances” (i.e., resolving disputes with management). This payment is generally known as an “agency fee” and would be collected from all employees not already paying union dues.[*]
Under the NLRA, states are permitted to decide whether unions can levy a compulsory agency fee. States that do not grant the unions this power are known as “right-to-work” states.
Michigan is not currently a right-to-work state — unions in Michigan can demand agency fees from all employees, regardless of whether those employees support the presence of the union in the workplace. Employees who do not pay agency fees to the union can legally be fired if the collective bargaining agreement includes a “union security” clause, as almost all contracts do. (Union-security clauses in a right-to-work state are unenforceable.)
Under the proposed Article I, Section 28(4), the Michigan Legislature would no longer be able to decide whether Michigan would become a right-to-work state for either government employees or private-sector workers. Only a further constitutional amendment would allow a right-to-work provision that affects a collective bargaining agent’s “financial support by employees.”
[*] Note that “agency fees” are not “union dues.” Generally, agency fees are meant to cover exclusively the costs of collective bargaining negotiations and grievance administration. Nevertheless, agency fees are often set at the same level as union dues and are decreased only if a fee payer invokes his or her rights to cover no more than the union’s negotiating costs (these rights are generally known as “Beck” or “Hudson” rights, based on the Supreme Court cases that articulated them). Agency fees are not supposed to be spent on political purposes, a significant difference from union dues, which can be. Note also that union dues, because they are incurred “voluntarily,” are owed to a union in either a right-to-work state or a non-right-to-work state. (The degree to which the union members join “voluntarily” when they may face considerable social and legal barriers to leaving the union and becoming fee payers, is beyond the scope of this Policy Brief.)