The Wisconsin Supreme Court has upheld, in its entirety, the 2011 Wisconsin statute that curtailed collective bargaining rights for public sector employees. Madison Teachers, Inc. v. Walker, No. 2012AP2067 (July 31, 2014).
In 2011, in a move that attracted significant fanfare and the chagrin of union advocates, the Wisconsin legislature passed Act 10, which prohibited public sector employees from collectively bargaining on issues other than wages, banned municipal employers from deducting union dues from paychecks, mandated annual recertification, and proscribed “fair share” agreements.
In 2012, two public sector unions challenged the law’s provisions regarding collective bargaining, fair share agreements, annual recertification as violative of the state constitutional right to association and the equal protection rights of unionized employees. The unions also challenged the law’s provision prohibiting Milwaukee from paying the employee share of contributions to the City’s retirement system. A state circuit court judge struck down parts of the law, including those provisions requiring unions to negotiate only over wages and requiring that local unions hold regular elections to recertify. The circuit court concluded that the law infringed upon employees’ rights to free speech, freedom of association, and equal protection.
The state Supreme Court’s opinion reversed the lower court, concluding that the law did not violate the rights to equal protection and free association. Justice Michael J. Gableman found that public employees have a constitutional right to organize and associate, but “collective bargaining remains a creation of legislative grace and not constitutional obligation.” Through Act 10, the legislature limited the scope of bargaining without violating the constitutional rights of public sector employees to organize.
In upholding the law, the court dismissed arguments that Act 10’s provision prohibiting Milwaukee from paying employees’ shares of retirement plan contributions violated a “home rule” provision in the Wisconsin Constitution or interfered with the right to make and enforce contracts.
The opinion framed the union’s argument as one which challenged Act 10’s effect on employees’ associational rights to collectively bargain because the law prohibited collective bargaining between municipal employers and representatives of municipal employees on topics other than wages and restricted negotiation on wage increases to those reported in the Consumer Price Index (absent voter approved raises that exceeded the CPI).
The unions also challenged Act 10’s prohibition of fair share agreements – agreements which required union-represented employees to pay a share of the costs of collective bargaining and contract administration – and the law’s ban on the use of payroll deductions for union dues.
The key factor, according to the court, was the plaintiffs’ First Amendment challenge to the law’s provisions. On this point, Justice Gableman wrote, “[T]he ‘right’ the plaintiffs refer to—the right to associate with a certified representative in order to collectively bargain on any subject—is categorically not a constitutional right.”
While the law impacted public sector employee bargaining, it preserved First Amendment rights; unionized public sector employees remained “free to advance any position, on any topic, either individually or in concert, through any channels that are open to the public.”
Act 10 did not mandate that employees forgo their constitutional right to associate and could not be found unconstitutional merely by imposing difficulties for union representation.
On the fair share argument, the court was not convinced that prohibiting fair share agreements left the unions open to “free riders” who do not pay the costs of union representation while accepting the benefits of such representation.
On the employees’ equal protection argument, the court stated, “The fact that Act 10 creates two classes of public employees by whether they elected to have a certified representative for collective bargaining purposes denies no employee equal protection under the law.” On this point, the court determined that the state had a legitimate interest in reducing costs and that the ban on payroll deductions for union dues furthered that legitimate interest: “The prohibition on paycheck deductions furthers this interest by imposed a burden that affects the influence of labor organizations over general employees who are less enthusiastic about participating in the collective bargaining process.” Employees are not prohibited from paying union dues; instead employees must “show the initiative to pay them on their own.”
Further, Wisconsin has a “substantial interest in maintaining uniform regulations on public pension plan in order reduce the fiscal strain caused by state and local expenditures for public employee compensation.” The importance of this interest is, according to the court, unquestionable during an economic recession.
Critical to the court’s holding was the absence of a state constitutional right to engage in collective bargaining. Collective bargaining rights “are statutorily guaranteed” while associational rights are “constitutionally protected.” This distinction matters.