The Wisconsin Court of Appeals recently overruled the Circuit Court finding that an ordinance drafted in the City of Milwaukee requiring paid sick leave for employees within the City of Milwaukee was enacted pursuant to the direct legislation statute, Wis. Stat. 9.20, had a rational relationship to the City’s police powers, is not preempted by Wisconsin Statute, the National Labor Relations Actor or the Labor Management Relations Act, did not violate the state and federal constitutions and did not regulate activity outside the City limits. Therefore, the court lifted the permanent injunction of the circuit court allowing enactment of the ordinance. On April 12, 2011, the Wisconsin State Assembly passed Senate Bill 23, nullifying the ordinance.
Factual Background
This ordinance was brought under Wisconsin Statute §9.20 which permits city and village electors to submit a petition to the governing body requesting that the body either adopt the ordinance attached to the petition or submit the ordinance to the local electors for a vote. A petition under Wis. Stat. 9.20 was brought to the City of Milwaukee Common Council with an ordinance requiring paid sick leave for employees within the City of Milwaukee. The Common Council then elected to submit the ordinance to the local electors for a vote on November 4, 2008. Notice of the election, including the full text of the ordinance was published and posted as required under Wisconsin Statutes and the ballot question read “Shall the City of Milwaukee adopt Common Council File 080420, being a substitute ordinance requiring employers within the City or provide paid sick leave to employees?” The ordinance passed with nearly 70% affirmative vote and the ordinance became effective on November 12, 2008.
Circuit Court Challenge
Nearly immediately after passage the Milwaukee Metropolitan Association of Commerce, Inc. (“MMAC”) filed an action seeking declaratory judgment that the ordinance was invalid on multiple statutory and constitutional grounds and requested temporary and permanent injunctive relief, which they were granted. MMAC’s primary objections centered around the fact that the ordinance included two acceptable sick leave reasons that MMAC did not believe were within the commonly accepted understanding of sick leave and were not rationally related to the police powers of the City and therefore the ordinance was unconstitutional. These two accepted sick leave reasons were to seek relocation due to domestic or sexual violence or stalking and to prepare for or participate in a civil or criminal legal proceeding related to domestic or sexual abuse. Interestingly, the circuit court denied the City and 9 to 5, Inc. (an intervening defendant who collected the majority of petition signatures) request to sever those provisions from the ordinance. The circuit court agreed with MMAC and granted a permanent injunction.
Appeal
The Court of Appeals in reversing the circuit court made several important holdings. The first is that a statement under Wis. Stat. 9.20 is in fact a brief statement. The elector has several opportunities to review the full version of a proposed ordinance as a result of the extensive requirements to publish notice and the full ordinance, including access to the ordinance at the polling place. Further, ordinances can be lengthy and if MMAC’s theory that every element must be included in the statement, the statement would no longer be a brief and concise statement as the statute requires. Therefore, the more reasonable construction is that Wis. Stat. §9.20(6) requires a brief statement of the general purpose of the proposed ordinance, which this ballot question satisfied. In deciding that the purposes of the ordinance were rationally related to the City’s police powers, the Court of Appeals held that the question was not as MMAC posed it “whether the challenged provisions are rationally related to the state purpose of the ordinance” but “whether the challenged provisions are rationally related to any legitimate municipal objective” i.e. the health, safety and welfare of City residents. The Court of Appeals in concluding that provisions were rationally related to a legitimate municipal purpose found that it is a reasonable assumption that a person who has been a victim of domestic or sexual abuse will have better physical and mental health if the abuse stops and it is further reasonable to assume that measures taken to assure that it stops, such as relocation or legal proceedings are obvious preventative measures.
MMAC further challenged the requirement of paid sick leave verse unpaid sick leave as not rationally related to health, safety and welfare of the City. The Court of Appeals quickly disregarded this finding it is reasonable to conclude that employees who receive paid sick leave will be more inclined to use it when necessary as opposed to unpaid leave and the fact that unpaid sick leave would accomplish man of the same goals does not make paid sick leave unreasonable. The Court of Appeals quickly struck down other challenges that the ordinance is preempted by the Minimum Wage Law, FMLA and Workers Compensation Act, stating it does not increase minimum wage or conflict with FMLA or the Workers Compensation Act. For similar reasons the Court of Appeals holds that the ordinance is not preempted by Federal Law, specifically the NLRA and LMRA. The Court of Appeals also rejected MMAC’s argument that the ordinance impaired contracts nor extended extra-territorial activities outside of the City’s boundary. Lastly, the Court of Appeals was forced to address MMAC’s challenge that if the ordinance is passed the two year safe harbor provision had already passed allowing voters to repeal the ordinance. The Court held such a ruling would be contrary to the reasonable construction of the statute since the two year period would have ended before the injunction was lifted and the ordinance enacted.
Legislative Intervention
Amidst the confusion and commotion surrounding the State Budget Repair Bill, another bill was passed by republican senators on March 3, 2011 known as SB 23. SB 23 preempts cities, villages, towns and counties from creating ordinances requiring employers to provide employees with leave to deal with family, medical or health issues. The bill basically provides that the State of Wisconsin’s Family and Medical Leave Act is the law of the land, is uniform and consistent and ordinances taken by a municipality requiring employers to provide leave would be inconsistent with, go against the spirit of and defeat the purpose of that Act. On April 12, 2011 the Wisconsin State Assembly passed SB23 on April 12, 2011 and Governor Walker has stated he will sign the bill into law.
