Michigan State AFL-CIO v. Schuette

The Michigan Campaign Finance Act, Mich. Comp. Laws 169.254, generally bars corporations and labor unions from contributing to political candidates and organizations, but permits them to form and contribute to political action committees (PACs), which may make political contributions. A recent amendment defines a prohibited expenditure to include the administrative expenses of operating a payroll deduction program unless the deductions go to the corporation’s or union’s own PAC or a PAC established by a nonprofit corporation of which that entity is a member. Unions challenged the restriction under the Contracts Clause and First Amendment. Unions do not employ the bulk of their authorized donor base. To obtain payroll deductions in the past, unions secured agreements from employers to deduct PAC contributions from union members’ wages. The district court preliminarily enjoined enforcement of the law on both grounds. The Sixth Circuit affirmed the Contracts Clause ruling and reversed the First Amendment ruling. The Contracts Clause, prohibits the state from enforcing the contested provision with respect to pre-existing PAC check-off obligations through the end of the relevant collective bargaining agreements. The state’s “decision not to subsidize the exercise of a fundamental right” did not itself infringe that right. View "Michigan State AFL-CIO v. Schuette" on Justia Law