Seventh Circuit rejects challenge to Wisc. Act 10

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On Dec. 17, 2020, a three-judge panel of the U.S. Court of Appeals for the Seventh Circuit rejected a challenge to Wisconsin Act 10, omnibus legislation enacted in 2011 that introduced new requirements and regulations for public-sector labor unions.

The parties to the suit

The plaintiffs are the International Union of Operating Engineers, Local 139, and two of its members: Karen Erickson and Heath Hanrahan. IUOE Local 139 is an affiliate of AFL-CIO. According to its most recent filing with the U.S. Department of Labor, IUOE Local 139 has 10,223 members. 

The defendants are James Daley, chairman of the Wisconsin Employment Relations Commission, and the Wisconsin Legislature. 

What is at issue, and how the lower court ruled

On Aug. 26, 2019, the plaintiffs filed suit in the U.S. District Court for the Eastern District of Wisconsin. They alleged the following Act 10 provisions violated their constitutional rights:

• Collective bargaining subject restrictions: Act 10 prohibited municipal government employers from bargaining collectively with public-sector unions over any condition of employment except wages.
  • The plaintiffs alleged that "Act 10 has been interpreted and applied by the WERC to preclude any agreements between Unions and municipalities over any issues besides wages, even if not 'collectively bargained.' … Such an interpretation and application of Act 10 imposes an arbitrary restriction [on] Unions' ability to negotiate and/or contract with municipal employers on matters of significant public concern, outside of the collective bargaining context, in violation of the First Amendment and/or Fourteenth Amendment."
     
• Prohibition against payroll dues deductions: Act 10 prohibited municipal government employers from deducting union dues from union members' paychecks.
  • The plaintiffs alleged that "Act 10's blanket prohibition on wage deductions for Union dues constitutes a content based restriction on public employees' First Amendment rights."
     
• Recertification elections: Act 10 required annual recertification elections for unions, with a requirement that at least 51 percent of all workers in the bargaining unit vote to recertify.
  • The plaintiffs alleged that "by counting a non-vote as a 'no' vote, Act 10 violates the First Amendment rights of public employee non-voters to remain silent in the recertification process." 

In two separate orders (the first in March 2020 and the second in April 2020), U.S. District Court Judge Joseph Stadtmueller, a Ronald Reagan (R) appointee, dismissed these arguments. Stadtmueller ruled that the union lacked standing to challenge Act 10's recertification requirements and bargaining subject limitations. He dismissed the plaintiffs' challenge to the prohibition against payroll dues deductions on the merits, citing a 2013 Seventh Circuit ruling (Wisconsin Education Association Council (WEAC) v. Walker) that upheld such prohibitions. 

The plaintiffs appealed to the Seventh Circuit, which held oral argument on Nov. 13, 2020.

How the Seventh Circuit ruled

The three-judge panel – Judges Joel Flaum, Ilana Rovner, and Michael B. Brennan – unanimously affirmed the lower court's decision. Regarding the plaintiffs' dues deduction claim, Flaum, writing for the court, cited two U.S. Supreme Court precedents:

• Ysursa v. Pocatello Education Association, a 2009 decision upholding a law prohibiting payroll dues deductions because "[the First Amendment] does not confer an affirmative right to use government payroll mechanisms for the purpose of obtaining funds for expression." 
   
• Janus v. AFSCME, a 2018 decision establishing that public-sector unions cannot require non-member employees to pay fees covering the costs of non-political union activities.  

Flaum wrote: 

Plaintiffs-appellants' contention that we should revisit WEAC because Janus overruled Ysursa fares no better. Janus held that the First Amendment prohibits compelled speech in the form of mandatory agency fees. It did not mention Ysursa, let alone overrule its holding that states have no obligation to provide any payroll deductions. Plaintiffs-appellants concede that 'Janus did not have the opportunity to have directly overruled or altered the framework of Ysursa.' Given that the Supreme Court does not normally overturn or dramatically limit its precedents sub silentio [i.e., under silence, or implicitly], we conclude that Ysursa — and by extension, WEAC — still controls.

Flaum, Rovner, and Brennan are Reagan, George H.W. Bush (R), and Donald Trump (R) appointees, respectively.

What comes next

The plaintiffs have not said whether they will appeal the Seventh Circuit's decision. The case and number are International Union of Operating Engineers, Local 139 v. Daley (appellate court: 20-1672, 20-1724; district court: 2:19-cv-01233).