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Former UAW employee says he was forced to pay dues to a fake union local

courtesy Mackinac Center for Public Policy
Jim Shake retired from the UAW in 2018

A retired United Auto Workers employee says he was forced to pay dues to a fake local union. He’s now suing the UAW.

Jim Shake worked for the UAW as an accountant. Some UAW staff are part of local bargaining units. Shake was not. Still Shake says the UAW forced him to pay union dues to something called “Local X.”

“After initially refusing to contribute to the union and informing my supervisor that Michigan is a right-to-work state, my job was then threatened,” Shake says, according to a release from the Mackinac Center for Public Policy, which is representing him in the lawsuit.

"He was told ... this is just a kickback," says Derk Wilcox, an attorney representing Shake.

Shake’s lawsuit claims when he asked where the dues to Local X went, he was told it was a “kickback scheme” for the union.

“Mr. Shake, while he was there, was never given any membership meetings, never told about contract negotiations, never seen a contract,” says Derk Wilcox, an attorney with the Mackinac Center who’s working on the case. “And in fact he was told by other people at the headquarters that no, this is just a kickback, they just want you to pay money back to them.”

In a statement, the UAW says the lawsuit has no merit.

But it admits it collects “dues” from non-unionized employees and lists “Local X” as the collector.

The UAW says most of its employees are represented by a bargaining unit. But some employees, such as attorneys, accountants, and actuaries, are not eligible.

“While these types of employees are often not eligible for membership, the Union believes it’s important that – like other members of the International staff – they contribute their fair share to the cost of the UAW’s operations,” the union said in a statement about the lawsuit. “Local X is the administrative mechanism by which those contributions are made. They are deposited into the Union’s general fund along with ordinary dues payments.”  

Derk Wilcox, the attorney representing Shake, says if the dues paid to Local X are, in fact, dues, they are subject to reporting requirements.

“I would just add that it is counterintuitive to how a union is supposed to operate to say that it is acceptable for an employee to be required to pay money back to his employer to pay for the employer's expenses,” Wilcox says.

He says the case is especially concerning given the ongoing investigation of former UAW leaders, some of whom have now admitted to accepting bribes and kickbacks while working for the union.

Wilcox says Shake has been in touch with investigators.

“There has been communication with the federal attorneys, but I can’t say any more beyond that,” Wilcox says.

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Dustin Dwyer reports enterprise and long-form stories from Michigan Public’s West Michigan bureau. He was a fellow in the class of 2018 at the Nieman Foundation for Journalism at Harvard. He’s been with Michigan Public since 2004, when he started as an intern in the newsroom.
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