Now that Governor Walker has retained his seat, it is likely he will continue to make changes to labor laws. Since the passage of Act 10, Wisconsin claims to have balanced its budget. In addition, a number of Wisconsin cities, counties and school districts have declared that the pension and health care reforms they implemented have resulted in substantial savings and, in some cases, turned deficits into surpluses. So, if the results of the reform efforts are as successful as some are initially experiencing and predicting in Wisconsin, we are likely to see more changes in 2012 throughout the country.
Wisconsin Governor Scott Walker survived the union-led recall election. In his victory speech, he called for mending fences. However, now that Governor Walker has proven his invincibility, what new changes will he initiate in 2012? In the aftermath of the loss, some union leaders have said the recall election invigorated the union movement so that they are more committed than ever to protect workers’ rights.
Recall that less than one year ago, Governor Walker’s state became ground zero in the most direct and comprehensive nationwide effort to enact reforms to public sector bargaining statutes since their individual state inceptions. Proponents of the reforms claimed that public employees are overpaid in compensation and benefits and, thus, the cause of the significant public sector agency deficits. They argued collective bargaining statutes needed to be overhauled so as to remove the obstacles to innovation and greater economic efficiencies. This article will examine the changes adopted to various states’ public sector bargaining statutes in 2011.
Historical Context: This Is Not the First Time
There has always been some tension in allowing public employees the right to collectively bargain. Indeed, President Franklin D. Roosevelt, whose presidency brought us the New Deal and the Wagner Act (establishing the right to strike in the private sector), was opposed to public sector bargaining. In a 1937 letter to the National Federation of Federal Employees, President Roosevelt wrote,”All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management.”
Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of government employees.
Such action, looking toward the paralysis of government by those who have sworn to support it, is unthinkable and intolerable.
Less than 50 years later, this sentiment was revisited in 1981 when President Ronald Reagan replaced striking federal air traffic controllers. It is nearly universally understood that President Reagan’s actions were responsible for employers taking a more aggressive approach to unions’ collective bargaining demands.
30 years later, in 2011, the same feelings of asserting control over the public sector collective bargaining processes resurfaced. It resurfaced, however, not just in one state. Instead, a wave of reform washed over the country in at least 12 states. In some ways it is fitting that the reform movement began in Wisconsin where the country’s very first public sector collective bargaining statute was born in 1959.
Wisconsin: The Birthplace of Public Sector Collective Bargaining
On February 14, 2011, Governor Scott Walker proposed the Budget Repair Law (2011 Wisc. Act 10) so as to address a $137 million shortfall (which was slated to balloon to $3.6 billion in a couple of years). His stated goal was to give cost control tools to local governments without causing employee positions to be laid off or impair services.
Act 10 had a number of provisions changing the collective bargaining statutes. Below are the primary changes:
- Created two classes of public employees: “general employees” and “public safety employees”
- Eliminated collective bargaining rights for general employees (maintained collective bargaining rights for public safety employees):
- The only matter general employees may bargain over is “total base wages and excludes any other compensation which includes overtime, premium pay, merit pay, performance pay, supplemental compensation, pay schedules, and automatic pay progressions.”
- Mandated unions to recertify as the exclusive bargaining representative in units of general employees through an election process requiring the union to win by a margin of 51 percent of the employees in the bargaining unit (not a majority of those voting)
- Banned general employee units from negotiating union security provisions
- Declared unlawful voluntary dues deductions for general employees.
In response to these measures, thousands of state and municipal workers occupied the Wisconsin State Capitol to protest the bill. At the same time, fourteen (14) Democratic representatives left the state in an effort to avoid the legislature from establishing a quorum. Ultimately, however, Act 10 became law when state Republicans found a way around the quorum requirement and subjected the bill to a vote.
In August 2011, opponents of the statute unsuccessfully tried to recall the Republicans who pushed through the measure. However, just like on Tuesday, the Democrats did not win enough seats in the Senate to wrestle control away from the Republicans.
Thereafter, several of the state’s largest public sector unions mounted a federal law suit asserting a violation of Equal Protection and the First Amendment. They challenged four aspects of Act 10:
- Limitation of the scope of bargaining to ‘base wages’ only for unions representing general employees
- Prohibition of fair share agreements for unions representing general employees
- Recertification of unions representing general employees
- Ban on automatic dues deduction from payroll checks of general employees
On March 30, 2012, the Court for the Western District of Wisconsin upheld the limitation on bargaining rights and prohibition of fair share agreements. However, the Court struck down the requirement for unions to be recertified every year and the ban on automatic dues deductions. Wisconsin Education Association, et al v. Scott Walker, et al, Case No. 11-428, (W.D. Wisconsin 2012)(appeal pending).
Therefore, until there is a successful appeal, the primary provisions of Act 10 remain valid.
Catching the Wave of Reform
In 2011, at least twelve (12) states passed collective bargaining reform.[1] Some sought to completely ban it, while others sought only to tinker with the procedures. In either case, the overwhelming concerted effort to regain control of the collective bargaining statutes is undeniable. Below is a list of states in alphabetical order who adopted changes to their public bargaining statutes:
Idaho: SB 1108 limited teacher bargaining to “compensation.” Collective bargaining agreements are limited to one year terms. If the parties fail to reach a collective bargaining agreement by June 10, the school board now has the power to set the terms of employment for the coming year. However, SB 1108 is set for a referendum election in November 2012 seeking repeal of the statute.
Illinois: SB 7 amended the school labor statute changing certain bargaining subjects to permissive subjects relieving the employer from having to bargain about them.
Indiana: Act No. 575 limited the scope of bargaining for teachers to wages and benefits thereby barring all other subjects. Act No. 575 also prohibited grievance arbitrations. It is important to note that in 2005, Indiana abolished state employee collective bargaining through executive order and never had collective bargaining for most local government employees (with teachers being the main exception).
Massachusetts: Chapter 69 expedited the timing of negotiations over health insurance.
Michigan: Act No. 4 provides for an “Emergency Manager” who has the power to modify or reject a collective bargaining agreement in cases of a financial emergency. Separately, Act 103 limited the scope of teacher bargaining by prohibiting bargaining over layoffs and discipline. Finally, HB 4522 requires interest arbitrators to give the highest priority to the employer’s ability to pay concerns in rendering any interest arbitration awards.
Nebraska: Bill 397 modified interest arbitration procedures related to the use of comparable jurisdictions.
New Hampshire: SB-1 prevents collective bargaining agreements to extend past expiration if impasse is declared. HB 589 repealed a 2007 law allowing for mandatory card check recognition.
New Jersey: In late 2010, Chapter 105 capped wage increases to 2% for police and fire. In 2011, Ch. 78 suspended bargaining over health care benefits for 4 years while a new statute controlling the issue is phased in. The new phased in statue provides for a sliding scale of employee contributions to the insurance premiums.
Nevada: SB98 requires collective bargaining agreements to contain a clause mandating a reopener if there is a fiscal emergency.
Ohio: SB-5 eliminated collective bargaining rights for certain public sector employees. For those small groups of employees that were allowed to bargain, SB-5 limited the scope of bargaining and eliminated the right to strike and interest arbitration. SB-5, however, never went into effect because Ohio allows newly enacted legislation to be subject to a voter referendum. In November 2011, SB-5 was rejected through the referendum process.
Oklahoma: HB 1593 repealed the public bargaining statute for cities with populations of at least 35,000. Public safety employees, however, are covered by a separate bargaining statute not affected by HB 1593.
Tennessee: Chapter 378 repealed public bargaining statute for teachers. Instead, teachers are permitted to engage in ‘collaborative conferencing.’ However, no agreement is required and the school board may implement any final offer.
Conclusion: What’s Next?
Now that Governor Walker has retained his seat, it is likely he will continue to make changes to labor laws. Since the passage of Act 10, Wisconsin claims to have balanced its budget. In addition, a number of Wisconsin cities, counties, and school districts have declared that the pension and health care reforms they implemented have resulted in substantial savings and, in some cases, turned deficits into surpluses. So, if the results of the reform efforts are as successful as some are initially experiencing and predicting in Wisconsin, we are likely to see more changes in 2012 throughout the country.
On the other hand, the pendulum of change may swing in the other direction if the federal government steps in to federalize public sector bargaining for public safety employees under a bill still pending in Congress, the Public Safety Employer-Employee Cooperation Act of 2009. It already made a sweeping advancement in this area by granting collective bargaining rights to the Transportation Safety Administration (“TSA”) in February 2011.
No matter which way the reform efforts go, it is a fair assumption we can count on more changes to public sector bargaining.
Todd A. Lyon is an attorney at Barran Liebman LLP, a Portland-based law firm that focuses on management-side Labor, Employment, & Benefits Law. Contact Todd by phone at 503-276-2194 or email him at tylon@barran.com.
