Bence v. City of Milwaukee
| Decision Date | 30 March 1982 |
| Docket Number | Nos. 80-1815,81-1574,s. 80-1815 |
| Citation | 320 N.W.2d 199,107 Wis.2d 469 |
| Parties | Allen H. BENCE, William L. Brown, Edward F. Canning, William C. Crane, John Dotski, Russell H. Dunn, Milton A. Engbring, John Hodel, Ferdinand J. Meyer, Emil F. Milo, Frank Nawrocki, Joseph M. O'Donnell, Raymond P. Raths, Lawrence Venghaus, Richard H. Wissmueller, Harold F. Zemlicka, George Muehlbauer, Stanley A. Korbar, Clarence G. Krueger, Myron R. Ratkowski, Mary Rowe, Ruth Merkwae, Vladimir V. Barak, John Balcerak, Raymond Bednarek, Erwin Drake, Chester R. Esch, Clara Evenson, Leona E. Gerstenberger, Kurt Guttowski and Lyle W. Kohn, Plaintiffs-Respondents, v. CITY OF MILWAUKEE, a municipal corporation, and Policemen's Annuity and Benefit Fund, Defendants-Appellants-Petitioners. John W. ZILAVY, Special Administrator of the Estate of John J. Zilavy; Ray S. Agne, Elmer Baral, et al., Plaintiffs-Respondents, v. CITY OF MILWAUKEE, a municipal corporation, and the Retirement Board of the Policemen's Annuity and Benefit Fund of Milwaukee, Defendants-Appellants. |
| Court | Wisconsin Supreme Court |
Michael A. I. Whitcomb, Asst. City Atty., argued, for City of Milwaukee, et al. James B. Brennan, City Atty. and Thomas E. Hayes, Deputy City Atty., on brief.
Robert Arthur Melin of Schroeder, Gedlen, Riester & Melin, Milwaukee, argued and filed a brief, for Bence, et al.
Thomas P. Solheim, Robert W. McLewee, and Ross & Stevens, S. C., Madison, and Fricker, Bailey & Sayas, Milwaukee, for Zilavy, et al.
These cases involve decisions by two trial courts and the court of appeals which held certain provisions of charter ordinances of the city of Milwaukee to be unconstitutional in violation of the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.
Case No. 80-1815 is before us on review of a decision of the court of appeals, published at 103 Wis.2d 679, 309 N.W.2d 883 (Ct.App.1981), which affirmed a judgment of the circuit court for Milwaukee county, Hon. Leander J. Foley, Jr., Judge.
Case No. 81-1574 is before us by grant of a petition to bypass the court of appeals, made on behalf of defendants-appellants, from an order of the circuit court for Milwaukee county, Hon. John E. McCormick, Judge.
The main issue in these cases is whether an ordinance incorporating the terms of a collective bargaining agreement entered into by the city of Milwaukee (hereinafter the city) and the Professional Policemen's Protective Association (hereinafter the Union) is unconstitutional on equal protection grounds because it provides for greater pension benefits for employees who retired after a certain date than are accorded employees who retired prior to that date. We hold that there is a rational basis for the ordinances and reverse the decisions of the courts which held portions of the ordinances unconstitutional.
These cases involve challenges to two city of Milwaukee charter ordinances, each of which incorporated terms of a collective bargaining agreement entered into by the City and the Union. The challenged provisions pertain to the calculation of pension benefits. Defendant, Policemen's Annuity and Benefit Fund (hereinafter P. A. & B. F.), which was established by the city of Milwaukee, administers two pension systems, one for police officers who entered service prior to May 17, 1945, and another for police officers who entered service between May 17, 1945 and July 29, 1947. Police officers entering service after July 29, 1947, are under a separately administered pension system.
Both cases involve collective bargaining agreements reached after the beginning of the period covered by the respective agreements. This is not uncommon and retroactivity of provisions in such agreements is a way of life in collective bargaining. This court approved retroactive pay increases to state employees in Dept. of Administration v. WERC, 90 Wis.2d 426, 280 N.W.2d 150 (1979). Subsequently, in Berns v. Wisconsin Employment Relations Comm., 99 Wis.2d 252, 299 N.W.2d 248 (1980), this court held that a fair share agreement governing municipal employment could be made retroactive, stating:
99 Wis.2d at 266, 299 N.W.2d 248.
In this case the retroactivity involves the date of increases in pension benefits: Zilavy back to the beginning of the contract period; in Bence to a date within the contract period. Neither, in our opinion, violates the constitutional rights of any of the plaintiffs in either case. The specific facts of each case are as follows.
The parties in Zilavy v. City of Milwaukee stipulated as to the facts of the case. All of the plaintiffs began service with the Milwaukee Police Department prior to May 17, 1945, and retired prior to January 1, 1971. Charter Ordinance No. 378 of the city of Milwaukee, which was passed by the common council on January 8, 1972, and approved by the mayor of the city of Milwaukee on January 26, 1972, became effective on April 1, 1972. It amended the formula for conferring benefits under the P. A. & B. F. so as to increase the pension benefits accorded officers who began service prior to May 17, 1945, and retired on or after January 1, 1971. Officers who began service prior to May 17, 1945, and retired before January 1, 1971, were entitled to pensions equal to fifty percent of their last annual salary. Pursuant to Charter Ordinance 378, officers who began service prior to May 17, 1945, and retired on or after January 1, 1971, were entitled to pensions equal to fifty percent of their last annual salary plus an additional two percent for each year of service in excess of twenty-five years, limited to ten years of additional service. This additional two percent per year increase was based upon the average of the three highest years' salary prior to retirement. This ordinance codified provisions of a collective bargaining agreement entered into by the City and the Union which covered the collective bargaining period of January 1, 1971, through November 3, 1972.
Because the increase in pension benefits applied only to officers who retired on or after January 1, 1971, it did not accrue to the benefit of the plaintiffs in this case, who had retired and were not on the force or members of the collective bargaining unit at the beginning of the contract period. Since the increase covered persons retiring after January 1, 1971, even though the ordinance did not take effect until April 1, 1972, the increased benefits did accrue to five officers who had retired prior to the effective date of the ordinance. Plaintiffs commenced an action for declaratory relief alleging that the ordinance was unconstitutional and void because:
"... [I]t creates an arbitrary and unreasonable classification which has resulted in arbitrary and unfair treatment to plaintiff and members of his class and has failed to provide equal protection of the laws to plaintiff and all members of his class."
The City demurred to the complaint. The trial court overruled the demurrer. The City appealed to this court, which affirmed the order of the trial court in Zilavy v. City of Milwaukee, 86 Wis.2d 757, 271 N.W.2d 894 (1978) (unpublished per curiam opinion) and remanded the case to the trial court. Plaintiffs filed an amended complaint which individually listed the members of the class of plaintiffs and also sought an award for past benefits dating from January 1, 1971. The parties stipulated as to the facts of the case.
The trial court issued a memorandum decision in favor of plaintiffs, ruling that the classification contained in the ordinance, which granted increased benefits to officers who retired after January 1, 1971, but made no mention of officers who retired before that date, was "arbitrary, capricious and unreasonable" and therefore unconstitutional. The trial court ruled that Part Two of the ordinance which limited the benefit increase to employees retiring after January 1, 1971, was unconstitutional. The trial court severed Part Two from the ordinance and retroactively granted a benefit increase to the plaintiffs.
The City filed a notice of appeal and petitioned this court to bypass the court of appeals. We granted that petition and ordered that the case be consolidated with Case No. 80-1815, Bence v. City of Milwaukee, for the purposes of review.
The facts in Bence v. City of Milwaukee, as set forth in the findings of fact issued by the trial court, based on a stipulation of the parties, are as follows.
All of the plaintiffs entered service with the Police Department between May 17, 1945 and July 29, 1947, and retired prior to October 5, 1973. Of the thirty-one plaintiffs in Bence, nine were part of the collective bargaining unit at the beginning of the contract period, November 4, 1972. 1 Charter ordinance 410, which was adopted by the Milwaukee Common Council and signed by the mayor on February 12, 1974, became effective on April 21, 1974. It amended the formula for conferring pension benefits under the P. A. & B. F. so as to increase the benefits accorded persons who entered service between May 17, 1945, and July 29, 1947, and retired on or after October 5, 1973. Those officers' pensions were based upon their highest annual salary, while officers who entered service between May 17, 1945 and July 29, 1947, but retired prior to October 5, 1973, had their pension based upon the average of their last three years' salary. This ordinance incorporated the terms of an arbitrator's award accepted by the City and the Union which resolved an impasse in collective bargaining between the City and the Union over the contract governing the period from November 4, 1972, through November 2, 1974.
Because the plaintiffs all retired prior...
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