Mackinac Appeals Court Decision that would Unionize Independent Home Daycare Workers

Yesterday, the Mackinac Institute of Michigan took another step in its lawsuit challenging the forced unionization of independent daycare workers.

The litigation is in response to the Michigan Department of Human Services (MDHS) deciding that daycare providers, most of whom watch children in their home, are government employees and can be members of a union.

Child Care Providers Together Michigan (CCPTM), an American Federation of State, County and Municipal Employees (AFSCME) and United Autoworkers (UAW) affiliate, has forced 40,000 home day care providers to pay 3.7 million in union dues. The providers, who work out of their home and mostly operate as independent contractors and sole proprietors, have not received any pay increases or health care benefits.

Michigan receives federal subsidies to pay for daycare for children in low-income families. The state uses the subsidy to pay the daycare providers for supplying services to these children. Because Michigan is not a right to work state, the providers have no choice but to pay the dues, which the state automatically deducts from their subsidy checks.
Instead of the subsidy going to low-income families, they are now lining the pockets of union officials.

In May, Patrick J. Wright, Director of Mackinac Center Legal Foundation, filed suit in Michigan court on behalf of Sherry Loar, Michelle Berry, and Paulette Silversion. The three are daycare providers who run operations out of their home and consider themselves owners of the business. Two years ago, CCPTM notified them by mail that they were dues paying members of the union.

Months before, they were asked to vote in a unionization election by a postcard. All three discarded they ballot, which they thought was junk mail. They were not alone. Of the 40,500 home day care workers to be unionized only 6,396 voted — barley 15 percent. Loar commented:

I had gotten the mail…The letter had said that the day care had become part of the union, and we would be paying union dues … [I]t came out as a total shock…The next time I received my co-pay check, they took out union dues! 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.

After seeing their union dues automatically subtracted from their Michigan checks in January 2009, the three enlisted the Mackinac Center for assistance. Mackinac though its new legal arm, the Mackinac Center Legal Foundation (MCLF,) sued saying the three are home-based business owners and not government employees. MCLF demanded a court order preventing DHS from taking dues from the women.

On January 5, 2010, the Michigan Court of appeals dismissed MCLF’s case without explanation. MCLF appealed and the Michigan Supreme Court agreed. In a unanimous decision, the Supreme Court demanded an explanation from the lower court. The lower court answered in late September.

“For the second time, the Court of Appeals failed to discuss how private business owners can be made to pay dues to a government employees union,” Wright said. “In fact, the Court of Appeals entered just four sentences of legal assertions, and those managed to avoid the key legal questions. This is surprising, given that the Michigan Supreme Court unanimously ordered the Court of Appeals to explain its first dismissal of the lawsuit.

Yesterday, the Mackinac Center announced it would be appealing the ruling.