Wisconsin Supreme Court Upholds Public-Employee Union Restrictions

Wisconsin protestersFor three and a half years, public-sector unions in Wisconsin, to little or no avail, have sought to topple a state law to restrict their collective bargaining abilities. Their options now are nearly exhausted. Last Thursday, July 31, the Wisconsin Supreme Court upheld the constitutionality of a 2011 law passed by the Republican-majority legislature at the urging of GOP Governor Scott Walker. By a 5-2 margin, the court concluded that while public employees may organize unions, their employers are not obligated to negotiate with them. The ruling is a clear victory for Gov. Walker, who survived a voter recall in June 2012 over this issue. It’s also a blow for fiscal responsibility at a time when many state and local governments are facing large deficits in employee benefit programs. The decision is separate from federal rulings upholding the constitutionality of the law.

Union Corruption Update from the start has covered this bitter battle between the Walker administration and public-sector employee unions. Early in 2011, only weeks in office, Governor Walker unveiled legislation that would restrict the ability of unions to negotiate with public agencies for higher benefits. The state was facing an estimated two-year, $3.6 billion budget deficit, a gap largely driven by aggressive unionism. Union-negotiated health care and retirement benefit commitments were becoming unsustainable. The governor’s proposal, known as the Budget Repair Act, or “Act 10,” would require state and local workers to: 1) contribute 5.8 percent of wages or salary to retirement plans, up from virtually zero percent; 2) pay for 12.6 percent of health care coverage, up from about 6 percent; 3) accept pay hikes tied to the Consumer Price Index; 4) forgo bargaining over benefits and working conditions, though not base pay; and 5) enter into one-year rather than multiyear contracts. Additionally, public-sector unions would be barred from forcibly deducting dues from employee paychecks and would have to undergo annual recertification. At the same time, the proposal wouldn’t apply to police, firefighters and state troopers. It guarded against layoffs. And it wouldn’t apply to contracts in force.

Union officials and their allies weren’t impressed with the compromises. In fact, they were infuriated over the whole package. During the week of February 14-18, 2011, hundreds of demonstrators began a round-the-clock occupation of the State Capitol Building in Madison, buoyed by growing thousands of supporters outside. The takeover reached a climax, of sorts, on February 17 when all 14 Democratic state senators took off in their cars and left the state, leaving the remaining 19 senators unable to vote on the bill for want of a quorum. As many as 70,000 demonstrators rallied outside the Capitol that weekend. State government in Wisconsin effectively was paralyzed. On March 9, the Senate introduced the union curbs as a freestanding bill so as to get around the quorum requirement. The measure passed by 18-1. The next day the Assembly approved the measure by 53-42. The AWOL senators, seeing the handwriting on the wall, returned home. Sponsors of the legislation reattached the collective bargaining curbs to the larger Act 10. Once again, the Senate, by 22-11, and the Assembly, by 58-36, passed the measure. Gov. Walker quickly signed the bill.

Public-sector unions already had taken their grievances to court. That March they convinced the Dane County (Madison) district attorney to file suit in State Circuit Court to obtain a temporary injunction against law on procedural grounds. The unions alleged that the legislative conference left insufficient time for debate and thus violated the Wisconsin Open Meetings Law. The presiding judge, Maryann Sumi, agreed. She issued a temporary injunction on March 18 and made it permanent on May 26. The State appealed to a divided Wisconsin Supreme Court – successfully. On June 14, the Court, in a party-line decision, voted 4-3 that the law did not violate the Open Meetings Law.

The unions and their political allies moved back into the legislative arena that summer, launching a recall campaign against six Republican and three Democratic senators who had the temerity to vote for Act 10. The effort very nearly succeeded, but the GOP hung on. Now it was time for a bigger recall election – against Gov. Walker himself. Union activists circulated a statewide recall petition and eventually obtained around 900,000 signatures, well over the necessary minimum. The vote, held on June 5, 2012, was a rerun of the 2010 election, with Walker and Milwaukee Mayor Tom Barrett squaring off. Walker prevailed by 53 to 46 percent, a margin slightly larger than the previous time around.

But the unions already were testing the courts, this time on constitutional grounds. In the summer of 2011 a coalition of unions had gone to federal court to overturn Act 10. They won a partial victory. U.S. District Judge William Conley, an Obama appointee, in March 2012 upheld the basic features of the law, but struck down two others. The State of Wisconsin, he concluded, lacked the authority to: 1) bar union officials from deducting dues from worker paychecks; and 2) require annual union recertification votes. The State, believing that the law was wholly constitutional, appealed. And it won. On January 18, 2013, a federal appeals court in Chicago, by 2 to 1, upheld the entirely of the law, holding that the Budget Repair Act did not violate public-sector unions’ right to free speech or equal protection. In another federal case, unions representing public employees of the City of Madison and the rest of Dane County sought to invalidate the law on constitutional grounds. Here, too, organized labor lost. In September 2013, a U.S. district court ruled that the State of Wisconsin was not obligated to maintain policies that support private associations such as unions. A three-judge appeal court panel upheld the decision this past April.

It was the Wisconsin Supreme Court that would give Act 10 full vindication. Yet even here the Walker administration had to swim upstream for a long while. Back in September 2012, Wisconsin State Circuit Judge Juan Colas (Dane County) had struck down the collective bargaining limits of the law as they applied to municipal, county and school district employees. State Attorney General J.B. Van Hollen filed an appeal, but Judge Colas denied the motion. Finally, in 2013 the State Supreme Court agreed to take the case, bypassing a court of appeals. Even prior to a ruling on merits, the Walker administration ran into a detour. The two sides disagreed over whether Judge Colas’ ruling applied to all public-sector unions or just the pair that brought forth the case. In a procedural ruling, Colas ruled last October that as a result of his decision the previous year, the state employment commissioners were in contempt of court for applying parts of the Budget Repair Act to other unions.

The case proceeded. The Supreme Court heard oral arguments in November 2013. Ten days later it handed the Walker administration a procedural victory, reversing the contempt-of-court order by a 5-2 vote. And at long last, on July 31, again by a 5-2 margin, the Court handed down its ruling on the merits of the case. Collective bargaining, said the court, is not a right insofar as applies to public employees. Act 10 passed muster. Four of the justices – Michael Gableman, David Prosser, Patience Roggensack and Annette Ziegler – ruled that Act 10 was sound. Justice N. Patrick Crooks, joined them, arguing that the law is unsound, but notwithstanding is allowable under the state constitution. Writing for the majority, Justice Gableman concluded:

No matter the limitations or ‘burdens’ a legislative enactment places on the collective bargaining process, collective bargaining remains a creation of legislative grace and not constitutional obligation. The First Amendment cannot be used as vehicle to expand the parameters of a benefit that it does not protect…The plaintiffs remain free to advance any position, on any topic, either individually or in concert, through any channels that are open to the public.

Governor Walker, who faces a tough re-election this November, was elated. Noting that state and local governments in Wisconsin have saved a combined roughly $3 billion thus far as a result of the provisions of Act, he declared at the opening of the Wisconsin State Fair in suburban Milwaukee: “I’m happy for the taxpayers of this state. I think people by and large have seen – despite the hype and hysteria years ago – that it’s worked.” His Democratic challenger, Mary Burke, a member of the Madison School Board (one of the plaintiffs), has a different view. “There’s nothing about collective bargaining that stands in the way of having an effective, efficient, accountable government,” she said.

Even if Walker were to lose his re-election bid, Act 10 appears here to stay. An appeal of the state decision last week to the U.S. Supreme Court won’t materialize unless there are aspects of the case within the province of the U.S. constitution. And having been defeated twice in federal appeals court on free speech and other grounds, it’s hard to see how the unions and their allies will be successful if they take their case to Washington. Lester Pines, the lawyer who represented the unions in the Wisconsin Supreme Court, concedes as much: “The lawsuits are for the most part done. All the other cases have failed. In light of what’s happened in all the other cases, it doesn’t look good.” But Pines made clear he sees options outside the courts. “The governor’s desire to destroy the public employee unions has failed,” he asserted. “We’ll just see new approaches to dealing with employers by the unions. Those will become evident as we go forward.” The one remaining court case – a lawsuit brought forth by the Wisconsin Law Enforcement Association – rests on the same assertions made by the plaintiffs in the case handed down last week. The association’s attorney, Sally Stix, said her client will decide shortly over whether to continue with its suit, which has been rejected by a Dane County judge and is now before a state appeals court.

The curbs on public-employee union benefits and collective bargaining authority ultimately stand or fall on whether the general public benefits. And evidence of cost-savings of the law was available as early as a year following passage. A study released in May 2012 by the Suffolk University (Boston) think tank (see pdf), the Beacon Hill Institute for Public Policy Research, concluded that Act 10 already had saved Wisconsin state and local governments a combined $984 million. Moreover, the law had a net positive effect on employment in the private and the public sector. From a policy and a political standpoint, union officials and allied activists will have a tough time convincing lawmakers or the electorate that the state should reverse course. Indiana and Michigan, in somewhat less dramatic ways, emulated the Wisconsin example in 2012. Thanks to the Wisconsin Supreme Court, other states may be more emboldened to take this course. 


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