Court Opinion

ID: 9962208
Source: CourtListenerOpinion
Date Created: 2024-04-23 06:05:32.032597+00
Date Added: 2024-06-11T08:20:01.178844
License: Public Domain

Michigan Supreme Court
                                                                                           Lansing, Michigan

Syllabus
                                                             Chief Justice:             Justices:
                                                              Elizabeth T. Clement      Brian K. Zahra
                                                                                        David F. Viviano
                                                                                        Richard H. Bernstein
                                                                                        Megan K. Cavanagh
                                                                                        Elizabeth M. Welch
                                                                                        Kyra H. Bolden

This syllabus constitutes no part of the opinion of the Court but has been              Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader.                Kathryn L. Loomis

                        TECHNICAL, PROFESSIONAL, AND OFFICEWORKERS
                             ASSOCIATION OF MICHIGAN v RENNER

              Docket No. 162601. Argued October 5, 2023 (Calendar No. 2). Decided April 22, 2024.

              Daniel L. Renner filed an unfair labor practice charge with the Michigan Employment
      Relations Commission (MERC) against the Technical, Professional, and Officeworkers
      Association of Michigan (the Union) alleging that the Union violated its duty of fair representation
      by refusing to represent him in a grievance with his employer unless Renner paid a fee for direct
      representation services. Renner worked as a groundskeeper for Saginaw County and was part of
      a bargaining unit represented by the Union. In 2017, Renner opted out of dues-paying membership
      with the Union. In 2018, Renner filed a complaint with his employer, claiming that a coworker
      smoked around him, which was injurious to his health. Renner’s supervisor concluded that the
      claim was false and warned Renner that further incidents would lead to “progressive disciplinary
      action.” Renner then attempted to commence a formal grievance procedure under county policy,
      but his supervisor responded that Renner was precluded from invoking the procedure because he
      was a member of the bargaining unit represented by the Union, and under the collective bargaining
      agreement between the county and the bargaining unit, only the Union could pursue that grievance
      procedure. Renner informed the president of the local chapter of the Union of his grievance, and
      a Union representative told Renner that he would have to pay a fee to obtain the Union’s assistance
      with the grievance under its pay-for-service policy for nonmembers, which the Union had adopted
      in 2018. The Union required Renner to pay $1,290 before it would provide assistance with his
      grievance, plus any additional actual costs incurred by the Union in representing Renner. Renner
      refused to pay the fee, the Union did not provide assistance, and the deadline for pursuing the
      grievance under the collective bargaining agreement expired. In the proceedings before MERC,
      Renner alleged that the Union had violated the public employment relations act (PERA), MCL
      423.201 et seq., by violating its duty of fair representation when it had demanded a fee in exchange
      for direct representation services. An administrative law judge (ALJ) ruled in favor of Renner,
      concluding that the direct service fee was not permitted under PERA or the collective bargaining
      agreement and that it constituted an unfair labor practice. MERC adopted the decision of the ALJ,
      and the Union appealed in the Court of Appeals. The Court of Appeals, O’BRIEN, P.J., and M. J.
      KELLY and REDFORD, JJ., affirmed MERC’s decision, agreeing that the Union’s pay-for-services
      procedure violated PERA because it unlawfully discriminated against nonmembers of the Union
      and restrained employees from expressing their right to refrain from joining or assisting a labor
      union. 335 Mich App 293 (2021). The Union sought leave to appeal in the Michigan Supreme
Court, which initially ordered oral argument on the application. 508 Mich 975 (2021). Following
oral argument, the Supreme Court granted the Union’s application in part. 510 Mich 1097 (2022).

       In a unanimous opinion by Justice WELCH, the Supreme Court held:

        Under the 2014 version of PERA, a public sector union that is the exclusive bargaining
representative of a bargaining unit violates the union’s duty of fair representation by requiring an
employee in that bargaining unit who is not a member of the union to pay a fee for the union’s
representative services when the union’s pay-for-service policy denies the nonmember employee
access to the grievance administration process under the collective bargaining agreement.

        1. The duty of fair representation was judicially crafted under the common law but derived
from the National Labor Relations Act (NLRA), 29 USC 151 et seq. The United States Supreme
Court has explained the duty by stating that when a union has been granted broad authority as the
exclusive bargaining agent in the negotiation and administration of a collective bargaining
contract, the union has a responsibility and duty to make a good-faith and honest effort to serve
the interests of all members of a bargaining unit without hostility or discrimination toward any
members, to exercise the union’s discretion with complete good faith and honesty of purpose, and
to avoid an arbitrary contract. Further, although a member of a bargaining unit does not have an
absolute right to have their grievance taken to arbitration, the duty of fair representation does not
allow a union to arbitrarily ignore a meritorious grievance or process it in a perfunctory fashion.
Michigan’s PERA was modeled after the NLRA, and this Court affirmed in Goolsby v Detroit,
419 Mich 651 (1984), that PERA includes a duty of fair representation. Additionally, the Court
held in Goolsby that under PERA, bad-faith conduct is not always required to establish a breach
of the duty, and the union’s failure to comply with collectively bargained grievance procedure time
limits constitutes a breach of the duty of fair representation. While statutory unfair labor practices
under PERA and the duty of fair representation are both components of Michigan’s labor policies,
their purposes are not identical. PERA includes a duty of fair representation that coexists with but
is not subsumed within statutory unfair labor practices, and decisions of the National Labor
Relations Board (NLRB) and the federal courts interpreting NLRA remain highly relevant
persuasive authority for Michigan courts when evaluating alleged violations of the duty. However,
the NLRA applies only to private sector unions. Until 2012, public sector employers and their
unions could agree to require all employees in a collective bargaining unit to pay dues to the union
covering the cost of collective bargaining and contract administration; such agreements were often
referred to as “agency shop” agreements. But in 2012, the Legislature amended PERA and
codified the right not to join a union. The 2012 amendments also prohibited a public employer or
union from interfering with the exercise of this right, discriminating with regard to conditions of
employment in order to encourage or discourage membership in a union, or requiring an individual
to join a union or pay dues as a condition of employment. The 2012 amendments effectively
eliminated agency shop agreements. In 2023, the Legislature repealed the 2012 amendments, but
the dispute in this case predated the 2023 amendments and is governed by the 2014 version of
PERA.

       2. In the context of the private sector, the NLRB has considered the question before the
Court many times, i.e., can private sector unions charge fees to nonunion employees to act as their
representative in grievance procedures? In Hughes Tool Co, 104 NLRB 318 (1953), the NLRB
determined that a fee system for nonmembers violated the duty of fair representation because all
employees were entitled to the impartial assistance of the certified representative in pursuing
grievances and requiring payment by nonmembers before rendering this assistance was an abuse
of the union’s “privileged status” as the certified representative. The NLRB has affirmed its
conclusion in Hughes Tool in subsequent cases addressing this issue.

        3. Courts in at least two jurisdictions, Cone v Nevada Serv Employees Union/SEIU Local
1107, 116 Nev 473 (2000), and Perry v Int’l Longshoremen Ass’n Local No 1414, 295 Ga App
799 (2009), have upheld grievance fee policies instituted by public sector unions for nonmembers.
Notably, in Cone, the Nevada Supreme Court held that a grievance fee policy that applied only to
nonmembers of the union did not violate the duty of fair representation because the nonmember
employees had the right to act on their own behalf with respect to any condition of employment,
including pursuing grievances, and it did not violate the duty of fair representation because there
was no discrimination or coercion in requiring nonmembers to pay reasonable costs associated
with individual grievance representation. However, Cone and Perry both preceded the United
States Supreme Court’s decision in Janus v AFSCME Council 31, 585 US 878 (2018). In Janus,
the Court struck down an Illinois statute authorizing public sector unions to charge nonmembers
an agency fee as violative of the First Amendment right of nonmember public employees because
it compelled them to “subsidize private speech on matters of substantial public concern.” In Janus,
the Court expressly overruled Abood v Detroit Bd of Ed, 431 US 209 (1977), which had upheld a
similar statute. The Janus Court also held that agency fees could not be upheld on free-rider
grounds. The Court concluded that the “unwanted burden” of representing nonmembers in
disciplinary matters could be eliminated “through means significantly less restrictive of
associational freedoms” than the imposition of agency fees. Regarding the unfairness of requiring
unions to bear the duty of fair representation without an agency-fee policy, the Court noted that
the duty was a “necessary concomitant of the authority that a union seeks when it chooses to serve
as the exclusive representative of all the employees in a unit.”

        4. Although the duty of fair representation does not necessarily mean that nonunion
members of a bargaining unit must always be treated the same as union members, grievance
administration is different. Grievance processing and arbitration are a critical aspect of the
collective bargaining process through which unions wield significant power as the exclusive
representatives of a bargaining unit. Through the bargaining process, unions and employers
determine how employees can resolve disputes to enforce their contractual rights set forth in the
collective bargaining agreement, and through the exercise of its discretionary authority as the
exclusive representative, a union determines whether and how far to pursue each grievance. Thus,
the way the grievance process is implemented by the exclusive representative of employees bears
directly on the fruits of collective bargaining. The pay-for-service fee policy that the Union here
seeks to uphold violates the duty of fair representation for several reasons. First, it exercises the
Union’s authority in a way that treats the prospective grievance of member and nonmember
employees within the bargaining unit differently in substantial and material ways. Second, caselaw
requires a union, when exercising its discretion as to whether a grievance should be processed or
pursued, to at least make a preliminary determination as to the merits of the grievance before
deciding whether to pursue it. The Union’s policy here required no such initial determination and
would allow the Union to ignore a nonmember’s grievance unless the nonmember paid the fee.
Third, the long line of decisions from the NLRB, beginning with Hughes Tool, correctly concluded
that charging only nonunion employees within a bargaining unit for services that union members
receive as a part of their annual dues was antithetical to the exclusive representative status of
unions. While the problem of free riders creates financial hardship for unions, as exclusive
representatives, unions take on the responsibility of representing all employees, even those who
withhold their financial support. The practical reality of a pay-for-services fee policy for grievance
administration for nonunion members is that the exclusive representative of the bargaining unit is
refusing representation to some of the employees in the group except as a hired agent. The duty
of fair representation does not permit this form of discriminatory treatment of members and
nonmembers in the absence of express legislation authorizing such fees by public sector unions.
Additionally, the overturning of Abood by Janus calls into question the continued viability of the
“fair share” principles relied on in Cone to uphold fee policies that applied exclusively to nonunion
public sector employees. Further, the statute that the Cone court relied on differed from MCL
423.211, which has long been interpreted to require that the union must be the exclusive bargaining
representative of the entire bargaining unit.

        5. Although the Union argued that Janus authorizes its pay-for-service fee policy and
removed the duty of fair representation for purposes of grievance processing, the Court’s decision
in Janus was not so broad. Janus suggested that charging individual nonmember employees fees
for specific union services would survive a First Amendment challenge, but any speculation
beyond that suggestion was dicta given that only the constitutional question was before the Court.
Janus also did not analyze whether such fees would be consistent with the duty of fair
representation. Moreover, in support of its suggestion, Janus cited two statutes authorizing fair
share fees for costs associated with representative union services. Michigan’s Legislature did not
include similar express authorization for a fair share fee schedule in the applicable version of
PERA, nor was any such authorization included in the 2023 amendments.

       Part III of the Court of Appeals opinion affirmed to the extent that it found the Union’s
pay-for-service fee policy invalid, and Court of Appeals’ analysis and conclusion that Janus did
not hold that a union can unilaterally impose a fee for services only on nonmember employees also
affirmed. Court of Appeals’ analysis and holdings related to the alleged violations of § 9 and § 10
of PERA vacated. MERC’s conclusion that the pay-for-service fee policy violated § 9 and § 10
of PERA also vacated, but MERC’s decision otherwise affirmed.
                                                                           Michigan Supreme Court
                                                                                 Lansing, Michigan

OPINION
                                                  Chief Justice:                Justices:
                                                   Elizabeth T. Clement         Brian K. Zahra
                                                                                David F. Viviano
                                                                                Richard H. Bernstein
                                                                                Megan K. Cavanagh
                                                                                Elizabeth M. Welch
                                                                                Kyra H. Bolden

                                                                   FILED April 22, 2024

                            STATE OF MICHIGAN

                                   SUPREME COURT

  TECHNICAL, PROFESSIONAL, AND
  OFFICEWORKERS ASSOCIATION OF
  MICHIGAN,

               Respondent-Appellant,

  v                                                                No. 162601

  DANIEL LEE RENNER,

               Charging Party-Appellee.

 BEFORE THE ENTIRE BENCH

 WELCH, J.
       A core tenet of labor relations in the United States is that a union owes the

 employees it represents a duty of fair representation. This duty reaches all employees in

 the bargaining unit, even if the employee is not a member of the union. Further, a key

 component of collective bargaining agreements between a union and an employer is the

 establishment of rules and procedures for how an employee must submit grievances to the
employer, which is typically through a union representative. Given these longstanding

labor concepts, a union has traditionally had discretion to decide whether it is in the best

interests of the entire bargaining unit to pursue a particular grievance while also having a

duty to fairly represent all employees in the grievance process.

       This case arrives to us in the wake of both significant changes to Michigan’s public

employment relations act (PERA), MCL 423.201 et seq., the statute that governs public

sector labor relations, and the United States Supreme Court’s decision in Janus v AFSCME

Council 31, 585 US 878; 138 S Ct 2448; 201 L Ed 2d 924 (2018), which held that the First

Amendment prohibits public sector unions from charging nonunion employees in a

bargaining unit “agency fees” to cover their proportionate share of the union’s costs for

collectively bargaining on behalf of the entire unit.        In 2018, the appellant union

implemented a pay-for-services fee policy that required bargaining unit employees who

had opted not to pay union dues to pay a fee to the union before the union would review

and process a matter through the collective bargaining agreement’s grievance process. The

Legislature has not expressly authorized this form of a fee policy applicable to only

nonunion members of a bargaining unit, and similar policies have almost uniformly been

rejected across the country. In the absence of legislative authorization, the fee policy at

issue violates the union’s duty of fair representation and is invalid regardless of whether it

also violates MCL 423.209 or MCL 423.210. Accordingly, as explained more thoroughly

in this opinion, we affirm in part and vacate in part the judgment of the Court of Appeals

and the decision of the Michigan Employment Relations Commission.

                                              2
                                    I. BACKGROUND

                   A. FOUNDATIONAL LEGAL BACKGROUND

       To understand the facts of this case and the parties’ legal dispute, it is first helpful

to understand the nature and evolution of labor relations in Michigan. Labor relations for

public sector employers with unionized workforces is governed by PERA. 1947 PA 336.

PERA requires that a union selected by the majority of employees within a bargaining unit

act as the exclusive bargaining representative for employees in that unit with respect to

compensation, hours, and other terms and conditions of employment. MCL 423.211.

       First enacted in 1947, PERA initially provided “public employees . . . relatively few

of the organizational privileges which their counterparts in the private sector enjoyed.”

Lamphere Sch v Lamphere Federation of Teachers, 400 Mich 104, 127; 252 NW2d 818

(1977). In 1965, the Legislature amended PERA to explicitly grant public employees the

statutory right to engage in collective bargaining, and additional amendments in 1973

authorized the assessment of “agency fees” upon all members of a collective bargaining

unit. See 1965 PA 379; 1973 PA 25; Detroit Police Officers Ass’n v Detroit, 391 Mich 44,

49-50; 214 NW2d 803 (1974). From 1973 until 2012, both public sector employers and

their unions could agree to require all employees in a collective bargaining unit to pay dues

to the union to cover the cost of collective bargaining and contract administration. These

agreements were known as “agency shop” agreements, and until recently, they had been

deemed constitutionally permissible. See Abood v Detroit Bd of Ed, 431 US 209, 211; 97

S Ct 1782; 52 L Ed 2d 261 (1977), overruled by Janus, 585 US 878. Abood made clear

that the First Amendment prohibits public sector unions from charging to objecting

members of a bargaining unit mandatory fees that support political work but held that the

                                              3
union could still require nonunion employees to pay a service charge to cover the cost of

collective bargaining work from which all employees benefited. 1 Abood, 431 US at 232-

236. As a result, the law provided that a public sector employee did not have to be a union

member simply because their bargaining unit was represented by a union, but the employer

and union could still agree that the nonunion employee had to pay a “fair share” amount to

the union for the collective representation provided by the union.

         In 2012, Michigan’s Legislature significantly overhauled PERA when it enacted

Public Acts 348 and 349 of 2012. 2 In addition to codifying the right not to join a union,

the 2012 amendments provided that:

                (2) No person shall by force, intimidation, or unlawful threats compel
         or attempt to compel any public employee to do any of the following:

                (a) Become or remain a member of a labor organization or bargaining
         representative or otherwise affiliate with or financially support a labor
         organization or bargaining representative.

                (b) Refrain from engaging in employment or refrain from joining a
         labor organization or bargaining representative or otherwise affiliating with
         or financially supporting a labor organization or bargaining representative.
         [MCL 423.209(2), as amended by 2012 PA 349.]

         The 2012 amendments of MCL 423.210 also prohibited a public employer or union

from “interfer[ing] with, restrain[ing], or coerc[ing] public employees” in the exercise of

these new rights, MCL 423.210(1)(a) and (2)(a); prohibited discrimination “in regard to

hire, terms, or other conditions of employment to encourage or discourage membership in

1
  Such service charges are often referred to as “agency fees” or “fair-share fees.” See
Janus, 585 US at 935 (Kagan, J., dissenting).
2
    This legislation has been colloquially referred to as Michigan’s “right to work” law.

                                               4
a labor organization,” MCL 423.210(1)(c); and provided that (subject to police and fire

department exemptions in Subsection (4)) an individual must not be required to join a union

or pay dues as a condition of employment, MCL 423.210(3). 3

       The 2012 PERA amendments had the effect of eliminating agency shop

agreements. 4 The end result was that employees could choose not to join a union or

financially support a union, even if the union was responsible for a bargaining unit with

nonunion employees and such employees received benefits from the collective bargaining

agreement. In 2023, the Legislature voted to repeal the 2012 amendments, and the

Governor signed the repeal into law. 2023 PA 9; 2023 PA 114. As a result, PERA

effectively returns to its pre-2012 status once the new law goes into effect. 5

       That said, public sector unions are treated differently than their private sector

counterparts. In Abood, the United States Supreme Court found that fair-share fees could

be charged to nonunion members of a public sector bargaining unit and that such fees did

not violate the First Amendment. Abood, 431 US at 232-236. In 2018, the Court revisited

this holding and found otherwise. Specifically, in Janus, the Court held that the First

Amendment’s freedom-of-association protection prohibits public sector unions (or public

3
  Further amendments were made to provisions of PERA by 2014 PA 414 that are not
directly implicated in this case. The 2014 iteration of PERA was in effect at all times
relevant to this case and is relevant to the current legal dispute; all references in this opinion
to PERA are to the 2014 law unless otherwise stated.
4
 An exception was written into PERA for police and fire department employees and the
unions representing them. See MCL 423.210(4).
5
 This dispute predates the 2023 amendments. As noted, the 2014 version of PERA is the
version of the law applicable to this case.

                                                5
sector employers) from requiring employees to pay fair-share agency fees. Janus, 585 US

at 914-916. Thus, despite the repeal of the 2012 amendments, public sector units must still

abide by Janus.

      B. FACTS GIVING RISE TO THE UNFAIR LABOR PRACTICE CLAIM

       Daniel Renner, the charging party, is employed by Saginaw County as a

groundskeeper. The Technical, Professional, and Officeworkers Association of Michigan

(the Union) represents Renner’s bargaining unit. In 2017, Renner opted out of dues-paying

membership with the Union as was permitted by MCL 423.209 and MCL 423.210.

       The events giving rise to the present dispute occurred in 2018. In September 2018,

Renner submitted a complaint to the County’s director of maintenance, Bernard Delaney,

Jr., claiming that another employee smoked around Renner and that this negatively affected

his health. Delaney concluded that Renner’s complaint was a false claim and warned

Renner that “[a]ny further incidents will lead to progressive disciplinary action, up to and

including discharge.” Renner sent Delaney a document the next day that purported to

invoke a specific formal grievance procedure under County Policies, Category 300,

Number 337, Policy 6.1.1. On September 26, 2018, Delaney responded to Renner in

writing, noting that Policy 6.1.1 precluded Renner from invoking the specific grievance

procedure because he was a member of a bargaining unit represented by the Union.

However, Delaney went on to state that he had reviewed Renner’s submission, and he was

denying the grievance on the merits.

       On the same day that Renner submitted the grievance to Delaney, he also informed

the president of the local chapter of the Union of the grievance and expressed his desire to

                                             6
receive union representation. A Union representative responded and told Renner that if he

needed assistance with the grievance, he would have to pay fees for this service to the local

chapter in accordance with the Union’s internal rules and procedures. The representative

pointed to an internal procedure and pay-for-service fee policy that the Union had adopted

by resolution on July 23, 2018. Specifically, the policy states that nonunion members of a

bargaining unit “shall be required to pay, in advance, for” representation services, including

but not limited to: (1) internal investigatory proceedings, (2) employer administrative

proceedings, (3) state administrative proceedings, (4) consultations with a union

representative or union legal counsel, and (5) grievance step meetings, arbitration, and

post-arbitration matters. The Union reserved the right to determine costs, expenses, and

fees on a case-by-case basis and required employees to pay the difference if the actual cost

exceeded the anticipated amount.

       In short, under the Union’s internal policy, bargaining unit members who were not

dues-paying members of the Union were required to pay a separate fee for direct

representation services but not collective labor representation services. The Union’s pay-

for-service policy defines “direct labor representation services” to include “representation

of a bargaining unit member in an individual capacity, in employment related issues

including, but not limited to . . . grievance representation and arbitration, and

administrative representation[.]” According to the Union, the fee policy ensures that

nonunion members of a bargaining unit pay a fair share of the expenses associated with

direct representation that would otherwise be covered by a union member’s annual dues

over time. Under the policy, an employee is prohibited from joining the Union during the

pendency of an employment dispute, but the Union has discretion to waive this provision.

                                              7
If the Union elects to waive the prohibition, then an employee would be required to pay

union dues as a new member but would not have to pay a separate fee for direct

representation services. The Union’s legal counsel further advised Renner that “the only

process allowed to pursue a grievance, through the [collective bargaining agreement] steps,

is via the Union” and noted that the County could not directly respond to grievances with

individual employees in bargaining units covered by the collective bargaining agreement.

       The Union required Renner to pay $1,290, an estimate of the cost of its services, in

advance before it would assist him with the next step in the grievance process. If the actual

amount of the services provided exceeded the amount of the estimate, the Union would

require payment of those costs by Renner “prior to any continuation of services.”

Additional steps, such as pursuing binding arbitration, would require additional payment

by Renner. Renner refused to pay the fee. Accordingly, the Union took no further steps

to assist Renner with his grievance, and the default deadline under the collective bargaining

agreement to proceed with the grievance process expired.

                       C. ADMINISTRATIVE PROCEEDINGS

       Renner filed an unfair labor practice challenge with the Michigan Employment

Relations Commission (MERC) under PERA in October 2018. Specifically, Renner

alleged that the Union violated its duty of fair representation by demanding a fee in

exchange for direct representation services. The Union filed for summary disposition. It

did not dispute the underlying facts but instead argued that charging such a fee was lawful

following the decision of the United States Supreme Court in Janus. According to the

Union, Janus “remove[d] the duty [of fair representation] owed to a ‘member of a

                                             8
bargaining unit’ that is not a member of the union, if direct labor representation services

are requested and the individual refuses to pay for those services.”

       An administrative law judge (ALJ) disagreed with the Union and ruled in favor of

Renner. The ALJ relied heavily on decisions from the National Labor Relations Board

(NLRB) concerning analogous provisions in the National Labor Relations Act (NLRA), 29

USC 151 et seq., which MERC had historically followed. The ALJ further distinguished

one judicial decision to the contrary, Cone v Nevada Serv Employees Union/SEIU Local

1107, 116 Nev 473; 998 P2d 1178 (2000). In that case, the Nevada Supreme Court found

that a direct service fee could be charged by the union for grievance representation, but the

ALJ here found that Nevada law was unique because it expressly granted an individual

employee the right to present a grievance to their employer, to have it adjusted without

assistance from the union, and to compel the employer to deal directly with the employees

and their personal attorneys. As a result, employees in Nevada had a choice of how to

press forward with a grievance in a union workplace—either with union assistance or

without.

       In contrast, the ALJ concluded that neither PERA nor the applicable collective

bargaining agreement permitted the direct service fee in Michigan because neither

permitted an employee in a unionized workplace to communicate directly with an employer

about a grievance. Only the Union could process a grievance. Accordingly, the ALJ

recommended that MERC hold that (1) the Union’s pay-for-service fee policy violated

§ 10(2)(a) of PERA because it unlawfully discriminated against nonunion members and

restrained employees from exercising their right under § 9 of PERA to refrain from joining

or assisting a labor organization and (2) the Union violated its duty of fair representation

                                             9
by refusing to file or process Renner’s grievance unless he paid a fee for direct

representation, which discriminated against nonmembers.

       MERC agreed with the ALJ that the Union’s fee policy constituted an unfair labor

practice, and it adopted the ALJ’s decision and recommended order, thus rejecting the

Union’s arguments under Janus. MERC further rejected the Union’s state and federal

constitutional arguments that the Union was being forced to associate with a nonmember

against its will on the basis that the duty of fair representation negated such First

Amendment claims.

                             D. JUDICIAL PROCEEDINGS

       The Union appealed MERC’s decision in the Court of Appeals pursuant to MCL

423.216(e) and Const 1963, art 6, § 28. That Court affirmed MERC’s decision in a

published opinion. Technical, Professional, and Officeworkers Ass’n of Mich v Renner,

335 Mich App 293; 966 NW2d 693 (2021).

       The Court first addressed and rejected the Union’s arguments that the pay-for-

service fee policy did not violate an express provision of PERA. The panel emphasized

that MCL 423.209 gave public employees the right to organize or join collective bargaining

units or, conversely, to refrain from doing so.       Id. at 302-303.     Conversely, MCL

423.210(1)(a) prohibits a public employer from “interfering with, restraining, or coercing

public employees in the exercise of their rights guaranteed in section 9,” and MCL

423.210(2)(a) “prohibits labor organizations from restraining or coercing public employees

in the exercise of” the rights guaranteed in § 9, “but it does not impair the right of a labor

                                             10
organization to prescribe its own rules with respect to the acquisition or retention of

membership.” Renner, 335 Mich App at 303 (quotation marks and citations omitted).

       The panel agreed with MERC that the pay-for-services procedure violated MCL

423.210(2)(a) because it unlawfully discriminated against nonmembers of the Union and

restrained employees from exercising their right to refrain from joining or assisting a labor

organization under MCL 423.209. Id. at 303-304. The Court rejected the Union’s

argument that the pay-for-service fee policy was authorized by MCL 423.210(2)(a), which

allowed a labor organization to set its own rules “ ‘with respect to the acquisition or

retention of membership’ ” because the Union’s rule applied to only nonunion employees

and did not govern the acquisition or retention of membership. Id. at 304-305, quoting

MCL 423.210(2)(a). The panel concluded that the primary purpose of the pay-for-service

fee policy was to require nonunion collective bargaining unit members to pay for direct

representation services, and it advanced this purpose by restraining or coercing nonmember

employees in the exercise of their rights under MCL 423.209. Renner, 335 Mich App at

304-305. The panel also rejected the Union’s argument that the pay-for-service policy was

an internal rule permitted by MCL 423.210(2)(a) and was not unlawful because the fee was

not required as a “condition of obtaining or continuing public employment” MCL

423.210(3). Id. at 306-307. The panel further held that even if the policy was an internal

rule, the fee would be unenforceable as an impermissible form of restraint or coercion on

an employee’s right under MCL 423.209 to refrain from joining a union. Id.

       As to the duty of fair representation, the Court of Appeals acknowledged that MCL

423.211 has been interpreted as imposing a duty of fair representation on labor

organizations representing public sector employees that is analogous to the duty imposed

                                             11
by the NLRA on labor organizations representing private sector employees. Id. at 307-

308, citing Goolsby v Detroit, 419 Mich 651, 661 n 5; 358 NW2d 856 (1984); Ford Motor

Co v Huffman, 345 US 330, 337; 73 S Ct 681; 97 L Ed 1048 (1953). The Court went on

to reject the Union’s argument that the duty of fair representation was not violated on the

basis that nonunion members are treated equally for collective bargaining purposes.

Renner, 335 Mich App at 308-309.

       The Court noted that the Union, as the exclusive representative of Renner’s

bargaining unit, had negotiated a grievance process that governed Renner’s employer and

all members of the bargaining unit. Id. at 309. Therefore, all members of the unit were

required to use the negotiated procedure, and Renner had unsuccessfully attempted to

invoke individual grievance rights under MCL 423.211 of PERA. Renner, 335 Mich App

at 309-310. Thus, opined the Court, the Union’s pay-for-service policy “effectively

foreclosed a nonunion employee’s ability to use the grievance process absent payment for

services,” id. at 309, or to refrain from joining the union before there was a need to invoke

the grievance procedure, see id. at 310-311. Like MERC, the Court of Appeals also

rejected the Union’s arguments that Janus allowed for a pay-for-services regime and that

the Nevada Supreme Court’s Cone decision should be followed in Michigan. Id. at 311-

318. Finding no errors of law, the Court of Appeals affirmed MERC’s decision. 6

       The Union then sought leave to appeal in this Court, and we initially ordered oral

argument on the application. Technical Professional & Officeworkers Ass’n of Mich v

6
 The Court of Appeals also rejected the Union’s argument that the MERC decision violates
the Union’s First Amendment rights to freedom of association. Renner, 335 Mich App at
318-320. This issue was not included in this Court’s order granting leave to appeal.

                                             12
Renner, 508 Mich 975 (2021). After we heard oral argument on the application in October

2022, the Court granted the Union’s application for leave to appeal in part and directed the

parties to brief the following issues:

       (1) what is the difference between the common-law analysis of the duty of
       fair representation and the statutory analysis of “coercion” and “restraint”
       under the public employment relations act (PERA), MCL 423.201 et seq.,
       and whether the outcome in this case will differ based on which analysis is
       used; (2) whether the fee schedule in this case violates §§ 9 and 10 of PERA
       (MCL 423.209; MCL 423.210); and (3) whether the fee schedule in this case
       violates the common-law duty of fair representation.               [Technical
       Professional & Officeworkers Ass’n of Mich v Renner, 510 Mich 1097, 1097
       (2022).]

                              II. STANDARD OF REVIEW

       The scope of judicial review of a decision from MERC concerning alleged unfair

labor practices varies depending on whether the alleged error is one of fact or law. Const

1963, art 6, § 28 requires the Court to determine whether the “final [administrative]

decisions, findings, rulings and orders are authorized by law; and, in cases in which a

hearing is required, whether the same are supported by competent, material and substantial

evidence on the whole record.” The Legislature has further provided that MERC’s findings

of fact, “if supported by competent, material, and substantial evidence on the record

considered as a whole[,] shall be conclusive.” MCL 423.216(e).

       We have long recognized that MERC has the “administrative expertise to entertain

and reconcile competing allegations of unfair labor practices and misconduct under the

PERA.” Kent Co Deputy Sheriffs Ass’n v Kent Co Sheriff, 463 Mich 353, 359; 616 NW2d

677 (2000), quoting Rockwell v Crestwood Sch Dist, 393 Mich 616, 630; 227 NW2d 736

(1975). This Court gives “respectful consideration” to the construction of a statute by an

                                            13
agency charged with implementation and enforcement of the statute such that an agency’s

interpretation will not be overruled absent “cogent reasons” for doing so, but “the agency’s

interpretation is not binding on the courts, and it cannot conflict with the Legislature’s

intent as expressed in the language of the statute at issue.” In re Rovas Complaint Against

SBC Mich, 482 Mich 90, 103; 754 NW2d 259 (2008). Therefore, MERC’s legal rulings

are reviewed de novo and may be set aside if “they violate a constitutional or statutory

provision or they are based on a substantial and material error of law.” Grandville Muni

Executive Ass’n v City of Grandville, 453 Mich 428, 436; 553 NW2d 917 (1996). See also

Macomb Co v AFSCME Council 25, 494 Mich 65, 77; 833 NW2d 225 (2013); Port Huron

Ed Ass’n v Port Huron Area Sch Dist, 452 Mich 309, 323; 550 NW2d 228 (1996); MCL

24.306(1)(a) and (f).

                                    III. ANALYSIS

                    A. THE DUTY OF FAIR REPRESENTATION

       The duty of fair representation has a long history in both federal and Michigan labor

law. This duty was derived from the NLRA in a series of decisions from the United States

Supreme Court over 60 years ago. See Steele v Louisville & Nashville R Co, 323 US 192;

65 S Ct 226; 89 L Ed 173 (1944); Tunstall v Brotherhood of Locomotive Firemen, 323 US

210; 65 S Ct 235; 89 L Ed 187 (1944); Ford Motor Co, 345 US 330. We have previously

described the duty of fair representation under federal law as a hybrid of statutory and

common law because it was judicially crafted under the common law but derived from the

NLRA. See Demings v City of Ecorse, 423 Mich 49, 59; 377 NW2d 275 (1985) (“The

right is the product of a federal common law of statutory origin. How this hybrid is

classified is not of critical importance.”) (quotation marks and citation omitted). In

                                            14
Humphrey v Moore, 375 US 335, 342; 84 S Ct 363; 11 L Ed 2d 370 (1964), the United

States Supreme Court explained that when a union has been granted “broad authority” as

the “exclusive bargaining agent in the negotiation and administration of a collective

bargaining contract,” the union has a “responsibility and duty” to make a good faith and

honest effort to serve the interests of all members of a bargaining unit without hostility or

discrimination to any such members, to exercise the union’s discretion with “complete

good faith and honesty of purpose,” and to avoid an arbitrary contract. (Quotation marks

and citation omitted.)

       The United States Supreme Court later clarified that the duty of fair representation

did not allow a union to “arbitrarily ignore a meritorious grievance or process it in

perfunctory fashion,” even though an individual member of a bargaining unit did not have

an “absolute right to have his grievance taken to arbitration regardless of the provisions of

the applicable collective bargaining agreement.” Vaca v Sipes, 386 US 171, 191; 87 S Ct

903; 17 L Ed 2d 842 (1967). See also id. at 194 (“In administering the grievance and

arbitration machinery as statutory agent of the employees, a union must, in good faith and

in a nonarbitrary manner, make decisions as to the merits of particular grievances.”). Thus,

at its core, the duty of fair representation entitles all members of a bargaining unit to be

treated in a generally fair and nonarbitrary manner by the union that represents them.

       It is well established that Michigan’s PERA was modeled after the NLRA. See,

e.g., Rockwell, 393 Mich at 635-636. In Goolsby, 419 Mich at 660 n 5, this Court affirmed

                                             15
that PERA, like the NLRA, includes a duty of fair representation. 7 The Court’s holding

was largely based upon MCL 423.211 of PERA, which, like the NLRA, makes a labor

organization the exclusive bargaining representative of all nonexempt employees in a

covered bargaining unit. 8 Relying heavily on federal precedent, such as Humphrey and

Vaca, we specifically held in Goolsby that:

        (1) PERA impliedly imposes on labor organizations representing public
        sector employees a duty of fair representation; (2) bad-faith conduct is not
        always required to make out a breach of that duty; (3) the conduct prohibited
        by the duty of fair representation includes (a) impulsive, irrational or
        unreasoned conduct, (b) inept conduct undertaken with little care or with
        indifference to the interests of those affected, (c) the failure to exercise
        discretion, and (d) extreme recklessness or gross negligence; (4) absent a
        reasoned, good-faith, nondiscriminatory decision not to process a grievance,
        the failure of a labor organization to comply with collectively bargained
        grievance procedure time limits constitutes a breach of the duty of fair
        representation; and (5) in this case, the union’s inexplicable failure to comply

7
  MERC has also held that this duty of fair representation is imported through PERA
§ 10(2)(a). See Waverly Ed Supp Personnel Ass’n, 30 Mich Pub Emp Rep 50 (2017) (Case
Nos. CU16 H-044 and CU16 H-046 to H-049) (“The Commission [MERC] has interpreted
Section 10(2)(a) as incorporating the duty of fair representation . . . .”).
8
    MCL 423.211 provides that:

               Representatives designated or selected for purposes of collective
        bargaining by the majority of the public employees in a unit appropriate for
        such purposes, shall be the exclusive representatives of all the public
        employees in such unit for the purposes of collective bargaining in respect
        to rates of pay, wages, hours of employment or other conditions of
        employment, and shall be so recognized by the public employer: Provided,
        That any individual employee at any time may present grievances to his
        employer and have the grievances adjusted, without intervention of the
        bargaining representative, if the adjustment is not inconsistent with the terms
        of a collective bargaining contract or agreement then in effect, provided that
        the bargaining representative has been given opportunity to be present at such
        adjustment. [Emphasis added.]

                                              16
       with the grievance procedure time limits indicates inept conduct undertaken
       with little care or with indifference to the interests of plaintiffs, which could
       have reasonably been expected to foreclose plaintiffs from pursuing their
       grievance further. As a result, the union breached its duty of fair
       representation to plaintiffs. [Goolsby, 419 Mich at 681-682.]

       Goolsby also reaffirmed the longstanding principle that because of the overlap

between PERA and the NLRA, we look to decisions from federal courts and the NLRB

that construe similar provisions and principles under the NLRA for guidance. See id. at

660 n 5. See also Rockwell, 393 Mich at 636 (“In construing the Michigan labor mediation

act and the PERA, this Court has frequently been guided by the construction placed on the

analogous provisions of the NLRA by the NLRB and the Federal courts.”); Detroit Police

Officers Ass’n, 391 Mich at 53 (“Although we cannot state with certainty, it is probably

safe to assume that the Michigan Legislature intentionally adopted § 15 PERA in the form

that it did with the expectation that MERC and the Michigan courts would rely on the legal

precedents developed under NLRA, § 8(d) to the extent that they apply to public sector

bargaining.”).

       While there is substantial overlap between the duty of fair representation and

statutorily proscribed unfair labor practices, they are not identical. The duty of fair

representation is broader, and thus requires more of a union than avoidance of statutory

unfair labor practices; accordingly, the duty of fair representation should not be defined or

limited by those statutory proscriptions. See, e.g., Breininger v Sheet Metal Workers Int’l

Ass’n Local No 6, 493 US 67, 86; 110 S Ct 424; 107 L Ed 2d 388 (1989) (“[T]here is no

reason to equate breaches of the duty of fair representation with unfair labor practices,

especially in an effort to narrow the former category. . . . Pegging the duty of fair

representation to the [NLRB’s] definition of unfair labor practices would make the two

                                              17
redundant, despite their different purposes, and would eliminate some of the prime virtues

of the duty of fair representation—flexibility and adaptability.”).

       While statutory unfair labor practices under PERA and the duty of fair

representation are both components of Michigan’s statewide labor policies, their purposes

are not identical. Statutory unfair labor practices are primarily aimed at the Legislature’s

interest in effectuating and implementing state labor policies, while the duty of fair

representation seeks to prevent unions from perpetrating wrongful or arbitrary conduct

against individual employees within a bargaining unit. See Chauffeurs, Teamsters and

Helpers Local 391 v Terry, 494 US 558, 573; 110 S Ct 1339; 108 L Ed 2d 519 (1990)

(“Unlike the unfair labor practice provisions of the NLRA, which are concerned primarily

with the public interest in effecting federal labor policy, the duty of fair representation

targets ‘the wrong done the individual employee.’ ”) (citation omitted); Vaca, 386 US at

182 n 8; see Goolsby, 419 Mich at 681. Thus, an action that is not an unfair labor practice

could still be a violation of the duty of fair representation. Such distinctions were critical

to this Court’s previous holding that while MERC has exclusive original jurisdiction over

statutory unfair labor practice claims, it shares concurrent jurisdiction with the circuit court

over alleged violations of the duty of fair representation. Demings, 423 Mich at 57-58,

63-64. “In this state, a person claiming that a labor organization has breached its duty of

fair representation can institute an administrative or a judicial proceeding, the former by

filing an unfair labor practice charge with the NLRB or the MERC, the latter by filing a

complaint with a federal district or state circuit court.” Id. at 63-64, quoting Goolsby, 419

Mich at 665 n 6.

                                              18
       The duty of fair representation has long been and continues to be an important labor

law principle in Michigan. We reaffirm that PERA includes a duty of fair representation

that coexists with but is not subsumed within statutorily proscribed unfair labor practices.

We also reaffirm that decisions of the NLRB and federal court concerning the duty of fair

representation under the NLRA are highly relevant persuasive authority that should be

consulted when evaluating alleged violations of the duty.

  B. CHARGING NONUNION EMPLOYEES FOR DIRECT REPRESENTATIVE
         SERVICES AND THE DUTY OF FAIR REPRESENTATION

       Before this case, this Court, the Court of Appeals, and MERC had yet to consider

whether charging a fee to public sector bargaining unit members who are not members of

the relevant union for direct representation services is consistent with the duty of fair

representation. Given that this is an issue of first impression in Michigan, we look to

precedent from the NLRB and decisions from other courts concerning similar questions for

guidance.

             1. NATIONAL LABOR RELATIONS BOARD DECISIONS

       The NLRB, the administrative agency that oversees private sector labor disputes,

has considered the question before this Court several times: can unions representing

employees in the private sector charge fees to nonunion employees for representation in

grievance procedures? The issue was first presented in Hughes Tool Co, 104 NLRB 318

(1953). In that case, one chapter of the Independent Metal Workers Union, Local 1,

represented the white employees at a tool plant and another union chapter, Local 2,

                                            19
represented the Black employees. 9 Id. at 319. The NLRB had certified both chapters as

joint bargaining representatives. Id. Local 1 announced a policy that required employees

who were not members of the union to pay “$15 for each grievance and $400 for each

arbitration proceeding” in which the union would act as their representative; members of

Local 1 were not required to pay a fee beyond their monthly dues, and Local 2 did not

institute the fee system. Id. at 319-320.

       An action seeking decertification of the Metal Workers Union was commenced by

the International Association of Machinists alleging, in relevant part, that the grievance fee

system violated the union’s duty of fair representation. Id. at 320. The Machinists

specifically argued that the Metal Workers Union “misused, and continues to misuse, the

certification as exclusive bargaining representative by failing to process and present

grievances of all members of the bargaining unit on a nondiscriminatory basis.” Id. at 318-

319. The Machinists explained that “the certified bargaining representative owes a duty of

nondiscriminatory representation of all employees in the bargaining unit whether or not

they are members,” and this duty was “violated by a [Metal Workers Union] policy which

denies the services of the [union] representative to nonmembers except upon the payment

of discriminatory fees, thereby punishing and coercing those individuals into joining” the

Metal Workers Union. Id. at 320. The Metal Workers Union countered that the fee system

9
 Although the National Labor Union, the first national labor federation in the United States,
declared that it would admit members regardless of color or nationality as early as 1866,
segregation within unions was an unfortunate but common practice until after passage of the
Civil Rights Act in 1964, 42 USC 1981 et seq. See University of Maryland University
Libraries, African-American’s Rights <https://exhibitions.lib.umd.edu/unions/social/african-
americans-rights> (accessed December 4, 2023) [https://perma.cc/STN2-7PRL].

                                             20
was a “nondiscriminatory method of equitably sharing the costs of representation,” thus

curing a free-rider problem, and the prior system weighed down grievance processers with

frivolous claims. Id. The employer was located in Texas, which had a statute prohibiting

compulsory union membership. Id. at 329.

      The NLRB, in Hughes Tool Co, first focused on § 9 of the NLRA, which like MCL

423.211, provides that the union is the “exclusive representative” of employees within the

relevant bargaining unit. 10 Id. at 325. The NLRB found that this duty did not permit

discrimination on the basis of membership or nonmembership in a union and focused on

the prominent role that “grievance handling plays in the representation of employees,”

given that “viewed in the larger aspect, [it] constitutes, to a great degree, the actual

administration of a collective-bargaining contract.” Id. at 325-326. While the 1947

amendments of § 9 of the NLRA allowed some employees to present grievances to

employers directly under some circumstances, this did not lessen the union’s responsibility

10
  At the time that Hughes Tool Co was decided, § 9(a) of the NLRA, 29 USC 159(a), was
nearly identical to § 11 of PERA and provided:

              Representatives designated or selected for the purposes of collective
       bargaining by the majority of the employees in a unit appropriate for such
       purposes, shall be the exclusive representatives of all the employees in such
       unit for the purposes of collective bargaining in respect to rates of pay,
       wages, hours of employment, or other conditions of employment: Provided,
       That any individual employee or a group of employees shall have the right at
       any time to present grievances to their employer and to have such grievances
       adjusted, without the intervention of the bargaining representative, as long as
       the adjustment is not inconsistent with the terms of a collective-bargaining
       contract or agreement then in effect: Provided further, That the bargaining
       representative has been given opportunity to be present at such adjustment.
       [Emphasis added.]

                                             21
“concerning those grievances on which its aid is requested,” and thus the duty of fair

representation still required a union to act “impartially and without discrimination to accept

and process all grievances placed in its hands by the employees it represents.” Id. at 327.

As a result, the NLRB concluded that the grievance fee system for nonmembers violated

the duty of fair representation because

       all employees in an appropriate unit are entitled, upon their request, to the
       impartial assistance of the certified representative in the filing and
       adjustment of grievances. The duty of the certified representative to render
       such impartial assistance is clearly evaded where some employees are forced
       to pay a price for such help or to forego it entirely. The latter result is
       precisely what occurs under the fee schedule set up by the [Metal Workers
       Union]. [Id.]

       The NLRB specifically rejected the Metal Workers Union’s arguments to the

contrary:

       The defense of the [Metal Workers Union]—that it does not “refuse” such
       assistance as certified representative but merely requires payment for it—
       begs the question. It is the employee’s option alone as to whether the services
       of the representative are to be used in his behalf. By demanding the payment
       of a $15 or $400 fee by nonmembers as a prerequisite to their obtaining the
       assistance they are entitled to as employees in the unit and refusing the
       representation if not paid, the [Metal Workers Union] has abused the
       privileged status it occupies as certified representative by using that status as
       a license to grant or deny representation according to its own arbitrary
       standards.

              . . . While the question of employees who accept representation
       without sharing in its expenses is a historic and troublesome problem we do
       not consider that the measures placed in effect by the [Metal Workers Union]
       present a permissible solution. The [Metal Workers Union], in realistic
       terms, is claiming the privilege of refusing representation to some of the
       employees in a group except as a hired agent. Thus, it will assist, in grievance
       proceedings, in enforcement of rights accruing to an employee under a
       collective-bargaining contract only if that employee will join its organization
       or make a substantial payment. The [Metal Workers Union] is barred, by the
       law of the State of Texas, from obtaining compulsory membership. We do

                                              22
       not believe that, in the alternative, it may require a fee from nonmember
       employees for services which are due the latter as a matter of right. By
       adopting such a procedure, the [Metal Workers Union] has, in effect, taken
       the position that it will only represent its members in the important area of
       contract administration. [Id. at 328-329 (citation omitted).]

As to the contention of excessive frivolous grievances, the NLRB believed it sufficient that

the Metal Workers Union, like other certified unions, had the right to refuse to process

clearly meritless grievances. Id. at 329.

       This issue of charging nonunion employees separate fees for grievance processing

services was brought to the NLRB several more times in the decades following Hughes

Tool Co. The NLRB consistently reached the same conclusion. See, e.g., Int’l Ass’n of

Machinists, Local Union No 697 (The HO Canfield Rubber Co), 223 NLRB 832, 834

(1976) (“In conclusion, we find that Respondent, by charging only nonmembers for

grievance representation, has discriminated against nonmembers. We further find that a

grievance procedure is vital to collective bargaining and that grievance representation is

due employees as a matter of right.”); Plumbers, Local 141, 252 NLRB 1299 (1980)

(affirming the ALJ’s ruling premised on Hughes Tool Co and adopting the recommended

order); Columbus Area Local, American Postal Workers Union (Postal Serv), 277 NLRB

541, 543 (1985) (holding that where legislation prohibiting compulsory union membership

or payment of union dues is applicable, “in the absence of a valid [legislative] union-

security clause, a union may not charge nonmembers for the processing of grievances or

other services”); Furniture Workers Div, Local 282 (Davis Co), 291 NLRB 182, 183

(1988) (“Where state law prohibits a labor organization from compelling membership[,] a

union may not require a fee for vital collective bargaining services, including grievance

processing, which is due nonmembers as a matter of right[.]”).

                                            23
       The NLRB again considered this issue and reached the same conclusion as recently

as 2015 in United Steel, Paper & Forestry, Rubber, Mfg, Energy, Allied Indus & Serv

Workers Int’l Union, Local 1192, AFL-CIO, CLC (Buckeye Florida Corp), 362 NLRB

1649 (2015). Buckeye Florida Corp is significant because the NLRB affirmed the decision

of an ALJ that had specifically rejected the applicable union’s reliance on the Nevada

Supreme Court’s decision in Cone, 116 Nev 473.

       This unbroken line of NLRB precedent makes clear that under the NLRA, charging

nonunion members of a bargaining unit a separate fee for the processing of grievances and

direct representation services in grievance proceedings is a violation of the duty of fair

representation.   The NLRB has also long acknowledged the existence of free-rider

problems caused by non-dues-paying members of collective bargaining units and the

equitable and financial concerns raised by labor organizations.           However, it has

consistently held that, in the absence of a union security clause permitted by legislation in

states that otherwise prohibit compulsory payment of union dues or membership, a union

cannot charge nonunion members of a bargaining unit a fee for grievance representation.

                   2. RELEVANT PUBLIC SECTOR PRECEDENT

       The NLRA applies to only private sector unions. While the cases in the prior section

set forth precedent regarding the legality of charging fees to nonunion members for the

processing of grievances and representation in grievance proceedings in the private sector,

cases involving the same issue in the public sector are much sparser.

       The Nevada Supreme Court’s decision in Cone directly addressed this issue. In

Cone, the court was faced with a grievance fee policy that, like the one under review by

                                             24
this Court, charged nonunion members a fee for direct representation services in grievance

proceedings. The court in Cone acknowledged that the relevant version of the applicable

statute, Nev Rev Stat 288.027, defined a bargaining agent “as the exclusive representative

of all local government employees in the bargaining unit for purposes of collective

bargaining.” 11 Cone, 116 Nev at 477. The court determined the “mere inclusion of the

word ‘exclusive’ in and of itself prohibits a union from charging nonunion members service

fees for individual grievance representation.” Id. But the court also pointed to Nev Rev

Stat 288.140(2), 12 which “authorize[d] a nonunion member to act on his own behalf ‘with

respect to any condition of his employment.’ ” Id. at 478. Cone held that, as a result, such

language “provides an individual with a right to forego union representation” and this

carried with it an implicit “requisite that a nonunion member pay for pursuing his or her

own grievance, even if such payment is made to the union.” Id. at 478. Accordingly, from

a statutory interpretation perspective, Cone concluded that there was no express prohibition

of the fees at issue.

11
  During the period that Cone was pending on appeal, Nev Rev Stat 288.027 was replaced
by Nev Rev Stat 288.133, but the new statute still defines a bargaining agent as “the
exclusive representative of all local government employees in the bargaining unit for
purposes of collective bargaining.”
12
     Nev Rev Stat 288.140(2) provides as follows:

                 The recognition of an employee organization for negotiation, pursuant
         to this chapter, does not preclude any local government employee who is not
         a member of that employee organization from acting for himself or herself
         with respect to any condition of his or her employment, but any action taken
         on a request or in adjustment of a grievance shall be consistent with the terms
         of an applicable negotiated agreement, if any. [Emphasis added.]

                                               25
         Cone next turned to the duty of fair representation derived from Nev Rev Stat

288.140(1) 13 and Nev Rev Stat 288.270(2) 14 and concluded that the grievance fee policy

did not violate the duty. The court concluded that there was “no discrimination or

coercion” by “requiring nonunion members to pay reasonable costs associated with

individual grievance representation . . . .” Id. at 479. In support of this, the court cited

Opinion of the Justices, 401 A2d 135 (Me, 1979), and Schaffer v Bd of Ed of City of St

Louis, 869 SW2d 163, 166 (Mo App, 1993), but neither of those decisions considered

whether such a fee violates a union’s duty of fair representation.

         Cone found that the exclusive bargaining relationship between the union and

employee members of the collective bargaining unit established a “mutuality of

obligation[,]” which the court described as the union’s obligation to represent all

employees in the bargaining unit regardless of union membership status, and the

employee’s obligation, if permitted by the collective bargaining agreement and union

13
     Nev Rev Stat 288.140(1) provided that:

                 It is the right of every local government employee, subject to the
         limitation provided in subsection 3, to join any employee organization of the
         employee’s choice or to refrain from joining any employee organization. A
         local government employer shall not discriminate in any way among its
         employees on account of membership or nonmembership in an employee
         organization.
14
   When Cone was decided, Nev Rev Stat 288.270(2)(c) prohibited a union representing
public sector employees from discriminating against an employee “because of race, color,
religion, sex, age, physical or visual handicap, national origin or because of political or
personal reasons or affiliations.” (Emphasis added.) MCL 423.210(2) does not contain
an analogous provision, but it does prohibit a union from “caus[ing] or attempt[ing] to
cause a public employer to discriminate against a public employee in violation of
subsection (1)(c).” MCL 423.210(2)(c).

                                              26
policy, to share in the costs of collective bargaining services. Cone, 116 Nev at 479.

According to Cone, “recognition of this mutuality of obligation will, in part, serve to

discourage ‘free riders’—employees who receive the benefits of union representation but

are unwilling to contribute to its financial support.” Id. at 480. Cone also explicitly

rejected contrary authority from the NLRB, holding that it was not bound by such authority

and that the court disagreed with it “because it leads to an inequitable result that we cannot

condone, by essentially requiring union members to shoulder the burden of costs associated

with nonunion members’ individual grievance representation.” Id. Therefore, Cone held

“that the union did not discriminate against nonmembers in enacting the policy[] and that

the policy merely recognized the mutuality of obligation that may arise under an exclusive

bargaining arrangement.” Id.

       We have located only one intermediate appellate court decision that expressly

adopted the same rationale as Cone. See Perry v Int’l Longshoremen Ass’n Local No 1414,

295 Ga App 799, 801; 673 SE2d 302 (2009) (“Just as the union has an obligation to provide

referrals for all employees, whether members or not, all employees obtaining jobs at the

[union] hall should be obliged to pay their share of its costs.”). The private sector union in

Perry charged different fees to members than to nonmembers for providing referrals for

temporary work, and the court explicitly noted that following a settlement with the NLRB

concerning the same claims and fees, the union had begun charging union members and

nonunion members the same referral fee. Id. at 800-801.

       The decisions in Cone and Perry both preceded the United States Supreme Court’s

ruling in Janus. Janus concerned a challenge to an Illinois statute that authorized unions

representing public sector employees to charge nonunion members an agency fee for the

                                             27
proportionate share of union dues that would be attributable to collective bargaining

activities performed by the union on behalf of all employees within a bargaining unit. The

Court struck down this statute as violating the First Amendment right of nonmember public

employees by “compelling them to subsidize private speech on matters of substantial

public concern.” Janus, 585 US at 885-886. In doing so, the Court expressly overruled

Abood, which had previously upheld a very similar statute. 15 Id. at 886. The Janus Court

specifically addressed the history of free-rider problems:

              In any event, whatever unwanted burden is imposed by the
       representation of nonmembers in disciplinary matters can be eliminated
       “through means significantly less restrictive of associational freedoms” than
       the imposition of agency fees. Harris, 573 [US at 648-649] (internal
       quotation marks omitted). Individual nonmembers could be required to pay
       for that service or could be denied union representation altogether. Thus,
       agency fees cannot be sustained on the ground that unions would otherwise
       be unwilling to represent nonmembers.

               Nor can such fees be justified on the ground that it would otherwise
       be unfair to require a union to bear the duty of fair representation. That duty
       is a necessary concomitant of the authority that a union seeks when it chooses
       to serve as the exclusive representative of all the employees in a unit. As
       explained, designating a union as the exclusive representative of
       nonmembers substantially restricts the nonmembers’ rights. Supra, at 2460-
       2461. Protection of their interests is placed in the hands of the union, and if
       the union were free to disregard or even work against those interests, these
       employees would be wholly unprotected. That is why we said many years
       ago that serious “constitutional questions [would] arise” if the union were
       not subject to the duty to represent all employees fairly. Steele, [323 US] at
       198.

              In sum, we do not see any reason to treat the free-rider interest any
       differently in the agency-fee context than in any other First Amendment

15
   Notably, while Cone did not rely on Abood, two of the cases it relied heavily on—
Schaffer, 869 SW2d 163, and Opinion of Justices, 401 A2d 135—both heavily cited and
relied on Abood.

                                             28
       context. See Knox, 567 U.S., at 311, 321. We therefore hold that agency
       fees cannot be upheld on free-rider grounds. [Janus, 585 US at 900-901
       (some citations omitted).]

       As an example of a situation in which individuals could be required to pay for union

services or be denied the service, a single footnote in Janus noted that

       [s]ome States have laws providing that, if an employee with a religious
       objection to paying an agency fee “requests the [union] to use the grievance
       procedure or arbitration procedure on the employee’s behalf, the [union] is
       authorized to charge the employee for the reasonable cost of using such
       procedure.” E.g., Cal. Govt. Code Ann. § 3546.3 (West 2010); cf. Ill. Comp.
       Stat., ch. 5, § 315/6(g) (2016). This more tailored alternative, if applied to
       other objectors, would prevent free ridership while imposing a lesser burden
       on First Amendment rights. [Janus, 585 US at 901 n 6.]

       The Union here has also pointed to one post-Janus decision from an intermediate

appellate court in Pennsylvania as support for its argument. In Taylor v Pennsylvania State

Corrections Officers Ass’n, 291 A3d 1204; 2023 Pa Super 44 (2023), the court upheld a

pay-for-service grievance policy that is very similar to the one at issue here. The state’s

own version of PERA made the Pennsylvania State Corrections Officers Association

(PSCOA) the “exclusive representative” of the plaintiff’s bargaining unit. See 43 Pa Con

Stat Ann 1101.606.      Post-Janus, the PSCOA adopted a fee schedule for grievance

proceedings that applied to only nonunion employees within the bargaining unit, which

was challenged by the plaintiff as violating the duty of fair representation.           Taylor

specifically held that “there is no support under Pennsylvania law for Mr. Taylor’s broad

contention that PSCOA is not permitted to charge ancillary fees to non-union members in

connection with representing such individuals in the context of employment grievances.”

Taylor, 291 A3d at 1211.

                                             29
       Taylor read Janus, which precluded PSCOA from charging mandatory agency fees

for collective bargaining costs and contract administration as a condition of employment,

as specifically authorizing the “assessment of individual fees associated with a union’s

representation of a non-member . . . .” Id. at 1212. While Taylor held that the existence

of such a pay-for-service grievance scheme was not a per se violation of the duty of fair

representation, it left the door open to challenges premised on allegations that the fees were

“excessive or unrelated to the prospective grievance and arbitration proceedings.” Id.

3. GRIEVANCE FEES CHARGED TO ONLY NONUNION PUBLIC EMPLOYEES
VIOLATE MICHIGAN’S DUTY OF FAIR REPRESENTATION ABSENT EXPRESS
                  LEGISLATIVE AUTHORIZATION

       Unions representing public sector employees have the power and obligation to

represent all employees within a bargaining unit, regardless of union membership. It is

precisely because of this that the duty of fair representation is an important complement to

statutorily proscribed unfair labor practices. This does not necessarily mean that nonunion

employees of a bargaining unit must always be treated the same as union members in all

regards. For example, MERC has held that a union subject to PERA does not violate the

duty of fair representation “by suspending or expelling members from the union, restricting

attendance at union meetings to members, prohibiting nonmembers from voting in internal

union elections, and enforcing other restrictions against nonmembers, as long as those

requirements do not have a direct effect on terms and conditions of employment.” In re

AFSCME Council 25 Local 1583, MERC Decision & Order (Case Nos. CU13-011 to

CU13-013), issued March 27, 2014, p 9.

                                             30
       But grievance administration is different. Grievance processing and arbitration are

a critical aspect of the collective bargaining process, Machinists, Local 697, 223 NLRB at

834, through which unions wield significant power as the exclusive representatives of a

bargaining unit. It is thus unsurprising that a contractual grievance procedure is a universal

feature of collective bargaining agreements. Through the bargaining process, unions and

employers determine how employees can resolve disputes to enforce their contractual

rights set forth in the collective bargaining agreement, and through the exercise of its

discretionary authority as the exclusive representative, a union determines whether and

how far to pursue each grievance. See Goolsby, 419 Mich 665-669; Lowe v Hotel &

Restaurant Employees Union, 389 Mich 123, 147; 205 NW2d 167 (1973). Thus, the way

the grievance process is implemented by the exclusive representative of employees bears

directly on the fruits of collective bargaining. See Grand Rapids v Grand Rapids Lodge

No 97, Fraternal Order of Police, 415 Mich 628, 647; 330 NW2d 52 (1982) (“As the

exclusive bargaining representative, the union has an inherent interest in an individual’s

grievance.”).

       The pay-for-service fee policy that the Union seeks to uphold here violates the duty

of fair representation for several reasons. First, when a union exercises its authority in a

way that treats the prospective grievance of two employees within a bargaining unit

differently in substantial and material ways based solely on union membership status, the

duty of fair representation will typically be violated. This is because a “union practice that

principally looks to union membership or nonmembership to determine the type of

representation that will be provided [to] bargaining unit employees is discriminatory.”

Nat’l Treasury Employees Union v Fed Labor Relations Auth, 721 F2d 1402, 1406 (CA

                                             31
DC, 1983) (holding that a union, as an exclusive bargaining agent, may not provide

attorney representation solely to union members). A union generally cannot discriminate

“on the ground of non-membership.” Thompson v Brotherhood of Sleeping Car Porters,

316 F2d 191, 199 (CA 4, 1963).

       Second, under Goolsby and Lowe, when exercising its discretion as to whether a

grievance should be processed or pursued, a union must at least make a preliminary

determination as to the merits of the grievance before deciding whether to pursue it. The

Union’s policy here requires no such initial determination and, in fact, would allow the

Union to completely ignore a nonmember’s grievance unless and until the nonmember pays

the fee demanded.

       While the Union claims that it is not refusing to handle any grievances but is merely

demanding compensation to offset costs, we agree with Renner that this position is more a

matter of semantics. The fact that a fee must be paid before the Union will render a decision

as to whether a nonmember’s grievance will even be pursued violates the duty of fair

representation. 16 This effectively deprives nonunion members of access to the contractual

grievance process unless and until they pay a fee that union members are not required to

pay, regardless of the length of their membership. See Machinists, Local 697, 223 NLRB

at 834 (“[A]lthough a union is permitted wide discretion in its handling of grievances, a

16
  In this opinion, we do not address whether, in a post-Janus world, a pay-for-service fee
scheme that applies to both union members and nonunion members in a substantially
similar way violates the duty of fair representation. Cf. San Francisco Federation of
Teachers, 6 Pub Employee Rep for California 13159 (1982) (holding that a similar pay-
for-service fee policy violated the duty of fair representation because the union did “not
condition the processing of arbitration by dues-paying members on their paying a specific
fee for arbitration” and, thus, the policy discriminated against nonunion members).

                                             32
union cannot lawfully refuse to process a grievance of an employee in the unit because he

is a nonmember.”).

       Third, we agree with the long line of decisions from the NLRB beginning with

Hughes Tool Co, 104 NLRB 318, concluding that charging only nonunion employees

within a bargaining unit for services that union members receive as a part of annual dues

is antithetical to the exclusive representative status of unions. As noted in Hughes Tool

Co, when the payment of a fee by a nonunion employee is required before an exclusive

representative will even consider the employee’s grievance, the employee faces a stark

choice to either “pay a price for such help or to forego it entirely.” Id. at 327 (emphasis

omitted). We are cognizant of the financial hardships for unions created by the prospect

of free riders, and such problems are unlikely to dissipate after Janus. The ability of a

union to collectively represent employees is dependent on employees sharing the burden

of supporting that representation through the payment of dues.

       As an exclusive representative, however, unions take on the responsibility of

representing all employees, even those who withhold their financial support.            See

Machinists Local 697, 223 NLRB at 834 (holding that a union “take[s] on the responsibility

to act as a genuine representative of all the employees in the bargaining unit, irrespective

of union membership or the existence of a union security contract”) (cleaned up). The

practical reality of a pay-for-service fee policy for grievance administration by nonunion

employees is that the exclusive representative is “refusing representation to some of the

employees in a group except as a hired agent.” Hughes, 104 NLRB at 328. We therefore

hold that the duty of fair representation does not permit this form of discriminatory

                                            33
treatment between union members and nonmembers in the absence of express legislation

authorizing such charges by public sector unions.

       We also are not persuaded by the Union’s reliance on Cone, Taylor, and footnote 6

of Janus. The overturning of Abood by Janus calls into question the continued viability of

the “fair share” principles that Cone, 116 Nev 473, Schaffer, 869 SW2d 163, and Opinion

of Justices, 401 A2d 135, relied on in upholding fee policies that applied to only nonunion

public sector employees. Additionally, the statute critical to the court’s analysis in Cone,

Nev Rev Stat 288.140(2), differs from MCL 423.211. In Michigan, MCL 423.211 has long

been interpreted to require that the union must be the exclusive bargaining representative

of the entire bargaining unit. See, e.g., Detroit Bd of Ed v Parks, 417 Mich 268, 275-279;

335 NW2d 641 (1983); Quinn v Police Officers Labor Council, 456 Mich 478, 481-482;

572 NW2d 641 (1998); Demings v City of Ecorse, 127 Mich App 608, 616; 339 NW2d 498

(1983), aff’d in part and remanded in part 423 Mich 49 (1985).

       As the Court of Appeals noted, Renner, 335 Mich App at 300 n 3, 311, Cone’s

reading of the Nevada statute does not appear to require an employee to use the specific

grievance procedure that a union has bargained for. By contrast, nothing in MCL 423.211

allows an employee to avoid using the specific grievance procedure set forth in a collective

bargaining agreement. Moreover, while MCL 423.211 gives an employee the power to

present a grievance directly to an employer without the intervention of a bargaining

representative, because the statute “requires an individual adjustment to be consistent with

the collective bargaining agreement, the employer may elect to proceed under the

agreement’s procedures in the first place rather than risk rebargaining over the same

                                            34
issues.” Mellon v Bd of Ed of Fitzgerald Pub Sch, 22 Mich App 218, 221-222; 177 NW2d

187 (1970) (emphasis omitted).

       The Union further argues that Janus provides express authorization for the type of

pay-for-service fee policy that is at issue and removed the duty of fair representation from

the equation for grievance processing purposes. As support, the Union points to the Taylor

decision from the Pennsylvania Superior Court. We do not read Janus so broadly, and we

disagree with Taylor. Janus certainly suggested that charging individual nonmember

employees fees for specific services that a union provides would survive a First

Amendment challenge, but any speculation beyond that was dicta considering that only the

constitutional question was before the Court. Additionally, Janus did not analyze whether

such fees would be consistent with the duty of fair representation, despite reaffirming the

importance of the duty and the constitutionality of legislation making a union the exclusive

representative of a bargaining unit.

       Moreover, Janus cited two examples authorizing fair-share fees to be charged for

the costs associated with representative union services. See Janus, 585 US at 901 n 6,

citing Cal Gov’t Code, ch 10.7, § 3546.3 (1980); cf. 5 Ill Comp Stat 315/6(g) (2016). Both

involved statutory permission to charge the fees. Michigan’s Legislature did not include

similar express authorization for a fair-share fee schedule in the applicable version of

PERA, nor was such authorization included in 2023 PA 9 and 2023 PA 114, which largely

returned PERA to its pre-2012 status. This distinction is critical because, as previously

explained, the NLRB has consistently held that to avoid a violation of the duty of fair

representation under the NLRA, there must be an express union security agreement or

legislative authorization to charge nonunion members of a bargaining unit for services that

                                            35
union members receive as part of paying their annual dues. See Hughes Tool Co, 104

NLRB 318; Buckeye Florida Corp, 362 NLRB 1649. While there might be creative

legislative solutions that could assist public and private labor organizations with addressing

the longstanding free-rider problem, we decline to erode the duty of fair representation in

the manner the Union asks of the Court today.

                                    C. APPLICATION

       In accordance with the principles discussed above, we strike down the Union’s pay-

for-service fee policy as a violation of the duty of fair representation. The fee policy applies

to only nonunion employees within the relevant bargaining unit, such as Renner, and

deprives those nonunion employees of access to the grievance administration process that

they are compelled to use pursuant to the collective bargaining agreement unless they pay

the demanded fee. The Union also has not obligated itself to make an initial assessment of

the potential merit of a nonunion employee’s grievance unless and until the required fee

has been paid. Under such circumstances, the Union’s fee policy violates the duty of fair

representation. We reject the Union’s argument that dicta in Janus authorized the pay-for-

service fee policy at issue for the reasons previously stated.

       Our holding that the fee policy violates the duty of fair representation makes it

unnecessary to determine if the fee policy also violated § 9 or § 10 of PERA as a statutorily

proscribed unfair labor practice.

                                    IV. CONCLUSION

       For the reasons previously explained, we strike down the Union’s pay-for-service

fee policy because it violates the Union’s duty of fair representation, which makes it

                                              36
unnecessary to reach the issue of whether the pay-for-service fee policy also constitutes an

unfair labor practice in violation of § 9 or § 10 of PERA. We affirm the analysis and

holding contained in Part III of the Court of Appeals’ opinion to the extent it held that the

Union’s pay-for-service fee policy was invalid on the basis that it violated the duty of fair

representation, and we affirm the Court of Appeals’ analysis and conclusion that Janus did

not hold that a union can unilaterally fashion a policy or procedure imposing fees for

services on only nonunion employees.          See Renner, 335 Mich App at 308-318.

Considering our holding as to the duty of fair representation and the recent substantive

amendments of PERA enacted by 2023 PA 9 and 2023 PA 114, we vacate as unnecessary

the Court of Appeals analysis and holdings as to the alleged violations of § 9 and § 10 of

PERA. Renner, 335 Mich App at 302-307.

       We conclude that MERC’s findings of fact in this case were supported by

competent, material, and substantial evidence on the whole record. To the extent MERC’s

conclusions of law reflected a finding that the pay-for-services fee policy violated the duty

of fair representation, this decision does not constitute a substantial and material error of

law, nor does it violate a statutory or constitutional provision. However, consistent with

how we have handled the Court of Appeals’ decision, we vacate MERC’s conclusions of

law to the extent that MERC also determined that the pay-for-services fee policy violated

§ 9 and § 10 of PERA. With these qualifications, the decision of MERC is affirmed.

                                                         Elizabeth M. Welch
                                                         Elizabeth T. Clement
                                                         Brian K. Zahra
                                                         David F. Viviano
                                                         Richard H. Bernstein
                                                         Megan K. Cavanagh
                                                         Kyra H. Bolden

                                             37