Nov. 21, 2013 – Collective bargaining agreements entered into before passage of the controversial law that curbed public workers’ collective bargaining rights must be honored by the City of Racine, a state appeals court has ruled.
In early 2011, Racine ratified agreements covering a two-year period in 2013-14 before the Wisconsin Legislature passed Act 10 and Act 32, which limit collective bargaining.
After those laws passed, though, Racine cited Act 10 and Act 32 as a basis to fully or partially rescind the 2013-14 agreements with three groups of “general employees” and two other groups of “public safety employees” represented by unions.
The unions sued to enforce those agreements. A circuit court ruled that Racine could not rescind the agreements they signed before the laws were passed.
In American Federation of State, County and Municipal Employees AFL-CIO v. City of Racine, 2013AP290 (Nov. 20, 2013) a three-judge panel for the District II Court of Appeals affirmed that decision, clarifying that Act 10 and Act 32 are not retroactive.
The panel noted that both laws contain “initial applicability” provisions clearly stating that the laws “first apply to employees who are covered by a collective bargaining agreement … that contains [inconsistent provisions] on the day on which the agreement expires or is terminated, extended, modified, or renewed, whichever occurs first.”
An employee is “covered” by a collective bargaining agreement, the panel ruled, when a collective bargaining agreement has been approved and it applies to them.
Thus, the appeals panel concluded that Act 10 and Act 32 do not apply to the 2013-14 collective bargaining agreements until those agreements expire.
“[T]he fact that a contract contemplates that performance will not begin until some date in the future does not change the fact that the contract exists and is an enforceable, legally protected relationship,” wrote Chief Appeals Court Judge Richard Brown.
The appeals panel also rejected the city’s argument that the 2013-14 agreements should not be enforced because Act 10 and Act 32 were meant to “offer local governments the ability to manage spending reductions” for “fiscal stability.”
The city pointed to a press release from Gov. Scott Walker on the purpose of Act 10 and a Legislative Council Act Memo that said collective bargaining agreements that would normally be extended must be terminated “as soon as legally possible.”
“We read both the Governor’s press release and the legislative council’s memo as expressions that the legislation was expected to take effect as soon as legally possible, i.e., as soon as possible without upsetting preexisting legal contracts like contracts,” Chief Judge Brown wrote.
Judge Mark Gundrum wrote a concurring opinion to argue that Act 10 and Act 32’s “initial applicability sections” were ambiguous.
But he sided with the majority’s conclusion that Racine must honor the 2013-14 agreements because, “to read them otherwise, would result in inappropriate retroactive application of the acts” under “express language” or “necessary implication.”
