Welcome to The Labor Association of Wisconsin, Inc.

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Courtesy of the Journal Sentinel - 4/25/2013

Madison - An appeals court asked the state Supreme Court on Thursday to quickly take up a case over Gov. Scott Walker's controversial law on collective bargaining, saying the high court should decide the issue without the appeals court ruling on it.

If the seven-member Supreme Court agrees to take the case, it would speed up final resolution over whether parts of Act 10 violate the state constitution. If the Supreme Court does not accept the case, the Madison-based District 4 Court of Appeals will have to issue a ruling on the case.

A Dane County Circuit Court judge in September found parts of the law violated the state constitution's guarantee of free association and equal protection under the law. The two sides dispute whether the ruling affects only the unions who brought the case or virtually all teachers and local government employees in Wisconsin.

"It is hard to imagine a dispute with greater statewide effect or with a greater need for a final resolution by the Supreme Court," the three appeals judges wrote in their unanimous request for the Supreme Court to take the case.

"Although the parties do not address the topic, news accounts suggest that several municipal employers are engaged in legal disputes relating to this topic, and many more are left in limbo wondering whether they are better off engaging in some type of tentative bargaining or refusing to engage with employee representatives. We urge the Supreme Court to accept this certification and put these legal issues to rest."

The request comes two days after the unions who brought the lawsuit filed a motion with Dane County Circuit Judge Juan Colás asking him to block the Wisconsin Employment Relations Commission from enforcing parts of Act 10 because of the judge's September ruling.

The suit was brought by Madison Teachers Inc. and Public Employees Local 61, which represents City of Milwaukee employees.

In his ruling last year, Colás found parts of Act 10 violated the associational rights and equal protection rights of local government employees who chose to join a union because it treated them differently than employees who did not choose to join a union. Specifically, those in a union are limited by how much they can seek in wage increases, while those not in a union can seek any amount from their bosses, the judge said.

Colás also ruled Act 10 violated the home-rule clause of the state constitution because it dictated how much Milwaukee employees had to pay into their city pension funds.

Attorney General J.B. Van Hollen, who is trying to overturn the lower court ruling, said in a statement he is confident Act 10 is constitutional and called the appeals court's request a "positive development."

"Any remaining issues concerning Act 10 need to be resolved as soon as possible and this action by the Court of Appeals gives the Wisconsin Supreme Court an opportunity to resolve them in a final, binding decision," Van Hollen's statement said. 

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 Please consider signing this Petition so that Office Sebena’s name is added to the National Law Enforcement Memorial Wall in Washington DC.

Click this link to sign petition:  https://www.change.org/petitions/add-wauwatosa-police-officer-jennifer-sebena-s-name-on-the-national-law-enforcement-memorial-wall-in-washington-dc

National memorial to reconsider adding murdered officer's name in April - courtesy 620 WTMJ NewsRadio

Click here for story:  http://www.620wtmj.com/news/local/199888891.html 

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 Here is the latest information we have regarding ACT 10.  LAW continues to monitor this issue and will update everyone when more details are released.  As always, if you have any questions, please contact our Germantown office.

Parts of Act 10 still on hold, appeals court rules

March 12, 2013 - Courtesy of JS Online 

The state Court of Appeals on Tuesday kept in place - at least for now - a lower court's ruling that found parts of Gov. Scott Walker's union law was unconstitutional.

The ruling means that for now portions of the law cannot be enforced. The law, which prompted massive protests in early 2011 at the state Capitol, all but eliminated collective bargaining for most public employees.

The court's ruling comes in the early stages of the appeal, and the three judges could reach the opposite conclusion later.

The court has not yet addressed who is subject to the lower court's decision, which has prompted disagreements between local governments and unions. Some argue the original decision applies only to workers from Dane County and Milwaukee who challenged the law, while others say the original ruling applies to all local government and school district employees.

Those who appealed the decision asked the Court of Appeals to stay the original ruling for a number of reasons, including that it had caused confusion for local officials who did not know if the law, known as Act 10, would ultimately be upheld or struck down by higher courts. The court of appeals was not persuaded by that argument.

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Walker to public pension fund manager: "Can you spare $200 million?"

MADISON – Nearly two years after demanding public-sector unions pick up their share of taxpayer-funded pensions, Gov. Scott Walker is asking government workers to bet part of their retirements on a plan to subsidize new businesses in Wisconsin.

The venture capital plan calls for moving hundreds of millions of dollars into an embattled quasi-public economic development agency that lost track of a $56 million loan portfolio, among other mismanagement problems.

Documents obtained by Wisconsin Reporter show that Reed Hall, CEO of Walker’s Wisconsin Economic Development Corporation, recommended that the State of Wisconsin Investment Board loan $200 million to WEDC.

Documents obtained by Wisconsin Reporter show that Reed Hall, CEO of Walker’s Wisconsin Economic Development Corporation, recommended that the State of Wisconsin Investment Board loan $200 million to WEDC.

Walker serves as chairman of the WEDC board of directors.

Hall said WEDC would use SWIB’s cash to promote business growth through taxpayer-subsidized government investments in Wisconsin companies.

In a letter to SWIB, Hall explained that he was turning to the pension fund because his start-up program would likely find it harder to tap private investors “due to a lack of demonstrable track records.”

“Given that some of these funds may be managed by first-time fund managers, the issue arises of where to turn for the outside investment,” Hall wrote. “We recommend that SWIB consider an allocation … of $200M.”

Hall noted that $200 million “represents less than 0.3 percent of the SWIB’s total assets.” SWIB manages the $76 billion Wisconsin Retirement System public employee pension trust fund, as well as several smaller trusts.

SWIB politely rejected WEDC’s offer.

“The challenge for SWIB is to make sure that any new programs it engages in, such as economic development, does not have any adverse effect on its management of WRS assets,” the agency responded.

Any “investment opportunity” must meet SWIB’s “established due diligence and investment requirements.”

“However, use of WRS trust fund monies to fund economic development initiatives does not meet our fiduciary duty,” the agency added.

“We have to invest based on what’s best for trust fund,” said Vicki Hearing, communications director at SWIB. “We make the best investment choices based on the risk that is allowable for the trust fund. If a fund is not about earning an investment return, then it would not meet our fiduciary duty. Earnings will not be their primary goal.”

The brush-off might have something to do with the fact that WEDC has already developed a reputation for inattention to detail. The Milwaukee Journal Sentinel in October revealed the quasi-public economic development organization lost track of a $56 million loan portfolio , among other accountability concerns.

Another document shows WEDC has also approached private investors for their participation, and acknowledged that politics will determine the program’s future.

“It is also anticipated that the Program will be funded over a term of approximately six years in annual tranches to be determined,” WEDC’s David Volz wrote in a request for information to venture capital fund managers in December. “There is, however, no assurance that future Legislatures will continue authorization past the initial biannual budget period (2013-2014.)”

“Part of what we’re doing is trying to get some inquiries in advance of what the Legislature might do,” said WEDC spokesman Tom Thieding. “What Tim (Cooley, director of capital development at WEDC) has been doing is getting input from early-stage developers to fund managers to angel investors. This could be a pretty significant investment the state makes, and we really want to make sure we’ve done our homework and get it right out of the box.”

Despite its aversion to the WEDC proposal, SWIB has invested pension funds locally. The organization’s “Investing in Wisconsin 2012” report notes:

“Over the past 12 years, SWIB has allocated a total of $305 million to itsWisconsin Private Equity Portfolio. This represents 20 percent of SWIB’s total venture capital commitments. From July 2012 until June 2017, SWIB projects new Wisconsin private equity investments will range from $25 million to $50 million.”

Hearing, the SWIB spokesperson, said $25 to $50 million is just a guideline and that SWIB could invest more in venture capital at any time. The investment board just hasn’t “seen the good investment opportunities,” Hearing said.

In 2012, SWIB committed $25 million to a new venture capital fund, Venture Investors Early Stage V fund.

SWIB’s portfolio in Wisconsin as of June 2012 shows $126 million that SWIB has committed to venture capital funds that have not been drawn upon yet.

According to the 2012 report, SWIB has more than $16 billion of assets in companies based in Wisconsin or companies based elsewhere that employ more than 20 people in Wisconsin. Most of those assets are held in public equities.

Contact the reporter at rekvall@wisconsinreporter.com

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 Federal court of appeals upholds

Gov. Walker's union law

By Jason Stein of the Journal Sentinel

Jan. 18, 2013 12:52 p.m.

A federal court of appeals has upheld Gov. Scott Walker's legislation repealing most collective bargaining for most public employees, though a separate case remains ongoing at the state level. 

Last year a federal judge in Madison largely upheld the legislation but struck down parts of the legislation dealing with prohibitions on government employers withholding union dues from workers' payrolls as well as a section requiring labor unions to vote to recertify yearly. The U.S. Seventh Circuit Court of Appeals in Chicago reversed that lower court's ruling in a split decision Friday that upheld the law in its entirety. 

"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," the decision reads.

State Attorney General J.B. Van Hollen praised the decision in a statement. 

“For nearly two years, those opposing Act 10 have tried every angle to have it struck down and invalidated.  Today’s decision by the Seventh Circuit confirms what I have stated from the beginning.  Act 10 is constitutional," Van Hollen said. "While there are no guarantees, it is my hope that this decision will pave the way for resolving any remaining challenges in a manner that supports the legislative decisions made by our elected officials.”  

Judge David F. Hamilton dissented in part, saying he believed part of the collective bargaining law violated the First Amendment. Hamilton argued the state could not bar some unions from having their dues deducted from paychecks while it allowed public safety unions to do so.

Hamilton concurred with the rest of the decision. 

Voting to uphold the law in its entirety were Judges Joel M. Flaum and William J. Bauer. Flaum wrote the opinion. 

A judge in Dane County last year also struck down parts of the union law and that case is on appeal and is not affected by he federal ruling Friday. 

A spokesman for Gov. Scott Walker had no immediate comment. 

One attorney for the plaintiffs had no immediate comment Friday, saying she had to look at the decision. 

Sen. Luther Olsen (R-Ripon) praised the ruling. 

"We knew that this would happen when you get judges that look at the law, not the politics," he said.

 He said he was hopeful the decision would provide momentum for overturning the Dane County decision that blocks portions of Act 10.

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  Wisconsin Pension System Rated Nation’s Strongest

Eau Claire County dispute

By Associated Press

Oct. 27, 2012

Madison - A Madison judge has ruled Eau Claire County Sheriff deputies can negotiate their health care deductibles.

Dane County Judge Juan Colas' ruling marks a victory for rank-and-file police officers statewide who have complained their employers have threatened huge unilateral deductible increases if they didn't contribute more to their pensions.

Those municipalities contend language in the state budget prohibits police and firefighters from having any say in deductible structure. But Colas disagreed in a ruling handed down Thursday.

Eau Claire County attorney Keith Zehms didn't immediately return a message Friday.

A Milwaukee County judge ruled in April that city of Milwaukee police could negotiate deductibles. The city has appealed that ruling.

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  Dane County judge maintains ruling on bargaining limits

By Patrick Marley of the Journal Sentinel

Madison - A Dane County judge on Monday kept in place his ruling striking down major limits on collective bargaining for public workers.

Attorney General J.B. Van Hollen plans to soon ask the Court of Appeals to stay the original order as he continues his appeal of the case, a spokeswoman for him said Monday.

Gov. Scott Walker and Republican lawmakers sharply limited collective bargaining for public workers with a new law last year. Unions for school and municipal workers sued, and last month Dane County Circuit Judge Juan Colas threw out significant portions of the law, saying they were unconstitutional.

Van Hollen appealed the decision and asked Colas to stay his decision until a higher court could rule on it. On Monday, Colas declined to stay his decision, which means local governments cannot follow the portions of the law that have been found unconstitutional.

LAW is continually monitoring the situation and consulting with our attorney's.

Click here to read. 

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“Update on The Fallen Heroes Survivor Income Tax Exemption”  from the Wisconsin Department of Employees Trust Funds.

  Click here to read

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Department of Employee Trust Funds 
September 21, 2012

WRS Contribution Rates for 2013 Set

Contribution rates for most Wisconsin Retirement System (WRS) employees and employers will increase from 11.8% to 13.3% of payroll in 2013. In general, the total contribution rate is split equally between the employee and employer. The Employee Trust Funds (ETF) Board approved the rate changes yesterday, based on an annual actuarial report.

While many complex factors affect WRS contribution rates, the increase is primarily due to two factors: the lingering effects of the global economic meltdown in 2008 and recent law changes. Contribution rate changes, whether increases or decreases, are considered normal for retirement systems that have defined or pre-funded benefits.

Core Trust Fund investment results are distributed (“smoothed”) over a course of five years in order to soften the impact of year-to-year volatility of investments. The 26% Core Fund investment loss in 2008 started to affect contribution rates in 2010 and will continue to affect the rates through 2014.

The new rates will go into effect January 1, 2013. The contribution rates in the following table may be different for employees who have collective bargaining agreements.

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 Politics

Van Hollen expected to seek stay Tuesday on union ruling

By Patrick Marley of the Journal Sentinel

Sept. 18, 2012 10:30 a.m.

Madison - As Attorney General J.B. Van Hollen moves to stay a ruling finding that limits on public-sector collective bargaining are unconstitutional, local officials and unions must sort out how to proceed knowing that the state of the law could change again.

Last year, Gov. Scott Walker and Republicans in the Legislature sharply limited collective bargaining for most public workers, but Dane County Circuit Judge Juan Colas on Friday voided major portions of the law because he found they were unconstitutional.

The law, known as Act 10, barred most public-sector unions from negotiating over anything but wages, and it limited any negotiated raises to the rate of inflation unless voters approved higher raises in a referendum. It also required teachers, local workers and state employees to pay more for their health care and pension.

Colas' ruling, which applies to local workers but not state employees, allows unions to negotiate over a broad array of issues, such as workplace safety, and lifted the limits on how much they can seek in raises. It also said requiring City of Milwaukee workers to pay more for their pensions violates the "home rule" clause of the state constitution. His ruling did not change the requirement that all public workers pay more for their health care and did not change the requirement that public workers outside of Milwaukee pay more for their pensions.

Van Hollen plans to seek a stay of the ruling later Tuesday. He has said he expects Colas' ruling to ultimately be overturned by a higher court, while attorneys for the unions are confident it will remain in place.

Meanwhile, local officials have to decide what to do as unions begin clamoring to start up full-fledged bargaining. For instance, Madison Teachers Inc., which brought the lawsuit, has said it intends to try to renew negotiations immediately.

Dale Knapp, research director for the Wisconsin Taxpayers Alliance, said that holding onto the higher contributions from union employees on their health and pension benefits was the most important thing for school and municipal budgets.

But, with the law struck down for the moment, school districts could still see questions if they have used their new authority under Walker's law to switch insurance carriers to save money or add an hour to teachers' workday. In districts where administrators work well with union leaders, those questions will be easier to handle than in schools where relations are tense, Knapp said.

"They're just worried with all the uncertainty over this," Knapp said. "You don't know what the next day, the next week is going to bring."

Milwaukee Public Schools is in a different situation than many suburban districts that have already shifted from union contracts to school board-written employee handbooks because MPS had a four-year contract in place until the summer of 2013 when the governor's law passed.

To get the district's finances better under control, the Milwaukee School Board pursued changes under the auspices of Act 10 that were to take effect once the contract of their largest bargaining unit of about 5,500 educators expires on June 30, 2013. Some of those included furloughs and rollbacks to retirement benefits.

It appears those changes are void, and - absent another court ruling - the district will have to return to the bargaining table before it could take those steps.

"Although the decision is likely to be appealed, (Friday's) ruling indicates the continued and widespread concern in our state about the legality of Walker's overreach," said Bob Peterson, president of the Milwaukee Teachers Education Association. "We are encouraged by (the) decision, and by the prospect of returning to Wisconsin's long-standing tradition of solving labor disputes through collective bargaining."

Van Hollen said Monday the ruling consisted of "very inconsistent arguments based up on what we believe is a misapplication of the law" that he thinks will be blocked on appeal.

Milwaukee County officials are reviewing the decision to determine its impact on the county budget and other matters.

"In the short term, we are moving ahead with our budget," said Brendan Conway, a spokesman for County Executive Chris Abele. "It would be really difficult at this point to start over."

Abele introduces his 2013 budget Sept. 27. This year's county budget counted some $22 million in pension and health care savings attributable to Act 10. Walker's bargaining law also left the door open to additional savings, should the county seek to shift further costs onto employees. Abele has kept mum on whether he'll propose that for next year.

Richard Abelson, executive director of District Council 48 of the American Federation of State, County and Municipal Employees, said he was pleased with the decision but unclear on the immediate impact.

"We thought all along that Walker overreached (with Act 10) and his law was illegal," Abelson said. He said if the Dane County ruling survives appeal, he would expect it would restore collective bargaining to the more than 3,000 workers his local represents.

"We'll have to claw our way back on some of the wage and benefit issues that were lost," Abelson said. The union lost its certification as a result of Act 10, as did some other, smaller county unions. County nurses and other health care workers still have a county contract in force.

In his ruling, Colas found many of the collective bargaining limits violated local workers' rights to freedom of speech, freedom of association and equal protection under the law.

It is just one of several court challenges to the law. Walker has retained the firm Michael, Best & Friedrich to help Van Hollen defend the law, and so far taxpayers have spent about $675,000 for its work. Its contract is capped at $850,000.

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Collective bargaining battle far from over

By Charles Benson

MADISON- The legal battle over the collective bargaining law is about to get longer and more expensive.

A Dane County judge struck down the law last week, and now it's going to be appealed.

On Tuesday, Wisconsin Attorney General J.B. Van Hollen will throw a big red flag.  He wants a higher court to review the law that was ruled unconstitutional, and put everything on hold until a decision is made.

"There's going to be confusion even if a stay is entered," said former Wisconsin Supreme Court Justice Janine Geske.  She predicts a court will put the brakes on the recent decision until the case is appealed, but if they don't.  "Well then we have chaos," said Geske.

"The problem is clear, all future negotiations will be without the law but the problem is past negotiation or the 'lack there of' was based on that law."

The Supreme Court could speed up the process by taking the case right away and bypassing the court of appeals.  It would take four justices to say yes; the issues are complex. 

"It was unconstitutional primarily because there are two classes of workers: the workers who don't have a collective bargaining agreement can fight for wages above the cost of living increases, and the others can't," said Geske.

Wisconsin Attorney General J.B. Van Hollen thinks the state will ultimately prevail.  "We've got a lot people working on this case."

State taxpayers have already been billed $728,000 in legal fees to defend the law.  Throw in $13.5 million in this year's recall races and it starts to add up.

"The will of the people who have spoken through the legislature and the governorship should not be upset until it's ultimately struck down, if it is," said Van Hollen.

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 Judge throws out Walker's union bargaining law*

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 September 4, 2012

Annual Certification Election Activity Halted Pending US Court of Appeals Decision

On March 30, 2012, United States District Court Judge William M. Conley issued a Decision and Order that enjoined the WERC from taking any further action as to the initial annual certification elections created by 2011 Wisconsin Act 10. That Decision and Order is on appeal to the U.S. Court of Appeals for the Seventh Circuit. Pending a decision from that Court, the WERC cannot take any action to certify the results of the annual certification elections held in March 2012 or conduct any additional annual certification elections.

The Seventh Circuit Court of Appeals has scheduled oral argument for September 24, 2012, regarding appeals filed as to Judge Conley’s Order. It is not known when the Court of Appeals will issue its decision.

LAW will keep tabs on this case and post future developments as soon as they are available.  As always, if you have any questions, please call the Germantown office at 1-800-657-0742. 

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  Update on WRS Study 

Shown below, is a link to the WRS Study that was required in Act 32 by Governor Walker.  Pursuant to the study, the Department of Employee Trust Funds made the following recommendation:

Study Recommendation: 

Given the current financial health and unique risk-sharing features of the WRS, neither an optional DC plan nor an opt-out of employee contributions should be implemented in Wisconsin at this time.  Analysis included in this study from actuaries, legal experts, financial experts, and information from similar studies conducted in other states show that there are significant issues for both study items in terms of the actual benefit provided and potential for negative effects on administrative costs, funding, long term investment strategy, contribution rates, and individual benefits.

 http://etf.wi.gov/publications/wrs-study.pdf

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LAW SUCCESSFULLY DEFENDS THE RIGHT OF EMPLOYEES

 TO REMAIN AS PUBLIC SAFTEY EMPLOYEES

In August of 2011, Winnebago County filed a Unit Clarification with the WERC in hopes to remove the Deputy Sheriff’s assigned to the Jail from the Winnebago County Deputy’s Association because it was the County’s opinion that those employees did not meet the definition of a “Public Safety Employee” since Act 10/Act 32 was passed. 

LAW disagreed and based upon the decision referenced below from the WERC, the WERC agreed.  Even though it was a long seven month wait for the decision, it was worth it. 

The WERC ruled that the bargaining unit does not need to be altered and the inclusion of the Deputy Sheriff’s assigned to the jail in the bargaining unit is appropriate.

Special thanks to Roger Peters, Jason Freeman and the entire Winnebago County Deputy Sheriff’s Association in their help and assistance in this case.

Click here to read the WERC's decision

Department of Employee Trust Funds - April 11, 2012

The Department of Employee Trust Funds (ETF), which administers the Wisconsin Retirement System (WRS), continues to track an Internal Revenue Service (IRS) regulation regarding the definition of “normal retirement age” (the age at which one can retire with an unreduced benefit) for governmental plans. The regulation is effective January 1, 2013. There has been widespread concern that this rule would raise the normal retirement age for police officers, firefighters, and other protective-class employees in the WRS. Currently, the normal retirement age requirements for these protective-class employees are 54 years with less than 25 years of service, or 53 with 25 years or more of service.

Based upon additional research and a recent analysis conducted by ETF’s tax counsel, ETF’s position is that the current regulation DOES NOT affect the normal retirement age levels for any WRS participants. Although the regulation would benefit from clarification, analysis of the regulation, the underlying federal law and informal information from IRS representatives indicates that in regard to normal retirement age, the current rule only applies to governmental plans that make in-service pension distributions (payment of pension amounts while the person is still employed). The WRS does not permit in-service distributions, so the rule would not apply in regard to WRS normal retirement age levels.

ETF contacted Senator Kohl’s office expressing concern about the IRS rule in early 2011. Senator Kohl sent a letter to the U.S. Treasury asking that the matter be addressed. The Treasury’s reply indicated that they would be clarifying the matter in the near future, but they have not issued any guidance on the rule so far. On March 28, 2012, Senator Kohl and Representative Baldwin sent a joint letter to the Treasury strongly urging the IRS to take prompt action on this matter. We are hopeful that the IRS will clarify the regulation soon.

We will provide additional updates when they are available.

  Update on Response from the Department of Employee Trust Funds regarding  if IRS regulation affects the minimum retirement age - April 9, 2012

We will provide additional updates when they are available.