Michigan's right-to-work law applies to 35,000 state employees, a divided state appeals court ruled Thursday in the first major legal decision on the much-debated measure eight months after it passed.

Judges voted 2-1 to reject a lawsuit filed by unionized workers who make up more than two-thirds of all state employees. In a state with a heavier presence of organized labor than most, thousands of protesters came to the Capitol late last year as the Republican-backed measure won quick approval in a lame-duck session.

The law prohibits forcing public and private workers in Michigan to pay union dues or fees as a condition of employment, and applies to labor contracts extended or renewed after late March. It went to court after questions were raised whether it can affect state employees, since the Michigan Civil Service Commission, which sets compensation for state employees, has separate powers under the state constitution.

The court's majority said legislators have broad authority to pass laws dealing with conditions of "all" employment while the panel has narrow power to regulate conditions of civil service employment.

"In light of the First Amendment rights at stake, the Michigan Legislature has made the policy decision to settle the matter by giving all employees the right to choose," Judges Henry Saad and Pat Donofrio wrote, adding that legislators decided to "remove politics from public employment and to end all inquiry or debate about how public sector union fees are spent."

Dissenting Judge Elizabeth Gleicher said the court's decision strips the civil service panel of its "regulatory supremacy" clearly laid out in the constitution, which allows the four-member commission to regulate "all conditions of employment" for civil service workers.