Court Upholds Part of Controversial Wisconsin Collective Bargaining Law

Over the past year, the state of Wisconsin has garnered national attention for its changes to public-sector collective bargaining, resulting Capitol protests, Senate recalls, and the upcoming recall election of Governor Scott Walker. Recently, the federal court in the Western District of Wisconsin issued a significant decision upholding the state’s right to limit collective bargaining of general employees but striking down provisions (1) requiring an absolute majority to recertify and (2) prohibiting the deduction of fees from paychecks. The state has already filed a request to delay implementation of the court’s decision requiring employers to deduct union dues, pending an appeal.

Facts

The Budget Repair Bill (also known as 2011 Wisconsin Act 10) made significant changes to public employees’ right to unionize, bargain collectively, and collect or deduct union dues. The Act amended statutes governing public-sector labor relations in Wisconsin and created two classifications of public employees: (1) general and (2) public safety. Public-safety employees include police officers, deputy sheriffs, firefighters, state patrol officers, and state motor vehicle inspectors. General employees include all workers not categorized as public-safety employees.

The right of public-safety employees to unionize, bargain collectively, and collect or deduct union dues remains largely unchanged. However, general employees are no longer permitted to bargain collectively over a variety of issues such as hours and conditions of employment. Instead, collective bargaining for general employees is limited to negotiations over total base wages, which cannot exceed a cap based on the Consumer Price Index. General employees are required to take an annual vote to maintain certification as a union, and an absolute majority of all members of a bargaining unit (51%) is required. Additionally, employers may not deduct labor organization dues from general employees’ earnings.

Employees, labor organizations, and exclusive collective bargaining representatives of affiliated labor organizations filed suit against the state officials responsible for implementing or administering Act 10. Fueling the lawsuit is the claim that Act 10’s creation of two classes of public employees violates the Equal Protection Clause of and the First Amendment to the U.S. Constitution. State officials claim that the two classifications are necessary to protect the government’s legitimate interest in avoiding strikes by public-safety employees.

District Court’s Decision

There’s no question that Wisconsin may bar its public employees from engaging in collective bargaining. The only question for the court was whether the state could restrict the rights of general employees while granting full rights to public-safety employees. The law allows such “line drawing” as long as the government can articulate a rational basis for doing so and a suspect class isn’t involved. State officials argued that the law doesn’t limit the bargaining rights of members who perform the most essential functions of maintaining public safety because of concerns over strikes. The employees argued that (1) limiting bargaining rights isn’t rationally related to a government interest and (2) employees providing political support to the elected party receive favorable treatment.

The court first noted that receiving political preference isn’t actionable and is a matter for the next election. As to the state’s concern over strikes by public-safety employees and interruption of essential government services, the significant controversy surrounding the passage of Act 10 supports the state’s concerns. The court ruled that the creation of separate classifications of employees for the purpose of collective bargaining over wages doesn’t violate the Equal Protection Clause because (1) it doesn’t constitute a suspect class and (2) the state articulated a rational basis for creating the public-safety classification: concerns over strikes.

The court struck down the portions of Act 10 addressing annual recertification on equal protection grounds. The court found the annual recertification unprecedented and not rationally related to a legitimate government interest. Since collective bargaining for general employees has been limited to wages and the union is unable to compel participation of any employee in union activities, the court found it irrational to require annual recertification of general employees but not public-safety employees.

Likewise, the court found that deduction of union dues from public-safety employees who oppose the union but not general employees who support the union has no rational basis and violates the Equal Protection Clause. The concern of potential strikes does not support the distinction.

As to the employees’ First Amendment claims, the court found that the prohibition on deductions of union dues implicates the First Amendment because dues withdrawn from paychecks are used to fund speech. The court concluded that the state didn’t offer or articulate a rational basis to ban payroll deductions of union dues. According to the court, it appeared that the state was attempting to discriminate against the general employees based on their viewpoint. For that reason, the ban on deductions of union dues could not stand.

The court then turned to fashioning a remedy. It entered an order requiring the return of union dues that were automatically deducted to all members of public unions by May 31. The state filed a request to postpone implementation of the court’s order, pending an appeal. The court also stopped Act 10’s mandatory recertification of general employee unions, effective immediately. Wisconsin Educational Association Council v. Walker, Case. No. 11-cv-428-wmc (W.D. Wis., 3/30/12).

Bottom Line

Public employers may continue to bargain with general employees as set forth in the court’s decision, but they can no longer require annual recertification of general employee unions. Public employers should begin implementation of automatic dues reduction and, if the decision is not suspended pending an appeal, be ready to begin the deductions no later than May 31.

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