Opinion
No. 08CV018220.
Opinion Filed: June 12, 2009.
[EDITORS' NOTE: THE PUBLICATION STATUS OF THIS OPINION IS GOVERNED BY WIS. STAT. RULE 809.23 (2) AND (3).]
DECISION AND ORDER
Plaintiff, Metropolitan Milwaukee Association of Commerce, Inc., seeks summary judgment for its claim that section 112 of the Milwaukee Code of Ordinances is unconstitutional, void and invalid. Plaintiff also seeks a permanent injunction from this Court prohibiting the Ordinance's implementation and enforcement. This Court determines that for the reasons stated herein, the Ordinance is invalidly enacted and unconstitutional and, therefore, grants summary judgment and a permanent injunction.
Background
On November 4, 2008, the electors of the City of Milwaukee (the "City") enacted Milwaukee Code of Ordinances ("MCO") § 112, "Paid Sick Leave for Employes [sic] Provided by Employers Within the City" (the "Ordinance"). Pursuant to Wis. Stat. § 9.20. the Ordinance was presented to the electors of the City via direct legislation as an initiative. As such, at least 15% of the electors of the City signed a petition requesting that the proposed Ordinance, without alteration, either be adopted by the City's common council or be brought to a vote by the electors of the City. Wis. Stat. § 9.20(1) (2007-2008). The common council voted to submit the decision of whether to enact the Ordinance to the electors of the City in the form of a ballot question. On November 4, 2008, the electors of the City voted "yes" for the proposed Ordinance. Pursuant to Wis. Stat. § 9.20(7), the Ordinance became effective upon its publication on November 12, 2008.
Direction legislation takes two forms: initiate and referendum. An initiative empowers the electorate to enact new law within a particular jurisdiction. Heitman v. City of Mauston Common Council, 226 Wis. 2d 542, 546-47, 595 N.W.2d 450 (Ct.App. 1999). By contrast, a referendum is a direct review by the electorate of previously or provisionally adopted legislation. Mount Horeb Community Alert v. Village Bd. of Mt. Horeb, 2003 WI 100, ¶ 13, 263 Wis. 2d 544, 553, 665 N.W.2d 229 (2003).
All subsequent references to the Wisconsin Statutes are to the 2007-2008 version unless otherwise noted.
On November 5, 2008, Plaintiff, Metropolitan Milwaukee Association of Commerce, Inc. ("MMAC"), filed a notice of claim with the City asserting that the Ordinance was invalid and unenforceable. On January 14, 2009, our court granted 9to5's motion to intervene. On February 6, 2009, this Court granted MMAC's motion for a temporary injunction. MMAC has filed this motion for summary judgment, asking this Court to declare that the Ordinance is unconstitutional, void and invalid and to grant a permanent injunction prohibiting its implementation and enforcement.
The January 13, 2009 hearing was heard before the Honorable John J. DiMotto. Upon Judge DiMotto's recusal, this case was eventually assigned to this Court.
Standard of Review
This Court reviews a motion for summary judgment pursuant to Wis. Stat. § 802.08. In Preloznik v. City of Madison, 113 Wis. 2d 112, 334 N.W.2d 580 (Ct.App. 1983), the court of appeals set forth the methodology to be used in summary judgment:
[T]he court, trial or appellate, first examines the pleadings to determine whether claims have been stated and a material factual issue is presented. If the complaint . . . states a claim and the pleadings show the existence of factual issues, the court examines the moving party's affidavits for evidentiary facts admissible in evidence or other proof to determine whether that party has made a prima facie case for summary judgment. To make a prima facie case for summary judgment, a moving defendant must show a defense which would defeat the claim. If the moving party has made a prima facie case for summary judgment, the court examines the affidavits submitted by the opposing party for evidentiary facts and other proof to determine whether a genuine issue exists as to any material fact, or reasonable conflicting inferences may be drawn from the undisputed facts, and therefore a trial is necessary.
Summary judgment methodology prohibits the trial court from deciding an issue of fact. The court determines only whether a factual issue exists, resolving doubts in that regard against the party moving for summary judgment.
Id. at 116, 334 N.W.2d 580 (citations omitted).
Here, the parties have agreed that this dispute centers on an undisputed set of straightforward facts and statutory law. Our courts' interpretation of ordinances, as with our interpretation of statutes, presents a question of law. Hillis v. Village of Fox Point Bd. of Appeals, 2005 WI App 106, ¶ 6, 281 Wis. 2d 147, 151-52, 699 N.W.2d 636 (Ct.App. 2005) ( citing State v. Ozaukee County Bd. of Adjustment, 152 Wis. 2d 552, 559, 449 N.W.2d 47 (Ct.App. 1989) ("The rules governing interpretation of ordinances and of statutes are the same.")); U.S. Oil, Inc. v. City of Fond Du Lac, 199 Wis. 2d 333, 544 N.W.2d 589 (Ct.App. 1996) (whether state legislation preempts an ordinance is a question of law).
Discussion
This is a case where a proposed ordinance's reach exceeds its grasp. As such, this Court holds that the Ordinance is invalid and unconstitutional and MMAC is entitled to summary judgment and the permanent injunction that it seeks.
MMAC's complaint presents a litany of claims in support of its argument that the Ordinance is invalid, void and unconstitutional: (1) the Ordinance was improperly enacted under Wis. Stat. § 9.20; (2) the Ordinance is preempted by the Living Wage Act, Wisconsin Family Medical Leave Act, Worker's Compensation Act, National Labor Relations Act, and Labor Management Relations Act; (3) and the Ordinance is unconstitutional due to an invalid exercise of police powers, invalid impairment of existing contracts, extraterritoriality and vagueness. This Court will address each claim in turn.
1. Enactment under Wis. Stat. § 9.20
Direct legislation by initiative "is a creature of statute and its use must comport with the requirements established by the legislature." Heitman, 226 Wis. 2d at 547 (citing Landt v. City of Wisconsin Dells, 30 Wis. 2d 470, 478-79, 141 N.W.2d 245 (1966)). In order for an initiative to be valid, it must be enacted pursuant to Wis. Stat. § 9.20. See Mount Horeb, 2003 WI 100, ¶¶ 15-16. However, this Court must interpret § 9.20 broadly so that it does not impede upon an electorate's reserved legislative power to act "with particular appropriateness under circumstances where the people are of the opinion that their elected representatives are not acting in response to the public will." State ex. rel. Althouse v. City of Madison, 79 Wis. 2d 97, 118-19, 255 N.W.2d 449 (1977).
This legislative power is not without boundaries. If the proposed legislation is referred to a vote of the electors — as it is here — the ballot question must follow statutory guidelines:
The ordinance or resolution need not be printed in its entirety on the ballot, but a concise statement of its nature shall be printed together with a question permitting the elector to indicate approval or disapproval of its adoption.
Wis. Stat. § 9.20(6). MMAC contends that the ballot question for this Ordinance fails the requirement of "a concise statement of its nature."
In determining the sufficiency of "a concise statement of its nature," our courts have turned to State ex rel. Ekern v. Zimmerman, 187 Wis. 180, 204 N.W. 803 (1925). In Ekern, our supreme court stated:
Had the Legislature in the instant case prescribed the form of submission in a manner which would have failed to present the real question, or had they, by error or mistake, presented an entirely different question, no claim could be made that the proposed amendment would have been validly enacted. In other words, even if the form is prescribed by the Legislature, it must reasonably, intelligently, and fairly comprise or have reference to every essential of the amendment. This demonstrates quite clearly the fact that the form of submission is after all a mere form, and that the principal and essential criterion consists in a submission of a question or a form which has for its object and purpose an intelligent and comprehensive submission to the people, so that the latter may be fully informed on the subject upon which they are required to exercise a franchise.
Id. at 201. Thus, this Court must determine whether the Ordinance's ballot question reasonably, intelligently, and fairly comprises or has reference to every essential of the Ordinance. See State ex rel. Thomson v. Zimmerman, 264 Wis. 644, 660, 60 N.W.2d 416 (1953) ("If the subject is important enough to be mentioned on the ballot it is so important that it must be mentioned in accord with the fact.").
The ballot question for the Ordinance states:
Shall the City of Milwaukee adopt Common Council File 080420, being a substitute ordinance requiring employers within the city to provide paid sick leave to employees?
MMAC contends that the phrases "employers within the city" and "paid sick leave" are inaccurate and fail the "concise statement" requirement.
Specifically, MMAC argues that "employers within the city" suggests that the employers must be located within the boundaries of the City, while the Ordinance in fact gives no such limitation. Rather, the Ordinance's reach is actually limited to "any person who is employed within the geographic boundaries of the [C]ity." Ordinance § 122-1.3. MMAC contends this interpretation is mere word play and that an employer is only an "employer within the city" when its employees are working inside the geographical boundaries of the City.
While this Court could not find any statutory or case law that utilizes the "employers within the city" language, it is quite clear that the phrase "employer within the city" limits the Ordinance's reach to when an employee is working within the geographical boundaries of the City. The Ordinance defines employer by reference to Wis. Stat. § 104.01(3)(a):
"[E]mployer" shall mean and include every person, firm or corporation, agent, manager, representative, contractor, subcontractor or principal, or other person having control or direction of any person employed at any labor or responsible directly or indirectly for the wages of another."
MCO § 122-1.4 provides that the term "employer" only extends to the private sector:
For purposes of this chapter, 'employer' does not include any of the following: a. The United States government. b. The state of Wisconsin, including any office, department, agency, authority, institution, association, society or other body of the state, including the legislature and the judiciary. c. Any county or local government.
Thus, our legislature defined "employer" in terms of its control or direction of a person. Therefore, a reasonable, intelligent, and fair interpretation of the ballot question limits the reach of the Ordinance to any employer who is in control or direction of an employee working in the geographical boundaries of the City.
A literal interpretation of "employers within the city" that included employers located in the City but doing business anywhere in the world would conflict with the "absurd results" doctrine. The "absurd results" doctrine is the "[t]he doctrine that a statute will not be interpreted to reach an absurd result [in order] to avoid interpreting a statute in accordance with its plain language or [whenever] a statute is subject to more than one reasonable interpretation." Watton v. Hegerty, 2008 WI 74, ¶ 39, 311 Wis. 2d 52, 80, 751 N.W.2d 369 (2008).
A local ordinance that only regulates how the City's businesses must operate outside of the City's boundaries would clearly exceed the City's police and extraterritoriality powers; it would be absurd for the electors to assume a direct legislation would propose such a measure. When the "true import is obvious and not calculated to mislead a voter," our courts must find that the intent of the electors was exercised. Morris v. Ellis, 221 Wis. 307, 316-17, 266 N.W. 921 (1936); see State ex rel. Spaulding v. Elwood, 12 Wis. 551, 559 (1860) ("when the intention of the elector can be clearly ascertained from the ballot itself, or with the aid of competent evidence dehors the ballot, such intention should have effect, and the vote should be counted."). Therefore, this Court holds that the phrase "employers with the city" falls within the "concise statement" requirement of Wis. Stat. § 9.20(6).
MMAC also contends that "paid sick leave" fails the "concise statement" requirement of Wis. Stat. § 9.20(6). Specifically, MMAC notes that the Ordinance requires paid leave for reasons outside of a traditional definition of "sick leave." This Court agrees.
Notably, the Ordinance requires sick leave so that an employee may "seek relocation due to the domestic or sexual violence or stalking" and "take legal action, including preparing for or participating in any civil or criminal legal proceeding related to or resulting from the domestic or sexual violence." MCO § 112-5.1 These provisions are important subjects of the Ordinance, thus they must either be mentioned in the ballot question, see Thomson, 264 Wis. at 660, or implicitly covered within the term "sick leave," see Ekern, 187 Wis. at 201. Because neither domestic violence, sexual violence nor stalking is mentioned in the ballot question, this Court may only uphold the validity of the ballot question on this issue if it finds that "sick leave" not only reasonably, intelligently, and fairly comprises or references to domestic violence, sexual violence and stalking, but also that "sick leave" reasonably, intelligently, and fairly comprises or references relocation or pursuit of a legal action in response to such occurrences.
112-5. Use of Paid Sick Leave: 1. Paid sick leave shall be provided to an employe by an employer for:
a. An employe's mental or physical illness, injury or health condition or need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or need for preventive medical care.
b. Care of a family member with a mental or physical illness, injury or health condition who needs medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or who needs preventive medical care.
c. Absence necessary due to domestic abuse, sexual assault or stalking, provided the leave is for any of the following:
c-1. Seek medical attention for the employe or employe's child, spouse, parent, grandparent or extended family member to recover from physical or psychological injury or disability caused by domestic or sexual violence.
c-2. Obtain services from a victim services organization.
c-3. Obtain psychological or other counseling.
c-4. Seek relocation due to the domestic or sexual violence or stalking.
c-5. Take legal action, including preparing for or participating in any civil or criminal legal proceeding related to or resulting from the domestic or sexual violence.
This Court must first define the boundaries of "sick leave." Our legislature has previously defined "sick leave" in terms of University of Wisconsin System employment as "[l]eave of absence . . . owing to sickness." Wis. Stat. § 36.30. University of Wisconsin System sick leave is further defined in the Wisconsin Administrative Code:
Sick leave refers to absences of faculty, academic staff and limited appointees of the university of Wisconsin system due to personal illness, injury, disability or pregnancy as well as attendance on a member of the immediate family of the employee whose condition or death requires the employee's direct care, if such absences are being charged against the employee's accumulated sick leave credits.
Wis. Admin. Code § UWS 19.01 (emphasis added). Our legislature established the sick pay accrual rate for appointed authorities using similar wording, describing the benefit as "[l]eave of absence with pay owing to sickness." Wis. Stat. § 230.35(2). These definitions comport with the dictionary definition of "sick leave": "an absence from work permitted because of illness." MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 1089 (10th ed. 1997). Illness is defined as "an unhealthy condition of body or mind." Id. at 577. Each of these definitions illustrate how "sick leave" refers to a particular condition.
Courts may use a dictionary in order to determine the common meaning of a word; however, this does not mean the word is ambiguous. State v. Sample, 215 Wis. 2d 487, 499-500, 573 N.W.2d 187 (1998).
By contrast, domestic abuse, sexual assault, and stalking refer to acts perpetrated upon a victim. The Ordinance borrows the definitions of "domestic abuse" and "sexual assault" from the state legislature. MCO §§ 112-1.3 and 112-1.8; see Wis. Stat. §§ 968.075(1)(a) and 940.225. Domestic abuse is defined by a list of acts "engaged in by an adult person against his or her spouse or former spouse, against an adult with whom the person resides or formerly resided or against an adult with whom the person has a child in common." Wis. Stat. § 968.075(1)(a). Likewise, each of the four degrees of sexual assault involves sexual contact or sexual intercourse with another person. See Wis. Stat. §§ 940.225 (1) — (3m). For stalking, the Ordinance does not follow the statutory definition in Wis. Stat. § 940.32. Rather, stalking is defined as:
STALKING means engaging in a course of conduct directed at a specific person that would cause a reasonable person to fear for his or her safety or the safety of others, or suffer substantial emotional distress.
MCO § 112-1.10. As with domestic abuse and sexual assault, stalking involves the conduct of at least one person against another person.
Although the definition of "stalking" is more expansive in Wis. Stat. § 940.32 than in the Ordinance, this Court notes that they both involve the course of conduct of one person to the detriment of another.
While the effects of domestic abuse, sexual assault, and stalking (e.g., physical injury, mental trauma) may qualify for the treatment provisions of sick leave, the acts themselves are not conditions. Likewise, the provisions regarding relocation and taking legal action are responses to crimes perpetrated by a third party. By contrast, sick leave traditionally involves an illness to the employee regardless of the condition's origin. The legislature has recognized these distinctions by placing its provisions regarding domestic abuse, sexual assault, and stalking in the criminal law statutory scheme, whereas the "sick leave" provisions are found in employment statutory schemes. See Wis. Stat. chs. 938-951 (Crimes) and chs. 967 — 980 (Criminal Procedure); compare with Wis. Stat. chs. 36-39 (Higher Education) and ch. 230 (State Employment Relations). These distinctions are significant, and they create a separate primary issue within the Ordinance.
In instances where the direct legislation covers more than one primary issue, those separate issues must be parsed into separate phrases within the ballot question or voted upon individually. See Thomson, 264 Wis. at 657 ("We consider that a constitutional change in the individuals to be counted is not a detail of a main purpose to consider area in senate districts but is a separate matter which must be submitted as a separate amendment."). In Thomson, our supreme court determined that the ballot question for a proposed amendment regarding reapportioning senate districts "did not present the real question but by error or mistake presented an entirely different one." Id. at 660.
The ballot question at issue in Thomson stated, "Shall sections 3, 4 and 5 of article IV of the constitution be amended so that the legislature shall apportion, along town, village or ward lines, the senate districts on the basis of area and population and the assembly districts according to population?" Id. at 661. However, the amendment did not require such limitations of apportioning senate districts aside from being "contiguous" and "convenient." Id. at 660. Further, the amendment revoked a constitutional provision that excluded untaxed Indians and the military from being counted in determining the representation for each district. Id. at 657. Finding that these changes were too significant and distinct to fall within the main purpose of the ballot question, the Thomson court held that the ballot question failed the "concise statement" requirement in Wis. Stat. § 6.23(8). Id. at 659-60 ( citing Ekern, 187 Wis. at 201).
This Court finds that the holding in Thomson is persuasive. Although the ballot question in Thomson relates to a constitutional amendment, the Thomson court held that the ballot question failed the "concise statement" standard at issue in this case. The "concise statement" standard cited in Thomson, Wis. Stat. § 6.23(8) ("a concise statement of the nature thereof") is nearly identical to the "concise statement" standard found here, Wis. Stat. § 9.20(6) ("a concise statement of its nature"). There is no indication that the Thomson court intended to limit its analysis of the "concise statement" requirement to constitutional amendments.
Using Thomson as a guideline, this Court holds the term "sick leave" does not reasonably, intelligently, and fairly comprise or reference domestic violence, sexual violence and stalking. Even if this Court held otherwise, this Court still holds that "sick leave" does not reasonably, intelligently, and fairly comprise or reference relocation or pursuit of a legal action in response to such occurrences. These provisions are not details of the main purpose of the Ordinance, but separate matters which must be detailed in the concise statement voted upon on a different direct legislation ballot. Thomson, 264 Wis. at 657. Thus, the true intent of the voter could not be elicited for the purposes of direct legislation.
The City also contends that any ambiguities in the ballot question are clarified by the posting and discussion of the Ordinance at the voting stations, in the media and at the various public forums discussing the Ordinance before the election. However, such a holding would eviscerate the "concise statement" requirement in Wis. Stat. § 9.20(6) and overlook the litany of case law this Court has cited to describing the importance of the ballot question. As our supreme court has noted, "[t]he ballot was what the electors came directly in contact with. They presumably read the question as it appeared thereon and it is natural to assume that the question on the ballot was controlling." State ex rel. Thomson v. Peoples State Bank, 272 Wis. 614, 622, 76 N.W.2d 370 (1956). This Court finds that the question presented to the electors of the City failed the requirements set forth in Wis. Stat. § 9.20. Therefore, this Court holds that the Ordinance was invalidly enacted.
Although this Court's holding that the ballot question is invalid provides a sufficient ground to grant summary judgment, Wisconsin Power and Light Co. v. Public Service Com'n, 232 Wis. 59, 64, 286 N.W. 588, 122 A.L.R. 1135 (1939), this Court will proceed with its review of the balance of the issues.
2. Preemption with the Living Wage Act, Wisconsin Family Medical Leave Act, Worker's Compensation Act, National Labor Relations Act, and Labor Management Relations Act
A. Preemption by state law.
The Ordinance may be preempted by state law via the Wisconsin Constitution or the Wisconsin statutes. Under Wisconsin Constitution Article XI, § 3, ( 1):
Cities and villages organized pursuant to state law may determine their local affairs and government, subject only to this constitution and to such enactments of the legislature of statewide concern as with uniformity shall affect every city or every village. The method of such determination shall be prescribed by the legislature.
Unless an ordinance only affects a matter of local concern, that ordinance is preempted by a state statute where a conflict arises. Welter v. City of Milwaukee, 214 Wis. 2d 485, 494, 571 N.W.2d 459 (Ct. App. 1997). Here, the electors of the City have clearly identified sick leave as matter of local concern within the City.
However, it is undisputed that the regulation of employment benefits is also of statewide concern. See State ex rel. Michalek v. LeGrand, 77 Wis. 2d 520, 527-28, 253 N.W.2d 505 (1977) (whether a challenged legislative enactment is a matter of statewide concern is for the courts to decide); see also Glendale Prof'l Policemen's Ass'n v. City of Glendale, 83 Wis. 2d 90, 108, 264 N.W.2d 594 (1978) (there are statutes of statewide concern that govern wages, hours, and conditions of employment.). Therefore, the City's power to adopt the Ordinance must derive from an alternate route. City of Madison v. Schultz, 98 Wis. 2d 188, 198, 295 N.W.2d 798 (Ct.App. 1980). This route is found in our legislation.
Under Wis. Stat. §§ 62.04 and 62.11(5), cities and villages are given broad powers limited only by the constitution or statutes. Apartment Ass'n of South Cent. Wisconsin, Inc. v. City of Madison, 2006 WI App 192, ¶ 13, 296 Wis. 2d 173, 184-85, 722 N.W.2d 614 (Ct.App. 2006). When a statute has addressed a matter of statewide concern, that statute preempts a local ordinance in the event any of the following situations occur: "(1) the legislature has expressly withdrawn the power of the municipality to act; (2) the ordinance logically conflicts with the state legislation; (3) the ordinance defeats the purpose of state legislation; or (4) the ordinance violates the spirit of the state legislation." Id.
Wis. Stat. § 62.04 states:
It is declared to be the intention of the revision of the city charter law, to grant all the privileges, rights and powers, to cities which they heretofore had unless the contrary is patent from the revision. For the purpose of giving to cities the largest measure of self-government compatible with the constitution and general law, it is hereby declared that ss. 62.01 to 62.26, inclusive, shall be liberally construed in favor of the rights, powers and privileges of cities to promote the general welfare, peace, good order and prosperity of such cities and the inhabitants thereof.
Wis. Stat. § 62.11(5) states:
Except as elsewhere in the statutes specifically provided, the council shall have the management and control of the city property, finances, highways, navigable waters, and the public service, and shall have power to act for the government and good order of the city, for its commercial benefit, and for the health, safety, and welfare of the public, and may carry out its powers by license, regulation, suppression, borrowing of money, tax levy, appropriation, fine, imprisonment, confiscation, and other necessary or convenient means. The powers hereby conferred shall be in addition to all other grants, and shall be limited only by express language.
Although an ordinance may serve a related purpose to an existing statute, it is not necessarily preempted. See Michalek, 77 Wis. 2d at 530. ("[T]he challenged ordinance and sec. 280.22, Stats . . . are not locomotives on a collision course. Rather each moves on its own track, parallel and not too far apart, traveling in the same direction."). "Unless legislative provisions are contradictory in the sense that they cannot coexist, they are not to be deemed inconsistent because of mere lack of uniformity in detail." Fox v. Racine, 225 Wis. 542, 547, 275 N. W. 513 (1937). An ordinance that complements and not conflicts with our legislation is valid. Welter, 214 Wis. 2d at 492 ( citing DeRosso Landfill Co., Inc. v. City of Oak Creek, 200 Wis. 2d 642, 651, 547 N.W.2d 770 (1996)).
Here, the Ordinance contains a preemption clause that states nothing in the Ordinance "shall be interpreted or applied so as to create any power or duty in conflict with federal or state law." MCO § 112-19. MMAC contends the Ordinance naturally conflicts and is therefore preempted by both state and federal law: Living Wage Act, Wisconsin Family Medical Leave Act, Worker's Compensation Act, National Labor Relations Act, and Labor Management Relations Act. This Court disagrees and finds that while the Ordinance addresses related issues, the Ordinance merely complements and not conflicts with the cited legislation.
The Living Wage Act (the "LWA") established the minimum wage law, which requires "compensation for labor paid, whether by time, piecework, or otherwise, sufficient to enable the employee receiving the compensation to maintain himself or herself under conditions consistent with his or her welfare." Wis. Stat. § 104.01(5). Welfare "include[s] reasonable comfort, reasonable physical well-being, decency, and moral well-being." § 104.01(9). The term "wage" is defined as "any compensation for labor measured by time, piece or otherwise." § 104.01(8). The minimum wage law, by statute, is an enactment of statewide concern. § 104.001(1).
The Department of Workforce Development ("DWD") is responsible for establishing the minimum wage rate. § 104.04. In doing so, it has provided the minimum rates for hourly employees, employees who receive tips or gratuities, and employees who receive allowances for board and lodging. Wis. Admin. Code § DWD 272.03. It does not prescribe a minimum for benefits, such as sick leave.
By its own terms, the minimum wage law is compensation for labor. Wis. Stat. § 104.01(8). By contrast, the Ordinance provides a benefit that an employee is eligible to receive if that employee accrues a minimum amount of hours, MCO § 112-3, and qualifies under one of the enumerated uses of paid sick leave, MCO § 112-5. An employer need not pay any sick leave if the employee does not qualify under the Ordinance. Thus, paid sick leave is fundamentally different from a living wage because an employer need not compensate its employee with paid sick leave if the employee does not qualify for its use. Further, compensation under the LWA is limited to a minimum wage amount and tips. See Wis. Stat. § 104.045 (counting tips or similar gratuities toward an employer's obligation under the minimum wage law). Therefore, other employment benefits, including the payment of sick leave, could not qualify as compensation under the LWA.
Turning to preemption analysis, Wis. Stat. § 104.04 limits the DWD's authority to act on matters involving a living wage. Because a living wage involves compensation for labor and paid sick leave involves a benefit that an employee must be eligible to receive, the legislature has not expressly withdrawn the power of the City to act, does not logically conflict with the LWA, does not defeat the purpose of the LWA, and does not violate the spirit of the LWA. Therefore, this Court holds that the Ordinance is not preempted by the LWA.
The Wisconsin Family Medical Leave Act (the "WFMLA") provides for time off for events such as serious health conditions and care for family members. See Wis. Stat. § 103.10. MMAC contends that the WFMLA preempts the Ordinance because this time off not only overlaps the approved uses of paid sick leave, but the WFMLA specifically does not require an employer to compensate the employee for the time off. See Wis. Stat. § 103.10(5)(a). Therefore, MMAC suggests, the Ordinance would contradict the terms of the WFMLA.
Wis. Stat. § 104.10(5)(a) states: "This section does not entitle an employee to receive wages or salary while taking family leave or medical leave."
However, the WFMLA specifically permits an employee to "substitute, for portions of family leave or medical leave, paid or unpaid leave of any other type provided by the employer." Wis. Stat. § 103.10(5)(b); see Wis. Admin. Code § DWD 225.03 (substituting leave under the WFMLA). Thus, the WFMLA provides a carve-out for a paid sick leave system provided voluntarily or otherwise from an employer. See generally Heibler v. Department of Workforce Development, 250 Wis. 2d 152, 639 N.W.2d 776 (Ct.App. 2001) (discussing how a government employer's paid sick leave policy does not conflict with WFMLA). Moreover, the WFMLA permits an employer to provide "employees with rights to family leave or medical leave which are more generous to the employee than the rights provided under this section." Wis. Stat. § 103.10(2)(a). As such, the requirement of paid sick leave in the Ordinance maintains the "spirit" of the WFMLA.
As with the Living Wage Act, the WFMLA is fundamentally different from the Ordinance. The WMFLA requires an employer to give an employee time off to attend to certain family and medical related issues. By contrast, the Ordinance requires paid leave when attending to qualified uses. This Court recognizes that there are certain similarities in the WFMLA and the Ordinance. For example, MCO § 112-5.1 a permits an employee to receive paid sick leave for an "employe[e]'s mental or physical illness, injury or health condition or need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition or need for preventive medical care." The WFMLA permits up to two weeks of medical leave to attend to a "disabling physical or mental illness, injury, impairment or condition." Wis. Stat. §§ 103.10(1)(g) and 103.10(4). Similarly, MCO § 112-5.1.b provides paid sick leave for the care of a family member with any of the medical issues enumerated in MCO § 112-5.1.a. The WFMLA provides up to two weeks of family leave for an employee "[t]o care for the employee's child, spouse or parent, if the child, spouse or parent has a serious health condition." Wis. Stat. § 103.10(3).
While a use covered in MCO §§ 112-5.1.a-b may rise to a "disabling" or "serious" medical issue covered in the WFMLA, this potential for overlap does not necessarily render the Ordinance invalid. Rather, this Court finds that the addition of paid leave provides a complement rather than a conflict with the WFMLA. See Welter, 214 Wis. 2d at 492. As stated, an employee could elect to substitute the unpaid time off provided in the WFMLA for the paid time off provided in the Ordinance in the event of an overlap. The legislature has not expressly withdrawn the power of the City to act, does not logically conflict with the WFMLA, does not defeat the purpose of the WFMLA, and does not violate the spirit of the WFMLA. This Court holds that the Ordinance is not preempted by the WFMLA.
MMAC next contends that the Worker's Compensation Act ("WCA") preempts the Ordinance. However, the WCA limits the liability that an employer may owe an employee to instances where a covered employee sustains an injury while performing service growing out of and incidental to his or her employment for a covered employer. Wis. Stat. § 102.03(1). While the Ordinance's covered uses in MCO § 112-5.1.a could include an injury incurred at work, the covered uses broadly cover medical issues irrespective of where and how they originated. Further, the WCA accounts for sick leave benefits:
Unless an employee elects to receive sick leave benefits in lieu of compensation under this chapter, if sick leave benefits are paid during the period that temporary disability benefits are payable, the employer shall restore sick leave benefits to the employee in an amount equal in value to the amount payable under this chapter. The combination of temporary disability benefits and sick leave benefits paid to the employee may not exceed the employee's weekly wage,
Wis. Stat. § 102.30(3). There is simply no indication that the Ordinance violates the spirit of the WCA. Further, there is no indication the legislature has expressly withdrawn the power of the City to act, the Ordinance logically conflicts with the WCA, or the Ordinance defeats the purpose of the WCA. This Court holds that the Ordinance is not preempted by the WCA.
Therefore, this Court holds the Ordinance is not void as preempted by state law.
B. Preemption by federal labor laws.
The Ordinance may be preempted by federal law via Article VI of the Constitution, which states the laws of the United States "shall be the supreme Law of the Land . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. CONST. art. VI, cl. 2. There are three bases by which federal preemption may occur: (1) Congress states its intention to preempt state regulation with a direct statement within the text of the federal law; (2) the "structure and purpose" of the federal law shows a Congressional intent to preempt state law; and (3) there is an actual conflict between the state and federal law, rendering it impossible for a private party to abide by both federal and state law mandates. Fifth Third Bank ex rel. Trust Officer v. CSX Corp., 415 F.3d 741, 745-46 (7th Cir. 2005). MMAC contends that the Ordinance is preempted by two federal laws: National Labor Relations Act ("NLRA") and the Labor Management Relations Act ("LMRA").
The NRLA seeks to encourage collective bargaining and protect workers' rights to organize. 29 U.S.C.A. § 151. Although the NLRA contains no express preemption provision, the NLRA regulates in an area of law traditionally regulated by the states; therefore, a court's "NLRA preemption analysis starts with the basic assumption that Congress did not intend to displace state law." St. Thomas — St. John Hotel Tourism Ass'n, Inc. v. Government of U.S. Virgin Islands, 218 F.3d 232, 238 (3rd Cir. 2000) (internal quotations omitted).
When legislation affects protected union activities or the relationship between unions and employers, that legislation may be preempted by the National Labor Relation Act under one of two doctrines: the Garmon and Machinist doctrine. See generally San Diego Building Trades Council et al. v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959); Machinists v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 154, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976).
In Garmon, the Court held that a state court exceeded its proper jurisdiction in awarding damages arising out of peaceful union activity and that the state court action was preempted by the NLRA. Garmon, 359 U.S. at 246. It doing so, the Court noted that whenever an activity is protected under § 7 of the NLRA or prohibited by § 8, state jurisdiction is preempted because the NLRB is a regulatory body that trumps the states' ability to regulate certain activities. Id. at 243. However, the Court also held that a state law is not preempted if the activity regulated is a "peripheral concern of the Labor Management Relations Act" or when the regulated conduct touches interests "deeply rooted in local feeling and responsibility." Id. at 244. That is, the Garmon doctrine does not "support an approach which sweeps away state-court jurisdiction over conduct traditionally subject to state regulation." Id. at 219.
Here, the Ordinance is concerned with the health and welfare of its citizens through paid benefits. The enforcement of the Ordinance is not related to the activities covered in §§ 7-8 of the NLRA. See 29 U.S.C.A. §§ 157 and 158 (sections 7 and 8 of the NLRA, respectively). Rather, public health and welfare regulations are traditional subjects of statewide concern. Wisconsin Solid Waste Recycling Authority v. Earl, 70 Wis. 2d 464, 481, 235 N.W.2d 648 (1975). Thus, the Garmon doctrine does not apply to the Ordinance.
Under the Machinist doctrine, a state statute or ordinance is preempted if the state's action shifts the balance of power between labor and management or frustrates the federal purpose behind the NLRA. Machinists, 427 U.S. at 154. Notably, the Court held that neither the National Labor Relations Board (NLRB) nor the state of Wisconsin could regulate usage of economic weapons or economic pressures in collective bargaining negotiations. Id. at 146-47. Although the NLRA did not address the facts of the case, the Court surmised that such conduct was meant to be left unregulated. Id. at 146.
Here, the Ordinance involves the eligibility of paid leave for all employees within the City and does not impermissibly regulate economic weapons or provide a self-help remedy for collective bargaining agreements ("CBA") negotiations. Sick leave simply has no direct bearing on the balance of power between employers and employees. Thus, the Machinist doctrine is inapplicable to the Ordinance.
Even if either doctrine applied to the Ordinance, MMAC has failed to demonstrate that it is not a minimum labor standard. MMAC cites to 520 S. Michigan Ave. Ass's v. Unite Here Local 1, 549 F.3d 1119 (7th Cir. 2008) for the principle that the Ordinance is not a law of general application that imposes only a minimum labor standard on collectively bargained terms. Id. at 1132, 1134-35. This Court disagrees. Aside from the government worker exception that applies to any local ordinances of this nature, this Ordinance applies equally to all employees and acts as a traditional law of general application. This Court holds that the Ordinance is not preempted by the NLRA.
The LMRA seeks to prescribe and protect the rights of employees and employers and protect the public from labor disputes affecting commerce by settling controversies involving CBAs and authorizing federal courts to create a body of federal law to enforce such CBAs. 29 U.S.C.A. § 141; see Textile Workers v. Lincoln Mills, 353 U.S. 448, 451, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). MMAC contends that the Ordinance requires the City's Equal Rights Commission ("ERC") to impermissibly interpret CBAs in violation of § 301 of the LMRA.
MMAC misinterprets the purpose and impact of § 301. The LMRA merely requires that a court utilize federal law in interpreting a CBA. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 408, 108 S.Ct. 1877 (1988). It has no bearing on the substantive rights a state law or ordinance may provide workers as long as a court need not address the CBA. See id. Moreover, the LMRA does not act to invalidate a state statute or ordinance, but rather it preempts a particular state law claim (i.e. breach of contract) and requires the application of federal law. Id. at 405; see Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). Therefore, this Court holds that the Ordinance is not preempted by the LMRA.
3. Constitutionality of the Ordinance: exercise of police powers, impairment of existing employment contracts, extraterritoriality, and vagueness.
Ordinances carry a presumption of validity and must be liberally construed in favor of the municipality. Town of Rhine v. Bizzell, 2008 WI 76, ¶ 26, 311 Wis. 2d 1, 20, 751 N.W.2d 780 (2008). Although a court may disagree with the wisdom (or lack thereof) or desirability of an ordinance, the court may not substitute its judgment for that of the electorate. See id. While it is true that an ordinance must be construed so as to avoid an unconstitutional interpretation, see State ex rel. Strykowski v. Wilkie, 81 Wis. 2d 491, 526, 261 N.W.2d 434 (1978), this standard does not supplant substantive judicial review. "Otherwise, there would be no such thing as an unconstitutional statute." United States v. X-Citement Video, Inc., 513 U.S. 64, 86, 115 S.Ct. 464, 130 L.Ed.2d 372 (1994) (Scalia, J., dissenting).
An ordinance is not impervious to judicial review simply because it was enacted directly by the people. "[D]irect legislation cannot exceed or enlarge the powers conferred upon the municipal governing body by state law." Mount Horeb, 2003 WI 100, ¶ 26. That is, electors may not enact through direct legislation what a municipal governing body could not do. Id. Whether enacted via common council or direct legislation, our courts' standard of review of an ordinance is the same.
The mere enactment of an ordinance has no bearing on its constitutionality. Althouse, 79 Wis. 2d at 117-18 (holding that a common council must permit proposed direct legislation to reach the ballot even if it has grave doubts of its constitutionality). Rather, the constitutionality of all ordinances is subject to judicial review in order to maintain their validity. Bizzell, 2008 WI 76, ¶ 27. Here, MMAC challenges the constitutionality of the Ordinance as an invalid exercise of the City's police powers, impairment of existing employment contracts, extraterritorial regulation, and vagueness.
A. Police powers
Police power is an inherent quality of government and enables regulations for the protection of the health, lives, and property of citizens and for the promotion of good order and good morals. Chicago, Milwaukee and St. Paul R. Co. v. Milwaukee, 97 Wis. 418, 422, 72 N.W. 1118 (1897). Challenges to the validity of a City's police powers on due process grounds are reviewed under the rational-basis test. State ex rel. Grand Bazaar Liquors, Inc. v. City of Milwaukee, 105 Wis. 2d 203, 209, 313 N.W.2d 805 (1982). In order to overcome this standard, MMAC must "demonstrat[e] beyond a reasonable doubt that the ordinance possesses no rational basis to any legitimate municipal objective." Id. If the Ordinance is reasonable and rationally related to the objective, the Ordinance must be deemed a valid exercise of the City's police powers. Safe Water Ass'n, Inc. v. City of Fond Du Lac, 184 Wis. 2d 365, 375, 516 N.W.2d 13 (Ct.App. 1994).
Despite this high standard, courts are not required to merely acquiesce to the presumed constitutionality of the Ordinance. See Ferdon ex rel. Petrucelli v. Wisconsin Patients Compensation Fund, 2005 WI 125, ¶ 77, 284 Wis. 2d 573, 613, 701 N.W.2d 440 (2005). Indeed, it has been stated that the rational-basis test is not a "toothless one." Grand Bazaar, 105 Wis. 2d at 209 ( quoting Schweiker v. Wilson, 450 U.S. 221, 234, 101 S.Ct. 1074, 1082, 67 L.Ed.2d 186 (1981)) (Brennan, J., dissenting). Our courts' review is not limited to form and not substance. Id.; see Clark Oil Refining Corp. v. City of Tomah, 30 Wis. 2d 547, 556, 141 N.W.2d 299 (1966) (finding the ordinance at issue unworkable and unreasonable).
Courts must first identify the electors' objectives in order to determine whether an ordinance's provisions are rationally related to achieving such objectives. See Ferdon, 2005 WI 125, ¶ 85, 284 Wis. 2d at 617. Unlike an ordinance that is passed by the common council, there is no explicit legislative history for direct legislation. Rather, the common council's role is limited strictly to passing the ordinance or placing it on the ballot. Wis. Stat. § 9.20(4); Althouse, 79 Wis. 2d at 107. Because the Ordinance does not explicitly codify its objectives, see MCO § 109-1 (providing the findings and declaration of policy for the creation of the ERC), this Court must look elsewhere.
Our courts have not had the occasion to determine how a court may pinpoint the objectives of an ordinance enacted via direct legislation. Other jurisdictions have inconsistently addressed the same issue. See e.g. South Dakota Farm Bureau, Inc. v. Hazeltine, 340 F.3d 583, 593-94 (8th Cir. 2003) (the legislative history can be adduced from "several sources", including the direct evidence provided by the drafters to the voters before the election); People v. Superior Court (Turner), 97 Cal. App. 4th 1222, 1230, 119 Cal. Rptr. 2d 170 (Cal.Ct.App. 2002) (the legislative history is found in the language of the statute, the ballot summary, argument, and analysis distributed to the voters prior to the election); but see District of Columbia Bd. of Elections and Ethics v. District of Columbia, 866 A.2d 788 (D.C. 2005) (the legislative history was the short statement presented to the voters on the ballot); People v. Superior Court (Manuel), 104 Cal. App. 4th 915, 930 128 Cal. Rptr. 2d 794 (Cal.Ct.App. 2002) (proposition's primary purpose is reflected in its title).
Given the extensive campaign from numerous advocacy groups, government agencies and individuals in anticipation of the November 4, 2008 election, the most reasonable means to obtain such a history is by examining the record of disseminated material and hearing testimony prior to the election and the legislation text itself. This is consistent with our supreme court's decision to review similar information in finding that certain provisions in an ordinance prohibiting the transportation of gasoline — enacted via common council — was invalid under the police powers standard. Clark Oil, 30 Wis. 2d at 555-56 (considering hearing testimony, the National Fire Protection Association handbook and the Flammable Liquids section of the Wisconsin Administrative Code in determining the ordinance's objective). Among the voluminous fact sheets, written statements, expert reports, and hours of hearing testimony, this Court finds that the most appropriate source on the record is the City's legislation text. This document enacted both the Ordinance and the Equal Rights Commission (created to enforce the Ordinance), and it contains a number of "whereas" clauses. These clauses give a strong indication of the electors' objectives.
The analysis section, which contains a summary of the Ordinance and the aforementioned "whereas" clauses, enumerates numerous findings and objectives. The findings can be summarized as follows:
1. A large number of employers in the City do not have paid sick days available. This is especially true for part-time and low-income employees. Those with paid sick days generally do not have an adequate amount.
2. The absence or inadequacy of paid sick leave poses serious problems for City employees, their families, their employers, the health care system, and the community as a whole.
3. Such serious problems include: coming to work sick and being less productive, exposing others to sickness, spreading the sickness to certain goods that are entered into the public's stream of commerce, being unable to stay home and take care of a sick family member, risking loss of employment for staying home, having difficulty scheduling medical appointments, and risking certain family members to be sent to a nursing home.
4. These serious problems are particularly dire for single-parent households. They also affect women and people of color in the City particularly hard.
These findings are not binding on the court but they carry great weight. See Ferdon ex rel. Petrucelli v. Wisconsin Patients Compensation Fund, 2005 WI 125, ¶ 87, 284 Wis. 2d 573, 620, 701 N.W.2d 440 (2005).
Buried within these findings, the following objective can be extrapolated: Paid sick leave is required to protect the public welfare, health, safety and prosperity of the City in order to ensure a decent and healthy life for the people of the City and their families. Based on the findings detailed within the legislation text, it is clear that such public welfare, health, safety and prosperity is limited to traditional health conditions and related needs such as treating and caring for those with a contagious disease. This objective is supported by the Ordinance's title, "Paid Sick Leave for Employes [sic] Provided by Employers Within the City."
The "health, safety, and welfare of the public" elements of the objective found in the legislation text appear to be borrowed directly from Wis. Stat. § 62.11(5).
Courts may not reweigh the information stated in the findings and objectives. Safe Water Ass'n, 184 Wis. 2d at 375. Likewise, courts may not question the wisdom or correctness of direct legislation. Laskaris v. City of Wisconsin Dells Inc., 131 Wis. 2d 525, 534, 389 N.W.2d 67 (Ct.App. 1986). Rather our courts' role is limited to determining whether any of the information provides a reasonable basis for the Ordinance. Safe Water Ass'n, 184 Wis. 2d at 375.
Whether the numerous enumerated effects of City employees going to work sick or allowing their children to go to school sick qualify as "serious problems" is a determination better left for the electorate. However, the determination of whether the remedy employed reasonably addresses these problems is soundly within the jurisdiction of this Court. Laskaris, 131 Wis. 2d at 534. At no point does the summary, findings or objectives of the Ordinance include, discuss, or refer to the provisions related to domestic abuse, sexual assault or stalking. While these issues could be implicitly covered by terms such as "public welfare" and "safety," the "whereas" clauses make no attempt to connect the dots. Further, even the broadest interpretation of the clauses would not rationally relate the objectives to the provisions permitting paid leave to attend to relocation and pursue legal action.
This Court may also review the litany of direct evidence provided by 9to5 and distributed to the City's electorate prior to the election as a basis for additional legislative findings. See Clark Oil, 30 Wis. 2d at 555-56; see also Hazeltine, 340 F.3d at 593-94. In addressing this evidence, MMAC contends that there is no reasonable basis for offering nine sick days. As MMAC points out, 9to5's own literature, titled "Valuing Good Health in Milwaukee: The Costs and Benefits of Paid Sick Days," states that the average worker takes off 2.7 days annually to attend to one's own medical needs, for family care, and for doctor visits.
However, the 2.7 figure accounts for all workers, including those without paid sick leave. Thus, utilizing the findings for the Ordinance, it is reasonable to assume that the number would be higher if not for the lack of paid leave. The same study also noted that in cases where workers in small businesses were limited to five paid sick days and workers in large businesses were limited to nine paid sick days, workers took an average of 1.8 days annually due to attend to illness or injury (excluding maternity leave) and 54% did not take off any days due to illness or injury. Such direct legislative action found in this Ordinance does not exceed the boundaries of reason; therefore, this court may not find the amount of sick days allotted in the Ordinance to exceed the police powers of the City.
The same direct evidence includes a fact sheet titled, "Paid Sick Days Initiative Would Support Milwaukee Victims of Domestic Violence." This two-page article details the correlation between domestic violence and sexual assault and the Ordinance. It explains that such victims may require urgent medical care, temporary injunctions, and the ability to gain shelter to protect them and their families from further harm. It also contends "this job-protected paid time off could be critical to building family safety and security." Domestic violence is also discussed in the fact sheet, "Valuing Good Health in Milwaukee: The Costs and Benefits of Paid Sick Days." This fact sheet asserts that the provisions regarding domestic violence and sexual assault are intended to "establish safety and care for (the victims') families." Further, the fact sheet concedes that there is no data to indicate how much time off is required to address these needs. Finally, this Court is unaware of any direct evidence that correlates the provisions regarding stalking to the objectives of the Ordinance.
While this Court may not weigh the findings of this direct evidence or opine over their merits, it must determine whether the objectives of the domestic violence and sexual assault are rationally related to the overall objectives of the Ordinance. Grand Bazaar, 105 Wis. 2d at 209. This Court finds that it does not. The provisions regarding domestic violence and sexual assault are not rationally related to the Ordinance's overall objectives of protecting the public welfare, health, safety and prosperity of the City in order to ensure a decent and healthy life for the people of the City and their families. Although treatment of injuries related to domestic violence and sexual assault fall squarely within the objective, provisions regarding relocation and taking legal action do not.
This Court would have to ignore the context by which the objective has been presented to the public through the legislative text and direct evidence in order to find otherwise. Such a broad interpretation would eradicate the tenants of police power review and open the floodgates to any provision that is even tangentially related to the stated objective of "public welfare, health, safety and prosperity."
As discussed above, the Ordinance's recognized objective relates to the problems related to sickness and how an electorate can address such problems. Thus, any provisions related to relocation and taking legal action are without a rational basis. The direct evidence itself states that it is unclear how many days of paid leave would address the issues related to domestic abuse and sexual assault. There is no legislative history related to stalking and how a sick leave ordinance reasonably addresses those needs. This Court expresses no views on whether a separate ordinance that specifically addressed these issues would be properly enacted; this Court may only examine the Ordinance at issue. Clark Oil, 30 Wis. 2d at 557. The provisions regarding relocation and taking legal action to address domestic abuse, sexual assault or stalking, MCO §§ 112-5-1.c4 — c5, render the Ordinance unconstitutional.
B. Impairment of existing employment contracts
Both the federal and our state's constitution prohibit the enactment of legislation that impairs the obligations of contracts. See U.S. Const. art. I, § 10; Wis. Const. art. I, § 12. However, these contract clauses are not to be read literally so that an enactment that impairs a preexisting contract is automatically rendered void. State ex rel. Cannon v. Moran, 111 Wis. 2d 544, 554, 331 N.W.2d 369 (1983). Rather, courts must apply a three-part test in order to determine whether a new law unconstitutionally impairs existing contracts: (1) whether an obligation of contract has been substantially impaired; (2) whether the legislation has significant and legitimate public purpose; (3) whether the impairment of contract is reasonable and necessary to serve that purpose. Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI 107, ¶¶ 54-57, 295 Wis. 2d 1, 46-47, 719 N.W.2d 408 (2006).
U.S. Const. art. I, § 10 states: Treaties, Letters of Marque and Reprisal; Coinage of Money; Bills of Credit; Gold and Silver as Legal Tender; Bills of Attainder; Ex Post Facto Laws; Impairment of Contracts; Title of Nobility. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility
Wis. Const. art. I, § 12 states: Attainder; ex post facto; contracts. No bill of attainder, ex post facto law, nor any law impairing the obligation of contracts, shall ever be passed, and no conviction shall work corruption of blood or forfeiture of estate.
MMAC relies heavily upon State ex rel. Cannon v. Moran, for support that a statute changing benefits unconstitutionally impairs existing contracts. In Cannon, our supreme court considered whether a statute that reduced the salaries of certain Milwaukee County circuit court judges by the amount of pension benefits they received from the current retirement system was an unconstitutional impair of contracts. Cannon, 111 Wis. 2d at 563. The court found that the legislature had authorized the judges' switch from the Milwaukee retirement system to the state system and then "pulled the rug out" from under the judges by passing a law that reduced the judges' salaries. Id. at 559. By enacting such an unexpected and substantial loss, the legislation was deemed unconstitutional. Id. Here, the Ordinance is but one of many provisions negotiated in a CBA. The overwhelming balance of the CBA remains in tact, and MMAC has not provided any evidence to suggest that the addition of a benefit such as paid sick leave would "pull the rug out" from the MMAC employers.
In determining the severity of the legislation, courts must also consider whether "the industr[ies] affected [have] been regulated in the past, whether the legislation nullified a basic term of the contract, and the potential liability imposed as a result of the challenged legislation." The implementation of the aforementioned Living Wage Act, Wisconsin Family Medical Leave Act, Worker's Compensation Act, National Labor Relations Act, and Labor Management Relations Act have all impacted CBAs in direct ways. By comparison, this Ordinance only peripherally affects collective bargaining. It operates prospectively, imposes gradual requirements upon employers, and allows employers to credit other types of paid time off as paid sick leave. It does not nullify any basic terms of a CBA. The enormous potential liability that MMAC asserts in its cost estimates assumes that every employee will use the full amount of paid sick permitted. This is an assertion that belies the overwhelming evidence on record.
The Ordinance fails the threshold substantial impairment requirement. Therefore, this Court holds that the Ordinance does not unconstitutionally impair existing contracts.
C. Extraterritoriality
It is well established that cities may not regulate outside their territorial boundaries. See e.g. Safe Way Motor Coach Co. v. City of Two Rivers, 256 Wis. 35, 43, 39 N.W.2d 847 (1949); Cegelski v. City of Green Bay, 231 Wis. 89, 285 N.W. 343 (1939). MMAC contends that because the Ordinance regulates employers regardless of their location, the Ordinance unconstitutionally violates the extraterritoriality limits on municipal legislation. This Court disagrees.
The Ordinance explicitly only regulates those employees who are working within the geographical boundaries of the City. MCO § 112-1.3. As exemplified in the draft rules, the ERC can limit the usage of the paid sick leave days to when an employee is working in or scheduled to work within the City. The Ordinance has no bearing on what benefits employers offer when their employees operate outside the City limits. The mere act of requiring bookkeeping in order to comply with the Ordinance is insufficient to render legislation impermissibly extraterritorial as evidenced by similar bookkeeping statutes. See Wis. Stat. §§ 103.13 (recordkeeping requirements for WFMLA) and 104.09 (recordkeeping requirements for LWA); compare with MCO §§ 112-9 (requiring employers to provide notice and post information regarding the Ordinance) and 112-11 (requiring employers to retain certain records). Under MMAC's logic, any municipal legislation would be voided because it establishes a different set of legal boundaries than its neighboring jurisdictions. This is simply not true. This Court holds that the Ordinance is not unconstitutional as extraterritorial.
Whether the actual rules employed by ERC would unconstitutionally regulate extraterritorially is not before this Court.
D. Vagueness
An ordinance is unconstitutionally vague if it fails to afford proper notice of the prescribed conduct. City of Milwaukee v. Wilson, 96 Wis. 2d 11, 16, 291 N.W.2d 452, 456 (1980). That is, an ordinance is not void for vagueness unless it is "so vague and uncertain that it is impossible to execute it or to ascertain the legislative intent with reasonable certainty." Moedern v. McGinnis, 70 Wis. 2d 1056, 1074, 236 N.W.2d 240, 249 (1975); see State v. Dennis H., 2002 WI 104, ¶ 16, 255 Wis. 2d 359, 647 N.W.2d 851 (2002) (a statute is void for vagueness "if it fails to give notice to those wishing to obey the law that their conduct falls within the proscribed area."). Any doubt of an ordinance's constitutionality must be resolved in favor of upholding the ordinance. See State v. Starks, 51 Wis. 2d 256, 259, 186 N.W.2d 245, 246 (1971). The party arguing against the ordinance's enactment must establish its invalidity beyond a reasonable doubt. Clark Oil, 30 Wis. 2d 547, 553, 141 N.W.2d 299, 302 (1966).
MMAC's argument amounts to a bare legal conclusion that the Ordinance fails to give the adequate notice. In support of this contention, MMAC cherry-picks a quote from the City made at the temporary injunction hearing:
That's right. There are interpretations the City has to make. For example, what is affinity? What is reasonable documentation? As I said, when and where sick leave can be used. Who it applies to. What if someone is working for a very short period of time in the City of Milwaukee? How long does someone have to work here before they are actually considered an employee? All kinds of things will have to be applied, and I am absolutely certain that there will be challenges when they are applied.
However, this quote misrepresents the context of the City's argument. In support of its position why it did not object to MMAC's motion for a temporary injunction, the City explained that there were a number of unanswered questions regarding the Ordinance that would need to be addressed via the rulemaking process. Thus, the City was agreeable to a temporary injunction in order for those rules to be properly enacted. The City was not asserting, as MMAC implies, that any provisions within the Ordinance were unconstitutionally vague.
Assuming that this quote was intended to be MMAC's arguments on this issue, this Court finds that the Ordinance is not void for vagueness for the reasons the City allegedly argued. The term "affinity" is utilized in defining a family member as someone "related by blood or affinity whose close association with the employe[e] is the equivalent of a family relationship." MCO § 112-4. Our courts have previously addressed a nearly identical issue, defining "direct affinity" as related by marriage. Adoption of Abigail M., 221 Wis. 2d 781, 793-94, 586 N.W.2d 21 (Ct.App. 1998) (citing AMERICAN HERITAGE DICTIONARY 29 (3d ed. 1992)). The term "affinity" is not unconstitutionally vague.
Likewise, the term "reasonable" is not inherently vague. Presumably, the City was referring to MCO § 112-5.3, "An employer may not impose unreasonable barriers to use of paid sick leave or require unreasonable documentation of illness when employe[e] takes sick leave." Our courts have clearly stated that the term "reasonable" (or "unreasonable") does not render a statute or ordinance void for vagueness. State v. Nelson, 2006 WI App 124, ¶ 48, 294 Wis. 2d 578, 607, 718 N.W.2d 168 (Ct. App. 2006). The use of the term in this context provides adequate guidance for those interpreting the Ordinance. "Unreasonable documentation" means that employers may not require employees to provide documentation that goes beyond what is necessary to prove that the employee sufficiently qualified for paid sick leave.
The balance of the items detailed in the City's quotation is not so unclear as to elicit the void for vagueness doctrine. As discussed in the extraterritoriality section, sick leave can only be used while the employee is working in or scheduled to be working within the geographical boundaries of the City. The length of time working within the City in order to evoke paid sick leave is detailed with sufficient clarity in MCO § 112-3, "Accrual of Paid Sick Leave." The length of time someone must be working in the City before being considered an employee is resolved by the definitions section, which defines employees to include part-time and temporary employees. MCO § 112-1.3.
This Court holds that MMAC has not carried its burden of demonstrating beyond a reasonable doubt that the Ordinance is impermissibly vague on its face.
4. Severability
In the event this Court finds any portions of the Ordinance invalid, the City and 9to5 have asked this Court to sever those portions and enforce the balance of the Ordinance. Because the Ordinance does not contain a severability clause, this Court must look elsewhere to find the authority to perform this act. The City contends that such a source is located within the City's ordinances:
50-17. Severability. If any provision, sentence, clause, or other part of this code of ordinances or the application thereof to any person or circumstances, shall for any reason be adjudged by any court of competent jurisdiction to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remainder thereof or the application thereof to other persons or circumstances but shall be confined in its operation to the provision, sentence, clause, section or part thereof and the persons and circumstances directly involved in the controversy in which such judgment was rendered. It is hereby declared to be the intent of the common council that such remaining portion would have been adopted had such unconstitutional or invalid provisions, sentence, clause, section, part or application not been included therein.
MCO § 50-17. This Court finds that § 50-17 is inapplicable.
Whereas an ordinance enacted via common council may generally be severed in order to remain in tact the properly enacted provisions, Clark Oil, 30 Wis. 2d at 560, the same cannot be said for an ordinance enacted via direct legislation. Pursuant to Wis. Stat. § 9.20(8), ordinances "shall not be repealed or amended within 2 years of adoption except by a vote of the electors." When a statute and an ordinance conflict, the statute governs. See Welter v. City of Milwaukee, 214 Wis. 2d 485, 492, 571 N.W.2d 459 (Ct.App. 1997). Therefore, the two year prohibition on amending the Ordinance, including via severing void or unconstitutional provisions, applies to this Court.
If the Ordinance had included a severability clause, severability would have been within the dictates of Wis. Stat. § 9.20. This Court would then have to determine whether severing the invalid provisions would retain the legislative intent of the Ordinance. See City News Novelty, Inc. v. City of Waukesha, 231 Wis. 2d 93, 119-122, 604 N.W.2d 870 (Ct.App. 1999). Because this Court holds that severability does not apply, this Court need not conduct such an analysis.
This analysis is supported by the statute's legislative history. See Prechel v. City of Monroe, 40 Wis.2d 231, 237, 161 N.W.2d 373 (1968). The source of Wis. Stat. § 9.20 is ch. 513, Laws of 1911, § 39i, "Ordinances proposed for popular vote." Throughout the nearly 100 year old history of the legislation, the two year prohibition on repeal or amendment has remained similar. Compare Wis. Stat. Ch. 5, § 39 i(6) (1911-12) with Wis. Stat. § 9.20(8) (2007-08). Similarly, the direct legislation statute has maintained a similar limitation on the common council to either pass the ordinance without changing it or submit the proposed ordinance in its entirety to the electors. Compare Wis. Stat. Ch. 5, § 39 i(3) (1911-12) ("Any proposed ordinance . . . shall be passed without change . . . or it shall be submitted to the electors . . . [.]") with Wis. Stat. § 9.20(4) (2007-08) ("The common council or village board shall, without alteration, either pass the ordinance . . . or submit it to the electors . . . [.]"). It is clear through the statute's legislative history that a court's role in determining the validity of an ordinance enacted via direct legislation is limited to upholding or striking down the ordinance in its entirety.
In Wis. Stat. (1915), the direct legislation statute was modified slightly and renumbered to Wis. Stat. § 10.43. In Wis. Stat. (1967), the direct legislation statute was again modified slightly and renumbered to its current numbering at Wis. Stat. § 9.20.
This interpretation also avoids the threat of judicial activism when the will of the electorate has spoken. As previously stated, this Court's role is merely to review the validity of the Ordinance and not pass judgment on its merits. See Bizzell, 2008 WI 76, ¶ 26, 311 Wis. 2d at 21. By severing particular sections, this Court would have to balance policy decisions better left to the electorate.
Conclusion
Based upon a review of the record and for the reasons outlined above, this Court finds section 112 of the Milwaukee Code of Ordinances is invalidly enacted and unconstitutional.
Accordingly, IT IS ORDERED that Metropolitan Milwaukee Association of Commerce, Inc.'s Motion for Summary Judgment is GRANTED.
Further, IT IS ORDERED that Metropolitan Milwaukee Association of Commerce, Inc.'s Motion for a Permanent Injunction regarding the implementation and enforcement of section 112 of the Milwaukee Code of Ordinances is GRANTED.
Dated this day of, 2009, in Milwaukee, Wisconsin
THIS IS A FINAL ORDER FOR PURPOSES OF APPEAL