On July 12, 2017, the Seventh Circuit Court of Appeals issued a decision upholding a federal district court's ruling in favor of Wisconsin's Right to Work law. The law, which passed in March of 2015 and which applies to any labor agreement that was entered into, modified, renewed or extended after the effective date of the law, prohibits requiring workers to pay any dues, fees, assessments, charges, or other expenses to a union. Collective bargaining agreements commonly contain such clauses, which are often referred to as "union security" clauses. Wisconsin's Right to Work law has been subject to various challenges. One such challenge was brought by the International Union of Operating Engineers Locals 139 and 420 in the U.S. District Court for the Eastern District of Wisconsin last year, in which the unions claimed that the law was both preempted by the National Labor Relations Act and established an unlawful taking in violation of the U.S. Constitution. U.S. District Judge J.P. Stadtmueller heard the case and determined that Wisconsin's Right to Work law mirrored a similar law in Indiana which the Seventh Circuit had previously upheld several years earlier in Sweeney v. Pence, 767 F.3d 654 (7th Circuit 2014). Accordingly, Judge Stadtmueller applied the precedent established by the Seventh Circuit in Sweeney and held that Wisconsin's nearly-identical version was similarly lawful.
The unions appealed Judge Stadtmueller's decision arguing that Sweeney was wrongly decided and should be overturned. A three judge panel for the Seventh Circuit Court of Appeals was not persuaded. As a result, it affirmed the lower court's decision and upheld Wisconsin's Right to Work law.
The Seventh Circuit's decision is in line with a national trend in which a number of right to work laws throughout the country have been upheld by federal appellate courts. As we previously reported, however, a Dane County judge ruled in a separate challenge in state court last year that Wisconsin's Right to Work law is unconstitutional. The Wisconsin Court of Appeals has issued an injunction blocking that ruling, and the case currently remains on appeal.
What impact does the Seventh Circuit decision have on Wisconsin's employers? The Seventh Circuit's recent decision reaffirms that the prohibition against union security clauses in collective bargaining agreements entered into after March 2015 in Wisconsin is lawful, at least under federal law. However, it still remains to be seen whether it will be upheld in Wisconsin. Employers should continue to work with counsel while awaiting a decision from the Wisconsin appellate court given the current uncertainty as to whether the Right to Work law will be upheld.