A Legal Setback for Wisconsin's Anti-Union Law

Last Friday a Circuit Judge in Dane County, Wisconsin ruled that certain portions of the Wisconsin law known as “Act 10” was unconstitutional under the state and federal constitution. Act 10 is the controversial law passed by the Wisconsin legislature in the March, 2011, that practically stripped most of Wisconsin’s public sector workers of their rights to engage in collective bargaining.

The law provided that Wisconsin public sector workers unions, except those deemed “public safety unions” could not bargain for wages above the rate of inflation and were prohibited from bargaining on any other issues. The law also prohibited the state or municipalities from agreeing to a dues check-off, prohibited “fair sharing fees” whereby non-members paid for the services the unions provided them, and required public sector unions to be submit to a recertification vote every year.

Act 10 was passed in a hastily convened special legislative session despite the fact that the Democratic legislatures left the state to prevent a quorum. It was the signature measure championed by the newly elected governor, Scott Walker.

Soon after Act 10 was passed, the Democratic legislators brought a legal challenge, claiming it was passed in violation of the state’s Open Meeting Law because the session when it was enacted had not been properly announced in advance. That challenge failed, and the law went into effect in June, 2011. Since then there have been challenges brought by public sector unions in both federal and state courts.

A federal case challenging Act 10, decided last March, was a partial victory for the unions. There the unions challenged the Act on Equal Protection grounds due to its differential treatment of general public sector workers; unions and public safety workers’ unions. The latter category includes municipal police officers, fire fighters and county traffic police officers, all represented by unions that supported Governor Walker in his initial election campaign.

In March, 2012, the Federal District Court found a “rational basis” for the Act’s distinction between general unions and public safety unions as it applied to two provisions of the Act – the prohibition on “fair share fees” and the elimination of collective bargaining rights for all issues except wages. The federal court found that the distinction was rationally related to the reasonable goal of preventing strikes by public safety workers. On the other hand, the court found that there was no rational reason to make the distinction between the two types of unions when it came to the annual recertification requirement or the dues check-off. It said that there might be a rational basis for the distinction in those areas, but the state had not articulated it. It also found those provisions to be a restriction on the workers’ associational and speech rights. This decision is on appeal to the Seventh Circuit Court of Appeals. It will be argued later this month.

These legal actions form the backdrop for Judge Juan B. Colas’ ruling last week. The state case was brought by unions representing municipal workers in Milwaukee and Madison. The plaintiffs claimed that legislative session that enacted Act 10 violated the state open meetings law, and the act violated their free speech and association rights under the state and federal constitutions, violated equal protection under the federal constitution, violated the state’s home rule statute, and illegal impaired their members’ contract rights in their pensions.

Judge Colas found no violation of the Open Meetings Law in the enactment of the statute. However, he did find violations in the substantive terms of the Act. In his reasoning, Judge Colas acknowledged that the state does not have to permit public sector employees to engage in collective bargaining at all. However, if it does so, he stated that it may not condition eligibility on the surrender or restriction of a constitutional right.

The judge found that the statute imposed improper burdens on employees’ speech and associational rights by treating unionized employees different from nonunionized ones. For example, he said, it provides that union employees can only bargain for wages that are less than or equal to the rate of inflation, while nonunion employees are able to bargain for wage increases without limitation. He stated that, because the statute burdened the plaintiffs’ exercise of speech and associational rights, and because those rights are “fundamental,” the state had to show that it had a significant governmental interest in imposing them and that the burdens so imposed were closely tailored to effectuate that interest.

The act, he found, failed to meet the test. Thus he held that the Act violated the first amendment rights of “general” municipal workers because it imposed burdens on the exercise of their speech and associational rights without any evidence of an evil that the restriction was designed to prevent.

On the Equal Protection challenge, the court reiterated its conclusion that the Act burdened the exercise of a “fundamental right.” Because a “fundamental right” was involved, the court held that the Act had to satisfy the stringent requirements of “strict scrutiny” -- i.e., the state had to show it made distinctions that are related to the achievement a compelling state interest and that burdens it imposed were closely tailored to the accomplishment of that interest. On this test, the court found the statute failed.

The court noted that the statute imposed different rules for bargaining on unionized workers than on nonunion workers. It also treated general workers’ unions differently than public safety workers’ unions for purposes of payroll deductions. The court held that state failed to articulate a compelling reason for these distinctions, and thus the statute invalid under the equal protection clause.

Judge Colas invalidated, under the Wisconsin Constitution’s Home Rule Amendment, the provision of Act 10 that prohibited the City of Milwaukee from paying the employee share of contributions into the city’s retirement system. He found that responsibility for contributions of the city’s pension system was a “local affair,” which the statute impermissibly intruded upon.

The Court considered also consider the unions’ claim that the provision voiding city contributions to the retirement fund were impairments with existing contract rights. The change prohibited the state from paying the employee portion of the pension contribution, an amount equaling 5.5% of an employees’ compensation. The court found the elimination of this benefit to be a substantial impairment and concluded that the state had not shown it was necessary for the preservation of the retirement system. Hence the court found a violation of the contract clause in the state and federal constitution.

Where does this recent ruling leave the Wisconsin collective bargaining law?

As of now, it’s most important provisions have been ruled unconstitutional under state and federal law, at least for the municipal unions in Milwaukee and Madison. Lawyers are predicting more lawsuits by state unions and unions in different localities. But the state is appealing the ruling, and today it asked for a stay of implementation of Judge Colas’ ruling in the interim. The stay issue will be decided very soon. Moreover, the federal lawsuit will be argued later this month, and it could also have an impact on the state case. Most significantly, the federal court held that the standard by which to measure the constitutionality of the statute was “rational basis” rather than “strict scrutiny.”

If that ruling is sustained, the Wisconsin courts may also revert to the more lenient test for upholding the statute. Wisconsin legal experts have noted that the state’s highest court is split, but tends to lean conservative.

So for now, in Wisconsin, the fight is far from over.