The Magazine

Stealth Unionization

How 40,000 home day care providers in Michigan were forced to start paying union dues.

Dec 28, 2009, Vol. 15, No. 15 • By MICHAEL D. JAHR and PATRICK J. WRIGHT
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Midland, Michigan

The barren economy of this rustbelt state is weakening the labor movement, but well-connected unions continue to shape Michigan's politics. So it's not surprising that some are willing to take extraordinary measures to help repopulate union ranks--even to the extent of making the state an accessory to a scheme to shanghai more than 40,000 home-based day care entrepreneurs and providers into a government-employee union.

This development was first brought to the attention of the Mackinac -Center for Public Policy, where we work, in early 2009, when the center was approached by Sherry Loar, owner of Baby Steps Childcare Center in Petoskey. She told us that though she operated the business in her home, the Michigan Department of Human Services was forcing her to pay "dues" to a government-employee union she had never heard of.

Loar's story seemed outrageous. Could a private business owner--an employer--really be considered a public-union member? It turned out that not only Loar, but also thousands like her, are to have an estimated total of $3.7 million withdrawn from their pay and diverted to union coffers each year. Worse, the Michigan Department of Human Services is withholding the dues without authorization of state law.

The bizarre unionization drive appears to have begun in 2006, when the United Auto Workers and the American Federation of State, County and Municipal Employees joined together to form a new union, Child Care Providers Together Michigan (CCPTM). The intent, according to union documents, was to organize all the home-based child care providers in the state.

The CCPTM, however, faced a challenge. With tens of thousands of home-based day care providers scattered across Michigan, who would act as the "employer" for the union to organize against?

In April 2006, the CCPTM sought to organize against the Michigan Department of Human Services, which mails subsidy checks to home-based day care providers whenever they care for children whose parents qualify for state and federal assistance. The effort was quickly abandoned, however, perhaps because of political concerns about nearly doubling the state workforce.

The union's predicament was apparently resolved in July 2006, when the Department of Human Services signed an "interlocal agreement" with a community college in Flint. Under state law, these agreements establish joint government agencies to coordinate responses to regional problems; in this case, the agreement created a shell corporation known as the Michigan Home Based Child Care Council. The council, according to department documents, would assist the department in child care matters--and "have the right to bargain collectively" as a "public employer."

The CCPTM could now claim it had an entity to organize against.

In September 2006, the union filed a petition with a state labor commission seeking an organizing election. When a vote by mail was conducted of the 40,500 providers who would be "represented," the outcome was 5,921 in favor of the union and 475 opposed--largely, one suspects, because the CCPTM got out the pro-union vote, while the rest of the providers didn't realize what was happening.

In 2008, the CCPTM and the council entered into what they called a "collective bargaining agreement." Tellingly, they conceded in the agreement they would need the assistance of the Department of Human Services.

The reason seems clear. Without the department's involvement, the union had no easy way to collect its "members' " dues. The department, on the other hand, could withhold dues whenever it sent checks to home-based day care providers on behalf of low-income parents receiving federal assistance. The department's decision to perform the withholding means that nearly $4 million in public funding intended to assist low-income parents while they work or attend school is ending up instead in union bank accounts.

Loar, who is married to a union member, says she was shocked when she received notification that she belonged to a union. "I'm not opposed to unions; everything has a place," she explains. "But when we enter my door, this is my home."

No matter. "The next time I received my co-pay check, they took out union dues," she says. "I can't take money out of an employee's check without a signature. How can the government take money out of a paycheck? I actually work for my parents and my children. I do not work for the state."

The Mackinac Center's public-interest law firm decided to make this violation of Loar's civil rights its first case, and it filed suit against the Department of Human Services at the Michigan Court of Appeals in September (at this writing, the court has taken no action). The argument was simple: The only constitutional way to convert people into public employees in Michigan is through an act of the state legislature--not through a rigged agreement between two government agencies each of which lacked the power to do this itself. In short, the department's withholding of "dues" is illegal.

Of course, there are other objections to this "unionization." Common sense tells us that home-based day care employers are not employees, and that the parents who select and pay them are their customers. Even if some of those parents receive a government subsidy to help defray the cost of day care, the state does not "employ" the day care owners any more than the federal government "employs" grocery store owners who accept food stamps. In fact, it is doubtful that even the state -legislature could convert all these day care providers into a collective bargaining unit. Compulsory unionization is permitted to override citizens' First Amendment right of free association only in the interest of labor peace. That doesn't apply here.

While Michigan's mechanism for creating more than 40,000 new union members is unique, the general effort is not. For several years, unions like the American Federation of State, County and Municipal Employees and the Service Employees International Union have been working to unionize day care workers in a number of states, sometimes even battling over jurisdictions. We have identified 14 states where unionization of day care providers has occurred.

An element common to many of these endeavors is subsidy money, which in large part originates from federal Temporary-Assistance-for-Needy-Families block grants. In Michigan, despite the fact that the state labor commission recognized the bargaining unit as all home-based day care providers, "dues" are taken only from those who receive subsidy checks. In essence, the union has organized against the money.

All this turns the concept of collective bargaining on its head. As Loar says: "How can I be in a union? In my house, I'm both labor and management." Michelle Berry, another Mackinac Center client, points out that she's seen no benefits from her imposed union membership: "There's no communication. We have a deduction taken from a check, and where that goes, I have no clue."

The notion that these independent entrepreneurs are government employees simply because a few of their customers receive government aid means that attempts to unionize doctors, landlords, and independent grocers can't be far behind. Still, even state agencies and powerful unions should have to follow the law. If union and government officials want to enact unfair and destructive policies, they should have the decency to do it without violating the state and federal constitutions.

Patrick J. Wright is director of the Mackinac Center Legal Foundation, and Michael D. Jahr is senior communications director for the Mackinac Center for Public Policy.