STATE OF WISCONSIN
BEFORE THE WISCONSIN EMPLOYMENT RELATIONS
In the Matter of the Petition of
CITY OF MILWAUKEE
Requesting a Declaratory Ruling Pursuant to Section 111.70(4)(b),
Wis. Stats., Involving a Dispute Between Said Petitioner and
MILWAUKEE POLICE ASSOCIATION,
LOCAL #21, I.U.P.A., AFL-CIO
Decision No. 29547
Attorney Thomas J. Beamish, Assistant City
Attorney, City of Milwaukee, 800 City Hall,
200 East Wells Street, Milwaukee, Wisconsin 53202-3551, appearing on behalf of the City
Eggert Law Offices, S.C., by Attorney Laurie A. Eggert, 840
North Farwell Avenue, Suite 303,
Milwaukee, Wisconsin 53202, appearing on behalf of Milwaukee Police Association, Local
Podell, Ugent, Haney & Delery, S.C., by Attorney Alvin R. Ugent,
611 North Broadway, Suite 200,
Milwaukee, Wisconsin 53202-5004, appearing on behalf of District Council 48, AFSCME,
Shneidman, Myers, Dowling, Blumenfield, Ehlke, Hawks & Domer,
Attorney Jeffrey P. Sweetland,
P. O. Box 442, Milwaukee, Wisconsin 53201-0442, appearing on behalf of
Association of Law
Enforcement Allied Services Personnel, Local 218, I.U.P.A., AFL-CIO.
FINDINGS OF FACT, CONCLUSION OF LAW
AND DECLARATORY RULING
On February 24, 1998, the City of Milwaukee filed a petition with the Wisconsin
Relations Commission pursuant to Sec. 111.70(4)(b), Stats., seeking a declaratory ruling as
City's duty to bargain with the Milwaukee Police Association, Local #21, International
Police Associations, AFL-CIO over certain matters. The
Association filed a response and amended response to the petition on March 9, 1998
and March 18,
The parties thereafter met on May 13, 1998 in Milwaukee, Wisconsin with
Examiner Peter G. Davis to determine whether some of the matters in dispute could be
After further discussion between the parties, the matters in dispute were reduced to
proposals regarding pension and payroll deduction for the Police Officers Defense Fund.
On September 15, 1998, the City filed an amended petition for declaratory ruling
reflected the change in the scope of the parties' dispute. In its amended petition, the City
the Association's pension proposal is a prohibited subject of bargaining and the payroll
proposal is a permissive subject of bargaining.
Hearing was held before Examiner Davis on September 17, 1998 in Milwaukee,
During the hearing, the Association of Law Enforcement Allied Services Personnel, Local
I.U.P.A., AFL-CIO, herein ALESAP, and District Council 48, AFSCME, AFL-CIO, herein
Council 48, appeared and were allowed to intervene as to the pension issue.
The parties thereafter supplemented the record with additional evidence and filed
argument. The record was closed on December 29, 1998 upon receipt of the Association's
regarding the Wisconsin Supreme Court's December 15, 1998 denial of the City's petition
in Milwaukee Police Ass'n et al v. City of Milwaukee, 222 Wis.2d 259 (Ct.App. 1998).
Having considered the matter and being fully advised in the premises, the
and issues the following
FINDINGS OF FACT
1. The City of Milwaukee, herein the City, is a municipal employer having its
at 800 City Hall, 200 East Wells Street, Milwaukee, Wisconsin 53202.
2. The Milwaukee Police Association, Local #21, I.U.P.A., AFL-CIO, herein the
is a labor organization representing certain law enforcement employes of the City for the
of collective bargaining.
3. During bargaining between the City and the Association, a dispute arose between
as to the City's duty to bargain with the Association over the following proposals:
Pension benefits for an
employee covered by this Agreement who is a member of the
Employe's Retirement System of Milwaukee (ERS) shall be those benefits defined in Chapter
the City Charter (ERS Act) that are applicable to a "policeman". Except for the following
enumerated below, these pension benefits shall continue unchanged during the term of this
For employees covered by
this Agreement, the City will make changes in existing
benefits as follows:
1. An employee's
service as a "policeman" shall be credited at the rate of
2.8% of his/her final
average salary per year for all years of creditable service or part thereof.
a. For any employee
who is or who becomes eligible to retire on a service retirement on or after
1995 1998, the City shall on the anniversary date of the
retirement and on each anniversary thereafter, increase the monthly pension benefit
by the increase in the Consumer Price Index (All Urban Consumers CPIU), U.S.
Cities Average as reported by the U.S. Department of Labor, Bureau of labor
Statistics, for the preceding calendar year, but in no event in an amount which
b. If a retired employe who is eligible for
an adjustment under 2.a., above, elects a
option, the spouse survivor allowance shall be computed based on the amount of the
retired employe's service retirement allowance, including adjustments, at the date of
c. If a retired employe who is eligible
for an adjustment under 2.a, above, has not
adjustment prior to death, a surviving spouse, who is eligible for a survivorship
option, shall have his/her survivor allowance increased by the amount provided in Sec.
2.a., above, effective with the pension check in which the eligible retired employe
would have received his/her adjustment had the retireee lived. If an eligible retired
employe has received an adjustment prior to death, a surviving spouse, who is eligible
for a survivorship option, shall have his/her survivor allowance increased by the
amount provided in Sec. 2.a., above, effective with the pension check in which the
eligible retired employe
would have received his/her next adjustment had the retiree lived. If an
elected a protective survivorship option and dies on or after January 1,
while in active service, a surviving spouse, who is eligible for a survivorship option,
shall have his/her survivor allowance increased by the amount provided, and effective
on the date provided in Sec. 2.a., above. After the first adjustment to the survivor
allowance, there shall be an additional increase in the survivor allowance by the
amount provided in Sec. 2.a., above, in each successive year effective with the
pension check on the anniversary of the first adjustment to the survivor allowance.
Each successive adjustment shall be computed on the survivor allowance as
d. If a retired employee elects ERS Option
4 and selects a reduced service retirement
with a benefit which is something other than a proportionate share of the retired
employee's benefit payable to a surviving spouse after the retired employee's death,
2.b. and 2.c., above shall not apply to the surviving spouse allowance.
e. This escalator benefit shall be in lieu
of any other escalator benefits provided by the
prior collective bargaining agreements and City ordinances.
f. Section 2.a through 2.d, above,
shall not apply to employees receiving an immediate
retirement allowance payable upon separation.
g. Sections 2.a. through 2.e., above,
shall apply to an employee with 25 years of service
separates from service on or after January 1,
1995 1998 on a
under Sec. 36.05.6.e., provided however, that the pension adjustment shall be
effective beginning on the anniversary f the date the employee commences receiving
such deferred retirement allowance upon attaining age 52.
3. The City agrees that it will never seek to increase
the age/service requirements
applicable to employees in active service and covered by the
1998-2000 City/MPA Labor
Agreement on its effective date that are provided for under section 36-05-1-f of the ERS Act.
1. Members of
the bargaining unit may authorize the City to deduct from their payroll checks an amount
of money which the City will remit directly to the PODF. If a member has so authorized a
payroll deduction, the City will deduct such payments from his bi-weekly paycheck and
these sums to the PODF c/o MPA within ten
calendar days after the payday from which the deduction was made. This agreement remains
in effect only as long as the PODF remains as an IRS-approved 501(c)(3) non-profit
2. The MPA
will reimburse the City for the costs of this check-off at the rate established by the City of
Milwaukee per year per member of the unit who authorizes the deduction from his payroll
check to the PODF.
4. The proposals set forth in Finding of Fact 3 primarily relate
wages, hours and conditions
Based on the above and foregoing Findings of Fact, the Commission makes and
CONCLUSION OF LAW
1. The proposals set forth in Finding of Fact 3 are mandatory subjects of
meaning of Sec. 111.70 (1)(a), Stats.
Based on the above and foregoing Findings of Fact and Conclusion of Law, the
makes and issues the following
1. The City of Milwaukee has a duty to bargain within the meaning of Secs.
111.70(1)(a), Stats., with the Milwaukee Police Association over the disputed proposals set
Finding of Fact 3.
Given under our hands and seal at the City of Madison, Wisconsin this
3rd day of March, 1999.
WISCONSIN EMPLOYMENT RELATIONS COMMISSION
James R. Meier, Chairperson
Paul A. Hahn, Commissioner
Commissioner A. Henry Hempe did not participate.
City of Milwaukee
MEMORANDUM ACCOMPANYING FINDINGS
CONCLUSION OF LAW AND DECLARATORY
The Applicable Legal Standards
Before considering the specific proposals at issue herein, it is useful to set out the
framework within which we determine whether a proposal is a mandatory, permissive or
subject of bargaining.
Section 111.70(1)(a), Stats., provides:
"Collective bargaining" means the
performance of the mutual obligation of a municipal
employer, through its officers and agents, and the representative of its municipal employes in
collective bargaining unit, to meet and confer at reasonable times, in good faith, with the
of reaching an agreement, or to resolve questions arising under such an agreement, with
wages, hours and conditions of employment, and with respect to a requirement of the
employer for a municipal employe to perform law enforcement and fire fighting services
61.66, except as provided in sub. (4)(m) and s. 40.81(3) and except that a municipal
not meet and confer with respect to any proposal to diminish or abridge the rights guaranteed
municipal employes under ch. 164. The duty to bargain, however, does not compel either
agree to a proposal or require the making of a concession. Collective bargaining includes the
reduction of any agreement reached to a written and signed document. The municipal
not be required to bargain on subjects reserved to management and direction of the
except insofar as the manner of exercise of such functions affects the wages, hours and
employment of the municipal employes in a collective bargaining unit. In creating this
legislature recognizes that the municipal employer must exercise its powers and
responsibilities to act
for the government and good order of the jurisdiction which it serves, its commercial benefit
health, safety and welfare of the public to assure orderly operations and functions within its
jurisdiction, subject to those rights secured to municipal employes by the constitutions of this
and of the United States and by this subchapter.
In West Bend Education Ass'n v. WERC, 121 Wis.2d 1, 7-9 (1984), the Wisconsin
Supreme Court concluded the following as to how Sec. 111.70(1)(a), Stats., (then Sec.
Stats.) should be interpreted when determining whether a subject of bargaining is mandatory
Sec. 111.70(1)(d) sets forth the legislative
delineation between mandatory and
nonmandatory subjects of bargaining. It requires municipal employers, a term defined as
school districts, sec. 111.70(1)(a), to bargain "with respect to wages, hours and conditions of
employment." At the same time it provides that a municipal employer "shall not be required
bargain on subjects reserved to management and direction of the governmental unit except
as the manner of exercise of such functions affects the wages, hours and conditions of
of the employes." Furthermore, sec. 111.70(1)(d) recognizes the municipal employer's duty
for the government, good order and commercial benefit of the municipality and for the
and welfare of the public, subject to the constitutional statutory rights of the public
Sec. 111.70(1)(d) thus recognizes that the
municipal employer has a dual role. It is
both an employer in charge of personnel and operations and a governmental unit, which is a
entity responsible for determining public policy and implementing the will of the people.
integrity of managerial decision making and of the political process requires that certain
be mandatory subjects of collective bargaining, Unified School District No. 1 of Racine
v. WERC, 81 Wis. 2d 89, 259 N.W.2d 724 (1977), sec. 111.70(1)(d) provides an
between the bargaining rights of public employees and the rights of the public through its
In recognizing the interests of the
employees and the interests of the municipal
employer as manager and political entity, the statute necessarily presents certain tensions and
difficulties in its application. Such tensions arise principally when a proposal touches
upon wages, hours, and conditions of employment and upon managerial decision making or
policy. To resolve these conflict situations, this court has interpreted sec. 111.70(1)(d) as
forth a "primarily related" standard. Applied to the case at bar, the standard requires WERC
first instance (and a court on review thereafter) to determine whether the proposals are
related" to "wages, hours and conditions of employment," to "educational policy and school
management and operation," to "'management and direction' of the school system" or to
or management of public policy." Unified School District No. 1 of Racine County v.
81 Wis. 2d 89, 95-96, 102, 259 N.W.2d 724 (1977). This court has construed "primarily"
"fundamentally," "basically," or "essentially," Beloit Education Asso. v. WERC, 73 Wis. 2d
54, 242 N.W.2d 231 (1976).
As applied on
a case-by-case basis, this primarily related standard is a balancing test
which recognizes that the municipal employer, the employees, and the public have significant
at stake and that their competing interests should be weighed to determine whether a
subject for bargaining should be characterized as mandatory. If the employees' legitimate
wages, hours, and conditions of employment outweighs the employer's concerns about the
on managerial prerogatives or public policy, the proposal is a mandatory
subject of bargaining.
In contrast, where the management and direction of the school system
or the formulation of public policy predominates, the matter is not a mandatory subject of
In such cases, the professional association may be heard at the bargaining table if the parties
to bargain or may be heard along with other concerned groups and individuals in the public
Unified School District No. 1 of Racine Co. v. WERC, supra, 81 Wis. 2d at 102; Beloit
Education Asso., supra, 73 Wis. 2d at 50-51. Stating the balancing test, as we have just
easier than isolating the applicable competing interests in a specific situation and evaluating
When it is asserted that a proposal is a prohibited subject of bargaining, the question
whether the proposal irreconcilably conflicts with a statutory provision or limits constitutional
Fortney v. School District of West Salem, 108 Wis.2d 169 (1982); Professional Police
Association v. Dane County, 106 Wis.2d 303 (1982); Glendale Prof. Policeman's Asso. v.
Glendale, 83 Wis.2d 90 (1978); WERC v. Teamsters Local No. 563, 75 Wis.2d 602 (1977).
The Pension Proposal
Given recent appellate court decisions regarding the City's Employes' Retirement
the City contends that the Association's pension proposal infringes on the constitutional due
rights of current System members. Therefore, the City asserts the proposal is a prohibited
Citing Welter v. City Of Milwaukee, 214 Wis.2d 484 (Ct. App. 1997) and
Police Association, supra, the City argues it is prohibited from bargaining over a proposal
uses System assets to benefit only a portion of the System's members. The City alleges the
have now held each individual System member has a property interest in the System's assets
the diversion of such assets to benefit a limited group of members is an unconstitutional
Because it is clear the Association's proposed pension improvements would be funded by
System assets, the City contends the Association proposal is a prohibited subject of
Although the Association contends that its pension proposal does not specify how it
funded, the City asserts that it is clear the proposed pension improvements would in fact be
using System funds. Thus, the City argues the Commission must come to grips with the
constitutionality of the System funding issue the City has raised. The City alleges that under
and Milwaukee Police Association, even where existing System members will continue to
their existing defined benefits, those System members suffer an unconstitutional taking of a
interest when increased benefits are provided to some but not all members of the System.
Courts' holdings place substantial restraint upon collective bargaining with respect to System
established benefits, the City argues that those holdings cannot be ignored.
Citing Sec. 111.70 (4)(jm) 4, Stats. and County of LaCrosse, 180 Wis.2d 100
Association argues it is clear that pension benefits are mandatory subjects of bargaining. It
that because its pension proposal does not identify how the benefits sought will be funded,
objection is irrelevant and the Commission could simply proceed to find the proposal to be a
mandatory subject of bargaining. However, because it wishes to have the legitimacy of
funding established, the Association argues the Commission should proceed to resolve that
Contrary to the City, the Association alleges that Welter and Milwaukee Police
Asosciation do not hold that increases in benefits for Association
represented employes would
violate the due process rights of other System members. The Association contends that
System members would continue to receive their benefits and because moneys will not be
from one fund to another, the holdings of the Court are not relevant to the mandatory nature
Association's proposal. The Association asserts that if its proposal were funded from
surpluses in the System's funds as well as from ongoing employer contributions, there would
an unconstitutional taking from other System members.
Intervenor ALEASP argues that because it cannot be determined how the Association
proposal would be funded, there is no existing duty to bargain "dispute" within the meaning
111.70 (4)(b), Stats. Therefore, Intervenor ALEASP urges the Commission to avoid making
advisory opinion on the funding issue.
Should the Commission conclude it is appropriate to address the constitutional issue
by the City, Intervenor ALESAP argues that Welter and Milwaukee Police Association do
prohibit providing increased benefits to some but not all System participants.
Intervenor District Council 48 also argues that the Commission would be making an
inappropriate advisory opinion if it were to resolve the merits of the City's constitutional
It asserts the Association has not proposed that the benefit improvements be funded from
surpluses nor required that System members lose rights without members' consent. District
48 notes that if the pension improvements were incorporated into a contract, the parties could
that the benefits would not improve until and unless any necessary member consent occurred.
The constitutional issue raised by the City is premised on use of existing System
assets to fund
the proposed pension improvement. Because the pension proposal does not mandate any
funding source, Intervenors District Council 48 and ALESAP (and to a lesser extent the
urge us to avoid resolving the constitutional issue. However, because the text of the
clear that the proposed benefits will flow from the System itself, we think the better course is
resolve the constitutional issue in this proceeding.
We have carefully considered the Court of Appeal's decision in Welter and
Milwaukee Police Association and the arguments of the parties to this proceeding. We
these decisions do not hold that an unconstitutional taking occurs whenever benefits are
for some but not all of the System participants. In the context of the existing
surplus in the System, we further conclude that if the Association proposal becomes
part of a
successor contract and if the City funds the increased benefits from existing System assets,
violation of constitutional rights would occur.
Thus, we conclude the Association proposal is not a prohibited subject of bargaining
a mandatory subject of bargaining primarily related to wages and conditions of employment.
The Police Officer Defense Fund Proposal
The City contends that this proposal is a permissive subject of bargaining because it
primarily related to wages, hours and conditions of employment. It asserts that it should
not be compelled to bargain over the direction of monies to any particular activity,
otherwise. The City argues that the "talismanic" invocation of the term "wages" does not
the proposal into a mandatory subject of bargaining.
The Association asserts the proposal is a mandatory subject of bargaining because it
to wages and conditions of employment and is unrelated to public policy or the direction of
department. It contends the proposal simply specifies how, when and where a portion of the
employes' wages are to be paid at the employes' discretion. The Association argues that its
is no different than a proposal that would allow employes to directly deposit a portion of
to a financial institution or a deferred compensation plan.
We find the proposal to be a mandatory subject of bargaining primarily related to
is apparent that the proposal simply gives the employes the option of using their wages in a
fashion through payroll deduction. The Association correctly argues that the proposal is
indistinguishable from any other which seeks to give employes options as to how they will
wages they earn. The City's arguments go to the merits of whether such a proposal should
part of the contract -- not to its bargainability.
Dated at Madison, Wisconsin this 3rd day of March, 1999.
WISCONSIN EMPLOYMENT RELATIONS COMMISSION
James R. Meier, Chairperson
Paul A. Hahn, Commissioner
Commissioner A. Henry Hempe did not participate.