News Story

‘My House Was Placed in a Union!’

Legislation to halt ‘stealth unionization’ takes a step toward the governor’s desk

The “stealth unionization” of independent contractors who either work for state government or whose customers accept government health and welfare benefits was dealt a blow by a Michigan House committee on Tuesday with the approval of House Bill 4003. Sponsored by Rep. Paul Opsommer, R-Dewitt, the bill is a response to a highly controversial policy implemented under the Granhom administration whereby tens of thousands of home day care workers and home health care workers were forcibly corralled into a government employee union under the pretext that their customers received some form of government assistance.

An estimated $8 million in union dues per year are taken from these two groups and handed over to state government employee unions run by the United Auto Workers, AFSCME and the Service Employees International Union.

Sherry Loar of Petoskey runs a child care business out of her home. The stealth unionization plot meant that she found herself involuntarily tossed into a government union and forced to pay dues merely because some of the lower-income parents of the children she cares for accept government assistance to help them pay for her services. Loar is one of three plaintiffs who sued the State of Michigan over this policy with the help of the Mackinac Center Legal Foundation. She testified in favor of HB 4003 during a hearing last week.

“My house was placed into a union!” an outraged Loar told the House Committee on Families, Children, and Seniors.

The dues were required each time Loar accepted a customer who was using a government child care voucher to pay her. As this is a child welfare program, the net effect of the policy was to take taxpayer money intended for the care of low-income children and instead hand it over to the unions. Though this policy applied to 45,000 child care providers, the majority — including Loar and her co-plaintiffs — were not part of the vote that allegedly created the union.

Patrick Wright, director of the Mackinac Center Legal Foundation and the lead attorney for Loar in her case against the state, also testified regarding the impact of the stealth unionization policy.

“Unions were taking money that was intended for kids and families,” noted Wright.

Wright also told the committee that the practical implications of the policy could be far-reaching if government is allowed to use such a standard for unionizing other occupations. He mentioned that doctors that accept patients on Medicare and grocery store owners who accept food stamps as just two other possibilities that the state could declare to be government employees.

The day care union was operated with the cooperation of the Michigan Department of Human Services under former Gov. Jennifer Granholm, using a convoluted legal mechanism called an “interlocal agreement.” The union was known as the Michigan Home Based Child Care Council. Because of the interlocal agreement, the DHS under Granholm was able to continue the policy of supporting the MHBCCC without legislative input — and even in the face of overt Legislative opposition and the legal challenge mounted by the Mackinac Center on behalf of Loar and the two other plaintiffs. 

However, shortly after being appointed by Gov. Rick Snyder, the new DHS director, Maura Corrigan, announced that DHS was reversing the Granholm-era policy and removing its support for the MHBCCC. Corrigan severed the state’s involvement by stating that the DHS did not consider the day care providers to be state government employees and would thus no longer allow the DHS to extract dues payments from their checks.

Opsommer’s bill seeks to assure that no future state department can do what the DHS did under Granholm. If enacted, the bill would require the Legislature’s approval before a state department could declare a new class of government employees and take dues payments from them.

“The Legislative power was taken away by a governor trying to help a political ally,” Wright told the committee. “And it took the money away from kids.”

Gov. Granholm openly boasted of the creation of the MHBCCC when speaking to the AFSCME convention in 2008:

“In Michigan because of the partnership between AFSCME and the governor's office, this means that 45,000 new AFSCME members, quality child care providers, will be on the ground providing care to children. That is great for our state."

The bill now moves the floor of the Michigan House for consideration.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.