July 16, 2018 – The Wisconsin Supreme Court has ruled that the City of Milwaukee violated the rights of employee-members of the public Employee Retirement System (ERS) by changing voting rules to the ERS Annuity and Pension Board (ERS Board).

Since 1937, employee-members of the ERS had the right to vote for three employees of their choice to the ERS Board, which had seven members. In 2013, however, Milwaukee exercised home rule authority to change the ERS Board’s voting rules.

Under the city’s change, each ERS employee-member could only vote for one employee, not three, and three seats were added as mayoral appointments.

Members of the Milwaukee Police Association and the Milwaukee Professional Fire Fighters Association filed a lawsuit, arguing the city could not alter the rights of ERS employee-members who were members before the amendment took effect.

And in Milwaukee Police Association v. City of Milwaukee, 2018 WI 86 (July 6, 2018), the Wisconsin Supreme Court ruled (4-3) to restore the voting rights of employee-members, and also ruled that the ERS Board cannot increase in size.

The circuit court had ruled in favor of the city, and an appeals court affirmed, concluding ERS employee members had no rights with respect to ERS Board composition. But a Supreme Court majority said employee-member voting rights were protected.

The majority noted that cities cannot “modify the annuities, benefits or other rights of any persons who are members of the system prior to the effective date of such amendment or alteration” and said the city’s changes modified “other rights.”

“Safeguarding ERS stability is promoted by employee-participation in the Board because it is employees, current and past, for whom stability of the ERS is critical,” wrote Chief Justice Patience Roggensack.

The phrase “other rights,” the chief justice noted, “easily encompasses employee voting rights because employee members of the Board are in a unique position to oversee the Board’s use of funds and thereby safeguard the financial stability of the ERS.”

In other words, the city must allow employee-members to vote for three employees of his or her choice to represent them on the ERS Board. Additionally, the ERS Board must remain at eight members so the votes of employee-members are not diluted.

“We conclude that having a meaningful voice on the Board is among the ‘other rights’ of employees that the City was not free to alter or modify under its home rule authority,” wrote Chief Justice Roggensack, noting expansion violates state law.

“[T]he voting rights of individual employees for membership on a Board does not unduly dilute their participation supports and is intertwined with a matter of statewide concern.”

Dissents and Concurrence

Justice Shirley Abrahamson dissented, joined by Justice Ann Walsh Bradley, concluding the majority opinion conflicts with a statutory provision that gives first class cities “the largest measure of self-government” with respect to retirement pensions.

“I conclude that the size, composition, or manner of election of the Pension Board … may be amended, altered, or modified,” Justice Abrahamson wrote. “Members of the Retirement System have the right to have their benefit commitments fulfilled, but they do not have a right to determine exactly how those benefit commitments are fulfilled.”

Justice Daniel Kelly wrote a separate dissent. He said the rights of proportional representation and at-large elections “don’t actually exist in the constitution, statutes, regulations or common-law,” and the majority, in its decision, “manufactured” them.

“They may be good and salutary rights for the employee members to have, but this is a question not given to the judiciary to answer,” Justice Kelly wrote. “We have no mandate to roam the state looking for good ideas to enact.”

Justice Rebecca Bradley wrote a concurring opinion. She joined the majority but wrote separately “to respond to the dissents.”

“The court applies an interpretation that furthers the purpose of the session laws – ensuring the security of retirement and death benefits – by preserving the legislature’s mandate of a Board to administer and operate the ERS,” Justice R. Bradley wrote.

“The dissents’ interpretation would obstruct this express legislative purpose by allowing the elimination of the Board, leaving the ERS without any entity to administer or operate it.”