James C. Justice, II, Governor of the State of West Virginia v. West Virginia AFL-CIO

Citation: Not availableDocket: 21-0559

Court: West Virginia Supreme Court; November 21, 2021; West Virginia; State Supreme Court

Original Court Document: View Document

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The Supreme Court of Appeals of West Virginia, in its September 2021 term, addressed the appeal from Governor James C. Justice II regarding the West Virginia Paycheck Protection Act, which prohibits state employers from deducting union dues and employee association membership fees from public employees' wages. Prior to the law's effective date, labor unions and affected individuals sought an injunction, claiming the law violated their constitutional rights and would cause them irreparable harm. The circuit court granted the injunction, but the Supreme Court found that this decision lacked careful consideration of the arguments and evidence presented. The Court determined that the likelihood of the respondents succeeding on their constitutional claims was lower than the circuit court had assessed. Consequently, the Supreme Court reversed the lower court's order, dissolved the injunction, and remanded the case for further proceedings. The ruling emphasized the need for sound judicial discretion in granting injunctions, as outlined in State v. Baker.

The Wage Payment and Collection Act previously defined 'deductions' to include legally mandated withholdings and amounts authorized for various purposes, such as union dues and charitable contributions, allowing employers to deduct these without annual reauthorization from employees. However, HB 2009 amended this definition for public employees in West Virginia, excluding union, labor organization, or club dues from allowable deductions unless the employee is covered by a collective bargaining agreement in effect as of July 1, 2021. The amendment also reiterated employees' rights to join and support unions without interference. Additional provisions were added, prohibiting deductions for union dues from the compensation of county and municipal officers and employees, as well as state employees and teachers. HB 2009 was set to take effect on June 17, 2021. In response, the Respondents filed a complaint in the Circuit Court of Kanawha County, claiming that HB 2009 infringed upon their constitutional rights and sought both a declaration of its unconstitutionality and a preliminary injunction to prevent its implementation. They argued that the law would disrupt their operations and impose significant burdens on their ability to collect dues, while asserting that any state interest in the law was minimal.

Respondents argued that the longstanding practice of deducting dues from public employees' wages, based on agreements between public employers and unions, was unjustly disrupted by the Legislature's enactment of HB 2009. They contended that this law exhibited animus towards unions by treating them differently from other organizations, violating equal protection rights. They claimed it undermined unions' ability to collect dues, thus infringing on their freedom of speech and association, and violated the contract clause by disrupting established agreements between employees, unions, and employers. Respondents further asserted that HB 2009 contradicted prior court decisions, specifically Pushinsky v. West Virginia Board of Law Examiners, by targeting employees' rights while favoring other organizations. 

In response, Petitioner argued that Respondents were unlikely to succeed in their claims based on several points: prior cases had dismissed similar challenges, there was no indication that Respondents' claims would fare better, historical Civil Rights cases were not applicable, and Respondents failed to provide any relevant contracts under the contract clause. Petitioner maintained that the law did not impose an unreasonable burden on unions for dues collection, citing that other methods (like bank drafts) were readily available. Petitioner emphasized the public interest in enforcing state laws outweighed any alleged harm to Respondents. 

After an evidentiary hearing on June 14, 2021, the circuit court granted Respondents a preliminary injunction, determining they would suffer irreparable harm if HB 2009 were enacted. The subsequent June 16, 2021 order, from which Petitioner appeals, is classified as non-final; however, the Court acknowledged an exception allowing for the review of preliminary injunctions. The Court will assess the grant of the injunction for abuse of discretion, factual findings for clear error, and legal questions de novo.

A preliminary injunction is considered a severe legal remedy, reserved for situations of significant necessity, with the burden on the party requesting it to prove several critical factors. These factors include the probability of irreparable harm if the injunction is denied and the likelihood of success on the merits. Courts must exercise caution in granting such relief, evaluating the circumstances of each case, including the nature of the dispute, the purpose of the injunction, and the hardships faced by both parties. 

In West Virginia, courts follow the 'clearer alternative standard' from Jefferson County Board of Education v. Jefferson County Education Association, which outlines four key considerations for issuing a preliminary injunction: 1) likelihood of irreparable harm to the plaintiff; 2) likelihood of harm to the defendant; 3) the plaintiff’s chance of success on the merits; and 4) the public interest. 

Petitioner seeks to adopt a different standard from the Fourth Circuit, which emphasizes the plaintiff demonstrating a likelihood of success, irreparable harm, a favorable balance of equities, and public interest considerations. The analysis primarily focuses on the circuit court's determination that Respondents are likely to succeed on their constitutional claims regarding HB 2009. 

Respondents assert that HB 2009 violates their constitutional rights. Courts must exercise restraint when evaluating the constitutionality of legislative acts, presuming such acts to be constitutional unless there is a clear violation of legislative authority. To succeed, Respondents must show that it is beyond reasonable doubt that the Legislature overstepped its constitutional limits with HB 2009. The Petitioner contends that the circuit court misused its discretion in concluding that Respondents are likely to succeed on these claims, and the court agrees.

Petitioner contends that the circuit court erred in finding that Respondents are likely to succeed in their claim that HB 2009 infringes upon their speech and associational rights as protected by the West Virginia Constitution. Federal appellate courts have previously ruled on similar cases involving state laws related to union dues deductions, determining that such laws are neutral and do not hinder unions' ability to express their views. Petitioner cites the case of Morrisey II, where it was established that West Virginia’s right-to-work law did not violate associational rights, as it did not deter unions from recruiting members or incite retaliation against union members. This reasoning extends to HB 2009, which is seen as posing minimal risk to Respondents’ rights.

Regarding equal protection claims, the circuit court found that Respondents were likely to succeed due to HB 2009 allegedly threatening fundamental rights. Petitioner argues that the circuit court overlooked federal precedents indicating that union membership is not a protected class and that there is no constitutional right to dues deductions. Petitioner asserts that HB 2009 meets rational-basis review standards. Respondents claim that the legislation unfairly denies wage deductions to unions, violating the common benefits clause of the West Virginia Constitution and that Petitioner’s justification fails rational-basis scrutiny. However, Petitioner maintains that Respondents have not shown a likelihood of success in this claim, as equal protection is only implicated when state action disadvantages similarly situated individuals. If the classification does not impact a fundamental right or a suspect criterion, it is upheld as long as it is rationally related to a legitimate state interest.

Legislative classifications affecting economic rights are generally subjected to a relaxed standard of scrutiny, upheld if they are reasonably related to a legitimate state purpose. Under the West Virginia Constitution, equal protection principles are broader than those in the Fourteenth Amendment. The petitioner cites both state and federal authority to argue that laws like HB 2009 do not warrant heightened scrutiny. A key case, City of Charlotte v. Local 66, illustrates that municipal policies allowing payroll deductions for some organizations while denying them to unions are assessed under a rational-basis review, as there is no constitutional right to payroll deductions. Numerous courts have upheld similar policies, indicating that the refusal to permit union dues deductions does not violate equal protection standards. Respondents' attempts to differentiate HB 2009 from City of Charlotte lack clarity and do not undermine the relevance of established cases. Additionally, the argument that HB 2009 violates the common benefits clause of the West Virginia Constitution appears weak, as cited cases are distinguishable. The court has not recognized a state payroll system as a public forum, and prior rulings suggest that decisions regarding payroll deductions do not infringe upon union speech rights. The Supreme Court has affirmed that while the government may need to accommodate expression in some contexts, it is not constitutionally required to fund specific expressions or political ideas through payroll deductions.

The case at hand is distinguished from Parsons and other federal constitutional benefits cases cited by Respondents, particularly regarding HB 2009, which denies payroll deductions for union-related dues. Respondents compare this law to past Supreme Court cases where states withheld benefits based on relocation status, emphasizing that the right to interstate travel is a fundamental constitutional right, unlike the state's lack of obligation to provide payroll deductions. The likelihood of Respondents demonstrating that HB 2009 fails rational-basis review appears low. The Petitioner argues that the law serves a legitimate interest in avoiding the complications of automatic payroll deductions for employee requests. This rationale aligns with decisions upheld by the Supreme Court and the Eighth Circuit, which recognized similar legislative interests regarding payroll deductions. Additionally, the Petitioner references a recent Supreme Court ruling that public-sector agency-shop arrangements violate the First Amendment, suggesting it is rational for the state to avoid acting as a mediator between unions and their members.

The text also discusses judicial restraint in legislative authority and constitutional interpretation, noting that fiscal interests of the government can justify legislative actions perceived as cost-saving, as seen in the Janus case. Respondents argue that the City of Charlotte was able to substantiate its cost-saving rationale with evidence, while there is no similar evidence for HB 2009. However, this overlooks the procedural context where Respondents must demonstrate their case for preliminary injunctive relief, including the likelihood of success on the merits. Lastly, Respondents assert that HB 2009 stems from legislative animus against unions, citing Romer v. Evans, which involved hostility towards a specific group.

An amendment to the Colorado constitution, which prohibited any governmental action aimed at protecting homosexual individuals, was deemed excessively broad and lacking a rational relationship to legitimate state interests, suggesting it was motivated by animus against the affected class. The circuit court failed to demonstrate how HB 2009 parallels this amendment, which the U.S. Supreme Court labeled "unprecedented." A recent Iowa Supreme Court case rejecting a similar argument regarding a ban on payroll deductions for union dues reinforced that such legislative decisions are policy choices and do not infringe on fundamental rights warranting judicial intervention. Consequently, the circuit court incorrectly found that the respondents had a strong likelihood of success on their equal protection claim against HB 2009. Furthermore, the petitioner contended that the circuit court mistakenly assessed the likelihood of success regarding the contract clause of the West Virginia Constitution. The petitioner argued that the respondents did not demonstrate the existence of any contracts at risk of impairment under HB 2009. Additionally, the law's differentiation between employees under collective bargaining agreements and those not under such agreements was justified as a protective measure for constitutional rights, undermining the respondents' equal protection claims.

Respondents argue that existing voluntary agreements between public employers and unions allow for the withholding of union dues, and that HB 2009 will significantly impair these agreements without a compelling public interest. However, HB 2009 does not prevent public employers from continuing to deduct dues from wages of municipal employees under active collective bargaining agreements as of the law's effective date, thereby not substantially impairing those agreements. Respondents failed to clearly demonstrate to the circuit court that HB 2009 affects a contractual relationship, leading to an erroneous conclusion that they were likely to succeed in their claim under the Contract Clause. The court's analysis hinges on whether the statute substantially impairs contractual rights, as guided by a balance-of-interest test. The Respondents provided evidence of long-standing practices and agreements, but key documents lacked signatures or formal approval, and some submissions were incomplete or vague. Consequently, the circuit court's findings regarding the impact of HB 2009 were based on insufficient evidence to establish that contractual rights were at stake.

HB 2009's potential to impair agreements regarding wage deductions for union dues was incorrectly assessed by the circuit court, which conflated agreements with contracts. An agreement signifies mutual assent, while a contract involves enforceable promises. The evidence presented by Respondents, such as blank membership cards and an unsigned memorandum, does not confirm a binding contract exists. Therefore, for Respondents to successfully argue that HB 2009 substantially impairs a contractual relationship, they must first establish the existence of a contract. The circuit court erred by concluding that Respondents were likely to prevail on this claim. Additionally, the court's consideration of irreparable harm suggested that if HB 2009 took effect, Respondents would have to alter their methods for collecting union dues, thereby diverting resources from other representational activities. The case was compared to a 1998 Sixth Circuit decision where a law affecting collective bargaining agreements was preliminarily enjoined, underscoring the necessity of demonstrating the existence of a contract for similar claims.

A contract cannot exist if any essential element lacks mutual agreement between the parties. Respondents assert that HB 2009 infringes on their constitutional rights, leading to “irreparable and severe injury” without a preliminary injunction. However, the evidence of such harm presented is weak. Fred Albert, President of AFTWV, indicated that 30% of members transitioned to alternative dues payment methods after HB 2009's enactment, and Elaine Harris from CWA District 2-13 noted her organization is exploring similar alternatives, yet none were operational by the injunction hearing. Harris expressed concerns that members may hesitate to provide personal financial information for new payment methods, though she affirmed their willingness to pay dues. Both Harris and Albert claimed that HB 2009's implementation would cause significant and irreparable harm to their organizations and members. This claim, however, contrasts with Albert’s prior statement that 98% of dues are collected via payroll deductions. James White from WVSSPA echoed similar concerns regarding the cessation of dues collection. Corporal J.W. Smith expressed a preference for continuing paycheck deductions, which he finds convenient. The court noted that a finding of irreparable harm requires more than mere speculation or unsubstantiated fears. Albert’s organization successfully transitioned a significant portion of its members in a short period, suggesting that change is feasible. Harris's apprehensions about member resistance to alternative payment methods lack substantiation, as no alternatives had been offered prior to her testimony. Overall, the statements from Smith and other employees about potential delinquency in dues payment if deductions cease reflect concern but do not provide concrete evidence of irreparable harm.

Affiants prefer paying dues through wage deductions; however, the cessation of this convenience does not constitute irreparable harm. The circuit court's finding of potential irreparable harm for Respondents does not alone justify a preliminary injunction. This finding must be evaluated alongside other factors, particularly the likelihood of Respondents succeeding on the merits of their claims. Respondents allege that HB 2009 infringes on their constitutional rights, specifically regarding speech, association, and equal protection. However, they fail to present relevant legal authority to support these claims and do not adequately establish their contract clause argument. Courts are required to interpret legislative enactments in a manner that upholds their constitutionality, resolving any reasonable doubts in favor of such enactments. Given the complexity of the constitutional challenge and the need for a clear demonstration of success on the merits, the circuit court should have denied the injunction. The court's failure to do so constitutes an abuse of discretion, leading to the reversal of its June 16, 2021 order, the dissolution of the preliminary injunction, and the remand for further proceedings.