Right-to-Work Law is an Unconstitutional Taking

On Saturday morning, April 9, 2016, I read the headline in the Wisconsin State Journal:  “Dane County Judge Strikes Down Right-to-Work Law.” I have to be honest: my first thought was that another out-of-control Dane County judge is running amok, taking his opportunity to stick it to the Walker administration before he retires form the bench on July 31. Could there be another explanation? After all, no right-to-work law has been struck down in any state where it has been enacted.

But, then I read the decision.

As someone who has never been much of an organized labor fan, I find myself in unfamiliar territory by agreeing with Judge Foust. The sum total of my knowledge of labor law and the law relating to unions and collective bargaining is contained in Judge Foust’s decision. It is not my area of practice. Apparently, unions are required by law to represent all employees, whether or not they pay dues. As a result, non-union members have typically paid “fair share fees” to unions to compensate the unions for services they provide to non-members. The amount of the fee is such that it does not include funding for such things as political activities by the unions.

2015 Wisconsin Act 10, among other things, prohibits unions from collecting fair share fees from non-members. But unions still must collectively bargain on their behalf and enforce the collective bargaining agreements in their interests. In other words, the unions must continue to expend their resources to protect and represent the non-member employees. This results in a “free-rider problem,” recognized (as Judge Foust points out) by Justice Scalia in Lehnert v. Ferris Faculty Association, 500 US 507 (1991).

Judge Foust analyzed the elements of the unions’ claim that Act 10 constitutes an uncompensated taking under Article I § 13 of the Wisconsin Constitution. Those elements are:

1. A property interest exists.
2. The property interest has been taken.
3. The taking was for public use.
4. The taking was without just compensation.

It did not take a great deal of analysis for the Court to find each element was satisfied. The court found:

1.  A legally protectable property interest exists because money expended by the union to provide services to non-members is property under the law.
2. The property interest was taken under the Penn Central regulatory takings theory.
3. The taking was for public use because the legislatively stated purpose for the right-to-work law was to make “the business climate in the State more favorable by eliminating the power of labor unions,” and in the court’s view, the legislative intent is sufficient to constitute a public use.
4. There was no just compensation for the taking, rejecting the State’s argument that unions have been justly compensated for their compelled labor by having the privilege of exclusive representation.

It seems to me that non-union members who ride the coat tails of members who have negotiated salary increases do not cause the union to expend more money or provide more services than it would otherwise provide if they were members. But forcing the union to expend extra resources to provide free services to non-members who pay nothing for those services seems a bit heavy handed. I think it is likely that the Wisconsin Supreme Court, in the likely event this case gets that far, will see it differently. We will see.