Michigan High Court Examines “Adopt and Amend” Action that Changed Minimum Wage and Sick Leave Laws

Michigan’s current minimum wage and medical leave laws may be overturned by the Michigan Supreme Court. Michigan’s current laws on its minimum wage and medical leave were passed by a GOP controlled legislature and governor back in 2019 by a unique legislative action called adopt and amend. That legislature and the governor saw two ballot initiatives introduced in 2018 for a public vote that would be (and could be again) unfavorable to the Michigan business community – in particular to small businesses. To intercept those initiatives, the legislature took those two ballot initiatives, passed them, and in the same legislative session amended them to the laws we have had for the past almost four years.

Today, the opponents of this adopt and amend strategy were the groups that initiated and supported the ballot initiatives.  In the case of Mothering Justice v. Attorney General, the Michigan Court of Claims first held that adopt and amend was unconstitutional in Michigan. This ruling was overturned by the Michigan Court of Appeals by a unanimous decision of a three-judge panel. That decision was appealed to the Michigan Supreme Court that heard arguments from both sides just last week.

With that little history out of the way, what was heard at these oral arguments may give us a hint as to whether the current Michigan minimum wage and medical leave laws may be turned back to the original laws passed and then amended. These were Public Acts 337 that would have moved the minimum wage to $12 by 2022 and increased the tipped wage that applies to many restaurant and bar workers. The paid sick leave law, Public Act 338, would have required most all Michigan businesses to provide up to 72 hours of paid sick leave per year.

During oral arguments, some of questions being asked by the justices suggested they were not only trying to figure out if the adopt and amend tactic was constitutional, but also, if not, how would a sudden change to current law play out?

The anti adopt and amend side argued that if that tactic was held unconstitutional, the laws would revert back to the previous laws as first passed. This would immediately increase the minimum wage and the sick leave law would impact thousands of small businesses by requiring an expensive new benefit be provided that the current law exempts them from.

The Justices asked if the adopt and amend process was turned down by the Court wouldn’t that put an unreasonable strain on employers? Attorneys that support overturning the adopt and amend suggested the courts ruling in that case could also provide a short period of time to facilitate the change to the laws. One justice that was not necessarily on board with holding the adopt and amend tactic unconstitutional asked whether the ballot initiatives and the amended and passed laws might be put to the voters in the future. This suggestion was based upon the position that according to the Michigan Constitution the legislature’s only option if they receive a ballot initiative they want to alter is to put in place a second alternative proposal on the ballot and as constitutionally intended, would then have the voters decide which laws they wanted.

Justices that seemed to support the adopt and amend tactic pointed to the fact that Michigan’s constitution does not limit the legislature in any way regarding using adopt and amend and absent a specific prohibition in the constitution the legislature can change law in this fashion. This was the basis of the appeals court decision. Opponents of adopt and amend posit that adopt and amend does not provide the voters their right to implement law despite the opposition of a hostile legislature. Holding for adopt and amend would, as an attorney opposing the adopt and amend stated, “eviscerate the right of initiative.” But proponents of adopt and amend argue that the state legislature has the “authority to do anything not strictly prohibited by language in the constitution. If there was a limit on its ability to adopt and amend, it would have appeared in Article II, Section 9, but no such language exists.”

During arguments the question of whether the people’s right to initiate laws by way of voter initiatives would be supported by the right to seek referendums and therefore harmed if the court overturned the appeals court. Eric Restuccia, Deputy Solicitor General representing the legislature, provided an explanation as to how the Michigan Constitution supports the people’s right to voter initiatives and referendums. The Deputy Solicitor General explained:

“I don’t see why that would occur because the Legislature knows that if it has an alternative, and it places it on the ballot, and its proposal is adopted by the people, it gets a three-fourths protection going forward,” Restuccia said. “So, there’s always an incentive to the Legislature if it has an alternative to place on the ballot and allow the people to decide. Of course, there’s always a risk.”

Restuccia’s hypothesis is not supported by the past 30 years of legislative action, however. Only once, in 1996, did the Legislature put a competing proposal on the ballot alongside a voter-initiated proposal, on bear hunting. And since 2000, the Legislature and four different governors have effectively ended the right to a referendum through the use of placing appropriations in bills. Some voter-initiated acts have used the same tactic of placing an appropriation in them to prevent a subsequent referendum.

A 2001 Supreme Court ruling says a bill with any appropriation, no matter how small, is off-limits from referendum.

Bernstein asked if the Legislature was unfriendly to the ballot proposal, could they prevent it from reaching voters. Restuccia said not entirely.

“If the people thought, ‘Hey, we like 337 and 338 and now they’ve been essentially displaced,’ they could have been subjected 368 and 369 to referendum. They would have been suspended. Once they’re suspended, 337 and 338 would have been back in place and the voters have then had a chance to up or down 368 and 369,” Restuccia said. “So, the idea that somehow the voters are left without remedies, there is a scheme or a structure that’s designed. The question is the very thing that the plaintiffs and the attorney general are talking about, this next legislative session, was even discussed at the convention.”

Justice Elizabeth Welch, in stating the Constitution was silent on when the Legislature can act to amend, as it did in this case at hand, but that the Michigan Constitution provided for options that were limited to either adopt, reject, place on the ballot, or do an alternative proposal. Justice Welch questioned whether the referendum approach created a new go-to remedy that was not detailed in the language of the constitution.

In summary, the oral arguments presented some “heady” constitutional questions that the Michigan Supreme Court will now seek to answer in its ruling on this case. In the end, Michigan employers will either continue with the current minimum wage and paid medical leave laws or have to provide for higher minimum wage and more expensive paid time off. Stay tuned.

Sources:

• Gongwer. Justices Focus on Potential Remedy in Adopt-and-Amend Oral Arguments (12/7/2023)
• Law 360 Mich. Justices Weigh Impact of Nixing Wage, Sick Leave Laws (12/7/2023)

By Michael Burns, courtesy of SBAM-approved partner, ASE.

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