The Sophisticated Employer Blog

On July 17, I listened to the oral arguments before the Michigan Supreme Court in In re Advisory Opinion on 2018 PA 368 & 369. It was riveting, but I walked away with only a sense of the direction that some of the justices may be leaning in the ruling.

Before we dive in, let’s review what has happened to bring the important issues of Michigan’s Paid Medical Leave and Improved Workforce Opportunity acts before the Supreme Court.

As you may recall, there were two citizen initiatives that were to appear on  the November 2018 ballot which, among other things, would have: (1) provided 40 hours of paid sick time to employees who work for smaller employers (having fewer than 10 employees) and 72 hours of paid sick time to employees working for employers with 10 or more employees; and (2) increased the minimum wage rate to $10/hour with additional yearly increases, bringing the minimum wage rate to $12/hour by 2022 and phasing out the tip credit by 2024. 

If both initiatives became law by vote of the citizens, the Michigan Legislature could only change them by a three-quarters vote of all members of both chambers of the Legislature, rather than a simple majority vote.

But the citizen initiatives were removed from the ballot when the Legislature adopted both laws.  If that was the end of the story, we would not now have issues to be decided by the Supreme Court. After the November election, the Legislature amended both laws and then Gov. Rick Snyder signed the amended versions into law during the lame duck session. That’s the rub. Can they adopt and amend?

The amendments significantly watered down the benefits to employees, making both laws friendlier to employers.  For example, under the amended laws (which became effective March 29, 2019), paid sick time must only be provided by employers with 50 or more employees and then only 40 hours a year.  Similarly, the minimum wage rate was increased to $9.45/hour and it won’t reach $12/hour until 2030. In addition, the tip credit will stay in place.

Democrats in the Legislature asked the state’s new Attorney General Dana Nessel to opine on whether the so called “adopt and amend” process is constitutional under Article 2 § 9 of the Michigan Constitution, which begins by stating: “The people reserve to themselves the power to propose laws and to enact and reject laws, called the initiative, and the power to approve or reject laws enacted by the Legislature, called the referendum.”  

The Republicans made the same request of the Michigan Supreme Court, believing its conservative majority would provide a more pro-employer opinion. The Supreme Court agreed to hold oral arguments on the issue but did not commit to issuing an advisory opinion. It requested briefs from the attorney general’s office, arguing both for and against the constitutionality of the process that had been utilized by the Legislature and the new laws. 

So, July 17 was the hearing which lasted approximately two hours. Therefore, much of what I am conveying now is being paraphrased. However, it does provide a glimpse into what happened.  

Remember that the Supreme Court asked the attorney general’s office to brief and argue both sides of the issue. Assistant Attorney General Eric Rustuccia was first up to argue that the process and laws are constitutional. But, before making that argument, he first argued that the Supreme Court did not have the authority to issue an advisory opinion after a law has been given effect. It is clear that a request for such an advisory opinion must be made before the effective date of the law. 

However, from the questions that were asked by the justices, it does not appear that the justices were at all convinced that the court had to issue its advisory opinion by any specific date. In fact, Justice Richard Bernstein pivoted from this issue to the substantive issues, asking whether the Legislature’s actions thwarted the will of the people?

The justices asked numerous questions, including whether amendments might further the will of the people while others might thwart it? And, setting aside the content of any specific amendment, couldn’t the process itself thwart the will of the people which reserved for themselves the right to ballot initiatives?

Next, attorney John Bursch argued for those in the Legislature who supported the constitutionality of the two new laws, indicating that the Legislature can amend any law at any time. That “how much of a thwart” should be permitted, a little or a lot, simply cannot be the test. Once the law was adopted by the Legislature, it is a law that can be amended at any time like any other law. He provided a hypothetical wherein the citizens pass a ballot initiative and the Legislature determines that there is not sufficient funding available. Shouldn’t the Legislature have the ability to change it?

The hypothetical was rejected by one of the justices who quickly asked whether anything like that occurred in this case? Justice Bernstein pointed out that the Legislature adopted the initiative as law. Isn’t the integrity of the Legislature, the belief of the people in their government, an issue that should be considered? Bursch rejected that as the test, arguing that the only test is the text of the constitution and it contains no restriction on the Legislature’s ability to adopt and amend the law.

Next came arguments in opposition to the constitutionality of the process and the two new laws. Michigan Solicitor General Fadwa Hammoud, of the Attorney General’s Office, quoted the opening line from Art. 2 §9: “The people reserved for themselves the power…” It is clear that the people did not intend to stand by as observers but were to be active participators in our government and Section 9 does not contemplate that the power of the people could be so easily thwarted. She argued that Section 9 was not intended to mean that the people could only propose simple suggestions for the Legislature to consider.

If adopt and amend becomes the standard then Section 9 is in effect nullified and the people could never have their voice heard by ballot initiative. She argued that if the Legislature felt that a ballot proposal was harmful, its remedy is to have its own proposal on the ballot.

Chief Justice Bridget McCormack focused on the timing of the amendment, asking whether it would have been permissible for the amendment to occur in January, after the close of the 2018 regular session? What if during the same session, the Legislature just amended the law to correct citations in the adopted initiative? Is the issue the timing or the will of the people?

Justice Megan Cavanagh asked if the court finds adopt and amend is not permitted, what would be the remedy? Do the original ballot initiatives stand? The will of the people was to have a state wide vote on the initiatives. So, should the initiatives be made law or should they be put on the ballot for a vote as originally intended?

Two more jurists (Mark Brewer and Samuel Bagenstos) argued that adopt and amend was unconstitutional. Mr. Bagenstos argued that adopt and amend allows the Legislature to kill any legislation that it does not agree with, and any tie on this issue should go to the people since the power was reserved to the people. 

Justice David Viviano asked if Art. 2 § 9 was put in place because of a mistrust of the Legislature, why wouldn’t there have been more protections put in place in the constitution to prevent adopt and amend? Chief Justice McCormick said some amendments may further the will of the people while others could thwart. How should it be determined? Justice Bernstein asked doesn’t this process provide a ready means to thwart the will of the people?

Mr. Restuccia, who had reserved three minutes for rebuttal, had the final word.  He noted that it may be difficult to determine whether an amendment is friendly to the will of the people or not and this should not be the test. The question is whether the Legislature has the power to amend in these circumstances. The constitution is silent on this issue. There is no restriction or prohibition. The remedy is that if the Legislature doesn’t act to further the will of the people, they can be voted out. That is the remedy.

So, is it the process or the change in the law itself that will be the primary issue for the Supreme Court? Maybe it will be both. Were the new Paid Medical Leave Act and minimum wage rate law constitutionally enacted or not? If not, what is the remedy? Do the original initiatives become law or do they get placed on the ballot? 

Unfortunately, I can’t provide you with answers to these questions or predict what the Supreme Court will do with any certainty, but I did walk away with the sense that the justices were troubled by what had occurred. Hopefully the Supreme Court will issue an advisory opinion. Stay tuned.