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Legal Alert: How Michigan's Right To Work May Impact Your Business

On March 28, 2013, Michigan will become the 24th state in the country to have what has been characterized as a “right to work” or “freedom to work” law.  This law promises to impact Michigan employers, including those dealing with unionized workforces and those who are not.  But how?  Michigan’s new Right to Work law (“RTW”) will change the employment relationship, but change will take time.
 
What Is Right to Work? RTW is not actually about anyone’s “right to work.”  Rather, it concerns an employee’s “right to work” for an employer without being forced to join a union or pay union dues as a condition of his/her employment.  Most union contracts today contain so-called “union security” clauses that require all employees to join the union – or minimally, to pay dues to the union – as a condition of their employment with the company.  Under RTW, those clauses will no longer be permitted in contracts negotiated on or after March 28, 2013.  As of that date, employees cannot be required to join, remain in, or support any labor organization as a condition of obtaining or maintaining employment, nor can they be intimidated, coerced, or threatened for choosing not to join, remain in, or support a labor union.  Michigan’s RTW law applies to private and public sector employees but excludes firefighters and police officers from its scope (so police officers and firefighters can still be required to unionize as a condition of employment). 
 
Can Employees Still Unionize?  Yes, RTW preserves the rights of Michigan employees to organize together, form, join or assist labor unions.  It also empowers employees to negotiate or bargain collectively with employers. 
 
Can Unions Still Collect Dues?  Yes.  RTW does not prevent unions from collecting dues as a condition of union membership.  It simply forbids the unions from being able to force employees to pay dues to an organization for which they are not a member.  As a practical matter, this may result in unions losing revenue from employees who choose not to join or remain members of a union.  But the law does not prevent a union from collecting dues from its members.
 
If Most of My Unionized Employees Resign from the Union or Stop Having Dues Deducted from Their Paycheck, Can I Stop Dealing with the Union?  Probably not.  Withdrawing recognition of a union is a process that is difficult and filled with legal pitfalls.  If you have a unionized workforce and most of those employees withdraw their financial support from the union, you should contact counsel before taking any action to withdraw recognition.
 
Must Employers Honor Pre-Existing Agreements With Unions?  Yes, RTW only applies to those agreements, contracts, understandings, or practices that take effect, are extended, or are renewed on or after March 28, 2013.  That means any pre-existing agreements that require employees to become union members or to pay union dues as a condition of employment will remain enforceable until those agreements either terminate or expire.  As a result of this provision, many unions are seeking to extend their existing contracts – even those not set to expire until after the 2013 cut off – because they want to retain the compulsory payment of dues by all employees covered by the contract beyond the March 28, 2013 deadline.  Thus, the full-impact of the RTW will not be felt for some time.
 
What Can Employers Tell Their Employees?  Whether you have employees represented by a union or not, the National Labor Relations Act (“NLRA”) (or the equivalent state act if the NLRA is not applicable to your business) still governs what an employer may discuss with its employees regarding union representation.  While Michigan employers may provide factual and accurate information regarding unions to their employees, employers are still prohibited from enticing or encouraging employees to resign their union membership.  Employers are also still subject to unfair labor charges if they engage in communication that is deemed to interfere with an employee’s right to unionize.  And employers whose employees are presently represented by a union remain obligated to bargain in good faith with the union concerning the hours, wages, benefits and other terms and conditions of employment of the employees within the bargaining unit represented by the union.
 
How Will the RTW Affect Michigan Employers?  Only time will tell the long-term effects of RTW for Michigan.  The American Legislative Exchange Council recently published research completed by the National Institute for Labor Relations regarding the key differences between RTW states and non-RTW states.  The statistics revealed that RTW states created more private sector jobs, enjoyed lower poverty rates, experienced greater technological advances, realized more personal income growth, and increased the number of individuals covered by employment-based private health insurance.  Other studies funded by RTW opponents cite lower overall wage rates among taxpayers in states that have passed RTW laws. 
 
Each state is different and the passage of time will tell how Michigan will fare as a RTW state.  In the interim, Rhoades McKee’s Employment and Labor attorneys can assist your business in understanding your rights, duties and liabilities under RTW and the NLRA. 
 
You are also welcome to join us today from 12:00 to 1:00 at Mlive for an online chat about Michigan’s Right to Work law.  If you cannot join us “live”, stop by www.rhoadesmkee.com, where the chat will remain posted for additional viewing after the online discussion is closed.