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November/December 2016 Issue

Also in this issue: Seventh Circuit Sides with Cities on Taxicab Deregulation     |     Responding to Requests for Records under the Public Records Law     |     Supreme Court To Hear Case on Whether Internal Management Committee Meetings Are Subject to Open Records Law     |     WERC Announces Revised CPI-U

Federal Court Upholds a Provision in Wisconsin’s Right-To-Work Law

In a decision dated September 26, 2016, U.S. District Judge J.P. Stadtmueller granted the State of Wisconsin’s motion to fi nd judgment in its favor, thus upholding a specific provision of Wisconsin’s right-to-work law, in a lawsuit brought by two unions in International Union of Operating Engineers Local 139 v. Schimel, et al.

As background, the plaintiffs are two Wisconsin labor unions representing around 11,000 Wisconsin employees in a variety of collective bargaining agreements across the state. Before Wisconsin’s right-to-work law (Act 1) was enacted, each of these unions had clauses in their collective bargaining agreements that required all bargaining unit employees to pay their “fair share” for the union’s representation. In other words, unions could charge non-union member employees in the bargaining unit representation fees for (1) collective bargaining negotiation; (2) contract administration; and (3) grievance responses.

When Act 1 was enacted, one of its provisions (Wis. Stat. § 111.04(3)(a)(3)) prohibited unions from compelling workers to pay any dues, including those related to collective bargaining, contract administration and grievance processing. In response to these changes, one of the plaintiff unions proposed to several employers that they enter into a “Fair Representation Fee Agreement” that contains, more or less, a conditional representation fee requirement. Knowing that these agreements could only be enforced if a court found that Act 1 did not preclude their enforcement, the plaintiff unions brought suit against Attorney General Brad Schimel and James Scott, Chair of the Wisconsin Employment Relations Commission.

The plaintiffs made two arguments why Section 111.04(3)(a)(3) of Act 1 was unconstitutional. First, they argued that it was preempted by the National Labor Relations Act (29 U.S.C.§ 164(b)). Specifically, they argued that it attempts to regulate activities that are protected or prohibited by the NLRA and, because federal law preempts state law, this Section was unconstitutional. Second, they argued that the Section violates the Fifth Amendment of the United States Constitution because they were forced to provide equal representation services to dues-paying and non-dues-paying members, which constitutes a “taking” of their property. They lost on both of these arguments.

In a swift decision, the court dismissed the preemption argument, finding the Seventh Circuit Court of Appeals decision in Sweeney v. Pence, 767 F. 3d 654 (7th Cir. 2014), binding. In Sweeney, plaintiffs challenged Indiana’s right-to-work law. Finding that the NLRA gives states wide latitude to regulate unions, the court held that Indiana’s law was not preempted under the NLRA. While the parties in Sweeney did not raise the Fifth Amendment “taking” argument, the court, appearing to recognize the argument would be raised in future cases, discussed it at length and rejected it. Specifically, it held that there was no taking because under the NLRA, the unions are “compensated” by their exclusive “seat at the negotiation table.”

Relying on the holding and taking language from Sweeney to reject both of plaintiffs’ arguments, Judge Stadtmueller found in favor of AG Schimel and Mr. Scott and subsequently dismissed the lawsuit against them.

— Kate A. Harrell

This newsletter is published and distributed for informational pur- poses only. It does not offer legal advice with respect to particular situations, and does not purport to be a complete treatment of the legal issues surrounding any topic. Because your situation may differ from those described in this Newsletter, you should not rely solely on this information in making legal decisions.

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