As the home of Ford and General Motors, Michigan was once considered the heart of America's union workforce. On December 11, 2012, however, Michigan Governor Rick Snyder joined a growing trend among states and signed Michigan's "right to work" bills (S.B. 0116 and H.B. 4003) into law, a measure which will surely curtail union membership in Michigan going forward.
For those unfamiliar with the term "right to work," some background may be helpful. In a state without a "right to work" law, an employer and a union can negotiate a union security provision into a collective bargaining agreement which will require all employees to pay union dues as a condition of employment. Thus, employees who want to work for the company must pay dues to the union, whether or not they are a member.
A "right to work" law changes this system. Such a law, which is permissible under the Taft-Hartley Act of 1947, forbids contracts between a company and a union that require all workers to pay the union for bargaining on their behalf. The two new laws passed in Michigan do precisely this, affecting both public and private sector employers, and effectively allow all employees to reap the benefits of union-negotiated contracts without having to pay union dues. It goes without saying that unions are vehemently opposed to such legislation. Even President Obama, while on a trip to Michigan on December 10, 2012, has weighed in by stating that "right to work" laws are the "right to make less money."
Setting politics aside, Michigan's laws are the latest in a line of "right to work" legislation being passed across the nation. Michigan's passage of the laws, however, is noteworthy for several reasons. First, as mentioned above, Michigan has traditionally been a pro-union state as a result of an expansive automobile industry. To some, the passage of these laws is a sign of waning union support as the country continues to search for solutions to the economic crisis. It should also be noted that both bills passed in their respective houses of the Michigan legislature with strong Democrat opposition, along with highly publicized protests at the state capital.
Second, Michigan now weighs in as the 24th state in the country to have "right to work" legislation on the books. More importantly, it is one of the few Midwestern states to employ such restrictions—Indiana being the other, having only passed similar legislation in February 2012. Typically, "right to work" laws have flourished in the Republican-leaning south, including Texas, Florida and Georgia.
Third, and perhaps most importantly, the bills' passage coincides with the continued drop in union membership and union density nationwide as unions face increasingly ardent political pressure and the globalization of the nation's economy. Across the country, union membership is locked in a decades-long slide, falling in 2011 to just 11.8 percent of the entire American workforce (including only 6.9 percent of the private sector) according to a Bureau of Labor Statistics report announced earlier this year. This is down from 13.3 percent in the early 2000s, and significantly lower than 35 percent seen in the 1950s.
Whether or not Michigan's laws will survive union challenges remains to be seen. For the time being, however, the state now stands as number 24 in a nearly evenly-split nation on the "right to work" issue.
If you have any questions about the material presented in this Alert, please contact Mike Asensio ( email@example.com 614.462.2622) or any member of BakerHostetler's Labor Relations Team.
Authorship Credit: M.J. ("Mike") Asensio and Jeffrey R. Vlasek