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United States District Court, E.D. Wisconsin

September 26, 2016

INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 139 and INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 420, Plaintiffs,
v.
BRAD D. SCHIMEL, JAMES R. SCOTT, and ANTHONY ARNOLD, Defendants.

          ORDER

          J.P. Stadtmueller U.S. District Judge

         This case represents Wisconsin's chapter in the ongoing, national debate about the role that labor unions play in the modern workplace and the extent to which they may be regulated by both state and federal governments. In 2015, Wisconsin joined the ranks of many sister states when it passed its own species of a so-called “right to work” law. See Wis. Stat. § 111.04 (Supp. 2016) (enacted Mar. 9, 2015), available at https://docs.legis.wisconsin.gov/statutes/statutes/111/I/04 (last visited Sep. 9, 2016) (“Act 1”). In their complaint, the plaintiffs claim, under 42 U.S.C. § 1983, 29 U.S.C. § 158(a)(3), and Article III, § 2 of the United States Constitution, that a specific provision of that right to work law, Wis.Stat. § 111.04(3)(a)(3), is preempted by Section 14(b) of the National Labor Relations Act (“NLRA”), 29 U.S.C. §164(b) (2012), and violates the Fifth Amendment of the United States Constitution. (Docket #1 ¶ 1). The specific subsection at issue in this case-Section 111.04(3)(a)(3)-prohibits union-security agreements that require employees to “[p]ay any dues, fees, assessments…to a labor organization.” In short, therefore, neither union membership, nor the payment of “any dues”-including those related to collective bargaining, contract administration, and grievance processing-may be compelled from Wisconsin workers. Wis.Stat. § 111.04(3)(a)(1)-(3).

         This case now comes before the Court on three motions: (1) the plaintiffs' motion for a preliminary injunction (Docket #9); (2) the defendants' motion for judgment on the pleadings (Docket #16); and (3) five alleged Amici's motion for leave to file an amicus brief (Docket #19). As more fully explained below, the disposition of this matter is largely controlled[1] by the Seventh Circuit's recent decision with respect to Indiana's right to work law. See generally Sweeney v. Pence, 767 F.3d 654 (7th Cir. 2014).[2] On the basis of Sweeney, and for the reasons stated herein, the Court concludes that the defendants' motion for judgment on the pleadings should be granted in its entirety, thereby rendering the plaintiffs' motion for a preliminary injunction moot. Furthermore, as the Amici do not add any materially significant arguments to the resolution of this case, the Court will exercise its discretion in denying the motion for leave to file an amicus brief.

         1. BACKGROUND

         Due to the unique posture of this case, the Court will first provide a brief summary as to where the matter stands both factually and procedurally. To that end, the following sections will be devoted to providing a overview of: (1) the parties in this case; (2) the relevant legal landscape; (3) the plaintiffs' challenge to Act 1; and (4) the Seventh Circuit's Sweeney decision.

         1. 1The Parties

         The plaintiffs are two unions that operate in the State of Wisconsin. (Docket #1 ¶¶ 7-8).[3] More specifically, the International Union of Operating Engineers Local 139 (“Local 139”) and the International Union of Operating Engineers Local 420 (“Local 420”) are labor organizations representing approximately nine thousand, and two thousand, working men and women in Wisconsin, respectively. (Docket #1 ¶¶ 7-8). Together, the unions are suing Brad Schimel-in his official capacity as Attorney General for the State of Wisconsin-and James R. Scott-in his official capacity as the chair of the Wisconsin Employment Relations Commission.[4] (Docket #1 ¶¶ 9-10).

         The plaintiffs allege that, combined, they have represented the interests of Wisconsin workers for more than 200 years. (Docket #1 ¶ 20). As part of their duties, they each purport to spend significant financial and human resources representing every employee in the bargaining units for which they have been elected the “exclusive representative, ” union members and non-members alike. (Docket #1 ¶¶ 21-29). Each of the plaintiffs represent Wisconsin employees under the auspices of various collective bargaining agreements (“CBAs”) with employers across the state. These CBAs are renegotiated according to a specific time schedule every couple of years. (Docket #1 ¶ 22). The plaintiffs allege that their contract administration and grievance related services are available equally to all members of the bargaining unit, regardless of an individual's union membership status. (Docket #1 ¶ 30).

         Prior to the enactment of Wisconsin's right to work law, each of the plaintiffs had, in each of their CBAs with Wisconsin employers, a union security clause that required all bargaining unit employees to pay their “fair share” for the union's representation, i.e., what the Court will refer to hereinafter as “representation fees.” (Docket #32). In other words, prior to Act 1, unions were permitted to charge non-union member employees in the bargaining unit for representation fees associated with: (1) CBA negotiation; (2) contract administration; and (3) grievance services. (Docket #1 ¶ 32). As a consequence of the enactment of Act 1, however, labor unions in Wisconsin have been prohibited from negotiating agreements that require employees pay representation fees. (Docket #1 ¶¶ 33-40).

         As a result of this changed legal landscape, beginning in approximately May of 2016, Local 139 has proposed to several Wisconsin employers to enter into a “Fair Representation Fee Agreement” that contains what is, in essence, a conditional representation fee provision.[5] (See Docket #1 ¶¶ 33-36). These agreements may only be enforced if Local 139 obtains a final judgment that Wisconsin's law cannot be applied to preclude their enforcement. (Docket #1 ¶¶ 33-36). Thus far, eight employers have signed such an agreement with Local 139. (Docket #1 ¶ 33). Two employers have refused to do so, citing Act 1. (Docket #1 ¶ 33). Though Local 420 does not purport to have entered into any similar type of agreements, it would like the opportunity to negotiate Fair Representation Fee Agreements with each of the employers with whom it has a CBA. (Docket #1 ¶ 39).

         1.2 Act 1 and the NLRA

         After a highly publicized and protracted political battle, the Wisconsin state legislature passed into law Act 1, which provides, inter alia, that:

No person may require, as a condition of obtaining or continuing employment, an individual to do any of the following:
1. Refrain or resign from membership in, voluntary affiliation with, or voluntary financial support of a labor organization.
2. Become or remain a member of a labor organization.
3. Pay any dues, fees, assessments, or other charges or expenses of any kind or amount, or provide anything of value, to a labor organization.
4. Pay to any 3rd party an amount that is in place of, equivalent to, or any portion of dues, fees, assessments, or other charges or expenses required of members of, or employees represented by, a labor organization.

Wis. Stat. § 111.04(3)(a) (emphasis added). Here, the Unions do not dispute their inability to require employees' “member[ship].” See Wis. Stat. § 111.04(3)(a)(2). Rather, the plaintiffs challenge subsection (3), which precludes unions from obtaining reimbursement for service fees associated with union representation expenses (i.e., those costs that accrue from collective bargaining, agreement administration, and grievance processing).

         Without delving into the merits of the parties' arguments, a brief summary of relevant federal law-namely that which is embodied in Section 8(a) and 14(b) of the NLRA-is important. In 1935, the federal government intervened to regulate what had once been a tumultuous relationship between laborers and management through the passage of the NLRA (also known as the Wagner Act). See 49 Stat. 449, as amended, 29 U.S.C. § 151 et seq. In general, the NLRA established the right of workers to unionize and bargain collectively through a democratic system of exclusive representation. See 29 U.S.C. § 159(a). Flowing from this system of exclusive representation, the Supreme Court interpreted the NLRA to also impose upon unions a “corresponding duty…to exercise fairly the power conferred upon [them] [o]n behalf of all those for whom [they] act[], without hostile discrimination against them.” Steele v. Louisville & N.R. Co., 323 U.S. 192, 203 (1944) (emphasis added); see also Ford Motor Co. v. Huffman, 345 U.S. 330, 337-38 (1953) (extending duty of fair representation to the NLRA). In other words, “[t]he duty of fair representation requires the exclusive bargaining representative (i.e., the union) to ‘serve the interests of all members [of the bargaining unit] without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct.'” Sweeney, 767 F.3d at 672 (J. Wood, dissenting) (quoting Vaca v. Sipes, 386 U.S. 171, 177 (1967)). This duty extends not only to the negotiation of CBAs, but to all union representational activity. See Air Line Pilots Ass'n, Int'l v. O'Neil, 499 U.S. 65, 67 (1991); s ...


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