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  • WisBar News
    March 13, 2013

    Dane County Court's Act 10 Decision Intact Pending Appeal

    An appeals court has denied a request to keep certain Act 10 provisions in force pending an appeal of a Dane County Circuit Court's decision in favor of a Madison teachers union.

    March 13, 2013 – The ongoing disputes related to Act 10, the divisive collective bargaining bill passed in 2011, continue as a state appeals court recently ruled to keep a Dane County Circuit Court decision in place pending full appeal.

    In general, Act 10 curtailed the collective bargaining rights of public sector employees, except public safety workers. The law impacts both state and municipal employees, including teachers. A Madison teachers union challenged the law's constitutionality.

    The circuit court decision, rendered by Judge Juan Colas in September 2012, declared that certain provisions of Act 10, also known as the “budget repair bill,” were unconstitutional as related to municipal employee-employer relations.

    But Madison attorney Kyle J. Gulya of von Briesen & Roper, who represents several public-sector employers throughout Wisconsin, says the appeals court decision has minimal impact on municipal government employers outside Dane County.

    “The appeals court acknowledged that until a published opinion by the Wisconsin Supreme Court or the Court of Appeals is issued, other circuit courts may make different decisions on this topic than the one reached in Dane County,” Gulya said.

    Act 10 Issues Continue

    Judge Colas struck down Act 10’s provisions restricting the collective bargaining and other rights of municipal unions, and refused to keep the law’s provisions in place pending appeal of that decision. Rights and restrictions related to municipal employees are now governed by the Municipal Employment Relations Act (MERS).

    MERS prohibits municipal unions from bargaining on subjects other than total base wages, and requires a referendum to increase wages above cost-of-living adjustments.

    The law also prohibits local unions from deducting dues through payroll deductions, and requires unions to recertify annually. Already, a federal appeals court has specifically ruled that prohibiting payroll deductions for union dues and requiring annual union recertification is lawful, in addition to its decision that Act 10 is constitutional.

    But in Madison Teachers Inc. v. Walker, et al., Judge Colas ruled that these provisions impose unconstitutional burdens on employees who belong to unions. The defendants, including Gov. Scott Walker, moved to stay that decision pending appeal.

    The District IV Wisconsin Court of Appeals recently blocked that motion, meaning the circuit court decision remains effective until an appellate court rules on the merits:

    “[W]e conclude that the circuit court reasonably considered, as weighing against a stay, the proposition that, even with a stay imposed, municipal employers could not be compelled to grant wage increases higher than the cost of living, whereas, in the absence of a stay, public employees would be flatly prohibited from bargaining on benefits or work conditions, and would be limited to cost-of-living increases.”

    The appeals court rejected the argument that “statewide confusion among municipal employers” would occur if the statutory provisions are not in force pending appeal.

    “[W]e reject out of hand the proposition that the circuit court’s decision has the same effect as a published opinion of this court or the supreme court,” the panel wrote.

    The appeals court also noted that the Act 10 legislation, not the circuit court decision, produces the confusion now at issue in the courts.

    “It appears to us that the sort of confusion the appellants highlight is not a product of the circuit court’s decision, but rather a product of ground-breaking legislation that is now subject to constitutional challenges,” the panel wrote.

    What Now?

    Gulya says municipal employers may choose to negotiate with unions solely on “total base wages” and consistent with Act 10’s prohibition on collective bargaining, or the employer may choose to negotiate with unions on the broader subject of wages and other permissive subjects of bargaining through a conditional agreement.

    “Until the courts provide further clarity or the litigation ends, local government employers still must make the same strategic choices when negotiating with unions composed of general municipal employees,” said Gulya, noting the potential for legal challenges.

    Milwaukee Ruling Still Intact

    Judge Colas also ruled that Act 10 could not stop the City of Milwaukee, through existing ordinance, from paying the employee share of retirement contributions, an argument advanced by a City of Milwaukee employee union, also a party to the case.

    This was a “local affair,” Colas ruled, protected by the municipal home rule, Wis. Const. Art. XI, section 3(1), and the state’s constitutional bar on impairment of contracts. The appeals court also left this decision in place for now, pending appeal on the merits.


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