Case Name: SMIGEL v. SOUTHGATE COMMUNITY SCHOOL DISTRICT
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1972-11-29
Citations: 388 Mich. 531
Docket Number: No. 50; Docket No. 53,008
Parties: SMIGEL v SOUTHGATE COMMUNITY SCHOOL DISTRICT
Judges: Adams and T. G. Kavanagh, JJ., concurred with T. M. Kavanagh, C. J.
Reporter: Michigan Reports
Volume: 388
Pages: 531–567

Head Matter:
SMIGEL v SOUTHGATE COMMUNITY SCHOOL DISTRICT
Decision of the Court
1. Labor Relations — Injunction.
Denial of injunction to restrain application of a collective bargaining agreement is reversed and case remanded to trial court.
Opinion for Reversal and Remand
T. M. Kavanagh, C. J., and Adams and T. G. Kavanagh, JJ.
2. Administrative Law — Michigan Employment Relations Commission — Statutes—Construction—Courts.
Pure legal issues concerning construction of Michigan’s statutes are not peculiarly within the scope of the expertise of the Michigan Employment Relations Commission and as such were properly brought before the circuit court.
3. Labor Relations — Public Employment Relations Act — Public Employer — Public Employees — Labor Organizations — Unions.
An amendment of the public employment relations act in 1965 not only authorized the formation of public employees’ unions but also incorporated the policy that an employer must assume a posture of complete neutrality regarding union membership; he must do nothing to either advance or retard union organizing and he must refrain from practices which either encourage or discourage membership in labor organizations (MCLA 423.201 etseq.).
References for Points in Headnotes
[I] 48 Am Jur 2d, Labor and Labor Relations § 1482 et seq.
[2, 16,17, 22] 48 Am Jur 2d, Labor and Labor Relations § 1155 et seq.
[3, 9, 26] 48 Am Jur 2d, Labor and Labor Relations §§ 1191, 1196.
[4-11, 18, 21, 24, 27-29] 48 Am Jur 2d, Labor and Labor Relations §§ 18, 184, 797, 798, 1191, 1195.
Union organization and activities of public employees, 31 ALR2d 1142.
[II] Validity and construction of "right-touch” laws, 92 ALR2d 598.
20 Am Jur 2d, Courts §§ 92, 95.
2 Am Jur 2d, Administrative Law § 788 et seq.
2 Am Jur 2d, Administrative Law § 332.
2 Am Jur 2d, Administrative Law §§ 595, 602, 603.
50 Am Jur, Statutes §§ 318-320, 326 et seq.
47 Am Jur, Schools §§ 134-137.
16 Am Jur 2d, Constitutional Law §§ 353-355.
Right of privacy, 14 ALR2d 750.
48 Am Jur 2d, Labor and Labor Relations §§ 184,1195,1197.
4. Labor Relations — Agency Shop — Union Shop — Public Employment Relations Act.
The traditional "agency shop” provision is a well known type of union security clause; its terms are often such as to render it the practical equivalent of a union shop and as such it by deñnition contravenes the policy and purposes of the public employment relations act (MCLA 423.201 et seq.).
5. Labor Relations — Agency Shop — Schools and School Districts —Teachers’ Association — Dues—Representation Expenses — Public Employment Relations Act.
"Agency shop” provision in a contract between a school district and a teachers’ association, providing that the payroll deduction for nonmembers is "a representation fee equivalent to the dues and assessments of the Association (including the National and Michigan Education Associations)” in which there is not even the pretense that the sum to be deducted is a pro rata share of representation expenses, or that it will even be used for such purpose, is repugnant on its face to the provisions of the public employment relations act (MCLA 423.201 et seq.).
6. Labor Relations — Agency Shop — Schools and School Districts —Teachers’ Association — Collective Bargaining Expenses— Dues — Public Employment Relations Act — Labor Organizations —Discrimination—Injunction.
Any "agency shop” clause in a contract between a school district and a teachers’ association, providing that the payroll deduction for nonmembers is "a representation fee equivalent to the dues and assessments of the Association (including the National and Michigan Education Associations)”, which makes no effort to relate the nonmembers’ economic obligations to actual collective bargaining expenses is clearly prohibited by a section of the public employment relations act, as of necessity either encouraging or discouraging membership in a labor organization; there appears upon the face of the contract de jure discrimination of a magnitude sufficient to invalidate the clause and the trial court erred in denying public school teachers employed by the school board but not members of that teach ers’ association injunctive relief from the collective bargaining agreement (MCLA 423.210).
Opinion Concurring in Part and Dissenting in Part
Williams, J.
See headnotes 2,15, and 17.
7. Labor Relations — Agency Shop — Public Employment Relations Act.
An "agency shop" is not permitted by a section of the public employment relations act because that act fails to include a savings clause for union security (MCLA 423.201 et seq.).
8. Labor Relations — Union Dues — Agency Shop.
Requirement that non-union members pay the union a sum equivalent to initiation fees and periodic dues is valid where the "agency shop” is valid.
Opinion for Reversal
T. E. Brennan, J.
9. Labor Relations — Public Employer — Labor Organizations — Discrimination — Closed Shop Contracts — Unions.
Statute, providing in part that "[ijt shall be unlawful for a public employer or an officer or agent of a public employer * * * to discriminate in regard to hire, terms or other conditions of employment in order to encourage or discourage membership in a labor organization * * * ”, does not address itself merely to all-union or closed shop agreements, it prohibits terms or conditions of employment which are designed to encourage membership in a labor organization (MCLA 423.210).
10. Labor Relations — Union Dues — Union Shop Contracts.
A so-called agency shop contract which makes the payment of dues and assessments of unions or the equivalent of such dues and assessments a condition of employment and which imposes the same obligation upon nonmembers is the practical equivalent of a union shop contract.
11. Labor Relations — Right to Work — Public Employment — Statutes.
Statute, providing in part that "[ijt shall be unlawful for a public employer or an officer or agent of a public employer * * * to discriminate in regard to hire, terms or other conditions of employment in order to encourage or discourage membership in a labor organization * * * ”, is in effect a "right to work” law, limited to public employment (MCLA 423.210[c]X
Opinion por Affirmance in Part and Reversal in Part
Swainson, J.
12. Courts — Jurisdiction—Waiver
Lack of subject matter jurisdiction cannot be waived; a court may and, indeed, has a duty to inquire into its jurisdiction.
13. Administrative Law — Primary Jurisdiction — Factual Questions.
Michigan Supreme Court has recognized the doctrine of primary jurisdiction and judicial deference to the expertise of administrative agencies which are well suited in the first instance to deal with the factual questions involved.
14. Administrative Law — Jurisdiction—Injunction—Declaratory Judgment.
An administrative agency has the authority in the Srst instance to determine its own jurisdiction and an injunction or declaratory judgment will not lie to challenge the jurisdiction of an administrative agency.
15. Equity — Injunction—Constitutional Law — Statutes.
The jurisdiction of equity may be invoked for the purpose of obtaining injunctive relief and a determination as to the constitutionality of the statute that is involved in cases where an irreparable injury will result from the acts of public ofBcials in attempting to proceed under an invalid law; plaintiffs’ case, which sought an injunction to restrain application of a collective bargaining agreement and damages, would St under this exception to the rules requiring that a party exhaust his administrative remedies prior to seeking judicial relief.
16. Administrative Law — Michigan Employment Relations Commission — Supreme Court — Questions of Law — Agency Shop— Teachers’ Tenure Act — Criminal Law.
The special expertise of the Michigan Employment Relations Commission is not helpful to the Michigan Supreme Court in determining questions of law, where the basic facts were agreed upon by the parties and the questions were whether an agency shop provision violated the teachers’ tenure act and the Michigan Penal Code (MCLA 38.71 etseq., 750.353 et seq.X
17. Administrative Law — Labor Relations — Exhaustion of Remedies — Injunctive Relief — Teachers’ Tenure Act.
A factor that courts consider in determining whether to require exhaustion of administrative remedies is the importance of the question involved; thus, a complaint for injunctive relief tó restrain application of a collective bargaining agreement which contained an agency shop provision was a proper procedure and the circuit court had jurisdiction of this matter, as the validity or invalidity of the agency shop provision will have far-reaching consequences upon collective bargaining in the public sector in Michigan (MCLA 38.71 et seq., 750.353 et seq.).
18. Labor Relations — Agency Shop — Contracts.
An agency shop provision may be voluntarily agreed upon by the parties to a labor contract and such an agreement does not violate the provisions of the public employment relations act (MCLA 423.201 et seq.).
19. Statutes — Construction—Legislators—Legislative Intent— Evidence — Supreme Court.
Statements of legislators and other citizens provide only some evidence of legislative intent of a statute; they are not conclusive on the Michigan Supreme Court.
20. Schools and School Districts — Teachers’ Tenure Act — Reasonable and Just Cause — Statutes—Legislative Policy — Notice— Hearing.
The words "reasonable and just cause” in the teacher tenure act are not defined, but are to be determined on a case-by-case basis; the legislative policy behind the section providing "[djischarge or demotion of a teacher on continuing tenure may be made only for reasonable and just cause, and only after such charges, notice, hearing, and determination thereof, as are hereinafter provided” is clearly to prevent the bring of qualibed teachers because of arbitrary and capricious actions on the part of school boards; the requirement of an agency shop fee, arrived at after mutual bargaining by a school board and the elected representatives of all the teachers, is neither arbitrary nor capricious and does not violate the terms of the teachers’ tenure act (MCLA 38.101).
21. Labor Relations — Public Employment Relations Act — Union Dues — Agency Shop Fee.
The provisions of the public employment relations act are not violated when nonmembers are required to pay an equivalent amount as the union dues as an agency shop fee (MCLA 423.201 etseq.).
22. Labor Relations — Michigan Employment Relations Commission — Agency Shop.
The Legislature has decreed that the Michigan Employment Relations Commission has jurisdiction where charges of unfair labor practices are made; thus, a Court of Appeals decision, which held any amount of agency shop fee could only be the nonmembers’ proportional share of the cost of negotiating and administering the contract involved, which might or might not be the equivalent to membership dues, and directed the circuit court to hold a hearing on the matter, directly invaded the function of the MERC and overruled the speciñc legislative intent to vest the MERC with jurisdiction in matters involving unfair labor practices.
23. Labor Relations — Unions—Constitutional Law — Association —Privacy, Right of.
Court of Appeals’ holding, that would require a labor union to disclose a great deal of information on the internal function of the union, may violate the members’ constitutional rights of freedom of association and the right to privacy as well as unduly interfering with the internal functions of a union.
24. Labor Relations — Agency Shop — Representation Fee — Unions —Union Dues — Discrimination.
A representation fee equivalent to the amount of union dues is valid and not discriminatory to the non-union members of the labor organization who receive like beneñts as members through the collective bargaining process conducted by the duly designated representative bargaining unit.
Dissenting Opinion
Black, J.
25. Labor Relations — Public Employer — Public Policy — Public Employees — Legislature—Courts—Agency Shop.
What the public policy should or should not be in the area of a negotiated agency shop provision in a collective bargaining agreement between a public employer and public employees is the task of the Legislature and not the task of the courts; the task of an appellate court is to determine the validity of the contract provision before it according to existing policy as legislatively announced and that precludes consideration of precedents in the private employment held.
26. Labor Relations — Public Employers — Public Employees.
A public employer must maintain a position of neutrality with respect to membership or non-membership in a labor organization when dealing with its public employees (MCLA 432.210).
27. Labor Relations — Public Employees — Agency Shop — Union Members — Non-Union Members.
The Legislature did not intend to eliminate agency shop sigreements in public employment collective bargaining contracts; if beneñts derive from such bargaining, non-union as well as union members enjoy those beneñts, and it would be inequitable not to require non-union members to pay their proportionate share of the cost of obtaining and administering such beneñts MCLA 423.210, 423.211).
28. Labor Relations — Schools and School Districts — Agency Shop —Dues.
The validity of an agency shop provision in a collective bargaining agreement between a school district and a teachers’ association hinges on the relationship between payment of a sum equivalent to dues of teachers’ associations and a non-member’s proportionate share of the cost of negotiating and administering the contract involved; if that payment is greater or less than that proportionate share, then the agency shop provision is invalid under a statute prohibiting a public employer, its officer or agent, from discriminating in regard to hire, terms or other conditions of employment in order to encourage or discourage membership in a labor organization MCLA 423.210).
29. Labor Relations — Criminal Law — Statutes—Wages—Agency Shop.
Statute, providing that any employer who makes any deductions from employees’ wages without their consent is guilty of a misdemeanor, was inapplicable where the terms of an agency shop provision in a collective bargaining agreement between a school district and a teachers’ association preclude deduction without authorization MCLA 750.353).
Appeal from Court of Appeals, Division 1, Quinn, P. J., and J. H. Gillis and O’Hara, JJ., reversing and remanding Wayne, Thomas J. Foley, J.
Submitted September 17, 1971.
(No. 50
June Term 1971,
Docket No. 53,008.)
Decided November 29, 1972.
Rehearing denied January 30, 1973.
24 Mich App 179 reversed.
Complaint by Jean Smigel and others against Southgate Community School District, Southgate Education Association, Donald Kouba and others for an injunction to restrain application of a collective bargaining agreement and damages. Injunction denied. Plaintiffs appealed to the Court of Appeals by leave granted.
Reversed and remanded. Defendants appeal. Reversed and remanded.
Clark, Hardy & Lewis (by Charles L. Fine), for plaintiffs.
Levin, Levin, Garvett & Dill (by Erwin B. Ell-man, Robert J. Finkel, Daniel J. Hoekenga, and Wallace K. Sagendorph), for defendant Southgate Education Association and its officers.
Amicus Curiae:
Detroit Federation of Teachers (by Rothe, Marston, Mazey, Sachs, O’Connell, Nunn & Freid).
Michigan Employment Relations Commission (by Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Francis W. Edwards, Assistant Attorney General).
American Federation of State, County and Municipal Employees, AFL-CIO (by Zwerdling, Miller, Klimist & Maurer).
Michigan Conference of Teamsters (by Goldberg, Previant & Uelmen [John S. Williamson, Jr.]).

Opinion:
T. M. Kavanagh, C. J.
(for reversal and remand). We concur with Justice Swainson that the pure legal issues concerning construction of our statutes are not peculiarly within the scope of the expertise of the Michigan Employment Relations Commission and as such were properly brought before the circuit court.
However, we do not agree that the trial court correctly denied the plaintiffs injunctive relief. The determinative issue which must be resolved in this case is:
Does the "agency shop" provision involved in the instant case create the practical equivalent of a "union shop" and, as such, is it prohibited by § 10 of the public employment relations act?
It should be emphasized at the outset that this case involves public employees and is therefore controlled by the so-called public employment relations act. The historical backdrop against which we must view this statute is most significant. The original act had as its stated purposes the prohibition of strikes by certain public employees and the provision for mediation of grievances. It was not until its amendment in 1965 that the statute granted public employees the right to organize and bargain collectively. 1965 PA 379 not only authorized the formation of public employees' unions, but also incorporated the policy of the National Labor Relations Act — that an employer must assume a posture of complete neutrality regarding union membership. He must do nothing to either advance or retard union organizing. Likéwise must he refrain from practices which either encourage or discourage membership in labor organizations.
In this respect there is a significant distinction in Michigan's labor law between public and private employees. Though MCLA 423.16; MSA 17.454(17) is nearly identical to MCLA 423.210; MSA 17.455(10) in respect to the requirement of employer neutrality, the statute regarding private employment includes one very important provision which is not found in the public employment relations act. MCLA 423.14; MSA 17.454(15) constitutes an authorization of union security clauses whether in the form of "closed shop," "union shop" or "agency shop".
Prior to the 1965 amendment of the public employment relations act, public employees had no right to organize collectively for bargaining purposes. Defendant union de-emphasizes the significance of this fact in an attempt to show that public employees now have been granted, with the exception of the right to strike, all rights conferred upon private employees.
However, as we have already indicated, the specification of rights for public employment is narrower than for private employment. The Legislature accomplished this result by not including in the public employment relations act the right, specified in MCLA 423.14; MSA 17.454(15), to enter into agreements containing union security clauses.
Defendant union urges the position that an "agency shop" agreement is not an "all-union" agreement as contemplated by MCLA 423.14; MSA 17.454(15) and that therefore it need not be specifically authorized by the public employment relations act. While this might be true where an "agency shop" provision accomplishes no more than reimbursement to the union for services rendered to a nonmember, it is certainly not true whenever an "agency shop" agreement has the effect of either encouraging or discouraging union membership in violation of MCLA 423.210; MSA 17.455(10).
The traditional "agency shop" provision is a well known type of union security clause. Its terms are often such as to render it the practical equivalent of a union shop and as such it by definition contravenes the policy and purposes of the public employment relations act.
The United States Supreme Court has on at least two occasions opined that an "agency shop" provision imposing on employees the only enforceable membership obligation — payment of initiation fees and regular dues — is the practical equivalent of an all-union shop. Retail Clerks International Association, Local 1625, AFL-CIO v Schermerhorn, 373 US 746; 83 S Ct 1461; 10 L Ed 2d 678 (1963); National Labor Relations Board v General Motors Corp, 373 US 734; 83 S Ct 1453; 10 L Ed 2d 670 (1963).
Significant here is the specific choice of language in article II, paragraph 2 of the contract. The payroll deduction for non-members is "a representation fee equivalent to the dues and assessments of the Association (including the National and Michigan Education Associations)." (Emphasis added.) There is not even the pretense that the sum to be deducted is a pro rata share of representation expenses, or that it will even be used for such purpose. In Retail Clerks v Schermerhorn, supra, the "agency shop" clause, though specifically earmarking the funds for aiding the union in meeting collective bargaining expenses, was nevertheless found objectionable under the Florida "right-to-work" law. The Court reasoned (373 US 746, 752-754):
"There is no ironclad restriction imposed upon the use of nonmember fees, for the clause merely describes the payments as being for 'the purpose of aiding the Union' in meeting collective bargaining expenses. The alleged restriction would not be breached if the service fee was used for both collective bargaining and other expenses, for the union would be 'aided' in meeting its agency obligations, not only by the part spent for bargaining purposes but also by the part spent for institutional items, since an equivalent amount of other union income would thereby be freed to pay the costs of bargaining agency functions.
"But even if all collections from nonmembers must be directly committed to paying bargaining costs, this fact is of bookkeeping significance only rather than a matter of real substance. It must be remembered that the service fee is admittedly the exact equal of membership initiation fees and monthly dues , Unions 'rather typically' use their membership dues 'to do those things which the members authorize the union to do in their interest and on their behalf.' If the union's total budget is divided between collective bargaining and institutional expenses and if nonmember payments, equal to those of a member, go entirely for collective bargaining costs, the nonmember will pay more of these expenses than his pro rata share. The member will pay less and to that extent a portion of his fees and dues is available to pay institutional expenses. The union's budget is balanced. By paying a larger share of collective bargaining costs the nonmember subsidizes the union's institutional activities. In over-all effect, economically, and we think for the purposes of § 14(b), the contract here is the same as the General Motors agency shop arrangement. Petitioners' argument if accepted, would lead to the anomalous result of permitting Florida to invalidate the agency shop but forbidding it to ban the present service fee arrangement under which collective bargaining services cost the nonmember more than the member;_
Following this reasoning we are compelled to conclude that the "agency shop" provision in the instant contract is repugnant on its face to the provisions of our public employment relations act.
We hold that any such clause as this which makes no effort to relate the nonmembers' economic obligations to actual collective bargaining expenses is clearly prohibited by § 10 of the public employment relations act, as of necessity either encouraging or discouraging membership in a labor organization.
Having so concluded, we hold that the trial court erred in denying plaintiffs injunctive relief. We see no need for an order remanding for proof of de facto discrimination in the assessment against nonmembers because there appears upon the face of the contract we have before us de jure discrimination of a magnitude sufficient to invalidate the clause.
Reversed and remanded to the trial court for the entry of injunctive relief consistent herewith.
Adams and T. G. Kavanagh, JJ., concurred with T. M. Kavanagh, C. J.
MCLA 423.201 et seq.; MSA 17.455(1) et seq.
1947 PA 336.
'Rather typically, unions use their members' dues to promote legislation which they regard as desirable and to defeat legislation which they regard as undesirable, to publish newspapers and magazines, to promote free labor institutions in other nations, to finance low cost housing, to aid victims of natural disaster, to support charities, to finance litigation, to provide scholarships, and to do those things which the members authorize the union to do in their interest and on their behalf.'
"We cannot take seriously petitioners' unsupported suggestion at the oral argument that we must assume that the union spends all of its income on collective bargaining expenses. The record is entirely silent on this matter one way or the other and it would be unique indeed if the union expended no funds for noncollective bargaining purposes."_