As we reported last year, in March 2015, Wisconsin became the 25th state in the country to enact a "Right to Work" law. That law prohibits collective bargaining agreements from requiring an employee, as a condition of employment, to become or remain a union member or to pay any union dues, fees, assessments, charges, or other expenses to a union. Almost immediately after its enactment, a trio of unions—the International Association of Machinists, the United Steelworkers and the Wisconsin AFL-CIO—challenged the law in Dane County Circuit Court. The unions claimed the law acted as an illegal taking of property without just compensation, prohibited under the Wisconsin constitution.
On Friday, April 8, 2016, Dane County Circuit Court Judge William Foust issued a decision finding the law unconstitutional. The judge held that the impact of the law—which allows employees to refuse to pay dues, fees and assessments while unions are still lawfully required to represent them—results in an unconstitutional taking of union "property." In this case, the property is the union's services as a bargaining representative and the money it spends in support of those services. The judge came to this conclusion based on the fact that under federal and state law, a union is the exclusive bargaining agent for employees in a bargaining unit and must represent all workers, even those who choose not to be members of the union and not to pay union dues. The judge rejected the state's defense that the union's status as the exclusive bargaining representative is itself "just compensation."
The Wisconsin Attorney General has vowed to appeal the ruling and expressed confidence that the law would be upheld on appeal. The Attorney General could ask the court to stay its order pending appeal. If the court refuses to stay its order, the Attorney General could ask the Court of Appeals to stay the order. Unless the Dane County Circuit Court stays this order, it will likely be months if not longer before the status of the law is determined.
Impact on Wisconsin Employers
This decision could cause significant issues for Wisconsin employers with unionized workforces. Initially, there may be a question regarding the statewide applicability of Judge Foust's ruling. In addition, for employers who eliminated "union security" or "dues checkoff" language from their collective bargaining agreements in light of the new Right to Work law, they can expect demands from those unions to bargain over this issue or to reinstate the earlier union security language. For employers whose collective bargaining agreements contain union security language and are still in force, expect unions to refuse to bargain the elimination of union security language in light of this decision. Employers will need to carefully scrutinize the language of their labor contracts in light of this ruling. Although a final ruling on the constitutionality of Wisconsin's Right to Work law is months away, employers will need to determine a strategy in the interim to deal with this ambiguity in addressing union demands.