Michigan’s High Court Shuts Down Union Cases

     LANSING, Mich. (CN) – Michigan’s Legislature can alter the pension benefits of public employees since they are subject to right-to-work laws, the state’s high court has ruled.
     The holding came down Wednesday in separate, sharply divided opinions by the Michigan Supreme Court. One of the 4-3 decisions forbids the state’s Civil Service Commission from approving contracts containing mandatory shop fees while the other prevents the commission’s interference in legislation.
     The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America brought the first lawsuit in the Court of Claims, a venue for suing state agencies.
     Shop fees, a cost nonunion members pay to cover collective bargaining and other services that benefit all employees, in this case would fund contract negotiations with the commission, according to the majority opinion by Chief Justice Robert Young Jr.
     This amounts to employees subsidizing the execution of the commission’s duties: It requires them to pay for collective-bargaining because that is the tool the commission uses to “regulate” public employee contracts, the court found.
     “Although authorizing public collective bargaining agreements is within the commission’s sound judgment, we hold that the commission lacks the authority to tax or appropriate – to wit, the authority to compel civil service employees to make involuntary financial contributions to subsidize the commission’s exercise of its constitutional duties and responsibilities,” Young wrote (italics in original).
     Finding that commission funding must come from the state Legislature, the court said it cannot be collected as a tax from public employees.
     Writing in dissent to that decision, Justice Mary Beth Kelly said that the Legislature lacked authority to pass a law relating to public-employee contracts in the first place. Kelly also slammed the majority for misunderstanding the nature of shop fees, which are not paid directly to the commission.
     “Employees pay agency fees directly to their exclusive representative for the costs associated with representation during the collective bargaining process and while a collective bargaining agreement is operable,” Kelly wrote. “While the commission has separate operational and regulatory duties that include approving, rejecting, or amending the collective bargaining agreement that arises out of the collective bargaining process, there has been no finding – not even an allegation – that agency fees fund these regulatory efforts.”
     Young meanwhile countered that direct payment is not necessary element to prove shop fees are taxation.
     “The fact that, here, the agency fees are paid to the union does not change the fact that the commission permits collective bargaining in order to fulfill its constitutional obligation to regulate conditions of employment,” the majority opinion states. “Thus, using collective bargaining for that purpose provides a benefit that flows directly to the commission.”
     Young noted that the second case involved a challenge by Michigan Coalition of State Employee Unions to how the Legislature changed the State Employee Retirement Act: increasing the cost and reducing “the accumulation of future pension benefits previously recognized.”
     The coalition claimed that the Legislature infringed on the commission’s authority because the commission is empowered to regulate both “rates of compensation” and “conditions of employment,” such as retirement benefits.
     The appeals court affirmed this argument, but the Michigan Supreme Court disagreed.
     Writing again for the majority, Young said that the commission’s powers are limited to controlling wages and salaries, and its regulation of a pension plan does not give it authority to override the legislature.
     “Instead, when the commission wishes to regulate ‘conditions of employment,’ it must proceed within its own sphere, using its own constitutionally provided tools, which it typically does by promulgating and enforcing its rules,” the opinion states.
     Further, the commission acquiesces to the Legislature’s intrusion in other matters to settle disputes.
     Kelly again wrote a dissent, this time supporting the majority decision to send the case back to the Court of Claims but maintaining that the Legislature invaded the commission’s authority.
     In a separate dissent, Justice Richard Bernstein disagreed with the majority’s holding that past acquiescence to the legislature on SERA negates future objections.
     “An objection to unconstitutional action does not equate to the exercise of legislative authority,” he wrote. “The commission’s objection is not a line-item veto of legislative action that would itself constitute a violation of the separation of powers doctrine, but is instead better understood as a declaration that the legislative action is a violation of the separation of powers doctrine and is therefore unconstitutional at the outset.”

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