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home : news : news September 15, 2014

1/22/2013 5:22:00 AM
Federal appeals court upholds Act 10 in its entirety
Court rejects unions' arguments that collective bargaining reform is unconstitutional

Richard Moore
Investigative Reporter

Gov. Scott Walker and Republican lawmakers scored a major victory Friday, as a federal appeals court rejected union challenges to the constitutionality of Act 10, the state’s controversial collective bargaining reform law.

The statute, which curbed collective bargaining for most public employees, is not out of the woods yet. A separate case in which a state court ruled portions of the law unconstitutional is still pending.

Still, the sweeping nature of the decision in a federal appeals court was a huge win for Walker and his allies. 

Concurring with a federal district court judge, the three-judge appeals panel said limitations on collective bargaining were constitutionally valid. 

But the judges, in a partially split decision, overturned district court judge William Conley’s determination that the state’s different treatment of certain groups of employees on matters of union dues’ payroll deductions and union recertification violated both the U.S. Constitution’s Equal Protection Clause and the First Amendment.

The appeals panel said the different treatment violated neither.



Walker, who has all along defended the law as rigorously constitutional,  called the ruling a triumph for state taxpayers.

“The provisions contained in Act 10, which have been upheld in federal court, were vital in balancing Wisconsin’s $3.6 billion budget deficit without increasing taxes, without massive public employee layoffs, and without cuts to programs like Medicaid,” Walker said. “With this ruling behind us, we can now focus on the next state budget, which will invest in priorities to move our state forward.”

Officials of the Wisconsin Education Association Council, one of the principal plaintiffs in the case – along with the Wisconsin State Employees Union and other unions – acknowledged the defeat.

“Wisconsin educators are extremely disappointed with the appeals court ruling,” WEAC president Mary Bell said. “What is so abundantly clear is that Act 10 was never about addressing the fiscal needs of the state but instead a ploy to eliminate workers’ rights to have a voice through their union – political payback for citizens who didn’t endorse the governor. This marks a setback, but the fact of the matter is that our members will not give up on their commitment to restoring their rights to negotiate for fair wages and safe working conditions.”

The union said it was reviewing the case to determine the group’s next steps.

As the appeals court pointed out, the law significantly altered the state’s public employee labor laws. In addition to requiring public employees to contribute more to thier health-care and pension benefit plans, it created two separate classes of public employees – “public safety employees” and “general employees.” 

“Among other things, the Act prohibited general employees from collectively bargaining on issues other than ‘base wages,’ imposed rigorous recertification requirements on them, and prohibited their employers from deducting union dues from paychecks,” the appeals court decision summarized. “The Act did not, however, subject public safety employees or their unions to the same requirements; they kept the same rights they had under the pre-Act 10 scheme.”

In general, police and firefighters fell into the public-safety category – but so did motor-vehicle inspectors – while most others were classified as general employees.


The decision

The unions challenged the law on three grounds. The limitations on collective bargaining, the union dues’ deduction prohibition, the recertification requirements – all those violated the U.S. Constitution, the unions charged.

The law violated the Equal Protection Clause, the unions asserted, because of the act’s different treatment of public safety and general employees. In addition, the prohibition on payroll deductions for general employees violated the First Amendment by targeting employees who had not endorsed or supported Walker when he ran for governor in 2010.

The district court judge used a rational-basis test to decide the case. In doing so, Conley found a rational basis for the state to believe that applying Act 10 to public-safety employees might spark in a retaliatory strike jeopardizing the public welfare, while a similar strike by general employees would be less damaging. He thus denied the claim on collective bargaining limitations.

However, Conley found, there was not rational basis for treating the two groups differently with respect to the recertification and payroll deduction provisions. In addition, Conley determined, the payroll deduction provision violated the First Amendment because the only possible justification for prohibiting payroll deductions for one group and not the other were their differing political viewpoints and endorsements.


First Amendment

The appeals judges first rejected the unions’ First Amendment arguments pertaining to the dues’ deduction prohibition. The court acknowledged the multiple arguments the union employed, but quickly rejected them all.

“Ultimately, none (of the arguments) apply because the Supreme Court has settled the question: use of the state’s payroll systems to collect union dues is a state subsidy of speech that requires only viewpoint neutrality,” the decision stated.

While the unions offer some evidence of viewpoint discrimination, the decision stated – Senate majority leader Scott Fitzgerald suggested Act 10 would limit unions’ fundraising capacity and make it more difficult for Obama to carry Wisconsin – that statement did not invalidate an otherwise constitutional, viewpoint neutral law because one statement could not be construed to represent the intent of the entire Legislature.

What’s more, the decision continued,  nothing requires government to “assist others in funding the expression of particular ideas, including political ones.”

“The Bill of Rights enshrines negative liberties,” the decision stated. “It directs what government may not do to its citizens, rather than what it must do for them.” 

So, while union dues’ payroll deductions can enhance the unions’ exercise of First Amendment rights, states are under no obligation to provide that aid, the judges concluded. They observed that the law erected no barrier to speech, and, not only that, speaker-based discrimination was permissible when the state subsidizes speech. 

First, the judges stated, the prohibition on payroll deductions for general employees did not erect a barrier to the unions’ speech. Indeed, the decision stressed, the state’s failure to authorize payroll deductions did not deny union members the right to associate, to speak, to publish, to recruit members, or to otherwise express and disseminate their views.

“Importantly, Act 10 does not present a situation where the state itself actively erected an obstacle to speech,” the decision stated. “Thus, nothing supports treating the selective prohibition of payroll deductions as a burden on or obstacle to the speech of general employee unions. Instead, Act 10 simply subsidizes the speech of one group, while refraining from doing so for another.”

What’s more, the judges determined, while it is unconstitutional to discriminate against speech with a law that prohibits or thwarts that speech, speaker-based distinctions are permissible when it comes to subsidizing unobstructed speech. That was the case with Act 10, the decision declared.

The unions also argued that the challenged Act 10 provisions were motivated by a desire to suppress a particular viewpoint, but the judges rejected that argument as well.

“These arguments require peering past the text of the statute to infer some invidious legislative intention,” the decision stated. “We decline this invitation.”

For one thing, the judges wrote, even though the benefits of Act 10’s subsidy might fall more heavily on groups with one particular viewpoint, that does not transform the law’s neutral language into an invidiously discriminatory statute. 

“Moreover, as a factual matter, the public safety category includes several unions that did not endorse Governor Walker – for example, none of the municipal police and firefighters unions, except those in Milwaukee and West Allis, endorsed Governor Walker,” the decision stated.

Obviously, the judges wrote, Act 10’s exemption differentiates on the basis of speaker without reference to whatever viewpoint that speaker may hold. 


Rational basis

The remaining constitutional question was, was there a rational relationship between the law and a legitimate government interest?

The unions said no. They argued  that the division of public safety and general employees was irrational under the Equal Protection Clause. 

“They apparently recognize that distinguishing certain unions that perform crucial tasks survives rational basis review, but they emphatically argue that the way Wisconsin divided the two groups is irrational,” the decision stated. “According to the Unions, the only explanation for the legislation is the extension of ‘rank political favoritism’ towards the unions that supported the governor’s campaign.”

Specifically, the decision stated, the unions argued that understanding why Wisconsin classified state motor vehicle inspectors as public safety employees but classified prison guards, the University of Wisconsin Police, and the Capitol Police as general employees required “the exercise of strained imagination.”

But that argument, the judges said, required the court to speculate about the Legislature’s motive, something the court could not do.

“Indeed, under rational basis review, we cannot search for the legislature’s motive,” the decision stated. “All that matters is whether the statute, as written, furthers a legitimate government objective. Once we find a ‘rational relationship between the disparity of treatment and some legitimate governmental purpose,’ the act passes constitutional scrutiny.”

And that is true whether or not some illicit motive is involved, the judges emphasized. So the question remained, was the differential treatment rational? 

The judges said yes, with respect to collective bargaining limitations, because Wisconsin could rationally believe that Act 10’s passage would result in widespread labor unrest, and also conclude that the state could not withstand that unrest with respect to public safety employees.

“We agree that Wisconsin reasonably concluded that the public safety employees filled too critical a role to risk such a stoppage,” the decision stated. “Not only has the Supreme Court previously held labor peace in certain instances is a legitimate state interest, the Court found the interest weighty enough to justify some impingement on the free speech rights of employees who do not belong to a union.”

What’s more, the judges added, experience legitimized the state’s fears: “in the wake of Act 10’s proposal and passage, thousands descended on the state capital in protest and numerous teachers organized a sick-out through their unions, forcing schools to close, while the state avoided the large societal cost of immediate labor unrest among public safety employees.”

Thus, the decision concluded, Wisconsin was free to determine that the costs of potential labor unrest exceeded the benefits of restricting the public safety unions.

Still, the unions argued, the way in which Wisconsin separated the two groups negated the legitimacy of the classifications. Specifically, they argued, Wisconsin should have either classified motor vehicle inspectors as general employees or placed prison guards, the University of Wisconsin Police, and the Capitol Police in the public safety group.

But the judges would have none of it.

“(W)e cannot, as the Unions request, determine precisely which occupations would jeopardize public safety with a strike,” the decision stated. “Even if we accept that Wisconsin imprudently characterized motor vehicle inspectors as public safety employees or the Capitol Police as general employees, invalidating the legislation on that ground would elevate the judiciary to the impermissible role of supra-legislature. ..... Distinguishing between public safety unions and general employee unions may have been a poor choice, but it is not unconstitutional.”

Ditto for payroll deductions. The judges found that Wisconsin’s differential treatment of general and public safety unions was also supported by its concern for labor peace among the public safety employees.

While the unions argued that the Legislature’s fear that prohibiting payroll deductions for public safety employees might spark an illicit strike was “wholly implausible,” the court said rational basis review did not require the state to produce evidence to sustain the rationality of the law, so long as it had some “some footing in the realities of the subject addressed by the legislation.” 

And there was footing, the judges concluded. 

“The state’s fear is rational, particularly considering the controversy surrounding passage of Act 10 and the Unions’ own admission before the district court that the effect of the payroll prohibition would be ‘catastrophic,’” the decision stated. “Consequently, the payroll dues prohibition survives rational basis review.”

Richard Moore may be reached at richardmoore.gov@gmail.com

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