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Sterling Employment Law

Financial consequences for thwarting Michigan's 'right-to-work' law?

Some Michigan Republicans are hot under the collar over maneuvers they believe are meant to thwart our state's hot -button "right to work" law, which goes into effect Thursday.

Detroit readers will recall that law makes it illegal for unions to force people to pay dues. Supporters say it encourages worker autonomy, but detractors say it allows freeloaders (i.e. people who accept the benefits of union organization but don't pay for them) and financially hamstrings unions.

Under the law, institutions can extend existing contracts, which effectively delays compliance. At least 46 workplaces that are home to powerful unions, such as Washtenaw County government and many school districts, did exactly that, pushing the expiration date of their existing contracts out several years.

Now, that is perfectly legal, but some Michigan Republicans see it as an attempt to follow the letter of the law while violating its spirit, and they are not happy.

Some of them are advocating for budget plans that cut funding for the institutions that extended their employment contracts. The penalties range from the tens of thousands of dollars all the way up to $47 million for the University of Michigan.

For now, it isn't certain that these budget plans will make it very far. Senate Majority Leader Randy Richardville (R-Monroe) said he is very hesitant about any budget proposal that ties state appropriations to local decisions.

Even so, what is abundantly clear is that this law is still a politically controversial topic.

We took note of this story because employment contracts are among those matters with which we help clients.

Source: The Detroit Free Press, "School districts, universities skirt right-to-work at a hefty financial risk," Kathleen Gray, March 27, 2013

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