Michigan Unions Lose Campaign Finance Fight

CINCINNATI (CN) – Michigan’s elimination of payroll deductions to political candidates does not infringe on union employees’ First Amendment rights, but it cannot be implemented until current collective-bargaining agreements expire, the Sixth Circuit ruled.

Argued last week, Michigan State AFL-CIO v. Schuette focused on changes made to the Michigan Campaign Finance Act, or MCFA, following the passage of Public Act 269 in April 2016.

The bill made it a felony for corporations to use payroll deductions to support political candidates through “separate segregated funds.”

The unions that filed suit against Michigan Secretary of State Ruth Johnson and Attorney General Bill Schuette argued that the elimination of these “PAC check-offs” violated not only their members’ First Amendment rights, but also the Contracts Clause of the U.S. Constitution.

In a nine-page ruling issued Thursday, Sixth Circuit Judge Jeffrey S. Sutton cited the 1998 Sixth Circuit case Toledo Area AFL-CIO Council v. Pizza extensively in his opinion, and determined that Michigan cannot enforce “the contested provision … [until] the end of the relevant collective bargaining agreements.”

“The Michigan law prohibits the administration of payroll deduction programs for union political action committees,” he wrote for a three-judge panel. “Just so in Pizza. The unions have contracts that provide for payroll deductions. Just so in Pizza. The Michigan law prohibits adherence to these agreements. Just so in Pizza. Michigan offers no interest distinct from those considered in Pizza to justify removing the PAC check-off obligations from the union contracts.”

Although the panel found the unions to be “on the right side” of the legal argument regarding the Contracts Clause, it was unconvinced by their free speech claims.

Judge Sutton again cited the 1998 ruling in Pizza, which “held that the ‘wage checkoff ban simply [did] not impinge, in a constitutionally significant manner, on any First Amendment rights.’”

“What was true then about opportunities to speak with one’s pocketbook is even more true today. Gone are the days when hard copy checks amounted to the primary, almost only, currency of – legal – political fundraising,” Sutton wrote. “The ever-growing modern options form a colorful array – from the once new and now traditional (monthly credit card or automatic bank withdrawals) to the now avant-garde and soon to be traditional (PayPal or Venmo).” (Parentheses in original.)

He continued, “As a practical matter, unions retain a number of effective options for soliciting political donations and union members have a number of ways for making them – say a monthly bank account withdrawal, which is little different from a monthly paycheck withdrawal through a PAC check-off.”

In his conclusion, Sutton cited the Seventh Circuit decision in Sweeney v. Pence, which dealt with Indiana’s Right to Work Act and mandatory union dues or membership fees.

“The court held that the law did not infringe the unions’ First Amendment rights merely because it made it more difficult for them to collect funds,” Sutton wrote. “The court’s assessment of the claim applies with equal force here: the State’s ‘decision not to subsidize the exercise of a fundamental right’ did not itself infringe that right.”

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