Monday, April 19, 2010

Were home based child care workers unionized against their will? The controversy continues…..

Once elected, I will fight forced unionization of independent private business owners who are receiving payments from the stateon behalf of their clients. Further, I will fight against high-handed executive branch diversion of funds contrary to the intent of the Legislature in its adopting the Appropriations bills.

Rick Olson, Candidate for State Representative, 55th Legislative District

In 2009, the Mackinac Center Legal Foundation filed a lawsuit (Loar v. DHS) against the state Department of Human Services on behalf of at least 40,000 home-based (business owners ) day care providers. The case challenges the union effort to designate the providers as government employees for unionization and dues-collecting purposes. The case is based on the grounds that state law presumes that no one is subject to public-sector bargaining unless state legislation has made them so, and in this case, there is no legislation — only an interlocal agreement. On December 30, 2009, the Michigan Court of Appeals dismissed the case without explanation. The public-interest law firm has appealed the case to the Michigan Supreme Court.

Several efforts to get the state Supreme Court to hear the case are underway.

“State Representative Dave Agema, R-Grandville, has submitted a resolution asking that the Michigan Supreme Court hear a case involving home-based day care workers who say they didn't realize they were unionized by the state.” State Reps. Joining Day Care Union Case, Tom Gantert article on Michigan Confidential, April 18, 2010.

The National Federation of Independent Business has joined the Mackinac Center for Public Policy in the legal arguments to go before the Michigan Supreme Court by filing a amicus brief. A show of public support for the Michigan State Supreme Court to hear the case is important, as the Court has discretionary authority on whether to hear the case or not.

Background Articles:

“A year ago in December . . . more than 40,000 . . . home-based day care providers statewide were suddenly informed they were members of Child Care Providers Together Michigan — a union created in 2006 by the United Auto Workers and the American Federation of State, County and Municipal Employees. The union had won a certification election conducted by mail under the auspices of the Michigan Employment Relations Commission. In that election only 6,000 day care providers voted. The pro-labor vote turned out. . . . [T]he state created an "employer" for the union to "organize" against. Of course, Michigan's independent day care providers don't work for anybody except the parents who are their customers. Nevertheless, because some of these parents qualify for public subsidies, the Child Care Providers "union" claimed the providers were "public employees."

Michigan's Department of Human Services teamed with Flint-based Mott Community College to sign an "interlocal agreement" in [September] 2006 establishing a separate government agency called the Michigan Home Based Child Care Council. This council was directed to recommend good child care practices — and not coincidentally, to serve as a "public employer." Although the council had almost no staff, no control over the state subsidies and no supervision of the providers' daily activities, it became the shell corporation against which the union could organize.

Thus the state created an ersatz employer and an ersatz "bargaining unit" against which what was essentially an ersatz union could organize. . . . “ Michigan Forces Business Owners Into Public-Sector Union, by the Mackinac Center for Public Policy, January 15, 2010.

“The Michigan Home Based Child Care Council . . . somehow -- became the intermediary between the department and a new AFSCME- and UAW-affiliated union called Child Care Providers Together Michigan.

In December 2006, AFSCME announced that the state had certified that a majority of home-based child care providers had chosen union affiliation. AFSCME said its drive to unionize child care providers encompassed eight other states, including neighboring Illinois, Minnesota, Ohio and Wisconsin. “ Forced unionization: Lawmakers should look into state's collusion in organizing babysitters, Editorial from The Detroit News, March 22, 2010.

“Last year in a complicated union deal, about 70,000 day care workers in Michigan learned they had joined a union known as Child Care Providers Together Michigan and were now working for Michigan Home Based Child Care Council. About 40,000 of those home-based day care workers have union dues to the tune of $3.7 million a year automatically deducted from their state subsidy checks. . . . State documents show that 6,396 day care workers voted and 5,921 were in support of forming a union. But the union supposedly represents the 70,000 day home-based day care workers in Michigan, not just the 40,000 who receive state subsidy checks, according to the Michigan Auditor General.” Minority Rules: Most Members of Child Care Union Didn’t Vote Themselves In, by Tom Gantert, article in the Michigan Confidential, March 1, 2010.

“Thirteen other states have pulled off the same shady scheme to surreptitiously subsidize unions in this manner and labor, with all its financial resources, would seem to have an unbeatable hand except for public interest groups like the Mackinac Center.

Individual care providers, who generally run low-budget operations, don't have the resources to fight back against such thuggery, sanctioned by their own elected representatives.

Answers needed . . .

Since the MHBCCC has indicated that it does not employ the care providers, how can these business owners be deemed employees in a labor union?
If the care providers need a license to operate a business, how can they be considered employees of a state council, which disclaims an employers' role?

And if the state does employ these people, should it also shell out the 6.2 percent federal payroll tax which employers are required to pay? [I.e., what supervisory functions does the council serve, when the “employee” vs. “independent contractor” criteria are applied, as for when Social Security taxes and Federal and state unemployment insurance taxes must be collected by the employer. Note that the day care providers file 1099 tax returns, which put them into the category of contractual workers.]”

The Mackinac Center lawsuit result is important for Michigan.

It will tell us whether our state will require transparent, fair treatment of its citizens in the future, or whether powerful special interest groups will continue to divert taxpayer dollars for their own benefit with the aid of those they helped elect.” Home Day Care Workers Should Have Fair Hearing, Frank Beckman editorial on Detroit News, April 9, 2010.

Meanwhile, the unions have responded with:

“Child care workers paid by the Michigan Department of Human Services in 2005 came to the UAW and AFCSME with a desire to bargain collectively to improve their wages and working conditions. Over the course of several months, a majority of these child care providers signed union cards. In the fall of 2006, they voted to form their union in a state-supervised election. . . . These workers followed state law in winning union representation and then went beyond that. They first organized by "card check," a legal procedure, and gathered more than 22,000 signatures of child care providers in favor of a union, or 55 percent of the state's 40,500 child care workers at that time.

But they also petitioned the Michigan Employment Relations Commission for an election. Under the state labor law system, most elections are done by mail.

In October 2006, ballots were mailed out by MERC to every eligible voter working at that time. Of those voting, 92 percent came back in favor of a union.” Special Letter: Child Care Workers Asked for Union, by James Settles, UAW, letter printed by Detroit News, April 15, 2010.

In an interesting and connected side note,

“The Legislature last year ended payments to the Michigan Home Based Child Care Council, a liaison between the state's Department of Human Services and a controversial labor union that, under questionable circumstances, came to represent people who receive government subsidies for providing day care in their homes for children of low-income working parents. Lawmakers recently learned that Human Services officials have defied them by shifting money within the department to keep the council's $200,000 contract intact.

A Human Services spokesman said this was done because the department has a contractual obligation to fund the council through the end of this year. The spokesman also claimed that the Legislature's action, taken as part of its approval of the department's budget for 2010, did not include a specific prohibition against further payments to the council from other funds. . . . “ Forced unionization: Lawmakers should look into state's collusion in organizing babysitters, Editorial from The Detroit News, March 22, 2010.

If this practice is allowed to stand, what would prevent the same thing from happening to home health care workers whose clients receive government assistance? Pharmacists? Others? This cannot be allowed.


  1. I am a home child care provider in Michigan. A group of us have filed a Class Action Federal Suit with the legal aid of the National Right to Work Foundation. We are challenging the constitutionality of Forced Unionization. I work as a self employed child care provider and pay taxes as a business owner. I never voted for a union....never even heard of the union until I received a letter from the State of Michigan, announcing that dues would be deducted from my parents next subsidy. Thank you for taking an interest and getting involved!

    Carrie Schlaud

  2. I wish you success in your law suit. We must battle this on all fronts.