“Don’t come around here no more,” Tom Petty famously crooned in 1985. Michigan sent the same message to organized labor Dec. 11, 2012, when it became the 24th right-to-work state.
Labor has only itself to blame, according to Michael Lotito, an attorney with Littler Mendelson in San Francisco.
Organized labor overreached, Lotito said, when its leaders promoted Proposal 2, which would have granted public and private employees the state constitutional right to organize and bargain collectively through labor unions. The initiative failed, and the legislature and governor struck back by enacting right-to-work legislation.
Don’t count unions out in Michigan or across the land, though, Lotito cautioned. “There’s been talk about the death of organized labor for decades. Organized labor is sick, not dead,” he told SHRM Online.
The new law has “tremendous symbolism,” he emphasized, and will drain union coffers because unions can no longer require employees other than police and firefighters at unionized Michigan worksites to pay union dues.
Less money will translate into less political influence, Lotito said, which is why President Barack Obama traveled to Michigan in the middle of fiscal cliff talks to protest the new legislation and thousands of protestors gathered in Lansing.
The government should not be “trying to take away your rights to bargain for better wages and working conditions,” Obama said Dec. 10, 2012, at the Daimler Detroit Diesel Plant. “These so-called ‘right-to-work’ laws, they don’t have to do with economics; they have everything to do with politics. What they’re really talking about is giving you the right to work for less money. You only have to look to Michigan—where workers were instrumental in reviving the auto industry—to see how unions have helped build not just a stronger middle class, but a stronger America.”
Unions spent $800 million in the past two presidential elections, Lotito noted. Now they will have to persuade employees in Michigan bargaining units to pay dues because unions are worth the expense. Lotito said dues range from $300 a year in the service industry to $700 to $900 a year in nursing and the construction industry.
It remains to be seen whether this law will be a “tipping point” that prompts other states, such as Ohio, Pennsylvania and New York, to pass similar laws, Lotito remarked.
Unions have used their influence to get localities and states to prop up swelling pension liabilities for public employees across the country, he added. If unions have less clout, politicians may have less of an appetite to bail out these pension funds, he added.
The biggest momentum for “right to work” legislation came in the early 1950s, when 20 states—mostly in the South and West—enacted laws allowing represented employees to not pay union dues. Louisiana followed suit in the early 1970s, then Oklahoma in the 1990s. Indiana joined the ranks of “right-to-work” states earlier this year.
Subsequently, Indiana attracted 90 businesses that were considering Michigan, Lotito said.
Michigan’s Republican Gov. Rick Snyder predicted that the new laws—House Bill 4003 and Senate Bill 116—will help drive the state’s economic comeback by making it more competitive.
Despite all the protests and hoopla surrounding Michigan’s enactment of a right-to-work law, there are numerous misunderstandings of what right-to-work laws actually do, Lotito said.
Section 14(b) of the Taft-Hartley Act—passed in 1947 by congressional Republicans over President Truman’s veto—lets states enact right-to-work laws and outlaws “closed shops.” Right-to-work laws, however, “just take away mandatory dues as a condition of employment,” Lotito explained, by outlawing union security clauses.
“So much of this is setting the table and setting the tone,” Lotito said. “ ‘Right to work’ does little. It does not impact union recognition like EFCA [the Employee Free Choice Act] would have.”
It also does not affect the right to bargain or engage in concerted activity, or change whom the union represents. Unions might try to pressure freeloading employees into paying dues in spite of right-to-work laws, and may think it’s unfair that employees can choose not to pay dues and still reap the benefits of collective bargaining units and agreements. Some employees at a unionized site might pay dues to help ensure more vigorous union representation on their behalf, Lotito noted.
Those who refuse to pay dues are not union members, but are in the bargaining unit, explained Cliff Nelson, the co-chair of Constangy, Brooks & Smith’s labor practice group in Atlanta. So the union has a duty to represent them and they are subject to follow the collectively bargained grievance procedure for grievances against the company.
But those who are not union members may not avail themselves of the union’s own grievance procedures for complaints about the union’s representation of them, he explained. They’d have to go to the National Labor Relations Board or file a duty of representation lawsuit in federal court to complain about that, which he said doesn’t happen often.
Because those who don’t pay dues aren’t union members, they could cross a picket line and work during a strike without risking being fined by the union, but cannot vote on ratifying a collective bargaining agreement or whether to go on strike. However, Nelson added that in recent years strikes have become much less common. “Employees are reluctant to use a strike as a weapon. It can backfire. They could end up being on the street,” he remarked.
That said—“right to work” does not result in the parade of horribles many assume, James A. Matthews III of Fox Rothschild in Philadelphia, said in a Dec. 12, 2012, interview. Some think right-to-work laws result in a nonunion state, “which just is not true,” he said.
Some conclude erroneously that any collectively bargained discipline and termination procedures fly out the window in right-to-work states, and make everyone at-will employees, even at unionized worksites. That’s pure fiction, according to Matthews. Employees in right-to-work states are in open shops, rather than union shops, Matthews noted.
Unions will have a reduced incentive to organize workers in right-to-work states, Matthews noted. Even if they organize and negotiate collective bargaining agreements successfully, it’s unlikely that they will get dues from everyone they represent, so there’s a financial disincentive to organize in right-to-work states.
In addition, HR may have more economic leverage in bargaining with a union in a right-to-work state than elsewhere, he added.
Employers should not overreact to Michigan joining the ranks of right-to-work states, Lotito cautioned, adding that if employers now overreach, the pendulum may swing back the other way.
Allen Smith, J.D., is manager, workplace law content, for SHRM.