Wisconsin Union Law Survives 7th Circuit

CHICAGO (CN) - The 7th Circuit upheld a controversial law that limits the power of public-sector unions in Wisconsin, sparking widespread protest and recall elections.

Gov. Scott Walker introduced Act 10 as part of his budget-repair package in 2011. The law prohibited public-sector unions from bargaining on issues other than base wages, required yearly recertification votes, and ended the practice of using the state's payroll systems to collect union dues.

It also prevented unions from establishing "fair-share agreements," which require nonunion employees to pay their proportionate share of union collective bargaining costs and contract administration.

Walker, a Republican, survived an ensuing recall election with 53 percent of the vote.

Meanwhile, seven of Wisconsin's largest public sector unions mounted a legal challenge against the law, seizing on a distinction between public safety employees who retained their pre-Act 10 bargaining rights under Act 10 and all other "general employees," to argue that the legislation was discriminatory.

U.S. District Judge William Conley struck down the recertification and payroll deduction provisions in March 2012, but allowed restrictions on bargaining activity to stand.

Splitting 2-1, a three-judge panel of the 7th Circuit upheld Act 10 its entirety on Friday.

Judge Joel Flaum, a Reagan nominee, and Judge William Bauer, appointed by President Gerald Ford, formed the majority. Judge David Hamilton, whom President Barack Obama nominated in 2009, dissented.

Applying rational basis review, the 7th Circuit rejected the unions' equal protection claims. Wisconsin lawmakers decided to distinguish between public safety employees and general employees, based on a rational fear of "a retaliatory strike that jeopardized the public welfare," the court found.

Refusing to subsidize dues-collection costs using the state payroll system did not violate unions' first amendment rights because the regulations are viewpoint neutral, the majority found.

Moreover, "Act 10 erects no barrier to speech, and speaker-based discrimination is permissible when the state subsidizes speech, according to the lead opinion authored by Flaum. "First, the prohibition on payroll deductions for general employees does not erect a barrier to the unions' speech."

"The First Amendment would undoubtedly prohibit a state law that itself raised the cost of the Unions' speech by, for example, requiring payment of a fee to speak. ... Act 10 imposes no costs of its own, though," Flaum added. "It merely declines to pay a portion of the preexisting costs."

Another of the unions' First Amendment challenges focused on a comment made by then-Wisconsin Senate Majority Leader Scott Fitzgerald, who explained that, "if we win this battle, and the money is not there under the auspices of the unions, certainly what you're going to find is President Obama is going to have a ... much more difficult time getting elected and winning the state of Wisconsin," in support of Act 10.

But the 7th Circuit deemed Fitzgerald's comments insufficient to show discriminatory intent.

"This singular comment, however overtly partisan, reveals little of the intent of the Legislature as a whole when it enacted Act 10 or the governor when he introduced it," Flaum wrote.

Any connection between discriminatory effects and the distinction between public safety unions and general employee unions is merely coincidental, the majority found.

Precedent struck in the 1999 decision Hearne v. Board of Education also dictates that political favoritism can deflect constitutional claims.

That decision said: "There is no rule whereby legislation that otherwise passes the proper level of scrutiny ... becomes constitutionally defective because one of the reasons the legislators voted for it was to punish those who opposed them during an election campaign."

"We went further stating, 'indeed one might think that this is what election campaigns are all about: candidates run a certain platform ... and the winners get to write the laws,'" Flaum added.

Overall, the Legislature had a rational basis for its belief that public sector unions are too costly for the state, thus surviving constitutional scrutiny, the majority said.

In his partial dissent, Hamilton challenged only the payroll deduction prohibition. By establishing a system for employee payroll deductions, Wisconsin created a "nonpublic forum" in which it may not engage in viewpoint discrimination, Hamilton argued.

"The District Court correctly found that Wisconsin's new law amounts to unconstitutional viewpoint discrimination," he added. "The majority attempts to avoid this result by portraying the new law as merely denying plaintiffs a 'subsidy' for speech. As explained below, that approach fails to come to grips with the applicable First Amendment doctrine and precedents, as well as the evidence showing viewpoint discrimination in the new and selective prohibition."

Hamilton noted that the law's public safety classification included five public sector unions that endorsed Walker's candidacy for governor in 2010, whereas nearly all public service unions that did not endorse Walker lost collective bargaining rights under Act 10.

"The correlation is admittedly not perfect - some other local police and fire unions did not endorse Governor Walker but are 'public safety' employees - but it's very strong," he wrote.

The unions have not yet announced whether they will appeal the decision.

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