IV. Reforming Labor Law to Protect Worker Rights (2 of 2)

23. 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 designated unions for all labor performed on a particular site. These "union-only" arrangements are frequently agreed to by state and local governments 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 noncompetitive bidding to persist.

Assuring labor peace on a construction site is a legitimate goal, but strikes are primarily a function of unions themselves. Consequently, nonunion contractors are actually in a better position than union contractors to deliver on a no-strike promise. PLAs are not a foolproof means of avoiding labor strife; in fact, strikes and other delays have occurred on projects covered by PLAs in other states.12

As a matter of public interest, the Legislature should ensure that Michigan's public construction awards are consistent with existing state bidding policies designed to foster competition in government contracting. The purpose of the many 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 nonunion employees in favor of union membership. This discrimination has potentially severe detrimental effects on nonunion employees and employers.

For further information, please see www.mackinac.org/88.

24. Pre-empt local "living wage" ordinances.

The proliferation of municipal "living wage" ordinances is a threat to economic growth in Michigan. These ordinances require employers who do business with a city, or who benefit from tax abatements, "enterprise zones," or other subsidies, to pay employees an above-market premium wage of around $8 to $12 an hour, and often require health benefits. As this report was written,13 "living wage" laws were in effect for Detroit, Ann Arbor, Eastpointe, Ferndale, Pittsfield Township, Ypsilanti, Ypsilanti Township, and the Washtenaw County Road Commission (see Chart 5).

"Living wage" ordinances have a certain superficial appeal; they are usually presented as a way to lift workers-and the families they support-out of poverty. But their appeal rests on a lack of knowledge about how the labor market works. These ordinances actually tear away the lower rungs on the ladder to economic opportunity. A Michigan House committee recently heard from small businesses with specific examples: A machine shop owner testified that he has seven employees and would like to hire more, but won't be able to if his city adopts a proposed living wage ordinance. "I just hired an ex-con at $7.50 an hour, and if he does well he can make a lot more. With a $10 living wage I could not take a chance on this employee, or younger, lower skilled workers."14

By artificially raising the cost of labor, "living wage" ordinances force employers to hire higher-skilled workers (in order to improve productivity and justify the higher wage rates) or reduce their payrolls. In either case, unskilled workers don't gain income-they lose jobs. And in the process, they lose opportunities to gain the work experience and on-the-job training necessary to find their way to higher wage employment. At the same time, higher wage costs lead to higher prices on goods and services sold to local government. These costs are eventually passed on to taxpayers in the form of higher taxes or limited services.

The spread of "living wage" ordinances is the result of a nationwide campaign by union officials. While such proposals have long been rejected by Congress and state legislatures because of their harmful economic effects, they often find fertile ground among ambitious local politicians. Not all local politicians are fooled, however. Ed McNamara, the Democratic executive of Wayne County, may have summed up "living wage" ordinances best, if rather bluntly: "living wage" is a "diabolical instrument that's got to be eliminated. It's the greatest deterrent to economic development of anything out there."15

Wages should be agreed to by employers and employees, not dictated by the government. "Living wage" laws simply add another level of government interference in the market. By pre-empting local "living wage" laws, the state of Michigan would clear away obstacles to job creation, economic growth, and employment opportunities.

Local "living wage" laws are simplistic public policy with bad economic results. The Legislature should not hesitate to set them aside.

For further information, please see www.mackinac.org/1705.

25. Give Michigan workers a flexible "comp-time" law.

In today's workplace, the act of punching a time clock in factory fashion is disappearing. The nature of work is changing and so are the needs and desires of workers who want ever more flexibility in their hours and compensation. Laws governing the workplace, however, are not always keeping pace. The issue known as "comp time" is a case in point.

Under existing law, hourly wage earners must be paid time-and-a-half or more for anything beyond the normal eight-hour day. But as workers increasingly feel a need to adjust their work schedules to accommodate family activities, desired leisure time, or the work patterns of a spouse, the old overtime practice is too rigid. Some workers would prefer to work overtime on some days and receive time off rather than cash for the extra hours.

The problem is that antiquated wage laws prevent workers from trading overtime earnings for comparable time off-a practice known as "comp time" that is becoming increasingly common in public-employee workplaces. Union leadership (but not so much rank-and-file workers themselves) oppose the adoption of any laws that would grant this time option because they fear employers will abuse the system to avoid paying overtime wages altogether. The 1964 Michigan minimum wage law sets minimum wage and overtime standards for many hourly employees not covered by the federal Fair Labor Standards Act.  Under these federal and state laws, employees must be paid in cash for overtime even though many would prefer the option of cashing in this pay for equivalent time off.16

Michigan's representatives in Washington can work to make the necessary changes at the federal level, but state legislators can act to extend the comp-time option to many workers right now. Today, there are more working, single parents and dual-income families than ever before. Especially for women in dual-earner and single-headed households, the comp-time option would provide greater workplace flexibility.

Comp time doesn't present a radical, untried idea. For many years, federal, state, and local governments have granted comp-time options allowing their employees trouble-free comp-time arrangements for leisure, family needs, or continuing education.17 It's time that employees in the private sector enjoyed the same benefits public-sector employees already enjoy.

Granting Michigan workers more flexibility in their work schedules by recognizing their preference for comp time is a progressive, pro-worker, family-friendly reform whose time has come.

26. Amend the Public Employment Relations Act to recognize the unconditional and immediate right of public-sector 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 U.S. 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 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.

Michigan's Public Employment Relations Act (PERA), which governs public-sector labor relations in the state, provides an option to government employees who are exclusively represented: They may either become members of a union, or else they decline union membership and become nonmember "agency fee payers."18 But some Michigan public employee unions place limitations-such as time-limited "window periods"-on the right of union members to resign. Unfortunately, PERA as written does not protect an employee's unconditional right to resign, contrary to federal labor law regarding the individual's First Amendment right of free association. The Legislature could better protect government employees' rights by amending PERA to include a clause specifically prohibiting any unreasonable restrictions on any government employee's right to resign from his union.

27. Permit employees to vote on compulsory support clauses.

Compulsory support clauses are provisions in 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 an amount equivalent to the dues of a full union member. Compulsory support clauses are the primary source of funding for unions, and they carry the force of law-so union negotiators will routinely sacrifice employees' economic benefits for the legal right to compel every employee to pay dues or fees. Unfortunately, employers often agree to a compulsory support clause, regarding it as a throwaway concession to the union. Ultimately, however, it is employees who pay in the form of reduced compensation.

An amendment to Michigan's Public Employment Relations Act (PERA) requiring prior employee approval-by way of a majority vote on the compulsory support clause-would give employees the ability to accept or reject an obligation to pay dues or fees before such an obligation is included in the contract and becomes legally binding.

The Legislature also should amend PERA to include a provision allowing for a "deauthorization" vote in unionized government workplaces where a specified number of employees presents a petition to the Public Employee Relations Board asking for such a vote. Deauthorization is a procedure whereby employees remove their union's legal ability to coercively extract fees; it in effect repeals a contract's compulsory support clause. If a majority of employees voting supported deauthorization, the compulsory support clause would be removed but the rest of the contract would remain in force, and the union would retain its exclusive bargaining rights.

The inherently abusive nature of the compulsory support clause is a ripe opportunity for employee-friendly labor reform. An amendment to PERA requiring employee approval for compulsory support clauses, as well as the option of deauthorization, would do much to promote democracy and fairness in the workplace.

28. Amend the Public Employment Relations Act to require employee ratification of union contracts for public-sector employees.

Some unions in Michigan allow for an employee ratification vote of negotiated contracts, but employee ratification is by no means a uniform practice, nor is it legally required. Without such ratification procedures, union officials may feel free to trade direct employee benefits-such as wage increases-for items that benefit union institutional interests, such as paid time off for union officials or free office space.

Even those unions that do provide for employee contract ratification do not necessarily require a secret-ballot vote. Public votes mean that union officials can keep an eye on any members who vote the "wrong" way on a contract.

As employee representative, a union has an ethical obligation to advance the interests of its members, not merely its own institutional interests. Unfortunately, Michigan's Public Employment Relations Act (PERA) as written does not adequately hold public-sector unions accountable to this standard. Accordingly, the Legislature should amend PERA to require all public-sector unions in Michigan to hold secret-ballot ratification votes, allowing all employees in a bargaining unit the opportunity to accept or reject the collective bargaining agreement their union has bargained for them. The PERA 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.

29. Require the Michigan Employment Relations Commission (MERC) to investigate the merits of unfair labor practice charges filed by employees.

Existing administrative procedures for pursuing unfair labor practice charges place an insurmountable burden on individual employees attempting to enforce their rights through the Michigan Employment Relations Commission (MERC). MERC presently does not investigate the merits of an unfair labor practice 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 and at their own cost.

If the charge appears to state a claim, then a complaint issues and a formal hearing occurs. Without counsel, however, employees in a hearing are left to navigate a maze of unfamiliar formal procedures entirely on their own. Such a prospect provides a significant disincentive for individuals employee who want to enforce their rights against a union or employer through MERC. Unsurprisingly, relatively few employees attempt to enforce their rights this way.

MERC should be accessible to unions, employers, and individual employees alike. Accordingly, the Legislature should amend the Public Employment Relations Act to authorize MERC to investigate charges and prosecute complaints on behalf of individual 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 would prosecute the case on behalf of the employee.