International Association of Machinists District 10 and its Local Lodge 1061, United Steelworkers District 2 and Wisconsin State AFL-CIO, Plaintiffs-Respondents,
State of Wisconsin, Scott Walker, Brad Schimel, James R. Scott and Rodney G. Pasch, Defendants-Appellants.
from a judgment of the circuit court for Dane County No.
2015CV628: C. WILLIAM FOUST, Judge. Reversed and cause
remanded with directions.
Stark, P.J., Hruz and Seidl, JJ.
The issue in this appeal involves whether Wisconsin's
"right-to-work law, " 2015 Wisconsin Act 1 (Act 1),
effectuates an unconstitutional taking of the property of
labor organizations in violation of the Wisconsin
Constitution. We conclude the parties challenging Act 1 have
not met their burden of proving the law is unconstitutional
beyond a reasonable doubt.
Employees are permitted to unionize and elect exclusive
representation. A benefit to unions of exclusive
representation is that employers are compelled to bargain
with that exclusive representative. But the benefits of
exclusive representation correspond to a duty to represent
all employees in the bargaining unit fairly, including
non-members of the union who will pay nothing for
representative services. Act 1 does not deprive compensation
for those mandated services. The law merely prohibits anyone
from conditioning a person's employment on the payment of
monies designed to cover the costs of performing that duty of
fair representation. Accordingly, Act 1 does not take
property within the meaning of the Wisconsin Constitution. We
therefore reverse the judgment and remand to the circuit
court with directions to dismiss the complaint.
Prior to Act 1 becoming effective on March 11, 2015, the
International Association of Machinists District 10 and its
Local Lodge 1061, United Steelworkers District 2, and the
Wisconsin State AFL-CIO (collectively, the Unions) commenced
this declaratory action challenging the constitutionality of
Act 1, naming as defendants the State of Wisconsin, Governor
Scott Walker, Attorney General Brad D. Schimel, Wisconsin
Employment Relations Commission (WERC) Chairman James R.
Scott, and WERC Commissioner Rodney G. Pasch, all in their
official capacities (collectively, the State).
The Unions alleged they collectively represent the interests
of every Wisconsin worker in the bargaining units for which
they have been elected the exclusive representative. The
Unions' services are available equally to all members of
the bargaining unit regardless of an individual's union
membership status. The Unions historically negotiated
"union shop" clauses, or other union security
clauses, in collective bargaining agreements to require both
members and non-members to pay their "fair share"
for the union's representation as a condition of
employment. These clauses required all employees who enjoyed
the benefits of that agreement to either pay dues as members
or a discounted fee for non-member employees who were charged
only the cost of services germane to collective bargaining,
contract administration, and grievance adjustment.
The Unions alleged Act 1 imposed a costly and ongoing duty to
represent non-member employees in collective bargaining and
grievance adjustments, while depriving the Unions of their
right to negotiate contracts that would allow them to compel
those non-member employees to pay the cost of the services
the Unions were obligated to provide for that representation.
According to the Unions, Act 1 thus violated the Wisconsin
Constitution's Takings Clause, which states "[t]he
property of no person shall be taken for public use without
just compensation therefor." See Wis. Const.,
art. I, § 13.
Following the denial of the State's motion to dismiss,
the circuit court granted the Unions' motion for summary
judgment. The court determined the Unions had a legally
protectable property interest in the money and services
expended to fulfill their duty of fair representation to
non-members. The court held that Act 1 constituted a taking
because the Unions were required to represent all persons in
the bargaining unit fairly and equally, including employees
who chose not to pay dues or representative fees. Requiring
the Unions to represent those non-members without
compensation from the non-members created a "free rider
problem" that was facially unconstitutional. The court
further found the Unions sustained revenue losses that were
"not isolated, " and the impact of Act 1 over time
"is threatening to the unions' very economic
The circuit court therefore declared the challenged
provisions of Act 1 "null and void." The court also
noted Act 1 "makes it a crime for the union to require
someone to pay for the services he or she receives from the
union, " and it determined that "[e]njoining the
Attorney General and the State from pursuing criminal
prosecution is appropriate relief." The court also
enjoined the WERC defendants, on the basis that "Act 1
renders an employer's collection of dues or assessments
without an employee's individual order an unfair labor
practice." The State now appeals.
The constitutionality of a statute is a question of law that
we review de novo. Madison Teachers, Inc. v. Walker,
2014 WI 99, ¶13, 358 Wis.2d 1, 851 N.W.2d 337. We
presume statutes enacted by the legislature are
constitutional-and we indulge every presumption to sustain a
challenged law. Wisconsin Med. Soc'y, Inc. v.
Morgan, 2010 WI 94, ¶38, 328 Wis.2d 469, 787 N.W.2d
22. A party bringing a constitutional challenge bears a heavy
burden, and it is not sufficient for a party to demonstrate
that the statute's constitutionality is doubtful or
probably unconstitutional. Rather, the presumption of
constitutionality can only be overcome if the party
establishes the statute's unconstitutionality beyond a
reasonable doubt. Id. Therefore, any doubt that
exists regarding the constitutionality of Act 1 must be
resolved in favor of its constitutionality. Id.
We also review summary judgments independently. Green
Spring Farms v. Kersten, 136 Wis.2d 304, 315-17, 401
N.W.2d 816 (1987). The standard methodology is
well-established. A party is entitled to summary judgment if
the pleadings, depositions, answers to interrogatories,
admissions, and affidavits, if any, show no genuine issue
exists as to any material fact and the party is entitled to
judgment as a matter of law. Wis.Stat. § 802.08(2).
In order to interpret Act 1, an understanding of its
legislative background is helpful.
The National Labor Relations Act
Modern labor law in America began in 1935, with the passage
of the National Labor Relations Act (NRLA), also known as the
Wagner Act. See Sweeney v. Pence, 767 F.3d 654, 681
(7th Cir. 2014) (Wood, C.J., dissenting). The federal
government had intervened to regulate a tumultuous
relationship involving significant violence between workers
and employers at the beginning of the twentieth century.
See International Union of Operating Eng'rs Local 139
v. Schimel, 210 F.Supp.3d 1088, 1093 (E.D. Wis. 2016).
In general, the NLRA established the right of workers to
unionize and bargain collectively through a democratic system
of exclusive representation. Id.
After World War II, however, "there was a feeling by
some in Congress that the pendulum had swung too far in the
direction of unionization." Sweeney, 767 F.3d
at 681. In particular, "closed-shop" agreements,
under which employers agreed to hire union members only,
"were thought by some members of Congress to be a
powerful tool that union leaders were abusing."
Id. On the other hand, Congress was also sympathetic
toward other union security agreements. Id. In
response, Congress amended the NLRA in 1947 by enacting the
Taft-Hartley Act. See Schimel, 210 F.Supp.3d at
The NLRA-as amended by Taft-Hartley-outlawed closed-shop
agreements. See, e.g., NLRB v. Local Union No. 55,218 F.2d 226, 232 (10th Cir. 1954). However, union-shop
agreements, in which new employees are required to join a
labor union after being hired, remained legal under the
NLRA.See Schimel, 210 F.Supp.3d at
1094. Nonetheless, the freedom reserved to the states was
extensive, and courts historically have interpreted Section
14(b) of the NLRA-which Taft-Hartley created-as allowing
individual states to ban union-shop agreements. See,
e.g., Retail Clerks Int'l Ass'n 1625 v.
Schermerhorn,375 U.S. 96, 102 (1963). Courts have also
held "Section 14(b)'s express allowance of state
laws prohibiting agreements requiring membership in