MERC’s Power to Approve the Unionization

Setting aside the questionable origin of the MQC3, a fundamental question remains: Would the unionization of in-home caregivers as public employees have been legal in the first place? State law and the history of public-sector unionization in Michigan indicate it would not have been.

MERC can take actions only within the limited subject matter over which it has jurisdiction, and its primary jurisdiction is public employees[*] — specifically local government employment, which is not part of the state’s classified civil service.[53]

Local government employees did not get the power to have a union recognized as their exclusive bargaining agent until the revision of the state constitution in 1963.[†] Michigan’s new constitution stated, “The legislature may enact laws providing for the resolution of disputes concerning public employees, except those in the state classified civil service.”[54] This provision made clear that the Legislature — not the governor’s office, municipalities or interlocal agreements — has the power to make the laws regarding public employees and unionization.

In 1965, following Michigan’s new constitutional provision, Michigan enacted the Public Employment Relations Act. PERA was modeled on the 1935 federal National Labor Relations Act, which governs most private-sector unionization.[‡] Notably, the NLRA excludes from its definition of “employee” those “in the domestic service of any family or person at his home” and “any individual having the status of an independent contractor.”[55] Prior to the in-home caregiver unionization, no court had ever held that PERA allowed the unionization of those who receive an indirect payment of money from the government.

Moreover, the Michigan courts had developed a four-factor test to identify who the government employer was in determining public employment under PERA. The Court of Appeals, in Wayne County Civil Service Commission v. Board of Supervisors,[56] set forth the following factors to determine who the employer is:

(1) that they select and engage the employee; (2) that they pay the employee; (3) that they have the power of dismissal; and (4) that they have the power and control over the employee’s conduct.[57]

Note that the MQC3 did not meet the requirements set forth in this four-part test for being the employer of the in-home caregivers. The MQC3 does not hire or fire the caregivers; the Medicaid care recipients do. In fact, the collective bargaining agreement between the MQC3 and the SEIU specifically states:

The parties reaffirm that Home Help Consumers have the sole and undisputed right to: 1) hire Providers of their choice. … 2) remove Providers from their service at will and for any reason; and 3) determine in advance under all circumstances who can and cannot enter their home.

The parties reiterate their prior acknowledgement that: the persons receiving service each, individually, retain control over the physical conditions at the work location and individually direct the performance of services and that such authority and control on the part of the individual consumers will not be, and is not, diminished in any way by this Agreement, nor by the outcome of any subsequent contractual negotiations between these parties.[§],[58]

Even the petition for certification presented to MERC acknowledged that the care recipients or their guardians retained the fundamental duties of employers: “[T]he individual persons receiving care retain authority over their personal selection and retention of particular homecare workers.”[59] Thus, the MQC3 did not meet elements (1) or (3) of the court’s four-factor test.

Similarly, the MQC3 does not pay in-home caregivers. Formally, the participants do, with assistance from the DCH, which issues the checks and prints the providers’ W-2s. These W-2s in turn list the participant as the employer.[60]

Nor, indeed, does the MQC3 determine the compensation in-home caregivers receive through the Home Help Program. In-home caregivers’ pay is determined by the Legislature. Compensation levels agreed to in the MQC3’s collective bargaining contract with the SEIU are aspirational. They essentially represent an agreement to lobby the Legislature for that level of compensation. The Legislature is not obligated to listen. Thus, the MQC3 did not satisfy element (2) of the court’s test.

The MQC3 does not exercise supervisory control over in-home caregivers, who are providing care in tens of thousands of homes across Michigan. The only agency visiting the home is the Department of Human Services, and it does so only as an initial visit;[61] there is no ongoing supervision, except by the participant (to the extent he or she is able). The MQC3 did not meet element (4), meaning that the MQC3 had none of the hallmarks of an employer.

In 1996, PERA was amended in a way that made it even more clear that the in-home caregivers where not public employees. The statute was amended to exclude from public employment any sort of contractor:

[A] person employed by a private organization or entity that provides services under a time-limited contract with the state or a political subdivision of the state is not an employee of the state or that political subdivision, and is not a public employee.[62]

This was how the law stood when the MQC3 and the SEIU approached MERC to certify the unionization in 2005. The Legislature, which has the sole power to determine public employment, had not classified in-home caregivers as public employees, and the MQC3 did not qualify under Michigan law as their employer.[¶] Given this, in-home caregivers were not public employees, and the Commission lacked jurisdiction. MERC should not have become involved.

Apparently, MERC did not consider whether it had the authority to be involved in the union certification. On May 4, 2010, the Michigan Senate Appropriations Subcommittee on Human Services, while discussing a similar certification involving home-based day care providers, received testimony from MERC Director Ruthanne Okun. Okun indicated that MERC never determined if it had jurisdiction in that case because the two parties consented to MERC’s involvement:

There was a consent election agreed to. In other words, indicating the employment relationship and that — who was in the bargaining unit and who would be eligible to vote. And it was that consent election. When that happens — when there’s a consent election, there never is an independent determination to — by the Michigan Employment Relations Commission. They’re the only body that would have the authority to make that determination, and there were no hearings in this [home-based day care providers] case. Had in fact someone wished to challenge the employment relationship, they would be welcome to do that, and then they would seek a hearing with the Michigan Employment Relations Commission. (Emphasis added.)[63]

As noted above, the MQC3 and SEIU indicated in their petition that they “consented” to MERC’s jurisdiction. One of the foundations of the law, however, is that a court or administrative agency does not have jurisdiction over a matter simply because the parties consent to it. The Michigan Supreme Court recently restated: “It is a recognized doctrine that parties cannot confer jurisdiction over a subject-matter by their consent, upon courts from which the law has withheld it.”[64] Hence, MERC lacked authority to approve the unionization in the first place.  

[*] MERC also oversees “the law governing labor relations for private sector employers and employees not within the exclusive jurisdiction of the National Labor Relations Act.” See “Guide to Public Sector Labor Relations Law in Michigan: Law and Procedure before the Michigan Employment Relations Commission,” (Michigan State University and the Michigan Employment Relations Commission, 2011), 1, (accessed Sept. 23, 2012).

[†] Prior to this, public employment was regulated by the Hutchinson Act. The Hutchinson Act did not require state or municipalities to bargain with public-sector employees or with their union representatives. See Public Act 116 of 1947.

[‡] One important difference between the two acts, however, is that the NLRA authorizes both employee strikes and employer lockouts, while PERA does not. See, for instance, MCL § 423.202. Other than that, PERA follows the NLRA model closely.

[§] Proposal 4 maintains this distinction in its proposed Article 5, Section 31(5). This subsection refers to providers as “participant-employed” and states, “Collective bargaining under this Section shall not deprive [Home Help Program] participants of their right to select, supervise, train and direct, or terminate, an individual provider.”

[¶] As noted previously, the Michigan Legislature amended PERA twice more in 2012 to clearly exclude situations like that presented by the MQC3 and SEIU.