To Pay or Not to Pay Union Dues? That is the Question Under Right To Work

In February, I wrote about the Michigan Court of Appeals decision Taylor School District and Taylor Federation of Teachers v Rhatigan, involving a 10-year union security clause that would remain in effect until July 1, 2023, while the remainder of the collective bargaining agreement (“CBA”) would expire in 2017. 

Why was the union security clause negotiated for a 10-year term? Because Michigan law was amended in 2012 to give employees the right to refrain from joining or assisting unions or paying any dues to a union and making it unlawful for employers and unions to interfere with those rights (often referred to as right-to-work law, MCL 423.14 and MCL 423.209). The amendments became effective March 28, 2013.

So, recognizing that it would soon be an employee’s right to opt out of the union, the union pushed for a union security clause that would require all of the employees holding union positions to either join the union or pay a service fee “in an amount determined by the union” for the next 10 years! The appellate court agreed with the Michigan Employment Relations Commission (MERC) that the 10-year term was excessive and unreasonable, depriving employees of their right to opt out, and effectively nullifying the state law for the next 10 years.

Since then the Michigan Court of Appeals has issued two more decisions concerning the right to work law. In Saginaw Education Association v Eady-Miskiewicz, the appellate court examined a union security clause that provided an annual one-month “window of opportunity” to opt out of union membership. Specifically, the union membership application stated above the signature line:

“Membership is continued unless I reverse this authorization in writing between
August 1 and August 31 of any year.”  Further, next to the payroll deduction box
it stated: “I authorize my employer to deduct … dues, assessments and contributions
as may be determined from time to time, unless I revoke this authorization in writing
between August 1 and August 31 of any year.”

The appellate court upheld MERC’s decision striking the clause, holding “where employees have a right to refrain from union activity, the union may not make rules interfering with or restraining employees in the exercise of that right.” The court noted, however, that the “right to discontinue financially supporting a union may be waived if the waiver is clear, explicit, and unmistakable” but the agreement at issue did not pass muster.

Now, in an unpublished decision, the appellate court has approved of a union dues agreement. In Teamsters Local 214 v Beutler, employees were provided a union membership application that stated:

"This authorization and assignment shall be irrevocable for the term of the applicable
contract between the union and the employer or for one year, whichever is the lesser,
and shall automatically renew itself for successive yearly or applicable contract periods
thereafter, whichever is lesser, unless I give written notice to the company and the union
at least sixty (60) days, but not more than seventy-five (75) days before any periodic
renewal date of this authorization and assignment of my desire to revoke same"

(Emphasis added). The collective bargaining agreement expired on June 30, 2013 and, in anticipation of the right to work legislation, the newly-negotiated agreement did not contain a union security clause or authorization for the employer to deduct dues from employees’ wages.

Pauline Beutler provided the union with written notice in September 2013 that she intended to exercise her right under the right to work act and withdraw from union membership. MERC found that her letter was sufficient to withdraw from union membership but not to avoid her obligation to continue to pay union dues. That obligation was separate from the collective bargaining agreement, contractual in nature, and found on her union application.

By agreement the employee was only permitted to terminate the obligation to pay dues during that 15-day window of opportunity. The obligation to pay dues was for a specified period, regardless of her union membership, and “constituted a binding waiver of her right to discontinue her financial support of the union at will.”  

It is unclear how this agreement and the appellate court’s ruling squares with the right to work law which also makes it unlawful for an employer or union to require an individual, as a condition of employment, to “pay any dues, fees, assessments, or other charges or expenses of any kind or amount or provide anything of value to a labor organization.” MCL 423.14 (1)(c). However, the appellate court has ruled, and we should expect to see more dues check off forms containing language similar to the above. Unions may not be able to force membership, but apparently they can throw obstacles up that will make it easier for them to continue collecting dues.

When was the last time your company utilized legal counsel to negotiate your collective bargaining agreement? If it has been a while, there may be terms that continue to be perpetuated that are now unlawful, or that can be renegotiated to be more favorable to the company. Experienced labor counsel can help.

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