AFSCME Iowa Council 61 v. State of Iowa and Iowa Public Employment Relations Board

This appeal, submitted with Iowa State Education Ass'n v. State , 928 N.W.2d 11 (Iowa 2019), also filed today, presents constitutional challenges to the 2017 amendments to the Public Employment Relations Act, Iowa Code chapter 20. The amendments ended payroll deductions for union dues and narrowed the scope of mandatory collective bargaining topics for bargaining units comprised of less than thirty percent "public safety employees," defined to include most police officers and firefighters. The new classifications result in many public employees losing significant statutory bargaining rights compared to other public employees with arguably similar jobs. A public employee union and several of its members filed this action against the State of Iowa and the Public Employment Relations Board (PERB) seeking injunctive and declaratory relief. The plaintiffs allege the amendments violate the equal protection clause of the Iowa Constitution and violate their right to freedom of association. The district court granted the defendants' motion for summary judgment dismissing the action, and we retained the plaintiffs' appeal.

Our role is to decide whether constitutional lines were crossed, not to sit as a superlegislature rethinking policy choices of the elected branches. We conclude the 2017 amendments withstand the constitutional challenges. The plaintiffs concede there is no constitutional right to public-sector collective bargaining or payroll deductions. The parties agree the equal protection claims are reviewed under the rational basis test. The legislature could reasonably conclude that the goal of keeping labor peace with unions comprised of at least thirty percent public safety employees, and the greater risks faced by emergency first responders, justified the classification. We hold the legislative classifications are not so overinclusive or underinclusive as to be unconstitutional under our highly deferential standard of review. We further hold the amendments do not violate constitutional rights of freedom of association. Public employees remain free to belong to the same unions. Accordingly, we affirm the district court's summary judgment.

I. Background Facts and Proceedings.

We begin by reviewing the statute in place before the 2017 amendments to put the constitutional challenges in context.1 In 1974, after public employees engaged in multiple strikes, the Iowa legislature enacted the Public Employment Relations Act (PERA), codified at Iowa Code chapter *2720. See generally Waterloo Educ. Ass'n v. Iowa Pub. Emp't Relations Bd. , 740 N.W.2d 418 (Iowa 2007) (detailing the history of public sector collective bargaining). PERA sought to create an orderly system of collective bargaining for public employees by establishing rules and procedures and by prohibiting strikes.2 Iowa Code §§ 20.6, .9, .10 (2017). PERA permitted, but did not require, public employees to join a public employee organization (union).3 Id. § 20.8. Employees could vote to select a union to represent them. Id. An employee who joined a union had the option to pay dues through automatic payroll deductions. Id. § 20.9; id. §§ 70A.17A, .19.

Once employees selected a union, PERA required the union and public employer to bargain in good faith on these topics:

wages, hours, vacations, insurance, holidays, leaves of absence, shift differentials, overtime compensation, supplemental pay, seniority, transfer procedures, job classifications, health and safety matters, evaluation procedures, procedures for staff reduction, in-service training and other matters mutually agreed upon.

Id. § 20.9.

If a public employer and union were unable to reach an agreement on these mandatory topics, PERA established a procedure for resolving the impasse through mediation and binding arbitration. Id. §§ 20.20, .22. If an impasse reached arbitration, each party submitted a final offer to an arbitrator. Id. § 20.22(3). The arbitrator was required to consider the following factors:

a . Past collective bargaining contracts between the parties including the bargaining that led up to such contracts.

b . Comparison of wages, hours and conditions of employment of the involved public employees with those of other public employees doing comparable work, giving consideration to factors peculiar to the area and the classifications involved.

c . The interests and welfare of the public, the ability of the public employer to finance economic adjustments and the effect of such adjustments on the normal standard of services.

d . The power of the public employer to levy taxes and appropriate funds for the conduct of its operations.

Id. § 20.22(7). After considering the proposals and the relevant factors, the arbitrator "select[ed] ... the most reasonable offer, in the arbitrator's judgment, of the final offers on each impasse item submitted by the parties." Id. § 20.22(9).

PERA imposed harsh penalties for engaging in strikes. Id. §§ 20.10(3)(h ), .12. PERA authorized courts to issue injunctions to restrain any actual or imminently threatened strike. Id. § 20.12(3). Anyone who failed to comply with an injunction faced contempt sanctions and punishment including up to six months in jail, fines, and automatic discharge from employment for an employee, or immediate decertification as a union. Id. § 20.12(3)-(6). See generally Iowa Code ch. 665 (contempt). There have been no strikes by public employees in Iowa since PERA's enactment in 1974. The University of Iowa Labor Center, "To Promote Harmonious and Cooperative *28Relationships": A Brief History of Public Sector Collective Bargaining in Iowa, 1966 to 2016 , 7 (2016), https://www.iowaaflcio.org/system/files/history_of_ia_public_sector_bargaining.pdf.

In February 2017, the Iowa legislature enacted House File 291, amending PERA. 2017 Iowa Acts ch. 2 (codified in part at Iowa Code ch. 20 (2018)). On February 17, the Governor signed House File 291 into law. The amendments altered the scope of mandatory collective bargaining and arbitration and eliminated payroll deductions for all union dues. See generally Iowa Code ch. 20.

Collective bargaining laws for public employees vary by state, with some states allowing collective bargaining rights for police and firefighters not shared by other public employees.4 House File 291 gave public employees different bargaining rights depending on whether they are part of a bargaining unit with at least thirty percent "public safety employees." Public safety employees are defined to include

a . A sheriff's regular deputy.

b . A marshal or police officer of a city, township, or special-purpose district or authority who is a member of a paid police department.

c . A member, except a non-peace officer member, of the division of state patrol, narcotics enforcement, state fire marshal, or criminal investigation, including but not limited to a gaming enforcement officer, who has been duly appointed by the department of public safety in accordance with section 80.15.

d . A conservation officer or park ranger as authorized by section 456A.13.

e . A permanent or full-time fire fighter of a city, township, or special-purpose district or authority who is a member of a paid fire department.

f . A peace officer designated by the department of transportation under section 321.477 who is subject to mandated law enforcement training.

Iowa Code § 20.3(11). Not included in the statutory definition of public safety employees are university police, probation or parole officers, fraud bureau investigation officers, airport firefighters, corrections officers, and emergency medical service providers.

If a union represents a bargaining unit with at least thirty percent public safety employees, it may exercise broad bargaining rights on behalf of all of its members, including those who are not public safety employees. Id. § 20.9(1). The union continues to have the right to bargain and, in the event of an impasse, the right to mediate and arbitrate with public employers on the following mandatory topics:

wages, hours, vacations, insurance, holidays, leaves of absence, shift differentials, overtime compensation, supplemental pay, seniority, transfer procedures, job classifications, health and *29safety matters, evaluation procedures, procedures for staff reduction, in-service training, grievance procedures for resolving any questions arising under the agreement, and other matters mutually agreed upon.

Id.

In sharp contrast, for unions representing a bargaining unit with less than thirty percent public safety employees, House File 291 limited mandatory bargaining and, in the event of an impasse, mediation and arbitration, to the subject of "base wages and other matters mutually agreed upon." Id.5 The amendment specifies that these subjects "shall be interpreted narrowly and restrictively." Id. The amendments allow public employers to voluntarily bargain over formerly mandatory topics. Longevity pay, shift differentials, and overtime compensation are still permissive subjects of bargaining. See Iowa Code § 20.9(1), (3). This leaves it up to the state or local government or school board whether to negotiate on these matters. See Waterloo Educ. Ass'n , 740 N.W.2d at 421. Public employees, like all citizens in our state, have the ability to affect those decisions. A unit of state government, a municipality, or a school board that wishes to negotiate on these matters with the employee organization is free to do so. But the union may not bargain over "insurance, leaves of absence for political activities, supplemental pay, transfer procedures, evaluation procedures, procedures for staff reduction, and subcontracting public services." Iowa Code § 20.9(3).

During arbitration with a bargaining unit consisting of at least thirty percent public safety employees, the arbitrator considers most of the same factors as before the 2017 amendments. Compare id. § 20.22(7) (2018), with id. § 20.22(7) (2017). The only change House File 291 made is that the arbitrator may no longer consider "[t]he power of the public employer to levy taxes and appropriate funds for the conduct of its operations." Id. § 20.22(7)(d ) (2017).

For all other public employee units, the arbitrator, in reaching a final decision, must consider

(1) Comparison of base wages, hours, and conditions of employment of the involved public employees with those of other public employees doing comparable work, giving consideration to factors peculiar to the area and the classifications involved. To the extent adequate, applicable data is available, the arbitrator shall also compare base wages, hours, and conditions of employment of the involved public employees with those of private sector employees doing comparable work, giving consideration to factors peculiar to the area and the classifications involved.

(2) The interests and welfare of the public.

(3) The financial ability of the employer to meet the cost of an offer in light of the current economic conditions of the public employer. The arbitrator shall give substantial weight to evidence that the public employer's authority to utilize funds is restricted to special purposes or circumstances by state or federal law, rules, regulations, or grant requirements.

*30Iowa Code § 20.22(8)(a ) (2018). The arbitrator shall not consider,

(1) Past collective bargaining agreements between the parties or bargaining that led to such agreements.

(2) The public employer's ability to fund an award through the increase or imposition of new taxes, fees, or charges, or to develop other sources of revenues.

Id. § 20.22(8)(b ).

Regardless of the makeup of the bargaining unit, the arbitrator must still determine the most reasonable offer. Id. § 20.22(10)(a ). However, if the bargaining unit is made up of less than thirty percent public safety employees and there is an impasse on base wages, the arbitrator is prohibited from selecting an offer, even if it is reasonable, that provides for an increase in base wages that would exceed in any year the increase in a specified consumer price index or three percent, whichever is less. Id. § 20.22(10)(b )(1).

House File 291 also eliminated the right of all public employees, including public safety employees, to bargain over union dues checkoffs and to pay union dues through payroll deductions. Id. § 20.9(3) ; id. § 70A.19. Public employees may still make other payments through payroll deductions, such as insurance premiums, charitable contributions, and dues in professional associations. Id. §§ 70A.15A, .17, .17A.

The plaintiffs in this case are a public employee union and four of its members. Iowa Council 61 of the American Federation of State, County and Municipal Employees (AFSCME) represents public employees throughout Iowa. The individual plaintiffs, Johnathan Good, a corrections officer; Ryan De Vries, a police officer; Terra Kinney, a motor vehicle enforcement officer; and Susan Baker, a drafter, are public employees and members of AFSCME. All of AFSCME's bargaining units in Iowa are comprised of less than thirty percent public safety employees. House File 291 restricted collective bargaining rights for every AFSCME bargaining unit, including those with public safety employees.

In February 2017, the plaintiffs filed this civil action for declaratory and injunctive relief. The defendants, the State of Iowa and PERB, answered, and the parties filed cross-motions for summary judgment. The plaintiffs' motion for summary judgment argued House File 291 violates article I, section 6, the equal protection clause of the Iowa Constitution because it unconstitutionally deprives some public employees of rights guaranteed to other, similarly situated public employees. The plaintiffs also argued that House File 291 deprives all AFSCME-represented state public safety employees of the right to meaningful collective bargaining, violating their fundamental right to freedom of association, and the court should therefore evaluate the law under a strict scrutiny standard.

The district court denied the plaintiffs' motion for summary judgment and granted the defendants' motion for summary judgment. The court rejected the plaintiffs' freedom of association argument. With regard to the equal protection challenge, the court applied the rational basis test and ruled that House File 291 is constitutional. The court concluded that while the amendments distinguish between similarly situated people, the State's desire to avoid public safety employee strikes was a realistically conceivable purpose and was based in fact, and the relationship between the classification and the purpose was not so weak as to be viewed as arbitrary.

The plaintiffs appealed, and we retained their appeal.

II. Scope of Review.

"We review summary judgment rulings for correction of errors at law."

*31Baker v. City of Iowa City , 867 N.W.2d 44, 51 (Iowa 2015). "We view the entire record in the light most favorable to the nonmoving party, making every legitimate inference that the evidence in the record will support in favor of the nonmoving party." Bass v. J.C. Penney Co. , 880 N.W.2d 751, 755 (Iowa 2016).

We review constitutional claims de novo. State v. Groves , 742 N.W.2d 90, 92 (Iowa 2007). Our standard of review with regard to constitutional challenges to statutes is well established.

We review constitutional challenges to a statute de novo. In doing so, we must remember that statutes are cloaked with a presumption of constitutionality. The challenger bears a heavy burden, because it must prove the unconstitutionality beyond a reasonable doubt. Moreover, "the challenger must refute every reasonable basis upon which the statute could be found to be constitutional." Furthermore, if the statute is capable of being construed in more than one manner, one of which is constitutional, we must adopt that construction.

State v. Seering , 701 N.W.2d 655, 661 (Iowa 2005) (quoting State v. Hernandez-Lopez , 639 N.W.2d 226, 233 (Iowa 2002) ), superseded by statute on other grounds , 2009 Iowa Acts ch. 119, § 3 (codified at Iowa Code § 692A.103 (Supp. 2009)), as recognized in In re T.H. , 913 N.W.2d 578, 587-88 (Iowa 2018).

III. Analysis.

The plaintiffs argue that House File 291 amendments to Iowa Code chapter 20 fail rational basis scrutiny under article I, section 6 of the equal protection clause of the Iowa Constitution. Additionally, the plaintiffs argue that the amendments violate their right to freedom of association. We address each challenge in turn.

A. Iowa's Equal Protection Analysis. The plaintiffs argue that the amendments to Iowa Code chapter 20 violate their right to equal protection under the Iowa Constitution because the defendants' asserted rationale is unsupported by the legislative facts and further because House File 291's extreme degrees of overinclusiveness and underinclusiveness render the amendments arbitrary. We conclude the plaintiffs' equal protection challenge fails because the plaintiffs cannot meet their burden of refuting every reasonable basis upon which the classification could be sustained.

Article I, section 6 of the Iowa Constitution is referred to as the equal protection clause and provides, "All laws of a general nature shall have a uniform operation; the general assembly shall not grant to any citizen, or class of citizens, privileges or immunities, which, upon the same terms shall not equally belong to all citizens." Iowa Const. art. I, § 6.

Iowa's equal protection clause "is essentially a direction that all persons similarly situated should be treated alike." Varnum v. Brien , 763 N.W.2d 862, 878-79 (Iowa 2009) (quoting Racing Ass'n of Cent. Iowa v. Fitzgerald (RACI ), 675 N.W.2d 1, 7 (Iowa 2004) ). In Varnum , we noted,

Even in the zealous protection of the constitution's mandate of equal protection, courts must give respect to the legislative process and presume its enactments are constitutional. We understand that Iowa's tripartite system of government requires the legislature to make difficult policy choices, including distributing benefits and burdens amongst the citizens of Iowa. In this process, some classifications and barriers are inevitable. As a result, courts pay deference to legislative decisions when called upon to determine whether the Iowa Constitution's mandate of *32equality has been violated by legislative action. More specifically, when evaluating challenges based on the equal protection clause, our deference to legislative policy-making is primarily manifested in the level of scrutiny we apply to review legislative action.

Id. at 879.

To prove an equal protection violation, the plaintiffs must first establish that the statute treats similarly situated individuals differently. McQuistion v. City of Clinton , 872 N.W.2d 817, 830 (Iowa 2015). Generally, however, determining whether classifications involve similarly situated individuals is intertwined with whether the identified classification has any rational basis. State v. Dudley , 766 N.W.2d 606, 616 (Iowa 2009).

Here, House File 291 distinguishes first between public safety employees and all other public employees, and second between bargaining units comprised of at least thirty percent public safety employees and all other bargaining units. The parties agree that rational basis review applies to the plaintiffs' equal protection challenge.

"The rational basis test is a 'very deferential standard.' " NextEra Energy Res. LLC v. Iowa Utils. Bd. , 815 N.W.2d 30, 46 (Iowa 2012) (quoting Varnum , 763 N.W.2d at 879 ). Plaintiffs bear "the heavy burden of showing the statute unconstitutional and must negate every reasonable basis upon which the classification may be sustained." Id. (quoting Bierkamp v. Rogers , 293 N.W.2d 577, 579-80 (Iowa 1980) ).

As we noted in Varnum ,

The rational basis test defers to the legislature's prerogative to make policy decisions by requiring only a plausible policy justification, mere rationality of the facts underlying the decision and, again, a merely rational relationship between the classification and the policy justification.

763 N.W.2d at 879.

"We will not declare something unconstitutional under the rational-basis test unless it 'clearly, palpably, and without doubt infringe[s] upon the constitution.' " Residential & Agric. Advisory Comm., LLC v. Dyersville City Council , 888 N.W.2d 24, 50 (Iowa 2016) (alteration in original) (quoting RACI , 675 N.W.2d at 8 ). Nevertheless, the rational basis standard, while deferential, " 'is not a toothless one' in Iowa." Varnum , 763 N.W.2d at 879 (quoting RACI , 675 N.W.2d at 9 ). "[T]his court engages in a meaningful review of all legislation challenged on equal protection grounds by applying the rational basis test to the facts of each case." Id.

We use a three-part analysis when reviewing challenges to a statute under article I, section 6. "First, we must determine whether there was a valid, 'realistically conceivable' purpose that served a legitimate government interest." Residential & Agric. Advisory Comm., LLC , 888 N.W.2d at 50 (quoting McQuistion , 872 N.W.2d at 831 ). "To be realistically conceivable, the [statute] cannot be 'so overinclusive and underinclusive as to be irrational.' " Id. (quoting Horsfield Materials, Inc. v. City of Dyersville , 834 N.W.2d 444, 459 (Iowa 2013) ). "Next, the court must evaluate whether the 'reason has a basis in fact.' " McQuistion , 872 N.W.2d at 831 (quoting RACI , 675 N.W.2d at 7-8 ). "[A]lthough 'actual proof of an asserted justification [i]s not necessary, ... the court w[ill] not simply accept it at face value and w[ill] examine it to determine whether it [i]s credible as opposed to specious." LSCP, LLLP v. Kay-Decker , 861 N.W.2d 846, 860 (Iowa 2015) (alteration in original) (quoting *33Qwest Corp. v. Iowa State Bd. of Tax Review , 829 N.W.2d 550, 560 (Iowa 2013) ); see also King v. State , 818 N.W.2d 1, 30 (Iowa 2012) ("[W]e have continued to uphold legislative classifications based on judgments the legislature could have made, without requiring evidence or 'proof' in either a traditional or a nontraditional sense." (Emphasis added.)).

"Legislative facts are relevant in deciding these constitutional issues because courts must normally analyze 'whether there exist circumstances which constitutionally either legitimate the exercise of legislative power or substantiate the rationality of the legislative product.' " Varnum , 763 N.W.2d at 881 (quoting 2 John W. Strong, McCormick on Evidence § 328, at 370 (5th ed. 1999) ). Legislative facts "may be presented either formally or informally" and consist of "social, economic, political, or scientific facts." Id. (first quoting Welsh v. Branstad , 470 N.W.2d 644, 648 (Iowa 1991) ).

The plaintiffs ask that if we find House File 291 to be constitutional, we reevaluate our rational basis standard. The plaintiffs argue that courts should not be able to rely on unstated rationales in upholding a statute. We disagree. As the foregoing authorities make clear, we are not limited to considering only the facts stated on the record during a legislative debate.

Finally, "we evaluate whether the relationship between the classification and the purpose for the classification 'is so weak that the classification must be viewed as arbitrary.' " Residential & Agric. Advisory Comm., LLC , 888 N.W.2d at 50 (quoting McQuistion , 872 N.W.2d at 831 ).

As we recently reiterated in unanimously rejecting a federal equal protection challenge, courts have only a limited role in rational basis review,

We many times have said, and but weeks ago repeated, that rational-basis review in equal protection analysis "is not a license for courts to judge the wisdom, fairness, or logic of legislative choices." Nor does it authorize "the judiciary [to] sit as a superlegislature to judge the wisdom or desirability of legislative policy determinations made in areas that neither affect fundamental rights nor proceed along suspect lines." For these reasons, a classification neither involving fundamental rights nor proceeding along suspect lines is accorded a strong presumption of validity. Such a classification cannot run afoul of the Equal Protection Clause if there is a rational relationship between the disparity of treatment and some legitimate governmental purpose. Further, a legislature that creates these categories need not "actually articulate at any time the purpose or rationale supporting its classification." Instead, a classification "must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification."

Baker , 867 N.W.2d at 57 (alteration in original) (quoting Heller v. Doe ex rel. Doe , 509 U.S. 312, 319-21, 113 S. Ct. 2637, 2642, 125 L.Ed.2d 257 (1993) ).

Our role is similarly limited under the Iowa Constitution. See Qwest Corp. , 829 N.W.2d at 560 ("[In RACI ,] we made clear that actual proof of an asserted justification was not necessary, but the court would not simply accept it at face value and would examine it to determine whether it was credible as opposed to specious."); King , 818 N.W.2d at 30 (" RACI has not been the death knell for traditional rational basis review. Since RACI was decided, we have continued to uphold legislative classifications based on judgments the legislature could have made, without requiring *34evidence or 'proof' in either a traditional or nontraditional sense.").

The district court found that the valid, realistically conceivable purpose for House File 291 was a concern for labor peace, especially among public safety employees. The State also asserts that another purpose was the unique health and safety concerns public safety employees face. We consider each justification.

1. Labor peace rationale. The plaintiffs argue that House File 291's legislative history belies the labor peace justification because no one mentioned this justification during the recorded legislative debates as a reason for amending PERA. The plaintiffs also argue that House File 291's definition of public safety employees includes employees who would not be crucial to maintaining labor peace, such as park rangers, DOT motor vehicle enforcement officers, fire marshals, and gaming enforcement officers, while excluding employees who may be necessary to maintain peace during a strike, including university police officers and other emergency medical service providers. The plaintiffs note that police officers already routinely enforce laws against union members, neighbors, friends, and even other police officers. Finally, the plaintiffs argue that the labor peace rationale is belied by the fact that there has not been a strike since PERA was enacted in 1974.

The plaintiffs also argue that even if a labor peace rationale could support House File 291, the law is so overinclusive and underinclusive "it cannot [reasonably] be said to ... further that goal." LSCP, LLLP , 861 N.W.2d at 861 (alterations in original) (quoting Bierkamp , 293 N.W.2d at 584 ). The plaintiffs contend that the thirty percent threshold ignores the bargaining unit's size, and some cities could have entire police forces that do not have expanded bargaining rights. These public safety employees would not have the same incentive to avoid strikes. The plaintiffs give examples of the effect House File 291 has on public safety employees. For example, plaintiffs identify a number of populous counties including Tama (population 17,337), Fayette (population 20,257), Delaware (population 17,403), Dubuque (population 97,125), Harrison (population 14,265), and Black Hawk (population 133,455) in which sheriff's deputies are unable to exercise the broad collective bargaining rights guaranteed to public safety employees in House File 291 because they are in bargaining units made up of less than thirty percent public safety employees. Yet deputies from comparably populated counties such as Floyd (population 15,960), Woodbury (population 102,782), Cedar (population 18,340), Webster (population 37,071), and Washington (population 22,247) are able to exercise broad collective bargaining rights under House File 291. Plaintiffs argue this extreme arbitrariness is not justified by any of the purported rationales of House File 291.

The defendants argue that the thirty percent threshold is rational because the risk from labor unrest is materially greater in a unit with a larger percentage of public safety employees. The defendants argue this thirty percent threshold had another rationale, protecting the public fisc. The thirty percent threshold also provides greater assurance that in the event of labor unrest there would be a critical mass of public safety employees available to enforce the law and preserve public safety.

The defendants rely on Wisconsin Education Ass'n Council v. Walker , in which the United States Court of Appeals for the Seventh Circuit rejected a public employee challenge to recent amendments to the Wisconsin public collective bargaining statute.