Published on Jul 10, 2017

The Michigan Supreme Court wrote several important Employment Law opinions in 2015 and 2016. The opinions addressed issues ranging from disability benefits and worker’s compensation to clarification of the Whistleblowers Act. The following is a brief review of those opinions.

Arbuckle v. General Motors, LLC
Date: July 15, 2016
Docket No: 151277

Employers Can Use Disability Pension Benefits to Reduce Worker’s Comp Benefits

Plaintiff Clifton Arbuckle injured his back while working for General Motors Corporation (GM). In May 1993, he retired and began receiving a disability pension. Later he was awarded workers’ compensation benefits and received Social Security Disability Insurance (SSDI) benefits.

In 2009, GM and the UAW adopted a new formula, which was incorporated into the Collective Bargaining Agreement (CBA). Under its terms, GM would use disability pension benefits to reduce the amount of workers’ compensation benefits for all workers and retirees, regardless of when they had retired. GM notified Arbuckle that, beginning January 1, 2010, his benefits would be reduced using the formula in the 2009 agreement.

Arbuckle appealed to the Workers’ Compensation Agency. It decided that GM was improperly using Arbuckle’s SSDI benefits to offset his workers’ compensation benefits, in violation of MCL 418.354(11). A workers’ compensation magistrate reversed the ruling but concluded that GM was prohibited from reducing Arbuckle’s workers’ compensation benefits by his disability pension benefits because Arbuckle had never agreed to coordination of benefits and no evidence established that the UAW had the authority to bargain on Arbuckle’s behalf after his retirement.

The Michigan Compensation Appellate Commission (MCAC) reversed in part, holding that GM was permitted to coordinate Arbuckle’s disability pension benefits. Arbuckle sought leave to appeal, but after the Court of Appeals granted his application, he died. Robert Arbuckle, the personal representative of the estate, was substituted as plaintiff. The Court of Appeals reversed in an unpublished opinion and remanded the case for further proceedings. GM then appealed.

The Supreme Court concluded that the Court of Appeals erred in holding that GM lacked the authority to coordinate Arbuckle’s benefits under the 2009 CBA. The Court reversed and reinstated MCAC’s order to coordinate benefits.

Pace v Edel-Harrelson.
Date: February 1, 2016
Docket Number: 151374

Whistleblowers’ Protection Act Clarified

An employee who was fired after reporting a suspected future violation of law could not bring a retaliatory discharge claim under the Whistleblowers’ Protection Act (WPA), the Michigan Supreme Court ruled in Pace v Edel-Harrelson (Docket No. 151374).

The plaintiff in the case, Barbara Pace, worked at SIREN, an Eaton County domestic violence shelter. When she noticed discrepancies in grant funding records and was allegedly told that a co-worker was planning to use some of the funds to buy a stove, she brought her concerns to management’s attention. She was ultimately fired. The plaintiff then sued SIREN and its executive director, asserting she was discharged in violation of the WPA for reporting her suspicions. The Eaton County Circuit Court dismissed the plaintiff’s complaint.

The Michigan Court of Appeals reinstated the plaintiff’s claim in a February 2015 published opinion (Docket No. 319223). The Court of Appeals rejected the notion that an actual violation of law had to occur in order to bring a WPA action.

The Supreme Court disagreed, reversing in a unanimous opinion. In so ruling, the high court explained that MCL 15.362 provides protection to employees who report a violation or a suspected violation of law.

According to the Supreme Court, the reference in MCL 15.362 to “a violation or a suspected violation of a law” means an act or conduct that has actually happened or is ongoing. There is no language in MCL 15.362 indicating that anticipated acts amounting to a violation or a suspected violation of a law are included within the scope of the WPA, the high court said.

The decision in Pace shows that there is no clear-cut line for when an employee’s complaint is protected by the WPA. And while most employment situations are presumed to be at-will, employers should still have a non-discriminatory, non-retaliatory reason for engaging in any adverse action against an employee.

2015 Employment Law:

Hodge v U. S. Security Associates, Inc.  
Date: February 6, 2015
Docket Number: 149984

Supreme Court Upholds Denial of Unemployment Benefits

Carnice Hodge was fired from her employment as a security guard at Detroit Metropolitan Wayne County Airport for checking flight information for a passenger on a computer near her post, which her employer said was unauthorized use of client equipment. Her application for unemployment benefits was denied by the administrative law judge and by the Michigan Compensation Appellate Commission (MCAC), but the Wayne Circuit Court reversed. The employer appealed to the Michigan Court of Appeals, which affirmed the lower court opinion, holding that Hodge’s conduct was, as a matter of law, a good faith error in judgment rather than misconduct. The Supreme Court reversed and reinstated the denial of benefits by MCAC. It held that the lower courts applied an incorrect standard of review by substituting their own assessment of the seriousness of Hodge’s conduct for the assessment of the MCAC. Accordingly, the Supreme Court reversed the Court of Appeals and reinstated the MCAC’s judgment.

Michigan Coalition of State Employee Unions v. Michigan
Date: July 29, 2015
Docket Number: 147758

Civil Service Commission Has No Legislative Powers

The Michigan Coalition of State Employee Unions and others brought an action in the Court of Claims against the State and various state agencies and officers, alleging that portions of the statute (2011 PA 264), amending the State Employees’ Retirement Act (SERA, MCL 38.1 et seq.), were unconstitutional because the changes to retirement benefits altered rates of compensation or conditions of employment, which were within the exclusive authority of the Civil Service Commission to regulate. The Court of Claims granted plaintiffs’ motion for summary judgment.

The Court of Appeals affirmed in part, reversed in part, and remanded. The Supreme Court reversed. “While the [Civil Service Commission] has considerable constitutional powers to manage the civil service system and to preserve its sphere of constitutional authority, the commission has no legislative powers. It may neither enact legislation nor revise an enactment, nor may it dictate that the Legislature repeal or modify an enactment. Therefore, we hold that because the commission has acquiesced in the application of SERA to the employees of the civil service system, plaintiff’s objections fail to establish a basis for relief.”

UAW v. Green   
Date: July 29, 2015
Docket Number: 147700

UAW Loses Constitutional Challenge to Public Employment Relations Act

The UAW and others brought an action in the Court of Appeals against Nino Green and other members of the Michigan Employment Relations Commission, the Governor, and the Attorney General, seeking a declaratory judgment (binding decision) that portions of 2012 PA 349, which amended the public employment relations act (PERA, MCL 423.201 et seq.), were unconstitutional. The 2012 act would prohibit public employers from requiring their employees to join a union or pay union-related expenses were unconstitutional demands for employees in classified positions with state civil service. The Court of Appeals held that the challenged portions of 2012 PA 349 were constitutional.

The Supreme Court affirmed the Court of Appeals on different grounds. It concluded that although public collective bargaining was a method the Civil Service Commission could use to perform its constitutional duties, it could not effectively require civil servants to fund the commission’s administrative operations.