25 Apr MICHIGAN SUPREME COURT RULES UNIONS CANNOT CHARGE GRIEVANCE REPRESENTATION FEES TO NON-DUES PAYING PUBLIC SECTOR EMPLOYEES
It is well established that unions owe a duty of fair representation to employees they represent in public sector employment. But what if a public sector employee represented by a union does not pay union dues? Can the union charge that non-dues paying employee a service fee to cover the union’s cost of processing a grievance or arbitration case on that employee’s behalf? Or, does the duty of fair representation require unions representing public sector employees to treat those non-dues paying employees the same as dues paying employees for purposes of grievance handling? On April 22, 2024, the Michigan Supreme Court decided in the case of TPOA of Michigan v. Renner that it is the latter – unions must provide the same core representational services to all public sector employees covered under their collective bargaining agreements, regardless of whether those employees pay dues or not.
A review of the ever-changing union dues rules for both the private and public sector employees puts the case in context.
Relationships between companies, unions, and employees in the private sector are governed by federal law as enforced primarily through the National Labor Relations Board (NLRB). On the other hand, such relationships in the public sector are governed by state law as enforced primarily through the Michigan Employment Relations Commission (MERC). In short – private sector is federal law under the NLRB. Public sector is state law under the MERC.
Labor relations in Michigan in both the private and public sector were affected by the Michigan right-to-work law in 2012, which granted employees in both sectors the right to refuse to pay union dues and still retain their jobs. Additionally, in 2018, the U.S. Supreme Court decided in Janus v. AFSCME that public sector workers in every state enjoyed a separate “right-to-work option” under the First Amendment, regardless of whether a state right-to-work law existed or not. Thus, while Michigan’s right-to-work law was recently repealed and effectively eliminated a right-to-work option for a private sector worker in our state, the U.S. Supreme Court’s Janus decision still essentially provides a right-to-work option for public sector employees within Michigan.
Numerous other states have had right-to-work laws for decades. When employees began making use of those rights and stopped paying dues, some unions viewed those employees as “free riders,” and responded by charging a fee to process grievances those employees might bring against their employers. On the private sector side, when the issue came before the NLRB years ago, it ruled that those unions were violating their duty of fair representation to those non-dues paying employees. The NLRB held that unions must process grievances the same for all employees covered under their labor agreements, regardless of whether some employees had exercised their right to not pay dues under a state right-to-work law. On the public sector side, at least one state (Pennsylvania) took the contrary approach and ruled that a union could lawfully charge pay-for-service fees under certain circumstances. However, because Michigan had never had a right-to-work law prior to 2012, and since the Janus decision did not exist before 2018, it wasn’t until recently that the issue was brought before the MERC (and the state courts on appeal) to determine what the rule would be for public sectoremployees in Michigan.
The Renner decision applies to Michigan public sector employees the same private sector rule the NLRB has maintained for decades and, conversely, rejects the Pennsylvania approach for its public sector employees. The facts and decision are straightforward. The Technical, Professional, and Officeworkers Association of Michigan union (TPOA) created an internal rule imposing an up-front, $1,290 fee on non-dues paying employees to process any grievances they might file. The employee (Renner) filed an unfair labor practice charge with the MERC claiming the TPOA’s rule violates the union’s duty of fair representation to him. The MERC agreed with Renner. The Court of Appeals affirmed. Now the Michigan Supreme Court has agreed as well. The Court held that a public sector union violates its duty of fair representation by requiring non-dues paying employees in the bargaining unit to pay a fee for representational services when no such fee is applied to dues paying employees.
The take-away from this case is that public sector employees working in jobs covered under union collective bargaining agreements have a constitutional right under Janus to not pay union dues. If they exercise their right not to pay dues, the unions must still represent them in all core bargaining and representational capacities in the same fashion as how the unions represent dues paying employees.
If you have any questions regarding this or any other labor and employment matter, please do not hesitate to contact Masud Labor Law Group.