Laborers Local 236, Afl-Cio v. Walker

• Decision Date: 22 May 2014
• Docket Number: No. 13–3193.,13–3193.
• Citation: 749 F.3d 628
• Parties: LABORERS LOCAL 236, AFL–CIO, et al., Plaintiffs–Appellants, v. Scott WALKER, Governor of Wisconsin, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

749 F.3d 628

LABORERS LOCAL 236, AFL–CIO, et al., Plaintiffs–Appellants,

v.Scott WALKER, Governor of Wisconsin, et al., Defendants–Appellees.

No. 13–3193.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 24, 2014.

Decided April 18, 2014.

Rehearing and Rehearing En Banc Denied May 22, 2014.

Bruce F. Ehlke, Attorney, Ehlke, Bero–Lehmann & Lounsbury SC, Madison, WI, for Plaintiffs–Appellants.

Steven C. Kilpatrick, Attorney, Office of the Attorney General Wisconsin Department of Justice, Madison, WI, for Defendants–Appellees.

Before FLAUM and ROVNER, Circuit Judges, and KENDALL, District Judge. ^*

FLAUM, Circuit Judge.

This case raises more challenges to the constitutionality of Wisconsin's Act 10, which we last addressed in Wisconsin Education Association Council v. Walker, 705 F.3d 640 (7th Cir.2013) (“WEAC”). Act 10 made significant changes to Wisconsin public-sector labor law: it prohibited government employers from collectively bargaining with their general employees over anything except base wages, made it more challenging for general-employee unions to obtain certification as exclusive bargaining agents, and precluded general-employee unions from using automatic payroll deductions and fair-share agreements. The plaintiffs, two public-employee unions and an individual union member, argue that these changes infringe their First Amendment petition and association rights. They also argue that Act 10 denies union members the equal protection of the laws.

The district court rejected the plaintiffs' constitutional theories and granted judgment in Wisconsin's favor. We affirm.

I. Background

Prior to 2011, Wisconsin granted broad protections and privileges to public-sector unions. Under the State Employment Labor Relations Act and the Municipal Employment Relations Act, state and municipal employers were obligated to bargain in good faith with employee representatives over a wide range of subjects, including wages and conditions of employment. Unions could petition the Wisconsin Employment Relations Commission for an election to certify the union as the employees' exclusive bargaining agent; certification required only a simple majority of those voting, and the union remained certified until thirty percent of the employees in the bargaining unit petitioned for a decertification election. Unions were also permitted to negotiate “fairshare” agreements requiring nonunion employees to pay a portion of the costs associated with the collective-bargaining process. In addition, unions could utilize the state and municipal payroll systems to automatically collect membership dues.

Much of that changed when the Wisconsin legislature passed the “budget repair bill” known as Act 10. See Wis. Act 10, 2011–12 Leg., Jan. 2011 Spec. Sess. (Wis.2011). The Act divided Wisconsin state and municipal employees into two categories: “public safety employees,” which includes police officers, firefighters, deputy sheriffs, county traffic police officers, state troopers, and state motor vehicle inspectors; and “general employees,” i.e., everyone else. See Act 10 §§ 214, 216, 268, 272.¹ Public safety employees, and their unions, continue to enjoy the protections and privileges of Wisconsin's preexisting scheme.

General employees, on the other hand, became subject to Act 10's various restrictions. To begin with, the Act reduced state and municipal employers' collective-bargaining obligations with respect to these employees. Public employers are still required to collectively bargain with their general employees over base-wage increases (though such increases cannot exceed a change in the Consumer Price Index). After Act 10, however, state and local employers are no longer required to bargain over anything else. See Act 10 §§ 210, 245, 262, 314. And in addition to limiting the scope of obligatory bargaining, Act 10 separately prohibited municipal employers from collectively bargaining with their general employees about non-wage issues. Act 10 § 169.

Further, Act 10 mandated that general-employee unions submit to a recertification election every year (instead of allowing unions to remain certified indefinitely). Certification now requires affirmative votes from an absolute majority of all employees in the bargaining unit, not just those voting. Act 10 §§ 242, 289. Act 10 also barred state and municipal employers from deducting union dues from their general employees' earnings. Act 10 §§ 227, 298. Finally, the Act prevented unions from imposing fair-share agreements on general employees. Act 10 §§ 213, 219, 267.

We have already rejected one challenge to Act 10's constitutionality. In WEAC, we held that Act 10's prohibition on payroll deductions did not violate the First Amendment. We found that the unions' previous use of the payroll system was the equivalent of the state subsidizing the unions' speech; accordingly, we reasoned that Wisconsin was free to withdraw this subsidy from certain groups so long as it did so on a viewpoint-neutral basis. WEAC, 705 F.3d at 645. And we concluded that Act 10's distinction between public safety and general employees was, in fact, viewpoint-neutral. Id. at 648.

The WEAC plaintiffs also raised an equal-protection challenge to Act 10's limitationson statutory collective bargaining, its stricter recertification requirements, and the payroll-deduction prohibition. They argued that Act 10's distinction between public safety and general employees—along with how the law classified particular employees—denied the general employees equal protection. Id. at 653. However, because Act 10 did not employ a suspect classification, and because we found that none of the three challenged provisions implicated a fundamental right, we applied rational-basis review. Id. The law's distinction between public safety and general employees held up under this standard. Id. at 654–57.

At this litigation's outset, the plaintiffs—two general-employee unions that represent city of Madison and Dane County employees, and an individual union member—raised arguments similar to those asserted in WEAC. (For ease of reference, we'll call all three plaintiffs “the unions.”) But the unions also pled other First Amendment and Equal Protection Clause theories unique to this case. Finding that these arguments failed to state a constitutional violation, the district court granted Wisconsin's motion for a judgment on the pleadings. See Laborers Local 236 v. Walker, No. 11–cv–462–wmc, 2013 WL 4875995 (W.D.Wis. Sept. 11, 2013). The unions appeal.

II. Discussion

In evaluating the state's motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), a court must determine whether “the complaint sets forth facts sufficient to support a cognizable legal theory.” Scherr v. Marriott Int'l, Inc., 703 F.3d 1069, 1073 (7th Cir.2013). On appeal, we answer this question de novo. Id.

We begin, however, with statutory interpretation. The two sides have a fundamental disagreement about Act 10's effect upon municipal employees' collective-bargaining rights. Because our Article III jurisdiction over most of the unions' claims depends on the outcome of this dispute, we must settle it before proceeding to the merits.

A. The meaning of Wis. Stat. § 66.0508(1m)

As discussed above, Act 10 altered Wisconsin's public-sector collective-bargaining law in more than one way. First, the Act amended the State Employment Labor Relations Act, Wis. Stat. § 111.81 et seq. (“SELRA”), and the Municipal Employment Relations Act, Wis. Stat. § 111.70 et seq. (“MERA”), to only require state and municipal employers to collectively bargain with their general employees over base-wage increases. See Act 10 §§ 210, 262. In addition, however, § 169 of the Act created a new code section, Wis. Stat. § 66.0508, titled “Collective bargaining.” This new section reads in relevant part:

(1) In this section, “local governmental unit” has the meaning given in s. 66.0506(1).²

(1m) Except as provided under subch. IV of ch. 111 [the amended, post—Act 10 MERA], no local governmental unit may collectively bargain with its employees.

(2) If a local governmental unit has in effect on June 29, 2011, an ordinance or resolution that is inconsistent with sub. (1m), the ordinance or resolution does not apply and may not be enforced.

...

Wis. Stat. § 66.0508.

The unions point to (1m) as the source of their constitutional troubles. They argue that this language prohibits municipal employers from collectively bargaining with their general employees about anything other than base wages—even if the employers want to bargain outside of MERA's statutory framework. For example, the city of Madison, acting as an amicus curiae, tells us that it voluntarily engaged in collective bargaining with its employees in the 1950s, before Wisconsin established statutory collective bargaining in 1959. Amicus Br. 1. Madison and the unions read § 66.0508(1m) to now bar the city from negotiating these kinds of agreements with its general employees. See id. (“Act 10 actually strips municipalities of the primary tool used for decades to craft tight budgets and maintain positive relations with their employees.”).

Wisconsin, to the contrary, urges us to read § 66.0508(1m) more narrowly. The state claims that the provision incorporates the definition of “collective bargaining” set forth in MERA: “the performance of the mutual obligation of a municipal employer ... and the representative of its municipal employees in a collective bargaining unit, to meet and confer at reasonable times, in good faith, with the intention of reaching an agreement ... with respect to wages for general employees.” Wis. Stat. § 111.70(1)(a). Thus, Wisconsin argues:

in the context of Wis. Stat. § 66.0508(1m), “collective bargaining” means only the statutorily-created “mutual obligation” of a municipal employer and a bargaining unit representative to negotiate a labor agreement.... In other words, “collective bargaining” in Wis....