Martinez v. Department of Industry, Labor & Human Relations

Citations: 165 Wis. 2d 687; 478 N.W.2d 582; 1992 Wisc. LEXIS 3Docket: 90-1266

Court: Wisconsin Supreme Court; January 15, 1992; Wisconsin; State Supreme Court

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The case involves a challenge to the constitutionality of Wisconsin Statute section 227.26, which allows the Joint Committee for Review of Administrative Rules (JCRAR) to temporarily suspend administrative rules during legislative review. The Dane County Circuit Court upheld the statute as constitutional, asserting it complied with bicameral passage and did not violate the separation of powers doctrine. However, the Court of Appeals reversed this decision, claiming that section 227.26 encroached upon executive authority.

The Supreme Court of Wisconsin ultimately ruled that section 227.26 is constitutionally sound, emphasizing that it is designed to foster collaboration between the legislature and administrative agencies in rule-making consistent with statutory mandates. The court reversed the Court of Appeals’ decision and reinstated the trial court's findings.

The factual background reveals that the Department of Industry, Labor, and Human Relations (DILHR) had enacted a rule allowing employers to pay a sub-minimum wage for a 120-day probationary period. Following a public hearing, JCRAR determined that this rule did not align with legislative intent and was arbitrary, leading to a suspension of the rule and a reduction of the probationary period to three days. DILHR subsequently instructed employers to disregard JCRAR's amendments, causing significant concern among migrant farm workers who typically work for short periods.

Migrant workers were classified as probationary employees under an original rule, consistently receiving wages below the 'living wage' established by the Department of Industry, Labor and Human Relations (DILHR). After the Joint Committee for Review of Administrative Rules (JCRAR) partially suspended DILHR's rule, legislation was introduced, coinciding with a federal minimum wage increase above Wisconsin’s. In response, DILHR enacted a new training wage rule with a non-repeating 60-day probationary period, effective April 1, 1990, which was not suspended by JCRAR. Despite these updates, affected migrant workers filed a lawsuit against DILHR for enforcing a sub-minimum training wage after the suspension. DILHR contended that the statute in question, sec. 227.26, Stats., was unconstitutional, claiming violations of bicameral passage requirements, the presentment clause, and the separation of powers doctrine. JCRAR intervened to defend the statute's constitutionality.

The trial court upheld sec. 227.26, finding no violations of bicameral passage or separation of powers, but ruled that DILHR had overstepped its authority and mandated employer notifications regarding regulations from July 1, 1989, to March 23, 1990, along with the payment of back wages. However, the court of appeals reversed this decision, asserting that sec. 227.26 undermined the executive branch's veto power and encroached on its ability to enforce properly established rules.

The supreme court is reviewing whether sec. 227.26 interferes with the constitutional powers of the three government branches, with the presumption of constitutionality resting on legislative enactments. The party challenging a statute must demonstrate its unconstitutionality beyond a reasonable doubt, and any ambiguity is resolved in favor of the statute. Wisconsin courts interpret the separation of powers as a principle that allows for shared powers among branches, aiming to maintain a balance and prevent the concentration of power in one branch, acknowledging that governmental actions often do not fit neatly into exclusive categories.

One branch of government may exercise powers of another only to the extent that it does not unduly burden or interfere with the latter's role. Substantial encroachments by one branch into the domain of another violate the separation of powers doctrine, particularly when interference occurs in an "exclusive zone" of authority. However, this exclusive zone is not applicable in cases where the legislative and executive branches share interests, such as in the creation and oversight of administrative agencies, which are established by legislative authority.

Legislative power can be delegated to administrative agencies if there are adequate standards in place. The rule-making authority of the Department of Industry, Labor and Human Relations (DILHR), which is being reviewed by the Joint Committee for Review of Administrative Rules (JCRAR), is derived from the legislature. Specific grounds under which JCRAR may temporarily suspend a rule include lack of statutory authority, emergency situations, non-compliance with legislative intent, conflicts with state law, changes in circumstances, and arbitrary or capricious actions.

DILHR, as a legislative creation, has no inherent constitutional authority to establish rules independently and can have its rule-making powers revoked by the legislature. Court precedent affirms that the existence and authority of administrative agencies are contingent upon legislative will. When DILHR instructed employers to disregard JCRAR's modifications, it acted beyond its powers, as administrative agencies do not possess authority superior to that of the legislature. Consequently, DILHR cannot declare JCRAR's rule changes void.

Defendants' claims that section 227.26 of the Wisconsin Statutes is unconstitutional for failing to meet bicameral passage and presentment requirements are rejected. The document clarifies that administrative rules are not classified as legislation; thus, any law resulting from the suspension or adoption of a rule must comply with these legislative requirements. Section 227.26 establishes checks and balances on temporary rule suspensions, mandating that only formal bicameral processes and executive actions can lead to permanent suspensions. The process begins with a complaint to the Joint Committee for Review of Administrative Rules (JCRAR), which must hold a public hearing to investigate the complaint.

A quorum of JCRAR can vote to suspend a rule based on specific justifiable reasons, preventing arbitrary agency actions. If a suspension occurs, JCRAR must introduce a repeal bill within 30 days; the rule remains effective unless both bills fail. Additionally, the governor can veto any legislative action regarding rule suspensions. The statute emphasizes legislative accountability and public welfare oversight by elected officials, distinguishing Wisconsin's framework from those of other states with different separation of powers doctrines. The rarity of rule suspensions in the past 25 years and the absence of executive challenges further support the legitimacy of JCRAR's power to suspend rules. The court affirms that JCRAR operates under valid legislative standards with adequate safeguards against unauthorized actions, ultimately declaring section 227.26 constitutional and reversing the appellate court's decision. Consequently, migrant workers will benefit from the provisions of Wis. Admin. Code sec. Ind. 72, enacted during a specified period.

JCRAR, established by sec. 13.56(1), Stats., consists of five senators and five representatives from both political parties. Under sec. 227.26(2)(c), the committee must hold public hearings on meritorious complaints regarding rules. It can suspend a rule by majority vote, based only on testimony from the hearing and specific reasons under sec. 227.19(4)(d). The term "living wage," as defined in sec. 104.05(5), refers to compensation sufficient for an employee's welfare. If a rule is suspended, the committee must introduce a bill to repeal it within 30 days (sec. 227.26(f)). The excerpt also discusses the separation of powers in the Wisconsin Constitution, as outlined in art. IV, sec. 1; art. V, sec. 1; and art. VII, sec. 2. It references case law that distinguishes between regulation and legislation, citing the Idaho Supreme Court's ruling in Mead v. Arnell. The governor's veto power is rooted in art. V, sec. 10 of the Wisconsin Constitution. Appellants argue that sec. 227.26 is unconstitutional, citing various state cases, but these do not present a comparable procedure. Judge Gartzke noted that Wisconsin courts give little weight to precedents from other states regarding separation of powers, as Wisconsin's constitution lacks an express provision for it, leading to a more liberal interpretation by the state supreme court.