March 27, 2023

Michigan Repeals 'Right-to-Work' Law

On March 24, 2023, Gov. Gretchen Whitmer signed into law reconciled Senate Bill 34/House Bill HB4005, which officially repealed Michigan’s “right-to-work” law, which has been in effect since 2012.

The core issue that right-to-work laws seek to address is the “union security clause” — a provision in a contract between a union and employer (called a collective bargaining agreement) that requires the employer to fire any employee who fails to pay dues or other required payments to the union.

Union security clauses are legal under federal law. However, a state can pass a “right-to-work” law to prohibit employers and unions from including union security clauses in their contracts. When a state elects to be a “right-to-work” state, employees will not lose their jobs if they choose not to financially support a union. The more employees opt out, the less revenue unions in that state receive from the employees they represent.

The United States is divided on this issue. About half of U.S. states and Guam have a “right-to-work” law. But Michigan is no longer among them. Effective immediately: “An employer and a labor organization may enter into a collective bargaining agreement that requires all employees in the bargaining unit to share fairly in the financial support of the labor organization.”

"Right-to-work" laws are often enacted (and repealed) along political party lines, and Michigan is no exception. The 2012 “right-to-work” statute passed under a Republican governor, Senate and House; the 2023 repeal passed under a Democrat governor, Senate and House, and the Senate vote was divided 20-17 directly along party lines. Democrats laud the repeal as representing commitment to Michigan’s legacy of organized labor, while Republicans decry it as limiting Michigan’s ability to compete against right-to-work states, including two on its borders — Indiana and Wisconsin. Perhaps anticipating that conservative-leaning parts of Michigan may try to pass laws to prohibit union security clauses at the local level (as Lincolnshire, Illinois, tried to do in 2015), the new law further bans Michigan localities from enacting their own ordinances which would “prohibit or limit an agreement that requires all bargaining unit employees, as a condition of continued employment, to pay to the labor organization membership dues or service fees.”

Any employer with a collective bargaining agreement with a union should find out whether it has a dormant union security clause that this legislation activates, and if so, what to do about it. If they have such a clause, it likely requires them to discharge any union-represented employee who refuses to pay union dues. If they don’t, they should anticipate that the union will ask for one in the next round of negotiations.

However, employers should be aware that technically this change only applies to union dues, not union membership. An employee may still refuse to be a member of a labor organization, even though that organization serves as his or her collective bargaining representative, and he or she is obligated to pay some form of dues to the union. Employers reviewing their contracts for dormant union security clauses should be careful to be precise in their communications with both the union and their employees, to avoid overstating the employer’s obligation.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

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