DocketNumber: No. 17-1178
Judges: Hamilton, Manion, Rovner
Filed Date: 9/13/2018
Status: Precedential
Modified Date: 10/19/2024
Wisconsin's Act 1 of 2015, codified at
A dues-checkoff authorization is a contract between an employer and employee for payroll deductions. These are "arrangements whereby [employers] would check off from employee wages amounts owed to a labor organization for dues, initiation fees and assessments." Felter v. Southern Pacific Co. ,
The Taft-Hartley Act imposes three limits on dues-checkoff authorizations: the authorization must be (1) individual for each employee, (2) in writing, and (3) irrevocable *493for no longer than one year. See
The district court found that Wisconsin's attempt to impose its own time limit on dues-checkoff authorizations is preempted by federal labor law, and the court issued a permanent injunction barring enforcement of that provision. International Ass'n of Machinists District 10 v. Allen , No. 16-cv-77,
I. Factual and Procedural History
A. Wisconsin Act 1
Before Act 1 was enacted in 2015, Wisconsin law had allowed so-called union security agreements in which unions and employers would agree that employees would be required either to join the union or pay fair-share fees. That changed with Act 1's "right-to-work" provisions, which prohibit employers from requiring their employees to pay dues or fees to a union. See International Union of Operating Engineers Local 139 v. Schimel ,
The section of Act 1 challenged in this lawsuit attempts a less dramatic change in labor law. It requires employers to terminate dues-checkoff authorizations within thirty days of receiving written notice from the employee. 2015 Wis. Act 1, § 9, codified at
(1) It shall be an unfair labor practice for an employer individually or in concert with others: ...
(i) To deduct labor organization dues or assessments from an employee's earnings, unless the employer has been presented with an individual order therefor, signed by the employee personally, and terminable by the employee giving to the employer at least 30 days' written notice of the termination. This paragraph applies to the extent permitted under federal law.
*494B. The Dispute at the John Deere Plant
This case stems from a complaint filed with the Wisconsin Department of Workforce Development, the State agency that enforces Wisconsin's wage laws. Lisa Aplin, an assembler at a John Deere plant in Wisconsin, signed a dues-checkoff authorization in November 2002. Her authorization instructed John Deere to deduct union dues from her paychecks and to remit them to the International Association of Machinists District 10 and Local Lodge 873, the plaintiffs-appellees here, which we refer to as the Machinists or the union. Aplin's authorization said that it was "irrevocable for one (1) year or until the termination of the collective bargaining agreement ... whichever occurs sooner." It also provided that it would be automatically renewed for successive one-year periods unless the collective bargaining agreement terminated or Aplin gave notice during a fifteen-day annual period. The authorization also provided that it was "independent of, and not a quid pro quo for, union membership." This arrangement remained in effect until 2015. As the State explains, dues-checkoff authorizations like this are a convenient way for employees to pay their union dues or fair-share fees.
In the wake of Act 1, John Deere and the Machinists updated their collective bargaining agreement, but they left in place a term making dues-checkoff authorizations irrevocable for one year. In July 2015, Aplin sent a letter to John Deere and the union invoking Act 1 and requesting the termination of her dues-checkoff authorization. The union responded that her request was untimely and could not be granted unless she renewed it during the annual cancellation period that November.
Aplin then filed a complaint with the State agency claiming that John Deere was violating State wage laws by not honoring within thirty days her attempt to revoke the dues-checkoff authorization. She sought a refund of $65.60 in union dues deducted from her pay after the cancellation would have taken effect. In November 2015, the agency sided with Aplin, finding that
C. This Federal Lawsuit
In February 2016, the Machinists filed this action in the Western District of Wisconsin and moved to enjoin the State from enforcing Act 1's dues-checkoff provision. The union contended that the federal Labor-Management Relations Act of 1947, better known as the Taft-Hartley Act, preempted Act 1 on this score. See Pub. L. No. 80-101, § 302(a), (c)(4),
To protect against corruption in the collective bargaining process, the Taft-Hartley Act, as amended, prohibits "any employer or association of employers" from giving "any money or other thing of value" to "any labor organization," § 186(a)(2), unless one of a long list of exceptions applies. § 186(c). The exception relevant here provides:
The [prohibition] provisions of this section shall not be applicable ...
(4) with respect to money deducted from the wages of employees in payment of membership dues in a labor organization: Provided , That the employer has received from each employee, on whose account *495such deductions are made, a written assignment which shall not be irrevocable for a period of more than one year, or beyond the termination date of the applicable collective agreement, whichever occurs sooner....
§ 186(c)(4). The union argued that this year-long dues-checkoff exception in federal labor law is incompatible with, and thus preempts, the corresponding thirty-day provision of Wisconsin's Act 1.
The district court granted the union's motion for summary judgment and permanently enjoined enforcement of
II. Analysis
We review the legal conclusions of summary judgment rulings de novo , construing all facts and drawing all reasonable inferences in favor of the non-moving parties. See Wisconsin Central Ltd. v. Shannon ,
We conclude that the Taft-Hartley Act preempts Wisconsin's attempt to set new rules for dues-checkoff authorizations governed by § 186(c)(4). Because the challenged portion of Act 1 regulates an employee's optional dues-checkoff authorization rather than an employee's obligation to pay dues as a condition of employment, it falls outside the scope of the § 164(b)"right-to-work"/union security agreement exception. We explain in Part II-A that we agree with the district court that the Supreme Court's summary affirmance in Sea Pak controls this case. In Part II-B, we explain why Sea Pak fits comfortably with broader preemption principles of labor law. In Part II-C, we address and reject further arguments by the State for recognizing an exception from those principles here.
A. Sea Pak's Continuing Force
The procedural history of the Sea Pak decision was a bit unusual, but the district court correctly found that the Supreme Court's summary affirmance in Sea Pak controls here. The Supreme Court has instructed that "the lower [federal] courts are bound by summary decisions by this Court 'until such time as the Court informs (them) that (they) are not,' " because "votes to affirm summarily ... are votes on the merits of a case," just like those accompanied by fully reasoned Court opinions. Hicks v. Miranda ,
To understand the effect of a summary affirmance, it is usually necessary to look closely at the decision that was summarily affirmed. In Sea Pak , the Southern District of Georgia found a Georgia law very similar to Act 1 preempted. A Georgia law required employers to treat dues-checkoff authorizations as revocable at will. The district court found that provision was "completely at odds" and "in direct conflict" with
*496
The district court in Sea Pak also noted that Judge Noland of the Southern District of Indiana had reached the same conclusion on the same preemption question, holding that § 186(c)(4) preempted an Indiana wage assignment law requiring assignments to be revocable at will.
The Sea Pak district court also had to decide whether the Taft-Hartley provision in
The Fifth Circuit affirmed per curiam , adopting the district court's opinion.
*497The State argues, though, that even if Sea Pak applies, subsequent developments in the Supreme Court's case law on preemption mean that Sea Pak is no longer binding. Language in Hicks v. Miranda may offer a small opening for lower courts to depart from summary decisions "when doctrinal developments indicate otherwise."
In addition, to agree with the State and reverse here, we would have to split with two other circuits. See United Auto., Aerospace & Agric. Implement Workers of Am. Local 3047 v. Hardin County ,
B. Labor Law Preemption More Generally
1. Machinists and Garmon Preemption
The State urges us to decide this case under more general field- or conflict-preemption principles. We conclude, however, that Sea Pak is consistent with the Court's other labor law preemption decisions, which provide quite clear guidance here. In Murphy v. National Collegiate Athletic Ass'n , --- U.S. ----,
Over the decades since enactment of the National Labor Relations Act and the Taft-Hartley Act, the Supreme Court has applied field preemption in a host of cases interpreting those laws. The resulting body of law reflects many individual applications of the general principles of preemption, and labor-law preemption cases specifically provide the most reliable guidance for us in this case, if any were needed beyond the Court's summary affirmance in Sea Pak .
Labor law preemption applies, to put it broadly, when a State acts "as regulator of private conduct" with an "interest in setting policy" that is different from the policy of the federal government. Building & Constr. Trades Council v. Associated Builders & Contractors of Mass./R. I., Inc. ,
The first, known as Garmon pre-emption, see San Diego Building Trades Council v. Garmon ,359 U.S. 236 [79 S.Ct. 773 ,3 L.Ed.2d 775 ] (1959), "is intended to preclude state interference with the National Labor Relations Board's interpretation and active enforcement of the 'integrated scheme of regulation' established by the [National Labor Relations Act (or NLRA, also known as the Wagner Act) ]." Golden State Transit Corp. v. Los Angeles ,475 U.S. 608 , 613 [106 S.Ct. 1395 ,89 L.Ed.2d 616 ] (1986) ( Golden State I ). To this end, Garmon pre-emption forbids States to "regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits." Wisconsin Dept. of Industry v. Gould Inc. ,475 U.S. 282 , 286 [106 S.Ct. 1057 ,89 L.Ed.2d 223 ] (1986). The second, known as Machinists pre-emption, forbids both the National Labor Relations Board (NLRB) and States to regulate conduct that Congress intended "be unregulated because left 'to be controlled by the free play of economic forces.' " Machinists v. Wisconsin Employment Relations Comm'n ,427 U.S. 132 , 140 [96 S.Ct. 2548 ,49 L.Ed.2d 396 ] (1976) (quoting NLRB v. Nash-Finch Co. ,404 U.S. 138 , 144 [92 S.Ct. 373 ,30 L.Ed.2d 328 ] (1971) ). Machinists pre-emption is based on the premise that " 'Congress struck a balance of protection, prohibition, and laissez-faire in respect to union organization, collective bargaining, and labor disputes.' "427 U.S. at 140, n. 4 [96 S.Ct. 2548 ] (quoting [ Archibald] Cox, Labor Law Preemption Revisited,85 Harv. L. Rev. 1337 , 1352 (1972) ).
Chamber of Commerce v. Brown ,
Both the Garmon and Machinists doctrines apply broadly to the Wagner (NLRA) and Taft-Hartley Acts: "the object *499of labor pre-emption analysis," according to the Court, is "giving effect to Congress' intent in enacting" provisions of "the Wagner and Taft-Hartley Acts" as statements of national labor-management policy. Brown ,
Machinists preemption is quite broad. It recognizes that federal labor statutes "specifically conferred on employers and employees" a right to determine certain questions through bargaining and the use of other "permissible economic tactics," and to be free from government fiat in finding solutions. Golden State Transit Corp. v. City of Los Angeles ,
For example, we applied Machinists preemption to an Illinois law that required cemeteries and gravediggers to negotiate to establish a pool of workers who would "perform religiously required interments during labor disputes." Cannon v. Edgar ,
Even State laws with indirect effects on bargaining can be preempted under Machinists . Though Machinists itself was directed at a union's "refusal to work overtime" and the economic pressure that the refusal placed on the employer, see
Before turning to more specific discussion of Garmon and Machinists preemption principles as applied to dues-checkoff authorization, we address the State's broadest argument, which is that the court should apply a much more demanding standard for preemption than was applied in Sea Pak , Garmon , or Machinists . The State cites and quotes Justice Kagan's concurring opinion in Kurns v. Railroad Friction Products Corp. ,
Kurns itself provides the best answer to the argument. Both the Kurns majority and Justice Kagan followed the arguably "anachronistic" decision in Napier v. Atlantic Coast Line Railroad Co .,
The State's reliance on more general principles of preemption from other statutory contexts thus fails to engage with the doctrinal heart of this case, which is the decades of decisions deciding the preemptive force of the Wagner and Taft-Hartley Acts. The issue before us is the preemptive scope of the Taft-Hartley Act, so the most relevant guides are the Supreme Court's decisions under that statute. Moreover, one cannot call Garmon and Machinists "anachronisms" when the Court has been citing and following them on a regular basis. See, e.g., Brown ,
2. Preemption for Dues-Checkoff Rules
Returning to the text of the relevant Taft-Hartley provision,
Section 186 was enacted after Congress had gained some experience with how the Wagner Act worked in practice. The provision was intended "to deal with problems peculiar to collective bargaining" and in particular "was aimed at practices which Congress considered inimical to the integrity of the collective bargaining process." Arroyo v. United States ,
Congress did not intend, however, to outlaw dues-checkoff agreements. They are not a special opportunity for corruption but a convenient way for employees to pay their union dues. So Congress included this exception to the anti-corruption provision:
The provisions of this section shall not be applicable ...
(4) with respect to money deducted from the wages of employees in payment of membership dues in a labor organization: Provided , That the employer has received from each employee, on whose account such deductions are made, a written assignment which shall not be irrevocable for a period of more than one year, or beyond the termination date of the applicable collective agreement, whichever occurs sooner.
§ 186(c)(4).
This exception sets three, and only three, limits on dues-checkoff agreements, the "written assignment" referred to in the statute. Such agreements must be (1) individual and (2) in writing, and (3) they must allow employees to revoke them at least once a year or upon expiration of the applicable collective agreement. Apart from those limits, dues-checkoff authorizations are left to collective bargaining. States are not free to mandate additional restrictions for the benefit of unions, employers, or employees.
In addition to the summary affirmance in Sea Pak , the Supreme Court reached the same conclusion in a full opinion interpreting a nearly identical provision in the Railway Labor Act,
The Felter Court explained that when Congress added Section 2 Eleventh (b) to the Railway Labor Act:
It thus became lawful to bargain collectively for "union-shop" and "checkoff" arrangements; but this power was made subject to limitations. The limitation here pertinent is that, by force of the proviso, the authority to make checkoff arrangements does not include authority to bind individual employees to submit to the checkoff. Any agreement was to be ineffective as to an employee who did not furnish the employer with a written assignment in favor of the labor organization, and any assignment made was to be "revocable in writing after the expiration of one year...." This failure to authorize agreements binding employees to submit to the checkoff was deliberate on the part of Congress. Proposals to that end were expressly rejected.... [The final bill allowed] the individual employee to decide for himself whether to submit to the checkoff, and whether to revoke an authorization after the expiration of one year.
359 U.S. at 331-32,
The Supreme Court then explained how this language placed in only private hands the decisions about additional terms of dues-checkoff authorizations:
The structure of § 2 Eleventh (b) then is simple: carriers and labor organizations are authorized to bargain for arrangements for a checkoff by the employer on behalf of the organization. Latitude is allowed in the terms of such arrangements, but not past the point such terms impinge upon the freedom expressly reserved to the individual employee to decide whether he will authorize the checkoff in his case. Similarly Congress consciously and deliberately chose to deny carriers and labor organizations authority to reach terms which would restrict the employee's complete freedom to revoke an assignment by a writing directed to the employer after one year. Congress was specifically concerned with keeping these areas of individual choice off the bargaining table. It is plainly our duty to effectuate this obvious intention of Congress....
Most relevant to this case, however, Felter explained the rules that apply as long as private agreements do not contradict the statutory ground rules:
Of course, the parties may act to minimize the procedural problems caused by Congress' choice. Carriers and labor organizations *503may set up procedures through the collective agreement for processing, between themselves, individual assignments and revocations received, and carriers may make reasonable designations, in or out of collective bargaining contracts, or agents to whom revocations may be sent.
3. Applying Machinists and Garmon Preemption Here
Here, Wisconsin acted to give employees like Lisa Aplin an additional statutory right under State law: the ability to cancel their duly authorized dues-checkoff agreements mid-year on just thirty days' notice.
A strong case could be made for Garmon preemption here because Act 1 can place employers under inconsistent State and federal expectations. After agreeing to a new collective bargaining agreement, employer John Deere was caught here in a federal-state bind. It had agreed, in light of federal law, to a collective bargaining agreement with the Machinists that incorporated by reference dues-checkoff agreements irrevocable for one year. Because this decision was inconsistent with Wisconsin's thirty-day revocability requirement, John Deere was told that it could be found responsible for committing an unfair labor practice under State law. But if, after executing the collective bargaining agreement, John Deere had decided to ignore its requirements and to comply with Act 1 instead, it could have been brought before the National Labor Relations Board by the union for committing a federal unfair labor practice. See, e.g., Metalcraft of Mayville, Inc. and District Lodge No. 10, Int'l Assoc. of Machinists & Aerospace Workers of Am. , No. 18-CA-178322,
The State responds that there is a simple solution that would allow an employer to resolve this conflict. In the bargaining process, the State says, the employer could simply refuse to agree to any irrevocability period longer than thirty days. That is true in theory, but this argument *504shows clearly why the State law is preempted under Machinists . Under the Taft-Hartley Act, the State simply is not allowed to impose its own view of how best to balance the interests of labor and management in zones that Congress deliberately left for resolution by collective bargaining. Machinists ,
As explained above, Machinists applies a rule of field preemption in areas that "Congress intended [to] be unregulated" by the NLRB or the States. See Brown ,
C. The State's Arguments for an Exception
The State offers two more arguments to shield
1. Section 186 's Preemptive Scope
First, as recounted above, Taft-Hartley's prohibition on employers and their agents giving "any money or other thing of value" to unions in § 186(a) was designed to fight corruption. The exception in § 186(c)(4) goes further, though. It also sets regulatory terms and conditions for lawful dues-checkoffs: "Provided , That the employer has received from each employee, on whose account such deductions are made, a written assignment which shall not be irrevocable for a period of more than one year[.]" This proviso shows a regulatory intent, not just a narrowing of the scope of § 186(a) 's criminal liability.
*505Section 186 is not a generic criminal statute applicable across many different potential contexts, comparable to say, mail or wire fraud. Next to Taft-Hartley's other provisions, the scope, exceptions, and location of § 186 show that it seeks primarily to regulate the interaction between employers and employee representatives, including some key terms of dues-checkoff authorizations. The fact that some violations of these policies may be felonies, see § 186(d), reflects the depth of Congress's commitment to these policy choices. It does not show a choice to limit this section's preemptive effect.
In addition, Machinists does not suggest that certain parts of Taft-Hartley should be treated differently in terms of preemption. Where Congress deliberately left choices to private actors, neither the State nor the NLRB may intervene. See Machinists ,
Finally, by attempting to regulate the revocation period of dues-checkoff authorizations, Act 1 is not a "state law[ ] of general application" like minimum-wage laws or minimum labor standards laws, which are generally not preempted. See Metropolitan Life Ins. Co. v. Massachusetts ,
2. The Exception for "Right-to-Work"/Union Security Agreements
The State also contends that
These arguments depend on the mistaken premise that dues-checkoff authorizations are union security agreements, i.e., "agreements requiring membership in a labor organization as a condition of em ployment *506," as set forth in the text of § 164(b) (emphasis added). They are not. Dues-checkoff authorizations are optional payroll deduction contracts between employers and individual employees, similar to health insurance premium payroll deductions or retirement savings arrangements. Checkoffs can be mentioned in a collective bargaining agreement, but they need not be. See Columbia College Chicago v. N.L.R.B. ,
In both Sea Pak and Felter , the Supreme Court has illustrated the difference between dues-checkoff authorizations and union security agreements, i.e., union-shop or agency-shop provisions. Neither Taft-Hartley nor the Railway Labor Act in Felter equates dues-checkoffs with compulsory union membership. In fact, Felter observed:
The Act makes no formal relationship between a union-shop arrangement and a checkoff arrangement; under [the Act] the parties can negotiate either one without the other, if they are so disposed. And of course, a labor organization member who is subject to a union-shop arrangement need not subscribe to the checkoff; he can maintain his standing by paying his dues personally.
359 U.S. at 337 n.12,
To counter these points, the State relies on Whiting , a case about federal immigration law and an Arizona business licensing statute, for the idea that it can use "appropriate tools to exercise [the] authority" granted under federal labor law in § 164(b).
Congress did not write § 164(b) nearly as broadly as it wrote the statute in Whiting . Courts have rejected reliance on § 164(b) to save State statutes that veered beyond the provision's express scope: agreements between labor and management designed to prevent workers from free-riding on a union's services. See Idaho Bldg. & Const. Trades Council v. Inland Pacific Chapter of Assoc. Builders & Contractors ,
There is no such free-rider concern here. Wisconsin is seeking to modify the terms of voluntary payroll deductions involving an employer and its employee, not mandatory union- or agency-shop requirements that the employer and the union agree to impose on all employees. We know this from the terms of Act 1 itself. Its language invoking the power granted by § 164(b) came in the "right-to-work"/union security agreements provision. 2015 Wis. Act 1, § 5, codified at
In Sweeney , we described the States' § 164(b) freedom as "extensive,"
Conclusion
In light of Sea Pak , Machinists , and the Supreme Court's other labor preemption decisions,
AFFIRMED.
Schimel followed our decision in Sweeney v. Pence ,
The district court also noted that the original House-passed version of § 186(c)(4) would have made dues-checkoffs "revocable by the employee at any time upon thirty days written notice to the employer," Sea Pak ,
In so holding, the Sea Pak district court interpreted § 186(c)(4) the same way the Supreme Court had already read a nearly identical provision in the Railway Labor Act in Felter , see 359 U.S. at 330-31,
The employer-appellant in Sea Pak presented the following questions to the Supreme Court, invoking mandatory appellate jurisdiction under
A. Whether the Georgia Statute requiring that dues assignments be revocable at will is in conflict with or preempted by Section 302(c)(4) of the Labor Management Relations Act.
B. Whether the Georgia Statute is a valid exercise of the authority reserved to the Georgia legislature by Section 14(b) of the Labor Management Relations Act, and is, therefore not saved from preemption.
Statement as to Jurisdiction for the Appellant at 5, Sea Pak ,
Where RLA and NRLA provisions "are in all material respects identical," the Supreme Court has used RLA cases as a guide to the NLRA and vice versa. See Communications Workers of Am. v. Beck ,
Notwithstanding any other provisions ... a labor organization ... shall be permitted to make agreements providing for the deduction ... from the wages of its or their employees ... any periodic dues ... Provided , That no such agreement shall be effective with respect to any individual employee until he shall have furnished the employer with a written assignment to the labor organization of such membership dues, initiation fees, and assessments, which shall be revocable in writing after the expiration of one year or upon the termination date of the applicable collective bargaining agreement, whichever occurs sooner.
Pub. L. No. 81-914, ch. 1220,
Another argument in favor of Garmon preemption is that the precise terms of dues-checkoff agreements might be considered a wage-related term of employment, and thus a mandatory subject of bargaining under the NLRA.
The exception that immediately follows, § 186(c)(5), regarding union trust funds, provides another example of regulatory choices made in this fashion. Its "Provided " language lists permissible uses for trust funds, sets forth a process for approving trust fund plans, and even empowers district courts to appoint "an impartial umpire" to settle certain kinds of disputes. This structure is used elsewhere in federal labor law. See, e.g., § 158(a)(3) (union security agreements and unfair labor practices).
§ 164(b) reads in full:
Nothing in this subchapter shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law.
On the facts of this case, Aplin's dues-checkoff authorization cannot reasonably be considered a union security device. She would not have faced any consequences from the union or her employer if she had never authorized it. It was also, by its express terms, "not a quid pro quo for ... union membership." Dkt. 30-3. The dues-checkoff authorization might have become a term of her employment once Aplin signed it, but it was never "a condition of employment" as that term is used in § 164(b) -the authorization was a freely adopted optional contractual arrangement with her employer, with its own cancellation terms and conditions that fully complied with federal law. See Dkt. 30-1 at 7; Dkt. 30-3;