Wisconsin Education Ass'n Council v. Walker

In 2011, the Wisconsin Legislature passed Act 10, a budget repair bill proposed by recently elected Governor Scott Walker. Act 10 significantly altered the state’s public employee labor laws, creating two distinct classes of public employees—a select group of “public safety employees” with the remainder classified as “general employees.” Among other things, the Act prohibited general employees from collectively bargaining on issues other than “base wages,” imposed rigorous recertification requirements on them, and prohibited their employers from deducting union dues from paychecks. The Act did not, however, subject public safety employees or their unions to the same requirements; they kept the same rights they had under the pre-Act 10 scheme. The proposal and subsequent enactment of Act 10 was controversial and received nationwide publicity. See Wis. Right to Life State Political Action Comm. v. Barland, 664 F.3d 139, 144-45 (7th Cir.2011).

Plaintiffs and cross-appellants, representing seven of Wisconsin’s largest public sector unions (the “Unions”), filed suit against defendants-appellants Governor Scott Walker and other state actors, challenging three provisions of the statute— the limitations on collective bargaining, the recertification requirements, and a prohibition on payroll deduction of dues—under the Equal Protection Clause. They also challenged the payroll deduction provision under the First Amendment. The district court invalidated Act 10’s recertification and payroll deduction provisions, but upheld the statute’s limitation on collective bargaining. We now uphold Act 10 in its entirety.

I. Background

A. Factual Background

Wisconsin grants public sector employees the right to bargain collectively through two principal labor laws—the Municipal Employment Relations Act (“MERA”) and the State Employee Labor Relations Act (“SELRA”)—that define the rights of employees and unions as well as their relationship with governmental employers. Act 10 amended these statutes, imposing new burdens on a group labeled “general employees.” 2011-2012 Wis. Legis. Serv. 29 (West). Unions representing “public safety employees,” however, continued operating under the pre-Act 10 scheme. Proposal and enactment of Act 10 triggered widespread protest from Wisconsin’s public sector labor unions, including the Unions’ challenge to the constitutionality of certain provisions of Act 10.

1. Act 10 Creates Two Categories of Public Employees

All of the Unions’ constitutional claims arise from the legislature’s decision to subject general employees but not public safety employees to Act 10’s restrictions on union activity. All employees governed by MERA and SELRA are “general employees” unless specifically identified as “public safety employees” in Act 10. In creating this distinct group, the Act cross-references seven of the twenty-two occupations *643listed in a separate statute, which governs the Wisconsin Public Employee Trust Fund. See Wis. Stat. § 40.02(48)(am). Under SELRA, Act 10 identifies state troopers and state motor vehicle inspectors as public safety employees. Wis. Stat. § 111.81(15r). Act 10 did not, however, identify the Capitol Police and the University of Wisconsin Police as public safety employees, even though both occupations qualified as such under the trust fund statute. Compare Wis. Stat. § 40.02(48)(am), ivith Wis. Stat. § 111.81(15r). Act 10’s list of public safety employees under MERA is somewhat longer, including (1) police officers, (2) fire fighters, (3) deputy sheriffs, (4) county traffic police officers, and (5) village employees that perform fire or police protection. Wis. Stat. § 111.70(l)(mm).

Notably relevant to the arguments in this appeal, when Governor Walker ran for election in 2010, only five public employee organizations endorsed his candidacy during the campaign: (1) the Wisconsin Troopers Association, which represents state troopers and motor vehicle inspectors; (2) the Milwaukee Police Association; (3) the Milwaukee Professional Fire Fighters Association; (4) the West Allis Professional Police Association; and (5) the Wisconsin Sheriffs and Deputy Sheriffs Association Political Action Committee. Each of these organizations represents employees categorized as public safety employees under Act 10. The public safety employee definition, however, also includes employee organizations that opposed or failed to endorse the governor. For instance, all state, municipal, and village police officers and firefighters qualify as public safety employees even though only those in Milwaukee and police officers in West Allis endorsed Walker. In addition, the Professional Firefighters of Wisconsin1 and the Wisconsin Professional Police Association endorsed Walker’s opponent. And the head of the Madison firefighters’ union called for a general strike in response to Act 10, despite its employees’ public safety classification.

2. Unions Challenge Three Parts of Act 10

The Unions challenge three different parts of Act 10: (1) limitations on the permissible collective bargaining subjects of general employees; (2) stricter recertification requirements for general employee unions; and (3) a prohibition on the payroll deduction of union dues for general employees.

First, prior to Act 10, MERA and SELRA permitted public employees to collectively bargain over a broad array of subjects including their wages and conditions of employment. Moreover, these unions could negotiate “fair-share” agreements, which require employees opting out of union membership to pay “their proportionate share of the cost of the collective bargaining process and contract administration.” See Wis. Stat. § 111.81(9). Act 10, however, limits general employee unions to the single topic of the “total base wages and excludes any other compensation.” Wis. Stat. §§ 111.70(l)(a), (4)(mb), 111.81(1), 111.91(3). It also forbids fair-share agreements. Wis. Stat. §§ 111.70(2), 111.845.

Next, MERA and SELRA formerly permitted municipal or state employees to petition the Wisconsin Employment Relations Commission to hold an election to select a particular union as the employees’ exclusive bargaining agent. Certification *644required a simple majority. Once certified, the union remained the employees’ exclusive agent until thirty percent of the employees petitioned for a decertification election. That election required a simple majority to certify a union as the exclusive collective bargaining representative. Act 10, on the other hand, requires general employee unions to submit to an annual “recertification” election in which an absolute majority—“at least 51 percent of the votes of all of the general ... employees in the collective bargaining unit” (not just those voting)—must approve the union to retain its status as the employees’ agent. Wis. Stat. § 111.70(4)(d)3.b., 111.83(3)(b).

Third, under a separate statute, Wisconsin permitted state employees to allow their employer to deduct a portion of their salaries for “[pjayment of dues to employe[e] organizations,” including unions. Municipalities could do likewise, provided that they extended the opportunity to all employee organizations with members in the particular unit. See Milwaukee Fed’n of Teachers Local 252 v. Wis. Emp. Relations Comm’n, 83 Wis.2d 588, 266 N.W.2d 314 (1978). Act 10 prohibits all payroll deductions for general employees. Wis. Stat. § 20.921(l)(a)2.

B. Procedural Background

The Unions filed suit in federal district court alleging that all three provisions violated the Equal Protection Clause because of the Act’s differential treatment of public safety and general employees. They also claimed that the prohibition on payroll deductions for general employees violated the First Amendment on several grounds, including that the payroll deduction prohibition targeted employees who had not endorsed or otherwise politically supported Governor Walker when he ran for office in 2010.

1. General Employees Move to Intervene

Several municipal employees (the “Employees”) moved to intervene in defense of Act 10. See Fed.R.Civ.P. 24(a). They were not members of the union, but pre-Act 10 law required them to pay union expenses under a fair-share agreement. After Act 10, the Employees were classified as general employees and thus no longer responsible for these dues.

2. Motion for Summary Judgment

The state moved for judgment on the pleadings, Fed.R.Civ.P. 12(c), and the Unions cross-moved for summary judgment on all claims, Fed.R.Civ.P. 56. Because the facts in the case are undisputed, the district court considered the motions together. The court also considered the Employees’ motion to intervene.

The district court applied rational basis review to the equal protection claims and upheld the limitation on general employee collective bargaining. Wis. Educ. Ass’n Council v. Walker, 824 F.Supp.2d 856 (W.D.Wis.2012). It found a rational basis in the state’s belief that applying Act 10 to public safety employees might result in a retaliatory strike that jeopardized the public welfare. A similar strike by the general employees, the state believed, would be less damaging. Id. at 866-68. However, the district court found no rational basis for treating the two groups differently with respect to the recertification and payroll deduction provisions. Id. at 868-70. It further concluded that the payroll deduction provision violated the First Amendment because the court determined that the differing political viewpoints of, and endorsements by, employees in the two classifications were the only possible justifications for Act 10’s prohibition on payroll deductions for general employees. Id. at 870-76. Consequently, the district *645court invalidated these portions of Act 10 and enjoined the state from enforcing the recertification and payroll deduction provisions. Defendants now appeal the recerti-fication and payroll deduction judgment, while the Unions cross-appeal the adverse collective bargaining ruling.

The district court also denied the Employees’ motion to intervene, concluding that their unique interest in the litigation was only “tangential” and that the state could adequately represent their interests. Id. at 860-61. Employees now appeal the denial of this motion to intervene.

II. Discussion

We review a district court’s ruling on summary judgment de novo, making all inferences of fact in favor of the non-moving party. Bennett v. Roberts, 295 F.3d 687, 694 (7th Cir.2002). We apply the same standard of review to a district court’s ruling on a motion for judgment on the pleadings. ProLink Holdings Corp. v. Fed. Ins. Co., 688 F.3d 828, 830 (7th Cir. 2012).

A. Act 10 Does Not Violate the First Amendment

Act 10’s payroll deduction prohibitions do not violate the First Amendment. The Unions offer several different First Amendment theories to rebut the compelling deference of rational basis review required under applicable law. Ultimately, none apply because the Supreme Court has settled the question: use of the state’s payroll systems to collect union dues is a state subsidy of speech that requires only viewpoint neutrality. See Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353, 358-59, 129 S.Ct. 1093, 172 L.Ed.2d 770 (2009); see also Regan v. Taxation with Representation, 461 U.S. 540, 548, 103 S.Ct. 1997, 76 L.Ed.2d 129 (1983). Admittedly, the Unions do offer some evidence of viewpoint discrimination in the words of then-Senate Majority Leader Scott Fitzgerald suggesting Act 10, by limiting unions’ fundraising capacity, would make it more difficult for President Obama to carry Wisconsin in the 2012 presidential election. While Senator Fitzgerald’s statement may not reflect the highest of intentions, his sentiments do not invalidate an otherwise constitutional, viewpoint neutral law. Consequently, Act 10’s prohibition on payroll dues deduction does not violate the First Amendment.

1. Use of the State’s Payroll System to Collect Union Dues Subsidizes— Rather than Burdens—Speech

The Bill of Rights enshrines negative liberties. It directs what government may not do to its citizens, rather than what it must do for them. See Smith v. City of Chi., 457 F.3d 643, 655-56 (7th Cir.2006). While the First Amendment prohibits “placing] obstacles in the path” of speech, Regan, 461 U.S. at 549, 103 S.Ct. 1997 (citation omitted), nothing requires government to “assist others in funding the expression of particular ideas, including political ones,” Ysursa, 555 U.S. at 358, 129 S.Ct. 1093; see also Harris v. McRae, 448 U.S. 297, 318, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980) (noting that Constitution “does not confer an entitlement to such funds as may be necessary to realize all the advantages of’ a constitutional right). Thus, even though “publicly administered payroll deductions for political purposes can enhance the unions’ exercise of First Amendment rights, [states are] under no obligation to aid the unions in their political activities.” Ysursa, 555 U.S. at 359, 129 S.Ct. 1093.

In Ysursa, the Supreme Court squarely held that the use of a state payroll system to collect union dues from public sector employees is a state subsidy of speech. Id. As the Court explained, “the State’s decision not to [allow payroll deduction of union dues] is not an abridgment of the *646unions’ speech; they are free to engage in such speech as they see fit.” Id. Other circuits have reached the same conclusion. See Utah Educ. Ass’n v. Shurtleff, 565 F.3d 1226, 1229-31 (10th Cir.2009); Toledo Area AFL-CIO Council v. Pizza, 154 F.3d 307, 319-21 (6th Cir.1998); S. Car. Educ. Ass’n v. Campbell, 883 F.2d 1251, 1256-57 (4th Cir.1989); Brown v. Alexander, 718 F.2d 1417, 1422-23 (6th Cir.1983); Ark. State Highioay Emps. Local 1315 v. Kell, 628 F.2d 1099, 1102 (8th Cir.1980). Like the statutes in these cases, Act 10 places no limitations on the speech of general employee unions, which may continue speaking on any topic or subject. Thus, Ysursa controls, and we analyze Act 10 under the Supreme Court’s speech subsidy cases.

The Unions try to distinguish Ysursa by noting that the prohibition in Ysursa applied across-the-board to unions representing all public employees, unlike Act 10’s prohibition targeting only general employees. Thus, the Unions argue, unlike the subsidy in Ysursa, Act 10 actively imposes burdens on the speech of unions representing general employees. Indeed, two recent district court cases have relied on precisely this argument to distinguish Ysursa in finding First Amendment problems with payroll deduction statutes similar to Act 10. See Bailey v. Callaghan, 873 F.Supp.2d 879, 885-86 (E.D.Mich.2012); United Food & Commercial Workers Local 99 v. Brewer, 817 F.Supp.2d 1118, 1125 (D.Ariz.2011).

But the Unions’ reasoning falters for two reasons: Act 10 erects no barrier to speech, and speaker-based discrimination is permissible when the state subsidizes speech. First, the prohibition on payroll deductions for general employees does not erect a barrier to the Unions’ speech. As the district court here recognized, Act 10 diminishes speech only because it diminishes “the union’s ability to fund its speech.” Walker, 824 F.Supp.2d at 871. Thus, the “obstacle” to speech here is the cost of speaking, an obstacle the state itself has not created. And while the state may not erect “obstacles in the path of [the unions’] exercise of ... freedom of speech, it need not remove those [obstacles] not of its own creation.” Regan, 461 U.S. at 549-50, 103 S.Ct. 1997 (quoting Harris, 448 U.S. at 316, 100 S.Ct. 2671) (original brackets omitted); see also Campbell, 883 F.2d at 1257 (“The state’s failure to authorize payroll deductions for the [union] does not deny [union] members the right to associate, to speak, to publish, to recruit members, or to otherwise express and disseminate their views.”); Brown, 718 F.2d at 1423 (same). Importantly, Act 10 does not present a situation where the state itself actively erected an obstacle to speech.2 Thus, nothing supports treating the selective prohibition of payroll deductions as a burden on or obstacle to the speech of general employee unions. Instead, Act 10 simply subsidizes the speech of one group, while refraining from doing so for another.

Second, such speaker-based distinctions are permissible when the state subsidizes speech. Nothing in the Constitutior requires the government to subsidize all speech equally. A government subsidy "that discriminates among speakers does not implicate the First Amendment unless it discriminates on the basis of ideas.' Leathers v. Medlock, 499 U.S. 439, 450, 111

*647S.Ct. 1438, 113 L.Ed.2d 494 (1991); see also Nat’l Endowment for the Arts v. Finley, 524 U.S. 569, 587-88, 118 S.Ct. 2168, 141 L.Ed.2d 500 (1998) (noting legislatures “may allocate competitive funding according to criteria that would be impermissible were direct regulation of speech ... at stake” and that such funding is not “discrimination] on the basis of viewpoint [but] ... merely ... funding] one activity to the exclusion of the other” (citation omitted)). As Regan explained, legislative “selection of particular entities or persons for entitlement to this sort of largesse is obviously a matter of policy and discretion not [ordinarily] open to judicial review[.]” 461 U.S. at 549, 103 S.Ct. 1997 (internal quotations omitted). Indeed, the speech subsidy upheld in Regan discriminated on the basis of speaker—veterans’ groups who engaged in lobbying could claim section 501(c)(3) status but other lobbying groups could not. Id. at 548-49, 103 S.Ct. 1997; see also Campbell, 883 F.2d at 1255-56 (no First Amendment implications to statute that discriminated on the basis of speaker in authorizing payroll deduction for some public employee organizations but not others). Thus, that the state gave one category of public employees the benefit of payroll dues deduction does not run afoul of the First Amendment.

Unable to distinguish Act 10 from Ysur-sa and the Court’s other speech subsidy cases, the Unions also liken the state’s payroll deduction system to a nonpublic forum.3 See, e.g., Rosenberger v. Rector & Visitors of the Univ. of Va., 515 U.S. 819, 830, 834, 115 S.Ct. 2510, 132 L.Ed.2d 700 (1995) (applying nonpublic forum analysis to a student activities fund used to reimburse the expressive activity of student organizations, noting that the fund was a “forum more in a metaphysical than a spatial or geographic sense”). But applying Rosenberger to this case would require us to ignore Ysursa, where the Supreme Court settled this question: it evaluated state-imposed restrictions on a union’s use of state payroll systems under subsidy cases like Regan, rather than under Ro-senberger ’s nonpublic forum framework. 555 U.S. at 359, 129 S.Ct. 1093 (citing Regan, 461 U.S. at 549, 103 S.Ct. 1997); but see also Legal Servs. Corp. v. Velazquez, 531 U.S. 533, 544, 121 S.Ct. 1043, 149 L.Ed.2d 63 (2001) (noting in a subsidy case that certain “limited forum cases ... may not be controlling in a strict sense, yet they do provide some instruction”).4 In fact, the Unions cite no case applying nonpublic forum analysis to a state payroll system, and this Court is not aware of any. Other circuits likewise have consistently evaluated state payroll deductions as speech subsidies. See Shurtleff, 565 F.3d at 1229-31; Pizza, 154 F.3d at 319-21; Campbell, 883 F.2d at 1256-57; Brown, *648718 F.2d at 1422-23; Kell, 628 F.2d at 1102.

Thus, Ysursa requires us to analyze Act 10 under First Amendment cases involving speech subsidies. Under those cases, Act 10 presents no free speech problem unless it invidiously discriminates on the basis of viewpoint.

2. Act 10 Does Not Invidiously Discriminate on the Basis of Viewpoint

While the First Amendment does not require government to subsidize all speech equally, it does proscribe subsidies that discriminate on the basis of viewpoint. Regan, 461 U.S. at 548, 103 S.Ct. 1997; see also Ysursa, 555 U.S. at 359, 129 S.Ct. 1093; Rosenberger, 515 U.S. at 834, 115 S.Ct. 2510. Act 10, however, is viewpoint neutral because it is neither facially discriminatory nor a neutral fagade for viewpoint discrimination.

a. Act 10 Is, on Its Face, Viewpoint Neutral

On its face, Act 10 is neutral—it does not tie public employees’ use of the state’s payroll system to speech on any particular viewpoint. See Velazquez, 531 U.S. at 546-48, 121 S.Ct. 1043 (speech subsidy viewpoint discriminatory when conditioned on recipient advancing particular viewpoint). Nevertheless, the Unions argue that Act 10 facially discriminates on the basis of viewpoint because general employee unions and public safety unions will necessarily espouse different viewpoints. Maybe they do. But this argument merely recycles the Unions’ earlier assertion that speaker-based discrimination in the subsidy context requires heightened scrutiny. It does not. See Regan, 461 U.S. at 549-50, 103 S.Ct. 1997 (citing Harris, 448 U.S. at 316, 100 S.Ct. 2671). The eases cited by the Unions, which invalidated laws discriminating on the basis of speaker, confirm this principle. Each one—unlike Act 10—involved a law that actively created barriers to speech rather than mere subsidies. For example, Citizens United v. FEC involved a law that prohibited speech by forbidding certain speakers from spending money, akin to prohibiting speech altogether. 558 U.S. 310, 130 S.Ct. 876, 896-97, 175 L.Ed.2d 753 (2010). Similarly, the statute in Sorrell v. IMS Health, Inc.—like that in Citizens United—actually prevented pharmaceutical manufactures from engaging in certain types of commercial speech. — U.S. -, 131 S.Ct. 2653, 2663, 180 L.Ed.2d 544 (2012).5 While Sor-rell and Citizens United support the unconstitutionality of speaker-based discrimination in statutes that prohibit or burden speech, Regan controls on government subsidies of speech: speaker-based distinctions are permissible. Regan, 461 U.S. at 548-49, 103 S.Ct. 1997.

The mere fact that, in practice, the two categories of unions may express different viewpoints does not render Act 10 viewpoint discriminatory. The two groups here are no more likely to express different viewpoints (and the government subsidy no more likely to advantage a particular viewpoint) than the speaker-based distinction sanctioned in Regan. In that case, the advantaged group, veterans’ organiza*649tions, undoubtedly held different viewpoints than those excluded from the subsidy; yet, the Court upheld the statute. Id. at 550-51, 103 S.Ct. 1997. Indeed, the Unions’ argument proves too much: if different speakers necessarily espouse different viewpoints, then any selective legislative funding decision would violate the First Amendment as viewpoint discriminatory. Such an interpretation of the First Amendment would leave legislatures with the unpalatable choice of funding all expressive activity or none at all.

Retreating somewhat from the argument that public safety and general employee unions necessarily espouse different viewpoints, the Unions next argue that the public safety/general employee distinction is “likely” to have a viewpoint discriminatory effect. See Southworth v. Bd. of Regents of the Univ. of Wis. Sys., 307 F.3d 566, 593-94 (7th Cir.2002); Chi. Acorn v. Metro. Pier & Exposition Auth., 150 F.3d 695, 699-700 (7th Cir.1998). The courts in both Southworth and Chicago Acorn applied a nonpublic forum analysis to invalidate facially neutral policies that had the effect of viewpoint discrimination. Southworth, 307 F.3d at 593-94; Chi. Acorn, 150 F.3d at 699-700. In both cases, however, this effect inhered in the policy classification itself. The Chicago Acorn regulation, for example, waived rental fees for applicants who might generate favorable publicity. 150 F.3d at 699. This criterion, however, would inherently produce a discriminatory effect: “As applied to political applicants ..., a favorable-publicity criterion is especially likely to have political consequences, since the only political users of the pier who will generate large amounts of favorable publicity are respectable, popular politicians and respected, well-established political groups; pariahs need not apply.” Id. at 699 (emphasis omitted). So too in Southworth, which involved two funding standards for student activities grants. One standard favored student organizations that had previously received funding; the other favored long-established organizations. 307 F.3d at 593. Because political and religious groups had previously been excluded from receiving funding, these two standards inherently disadvanta