IFCA Website Legal Column – July 2014
7th Circuit Upholds Collective Bargaining Limits in Wisconsin
by Meganne Trela
The controversial Wisconsin “Budget Repair Bill” (also known as “Act 10”) was recently
upheld by the Seventh Circuit in Laborer’s Local 236, AFL-CIO v. Walker, 2014 U.S. App.
LEXIS 7333 (7th Cir. Wis. Apr. 18, 2014). Act 10 had been challenged by two public employee
unions and an individual union member who alleged that Act 10 denied them equal protection of
the laws and infringed upon their First Amendment Petition and Association rights.
Act 10 is a law which restricts the collective bargaining rights of public employees in
Wisconsin and was enacted into law by Wisconsin Governor Scott Walker on March 11, 2011.
Act 10 famously caused protests and the departure of some Wisconsin State Senators from the
state in an attempt to block the measure. Most notably, Act 10 prohibits government employers
from negotiating with employee unions on anything except wages. Furthermore, Act 10 caps
employee wage negotiations at an amount no greater than the Consumer Price Index and
requires that 51% of all (not just voting) potential union members support the union at an annual
election. Act 10 does not apply to public safety employees and Wisconsin employees classified
as such enjoy the protections of Wisconsin’s previous public employee bargaining laws.
Since its enactment, Act 10 has been challenged on numerous occasions in both federal
and Wisconsin state courts. In fact, a year ago the Seventh Circuit upheld the constitutionality of
Act 10 when the state’s largest teacher’s union challenged the law under the Equal Protection
Clause. (See Wisconsin Education Association Council v. Walker, 705 F.3d 640 (7th Cir. 2013))
In assessing Act 10’s constitutionality under an equal protection theory, the court held
that the classifications created by the law only required a rational basis review — the lowest
level of scrutiny a law can face on judicial review. Under a rational basis analysis, a law is
upheld if it is rationally related to a legitimate government purpose. A legitimate government
purpose exists if there is a reasonably conceivable state of facts supporting the classification the
law creates. Accordingly, the court found that Wisconsin’s limitations on collective bargaining
rights for public employees was rationally related to the legitimate government interest of
promoting flexibility in government budgets by giving public employers more leverage in
negotiations. Thus, Act 10 did not violate the Equal Protection Clause.
The court additionally held that Act 10 did not infringe upon the First Amendment petition
and association rights of public employees. In addressing the petition rights issue, the court
reasoned that the law does not prohibit unions from forming, meeting or advocating for their
members; rather, the law restricts the actions of government employers. The court noted that
the First Amendment does not impose any affirmative obligation on the government to listen,
respond, or recognize an association and bargain with it. Furthermore, there is nothing about a
group’s status as public employees that give them greater entitlement to an audience. Union
members remain free to speak under Act 10 even though government employers are not
allowed to listen in the negotiations setting.
Although wages are the only term of employment that can legally be bargained under
Act 10, nothing precludes public employers from engaging in informal discussions to make
changes in the workplace. The court specifically noted that after passage of Act 10 the City of
Milwaukee passed an ordinance requiring the department of employee relations to meet and
confer with employees to communicate, solicit, and exchange information on the terms and
conditions of employment. Accordingly, public employees can still associate, discuss matters of
union membership, select union representatives, and use their collective weight to advocate for
change even though there is no constitutional entitlement to the opportunity to collectively
bargain with their employer.
The Seventh Circuit also denied claims that Act 10 infringed upon the First Amendment
Association rights of public employees. The court again stated that nothing in Act 10 prohibits
unions from forming, meeting or organizing. In response to concerns that Act 10 prevents
unions from accomplishing what they were formed to do, the court held that the First
Amendment does not require government to maintain policies that allow certain associations to
succeed. Further, the court noted that unions cannot use the First Amendment to force public
employers to engage in dialogue. As long as the government is not taking steps to prohibit or
discourage union membership it is free to ignore the union.
The Seventh Circuit’s latest decision in the Act 10 saga was not the final legal challenge
to the law. The outcomes of some Wisconsin state court challenges to the law are still pending.
Meganne Trela is an associate with the law firm of Ottosen Britz Kelly Cooper Gilbert &
DiNolfo, Ltd. in the firm’s Naperville office. Meganne concentrates her practice in the areas of
municipal and school law. She assists clients with legal matters involving collective bargaining,
contracts, employment issues, insurance, property disputes, public pensions, and litigation.
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