There is reason to be concerned the AFSCME lawsuit challenging the recent collective bargaining amendments will undermine the legislature’s effort to reform public sector collective bargaining.  As discussed in our previous post on the new law, AFSCME Council 61, the state’s largest public employee union, filed a lawsuit to invalidate the new law on February 20, 2017, only three days (and one business day) after the law went into effect.

The target of the lawsuit is the exemption in the new law for “public safety” employees.   Any employee who is part of a bargaining unit with at least thirty percent (30%) “public safety” employees is exempt from the amendments to the law.  That means, unlike all other public employees, employees in a public safety bargaining unit have the right to bargain over benefits, working conditions, evaluation procedures, seniority, transfers, grievance procedures and a host of other subjects.   Non-public safety employees’ bargaining rights are limited to base wages.

The law defines “public safety” employee to include a sheriff’s regular deputy, a police officer of a city, members of the division of state patrol, narcotics enforcement, state fire marshal, or criminal investigation, conservation officer or park ranger, fire fighter,  and DOT enforcement officers.   Police officers not employed by a city and corrections officers are not included within the definition of “public safety” employees.

The AFSCME lawsuit includes four individual plaintiffs strategically chosen to highlight what AFSCME characterizes as the arbitrary nature of the “public safety” exclusion.   For example, one of the plaintiffs is a DOT enforcement officer, which is included within the definition of a “public safety” employee.  Yet, more than 30 percent of her bargaining unit is non-public safety, so she is not covered by the exemption.   Another plaintiff is identified as a “police officer III” employed by the state.   Even though his duties are similar to a sheriff’s deputy or city police officer, he is excluded from the definition of “public safety” employee, and thus not covered by the exemption.

The legal challenge is based upon Iowa’s version of the equal protection clause, contained Article I, section 6 of the Iowa Constitution.  That section 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.”

To pass constitutional muster, laws that relate to economic issues, like the collective bargaining amendments, must satisfy what is known as the “rational basis” test.    So long as there is a rational connection between the purpose of the statute and the classifications in it, the law does not violate equal protection.   Generally, the “rational basis” test is a low bar.  A person does not have a fundamental right to public employment, nor is union membership or collective bargaining a suspect class subject to strict court scrutiny.   Therefore, even if a court disagrees with the purpose of the law or means of achieving it, they are supposed to defer to legislative judgment and not substitute its own.

But, that does not mean the courts will give this law a free pass.   The only stated reason I have seen or heard for including the public safety exemption is a political one; that is, public safety employees are viewed more favorably than other public employees, and granting them more rights will garner more support for law’s passage.    While many of us agree public safety is the most critical function of government, it does not necessarily follow that granting a certain segment of these employees favored bargaining rights promotes public safety.   The 30% bargaining unit threshold seems particularly arbitrary.    The biggest challenge facing the law’s proponents is coming up with a principled, rational reason for this classification.  Hopefully they have thought of one, and will at some point share it with the rest of us.

While there are very few Iowa Supreme Court decisions striking down legislation using the rational basis test, it is not unheard of.    The Court’s recent constitutional jurisprudence has tended to be unpredictable, especially when the issue is politically charged.   Thus, while I am not making a prediction, there is a legitimate risk the Court will rule that granting favored bargaining rights to a limited segment of public safety employees violates equal protection.  Unfortunately for the proponents of this law, it will be at least two years before that happens.  It is very possible the window of opportunity for this type of sweeping reform will have closed by then.

The 2017 Iowa legislative session has been one of the more rancorous in recent memory, driven in large part by proposed amendments to the public sector collective bargaining law.  Following all-night debates and massive protests by union supporters, the house and senate both voted on February 16 to make the most sweeping changes in the public sector collective bargaining statute since it was first enacted in the 1970s.  Governor Branstad signed the bill into law on February 17, a Friday.  Predictably, by the following Monday, the State’s largest public employee union, AFSCME Local 61, filed a lawsuit to prevent the law from going into effect.574px-Gov_Walker_Protests1_JR

In our view, the amendments are a much needed re-set of the relationship between public employees and the state agencies, municipalities, and school districts that employ them.  It’s true that the vast majority of public employees are hard-working, conscientious, and have a true spirit of public service.  Very few citizens begrudge paying competitive wages and benefits to public employees.   But, granting public employees the right to collectively bargain has, over time, unduly favored the interests of employees and unions at the expense of public employers and taxpayers.  It’s no coincidence that public employee union membership exceeds private sector membership  by more than five times (34.4 percent to 6.4 percent in 2016).

When benefits such as health insurance and pensions are taken into account, there can be little doubt public employee compensation typically exceeds the compensation of comparable private sector employees.   In some circumstances, public employees are eligible to retire in their 50s and receive their full pension benefit under the Iowa Employee Public Retirement System (IPERS).   Early retirees can sometimes “double-dip;” that is, they return to public employment while at the same time drawing a pension.    Much of the criticism of public sector compensation is based upon the fact that, while receiving generous wages, benefits, and retirement payouts, public employers have more job security and less accountability for poor performance compared to a similarly situated employee in the private sector.

Unfortunately, most of the news coverage and commentary published while the legislature debated the new law glossed over or even ignored fundamental differences between public and private sector employment that justify limiting the subjects over which public employees are allowed to bargain.  The most important difference is that the market imposes at least some check on a private sector union’s ability to bargain for economically unsustainable wages, benefits, and work rules.  Private employers have customers that won’t necessarily accept ever increasing prices or poor quality goods or services.  History is replete with examples of companies that failed or became less competitive under the weight of unsustainable collective bargaining agreements.  Public employers, on the other hand, are almost always a monopoly.   Citizens have nowhere else to go for public services, and governments can always raise taxes to pay for ever increasing wages and benefits.

Before the recently enacted changes, unions held most of the advantages in bargaining.  If the two sides could not reach an agreement on wages, insurance, and other items, the matter was submitted to binding arbitration.  Each party submitted its final offer to the arbitrator, who had to choose between them.  Among the criteria the arbitrator could rely upon in the decision was the arbitrator’s judgment whether the public employer could levy taxes and appropriate funds to pay for the wages and benefits in question.   Thus, even if a public body did not want to raise taxes to pay for the union’s proposed wage or benefit increases, an arbitrator had the effective power to impose a tax increase (or force the public body to cut services to pay for the arbitrator’s decision).

There is one other important reason public sector collective bargaining has unduly favored employee interests over those of employers.   Before it was amended, Iowa law allowed unions to demand that public employers withhold union dues from employee’s paychecks.   Public sector unions, in turn, use this dues money to support candidates running for city council, school board, or other public offices.  Over time, the unions end up negotiating contracts with the very public officials they helped elect to office.   In effect, the employee’s interests are represented on both sides of the bargaining table.

Even Franklin Roosevelt, one of history’s greatest supporters of workers’ right to collectively bargain, expressed opposition to public sector collective bargaining.   “All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service,” he wrote. “It has its distinct and insurmountable limitations when applied to public personnel management.”  He added: “[t]he very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations,”

The amendments to Iowa’s law are not perfect.   One of the gaping loopholes is the exemption for certain “public safety” employees.   The AFSCME lawsuit relies upon the public safety exemption in its constitutional challenge to the law.   We will discuss the lawsuit in a future post.  It is sufficient for now to say that its ultimate outcome is far from certain, and the loophole in the amendment may yet serve as the law’s undoing.

Image Credit from Google, Creative Commons license, Gov. Walker Protests

A divided panel of the Iowa Court of Appeals recently ruled that the rules of construction in the ADA as amended in 2008 apply to the Iowa Civil RIghts Act when determining what constitutes a disability (Knudsen v. Tiger Tots Community Child Care Center, No. 2-1011, 1/9/13). Although Knudsen is a public accommodation and not an employment case, the opinion is nonetheless very significant.   It shows at least one appellate panel’s willingness to adopt the ADA Amendments by judicial fiat. The Iowa legislature has not amended the ICRA to adopt the changes Congress made to the ADA in 2008 (effective January 1, 2009). 

The plaintiffs in Knudsen are parents of a child with a tree nut allergy. Their child was refused admission to a child care center because the center did not have sufficient staffing levels to deal with the extra care demands of a child with that kind of medical condition.  The trial court granted summary judgment to the defendants because the nut allergy was not a “disability” under the ICRA.

The court reversed the summary judgment because the trial judge had not evaluated whether an episodic condition like a tree nut allergy would substantially limit a major life activity when active.    Notably, coverage for episodic conditions has existed only since the ADAAA became effective January 1, 2009.   But the ICRA has never been amended.   In holding that the ADA amendments apply, the court relied upon several pre-2009 cases holding that a federal analytical framework applied to disability cases under the ICRA. 

Judge Vogel dissented from the majority’s decision. She argued the only reason the pre-2009 cases relied upon the federal disability framework is because of similarities between the ADA and ICRA that then existed. After the 2009 ADA amendments, however, the federal law was no longer similar in many respects.    Judge Vogel concluded that it is not the court’s role to change the definition of disability under the ICRA simply because federal law changed.   That is up to the legislature.

Fortunately, this panel’s opinion is not the end of the story.   A certified question is presently pending before the Iowa Supreme Court on this very issue.   In Stotler v. Delavan, Inc., U.S. District Judge Gritzner asked the Iowa Supreme Court to answer the following question:

In the absence of any applicable amendment to the Iowa Civil Rights Act (ICRA) regarding claims of disability discrimination, will the Iowa courts adopt the structure of the revised federal law enacted by Congress in the 2008 Americans with Disabilities Act Amendment Act (ADAAA), specifically 42 U.S.C. §§ 12101 and 12102, and federal regulations promulgated thereunder, when reviewing disability discrimination claims under the ICRA?

It would be tempting for the Iowa Supreme Court t to simply adopt the ADA Amendments (as the Court of Appeals did in Knudsen).    It would certainly make cases easier to litigate, particularly those that assert claims under both federal and state law.  Hopefully, the court will resist that temptation.   The ADA Amendment substantively changed the nature and extent of that law’s coverage.  The Iowa legislature has expressed no intention to expand the scope of the ICRA in a similar manner.  

Not following the federal ADA in this case would also open the door to re-evaluting whether federal precedent should be followed in other types of discrimination claims under the ICRA..  The courts have for years ignored the real substantive differences between federal and state discrimination laws, and it is time to revisit those decisions.

This week we are trying out a new feature on our Blog.  A weekly round-up of important, interesting, practical, or funny employment law information and news posted in blogs or otherwise on the world wide web during the past week.  Please contact us with any information or feedback.  Here we go for the first edition:

The Des Moines Register reports that key information was withheld from the Iowa Civil Rights Commission in connection with its investigation of racial bias by Iowa Workforce Development.    The investigation is part of a class action lawsuit alleging the Agency engaged in a pattern of failing to hire black applicants over a number of year.

New ADA Regulations coming soon.   The Washington Labor & Employment Wire notes that the EEOC voted to publish a Notice of Proposed Rule making.  Once the proposed regulations are published, there is a 60 day period for comments from the public.   The EEOC press release on the subject is here.    The EEOC has also published a Q&A document concerning the proposed rule making.

 EFCA Report discusses the many high profile politicians that have addressed the AFL-CIO constitutional convention this week.  Senator Specter (D-Pa) discussed a revised EFCA that would eliminate the controversial "card-check" feature of the bill.  However, the revised EFCA would still contain the binding arbitration provision and enhanced penalties for unfair labor practices that business interests strongly oppose.   In addition, while it eliminated card check, the proposed compromise bill shortens dramatically the time period between a petition for election and the actual election, thus reducing the time an employer would have to mount a campaign opposing the union.

Most sexual harassment cases involve female employees complaining about males, but occasionally it is the other way around.  The EEOC announced it is pursuing claims against a South Carolina Time Share resort because of alleged sexual harassment by a female supervisor of a male subordinate.  

For another example of the impact of internet social media on workplace litigation, see this post at the Delaware Employment Law Blog.

Ross Runkel’s LawMemo Employment Law Blog contains a link to a 79 page report issued by the U.S. Chamber of Commerce concerning what changes to expect the Obama NLRB. 

Finally, in light of the recent  public outbursts, tantrums, or otherwise offensive remarks Serena Williams, Rep. Joe Wilson (R., S.C.), rapper Kayne West, and other public figures, Work Matters Blog contains a thoughtful post about the art of the apology and how it can contribute to more civil behavior both in and out of the workplace. 

This post in HR Observations (Hat tip: Ohio Employer’s Law Blog) explores whether obesity could be the next characteristic to become protected under the anti-discrimination laws.   A group called the "Obesity Action Coalition" complains that discrimination against obese people is widespread.  Employer concern about rising costs associated with employee health coverage, workers’ compensation costs,  and an emphasis on employee wellness may also contribute to the perception among the overweight that they have been marginalized in the workplace.

Although obesity is not officially a protected class under the federal discrimination laws or Iowa Civil Rights Act, employers are wise to be alert to weight related conditions that might lead to discrimination claims.   Health problems associated with obesity may protect an employee under the recent amendments to the ADA.   To the extent that gender or age contribute to weight related health conditions, policies or practices that favor fit and healthy employees may adversely impact one gender or age group more than others.   Even an employer wellness program designed to combat obesity could potentially discriminate against those who do not benefit from it.    It remains to be seen whether the EEOC will address obesity in the revised ADA regulations, and whether the Courts are open to expansive interpretations that will, in effect, result in weight becoming a new protected class.

 

 

 

A recent post at Human Resources Executive Online, entitled "Warnings from the Top".  provides an excellent overview of some of the new challenges employers have been presented since the beginning of 2009.   "Like it or not" say the authors, changes are coming, and employers better be prepared.

According to several attorneys the authors interviewed, some of the most pressing new laws and regulations relate to the Lilly Ledbetter Fair Pay Act, the Employee Free Choice Act being debated in Congress, and Amendments to the ADA.    These new laws mean it is time to train–about labor relations issues, what managers can and cannot say about unions; about safety, and about reasonable accommodation.   Now is also a good time to conduct an audit of your company’s human resources practices, especially wage and hour compliance issues and compensation practices.  

Iowa employers are not immune from these changes.  Indeed, as discussed in a prior post on Iowa Employment Law Blog, compensation fairness issues may be even more urgent in Iowa because the the State has enacted its own version of the Lilly Ledbetter Act.

We will continue to keep you posted on developments in these important areas of the law.