Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
July 31--More than three years after its passage sparked massive protests that jammed the Capitol Square, the state Supreme Court upheld the constitutionality of a divisive state law that sharply curtailed the collective bargaining rights of most public workers.
In upholding Gov. Scott Walker's signature piece of legislation, the court handed the governor a major victory three months before he seeks re-election. The decision also cast doubt on the validity of several union contracts negotiated after a lower court found the law unconstitutional.
In its 5-2 decision, the court said public workers in Wisconsin do not have a constitutional right to bargain collectively.
"We reject the plaintiffs' argument that several provisions of Act 10, which delineate the rights, obligations and procedures of collective bargaining, somehow infringe upon general employees' constitutional right to freedom of association," Justice Michael Gableman wrote for the majority in a 90-page decision.
"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 a vehicle to expand the parameters of a benefit that it does not itself protect."
Justice Ann Walsh Bradley dissented, joined by Chief Justice Shirley Abrahamson.
Justice Patrick Crooks agreed with the majority, but in a brief concurring opinion he noted that while the law is constitutional, individuals should have the right to organize and bargain collectively, long a part of Wisconsin's progressive heritage.
"As thoughtful people from across the political spectrum and around the world have long recognized, collective bargaining benefits workers, employers and society itself," Crooks wrote. "Although Act 10 does not violate either the United States constitution or the Wisconsin constitution, it erodes longstanding benefits to both public workers and to public employers."
In a statement, Gov. Scott Walker called the ruling a victory.
"Act 10 has saved Wisconsin taxpayers more than $3 billion," Walker said. "Today's ruling is a victory for those hard-working taxpayers."
Mary Burke, Walker's likely Democratic opponent in his November bid for re-election, said she supports the right of workers to bargain collectively. While worker concessions in contributions toward health care and pensions were fair, they should have been bargained with unions, Burke said.
Lester Pines, attorney for Madison Teachers Inc., a plaintiff in the lawsuit, said the ruling was not a surprise. While the law was touted as a means to save taxpayer dollars, its true intent was "to cause municipal public employee unions and state public employee unions to go away," he said.
The law prohibits most government employees from bargaining on issues other than base wages up to the rate of inflation, required unions to hold annual recertification votes and prohibits the state and municipalities from deducting union dues from paychecks.
Public safety employees, which include some but not all police unions, kept the rights they had before the law took effect.
Several key provisions of the law were ruled unconstitutional in 2012 by Dane County Circuit Judge Juan Colas, who found that they violated workers' constitutional rights to free speech and freedom of association. He also said the law violates the U.S. Constitution's equal protection clause by creating separate classes of state workers who are treated differently and unequally.
A federal appeals court in January 2013 upheld other portions of the law that had been overturned by U.S. District Court Judge William Conley. Those pertained to the collection of union dues through payroll deductions and the annual union recertification elections required under the law.
It was not clear how or when Thursday's ruling might affect thousands of local government employees -- including those in Madison, the Madison School District and Dane County -- whose unions have continued to negotiate contracts based on Colas' ruling.
But with the court issuing the final word on the law, it seems certain the unions will eventually lose automatic dues collection, and their influence on pay, benefits and working conditions will wane, despite statements by several politicians saying they will still want input from workers.
Madison officials have been developing a post-Act 10 plan that calls for termination of employee contracts on Dec. 31.
"Most of us have assumed unfortunately that this would happen, so we have been preparing for some time," Mayor Paul Soglin said.
Eight city contracts were to expire on March 31, but their validity is now in question because they were entered into after Colas' ruling, said city attorney Michael May
May said the city isn't terminating the pacts immediately as a practical matter, adding it will be easier to make changes at the start of the new city fiscal year Jan. 1.
Madison city and schools officials and Dane County leaders have plans in place to replace contract provisions with employee handbooks.
Signed pacts valid?
But county board Chair Sharon Corrigan said she's awaiting clarification about the timing of the change. The county board has ratified employee contracts for 2014, 2015 and 2016.
"My position is that we negotiated the contracts in good faith and they should be valid," she said.
Madison School District spokeswoman Rachel Strauch-Nelson contended recently negotiated and approved contracts with district employee unions that stretch through 2016 would stand.
"We believe we were on solid ground to negotiate those contracts and we will continue to follow those agreements," she said in a statement
County Executive Joe Parisi called the Supreme Court ruling disappointing and said he will consult with labor attorneys on legal options.
"In Dane County we believe in working together with our employees and it has been successful for many years, before and after the passage of Act 10," Parisi said. "It has worked for us -- providing services and saving taxpayer money."
Last year the county board became the first government entity in the state to approve an employee handbook that would be available, when needed, to replace union contracts while taking away as little as legally possible from employees, Parisi said.
Act 10 will force some changes because it forbids collective bargaining on anything but base wages -- and then only for bargaining units that certify with approval of more than 51 percent of members, not just those casting votes.
The law also ends the arbitration system that was used to settle disputes when management and employees reached an impasse.
But, Parisi said, "There's nothing that stops us from sitting down and hearing what our employees have to say and receiving their input."
Some changes in benefits and working conditions are likely to be included in the city of Madison handbook for eight unions representing about 1,000 employees, said Brad Wirtz, city personnel director.
The union contracts cover city clerical, streets, engineering, library, parks, building trades and other workers.
"We've been working very cooperatively with them," Wirtz said. "It's going very well from my perspective. They are just trying to do the best they can under the circumstances."
Starting on Jan. 1, city employees will choose representatives to speak for them on major issues, such as pay rates, Wirtz said.
Details on benefits and working conditions will be decided ultimately by the City Council, based on recommendations from a new committee made up of employee representatives and managers, Wirtz said.
He said administrators hope the council will accept the recommendations and not debate amendments to provisions.
The handbook and ordinances the City Council will be asked to pass will preserve many contract provisions and likely won't make changes to base pay rates, Wirtz said.
Wirtz said some changes in benefits and working conditions are being discussed, including:
--Changes in employee payments for health insurance
--Removal of seniority rights that allowed the most veteran streets workers to chose their jobs; they would still be able to pick the side of the city where they work
--The amount of extra pay received for working certain shifts will be standardized across employee groups
Madison Teachers Inc. executive director John Matthews said Thursday the current contracts Madison teachers have with the School District will serve as a foundation for handbooks after the contracts expire in June 2016.
Matthews called Thursday's ruling "absurd," but acknowledged it is the final word on the question of whether the kind of collective bargaining most public employee unions had used until 2011 would continue.
Rick Esenberg, president and general counsel of the Wisconsin Institute for Law & Liberty, disagrees. He said Thursday that any agreement negotiated after Act 10 passed in 2011 that includes provisions other than base pay is "illegal."
"It's an unlawful collective bargaining agreement," he said, "(it) was utterly predictable that this would happen."
Earlier this summer, the Kenosha School Board settled a lawsuit brought by a former district teacher and Esenberg's law firm after the board negotiated and approved a contract with its teachers union in the fall. The contract also was nullified as a result.
Esenberg would not say whether he intended to bring suit against the Madison School District, the city of Madison or Dane County over post-Act 10 contracts, but said "clearly we've done it in the past when there has been individuals who wanted to come forward and challenge those things."
In a letter to district staff, Superintendent Jennifer Cheatham said Thursday that before current agreements expire in 2016 the district "will begin the collaborative handbook development process that the district and our unions have had initial discussions about, in order to create a handbook for after the time of our contracts."
In her dissent, Bradley wrote that the majority opinion sidestepped the actual issues in the matter and reframed the argument, focusing on whether there is a constitutional right to bargain collectively instead of whether Act 10 infringes on the freedom of association rights of public employees to organize.
She wrote that the unions' argument is "based on the well-established premise that there is a constitutional right to organize as a collective bargaining unit," which the U.S. Supreme Court has found to be a fundamental right.
Instead, Bradley wrote, the majority "pivots to a different issue advanced by the state and then analyzes that issue." By doing so, she wrote, "the majority avoids the actual argument advanced before this court."
Act 10 "discourages organizing as a collective bargaining unit by increasing its cost," Bradley wrote, because it requires annual recertification elections and eliminates the requirement that all members share the cost of providing the union's services.
"By making membership unduly expensive," Bradley wrote, "these Act 10 provisions collectively infringe on the associational right to organize. There is no doubt that these provisions act to discourage membership."
But Gableman, writing for the majority, said it is "undisputed that collective bargaining is not constitutionally protected. Indeed, Wisconsin is under no constitutional obligation to collectively bargain at all."
The dissent's accusation that the majority dodged the question "is misplaced," Gableman wrote. "Act 10 certainly presents meaningful difficulties for certified representatives, but these difficulties have no bearing on our analysis of the act's constitutionality."
Still, wrote Gableman, "Represented municipal employees, non-represented municipal employees and certified representatives lose no right or ability to associate to engage in constitutionally protected speech."
"Act 10 merely provides general employees with a statutory mechanism to force their employer to collectively bargain; outside of this narrow context, to which plaintiffs freely concede public employees have no constitutional right, every avenue for petitioning the government remains available."
Reporters Steven Verburg and Molly Beck contributed to this report.
(c)2014 The Wisconsin State Journal (Madison, Wis.)
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