Michigan Teacher Funding of Retiree Health Benefits Violates Employment Rights: Court

By Jerry Geisel

Aug. 20, 2012

A 2010 Michigan law that requires state teachers to pay three percent of their salaries to help fund retiree health care benefits violates their constitutional rights, the Michigan Court of Appeals ruled last week.

“The statute violates federal and state constitutional protections against state impairment of contracts, the taking of private property by the government without compensation as well as the constitutional guarantee of substantive due process,” the court ruled in its 2-1 decision in a suit filed by the American Federation of Teachers.

The court noted that the law ran afoul of protections against impairment of government contracts because teachers received three percent less in pay by paying into a fund than the amount the teachers and their employers agreed upon as part of teachers’ contracts.

In addition, while the money teachers paid helped to fund benefits for current retirees, the teachers making the contributions “have no vested right themselves to receipt of health benefits upon their own retirement,” the court ruled.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management.


blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog


EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

If you’re an employer looking to get as many of your employees vaccinated as possible, you can rest eas...

ADA, CDC, COVID-19, EEOC, GINA, pandemic, vaccinated

workforce blog


Fixing some common misconceptions about HIPAA

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wea...

COVID-19, health care, HIPAA, human resources, wellness

workforce blog


We are in the midst of a public mental health crisis; how employers can help

Do not ignore these issues or your employees who are living with them. Mental health illnesses are no d...

ADA, benefits, Coronavirus, FMLA, mental health, paid time off