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Wisconsin Supreme Court Declares Act 10 Is Constitutional

By D&K’s School and Higher Education Law Team

On July 31, 2014, the Wisconsin Supreme Court declared 2011 Wisconsin Act 10 (Act 10 or the Act) constitutional in its entirety. It may be hard to believe, but it has been over three years since Act 10 became law. Act 10, which prohibited virtually all collective bargaining for general municipal public sector employees in Wisconsin (those that are not either public safety or transit employees), has been the subject of numerous and continuous legal battles. That lengthy legal struggle has now come to a conclusion with the Wisconsin Supreme Court ruling, by a 5-2 vote, that all aspects of Act 10 are constitutionally valid. This should resolve any state or federal questions as to the validity of Act 10, as, in January 2013, the Seventh Circuit Court of Appeals rejected arguments that Act 10’s limitations on collective bargaining violate the U.S. Constitution. The latest ruling by the Wisconsin Supreme Court reaches the same conclusion with respect to challenges alleging the Act violated provisions of the Wisconsin Constitution.

Justice Gabelman delivered the opinion of the Court in Madison Teachers, Inc., v. Walker, 2014 WI 99, and rejected the Unions’ challenges to the law on the grounds that it violated Wisconsin Constitutional rights to Association and Equal Protection. Justices Abrahamson and Bradley dissented.

Implications of the Decision

The decision is 131 total pages. The full implication of the ruling will have to be more fully vetted in the coming days. However, a few things are now clear. First, general municipal employees (not public safety or transit employees) are permitted to bargain only as to total base wages. This will remain the case absent a legislative change. Engaging in bargaining beyond the scope of that limited topic area is impermissible.

Second, Act 10’s prohibition on municipal employers deducting union dues must be followed. During the past three years while the litigation concerning the validity of Act 10 was pending, many employers opted to continue deducting union dues based on Dane County Circuit Court Judge Juan Colas’ decision and the suggestion that it had statewide impact, as well as one of the earlier federal court decisions (later reversed) that allowed deductions. With the Supreme Court’s decision expressly declaring the union dues deduction and fair share prohibitions constitutional, any employers continuing to permit such deductions will be in violation of the law.

Third, the Supreme Court held that annual re-certification requirements within Act 10 are constitutional, as well. Therefore, labor organizations representing general municipal employee bargaining units that have either failed to complete the annual re-certification process or that have not prevailed in an election held as part of that recertification process are no longer certified bargaining representatives. Employers contacted by these labor organizations with demands to bargain or requests for recognition in some other manner are well-advised to consult their legal counsel.

As always, we strive to provide timely information on items of critical interest to our clients. Given the importance of this decision, this Alert is being issued in a summary fashion. A more detailed discussion of the Supreme Court’s decision and any additional implications will be forthcoming.

If you have any questions regarding this article, please contact your Davis & Kuelthau attorney.