The incentive package includes $1.5 billion in state income tax credits for job creation and $1.35 billion in state income tax breaks for capital investment.

WASHINGTON (Reuters) – Wisconsin Governor Scott Walker on Thursday defended his plan to give a $3 billion tax break over 15 years to convince Taiwanese electronics manufacturer Foxconn to build a $10 billion LCD flat screen factory.

White House officials highlighted President Trump’s negotiations with the world’s largest contract electronics maker, to secure the project, which they said would represent a $10 billion investment.

(Reuters) – A Wisconsin vending machine company is offering its employees a chance to have a microchip implanted in their hands that they could use to buy snacks, log in to computers or use the copy machine.

By Ronald Miller, J.D.

A union’s challenge to a provision in Wisconsin “Right-to-Work” law, Act 1, which prohibits union-security agreements that require employees to pay any dues, fees, or assessments to a labor organization, fell based on the Seventh Circuit’s ruling in Sweeney v. Pence . Here, the appeals court found that its decision in Sweeney remained good law and controlled the preemption analysis in this case, and dictated an outcome in favor of Wisconsin. The union did not provide any “compelling reason” to revisit Sweeney with an eye towards overturning that decision. Importantly, with respect to the union’s “Takings Clause” argument, the appeals court found that the district court got it right in ruling that the claim was ripe, and dismissed the claim with prejudice in light of Sweeney (International Union of Operating Engineers Local 139 v. Schimel, July 12, 2017, Flaum, J.).

In Sweeney v. Pence, the Seventh Circuit determined that the NLRA did not preempt Indiana’s right-to-work law, even though the law prohibited the payment of any dues or fees to unions. The appeals court also determined that the enactment of Indiana’s law did not effect a “taking” in violation of the Fifth Amendment. After Sweeney issued, Wisconsin enacted Act 1, a nearly identical law.

The union, which had entered into several conditional union-security agreements with employers, filed suit against various Wisconsin officials seeking to void the provision of Act 1 that prohibits forming union-security agreements of any kind. The union argued that Act 1was preempted by the same NLRA provisions at issue in Sweeney, and that Act 1 unconstitutionally takes the affected unions’ property without just compensation. Finding that Sweeney controlled in this case, the district court entered judgment on the pleadings in favor of Wisconsin. These cross-appeals followed.

“Compelling reason.” Before the district court, the union conceded that Sweeney controlled the preemption analysis in this case and dictated an outcome in favor of Wisconsin. On appeal, the union argued that Sweeney was wrongfully decided and should be overturned. Overturning circuit precedent requires a “compelling reason” to do so. A strong dissent, like Chief Judge Wood’s in Sweeney, coupled with a close vote to rehear Sweeney en banc, were not “compelling reasons” to overturn a recent decision. Further, the union pointed to no intervening developments in statutory, Supreme Court, or even intermediate-appellate-court law that undermined Sweeney’s validity.

Takings clause. Next, the Seventh Circuit turned to the union’s argument that Act 1takes the affected unions’ property without just compensation in violation of the Fifth Amendment. Here, the appeals court noted that the union brought its “takings” claim in federal court without first seeking just compensation in state court. Generally, such claims are regarded as unripe under Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City. However, the district court determined that the union’s “takings” claim was nevertheless ripe because it had made a pre-enforcement facial challenge to Act 1, and dismissed the complaint with prejudice. On cross-appeal, Wisconsin argued that the district court should have ruled that this claim was unripe and should have dismissed it without prejudice.

Generally, “if a state provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation.” However, the Seventh Circuit has recognized two exceptions to Williamson’s ripened requirement: “one for pre-enforcement facial challenges and one for situations in which relief is not available in state court.” In this case, the appeals court found that the union’s claim that Act 1 works an unconstitutional taking from all affected unions, and the relief that it sought—invalidation of parts of Act 1—both clearly reached beyond its particular circumstances.

The appeals court noted that the panel’s discussions of the Takings Clause issue in Sweeney indicated that an unconstitutional taking would arise, if at all, from the statutory language of the right-to-work statutes or the NLRA. In this case, the union asserted that the provision of Act 1 forbidding all union-security agreements amounted to an unconstitutional taking on its face. Thus, the district court correctly construed this claim as a “pre-enforcement facial challenge” to Act 1, and determined that the takings claim was ripe under that Williamson exception, and dismissed the claim with prejudice in light of Sweeney. Accordingly, the appeals court affirmed the judgment of the district court.

TAIPEI (Reuters) – Foxconn , the world’s largest contract electronics maker, is looking at six U.S. states including Wisconsin as locations for a display-making plant, a top executive said on Thursday.

By Ronald Miller, J.D.

A Wisconsin statute which classified dues checkoff authorizations as an unfair labor practice unless they were terminable by the employee on 30 days’ written notice was preempted by the LMRA, ruled a federal district court in Wisconsin. Relying on SeaPak v. Indus., Tech. & Prof’l Emp., Div. of Nat’l Mar. Union, AFL-CIO, the court determined that the Wisconsin law was not compatible with the LMRA’s allowance for irrevocable authorizations not to exceed one year. Accordingly, summary judgment was granted in favor of the union (International Association of Machinists, District 10 and Local Lodge 873 v. Allen, December 27, 2016, Conley, W.).

The Machinists union represented employees at a John Deere plant in Wisconsin. It is a party to a collective bargaining agreement with John Deere that became effective on October 1, 2015. The CBA included a dues checkoff provision. Among the employees represented by the union was an assembler in the bargaining unit. In November 2002, she signed an authorization to have union dues deducted from her wages, which continued in effect under the 2015 CBA. The authorization states that it was irrevocable for 1 year or until the termination of the CBA between the employer and the union, whichever occurred sooner.

Checkoff revocation. In July 2015, the employee sent a letter to John Deere stating that she no longer wished to pay union dues. Invoking Wisconsin’s “Right to Work” law, Section 9 of 2015 Wisconsin Act 1, the letter explained that she was now allowed to terminate her dues checkoff authorization on 30 days’ written notice, rather than having to wait until the end of the year of the authorization’s life. The union advised the employee that her request would not be granted because it was not presented during the narrow 15-day window leading up to the annual contract renewal.

Thereafter, the employee filed a complaint with the Wisconsin Department of Workforce Development (DWD) alleging that “union dues were taken out after opting out of the union.” A DWD investigator found that the dues taken from the employee’s paycheck after she submitted her withdrawal were “unauthorized and illegal.” Under the Wisconsin statute, the deduction was illegal unless the employee’s signed authorization was terminable by giving at least 30 days’ written notice to the employer. John Deere subsequently reimbursed the employee for the union dues deducted from her check. The union filed this lawsuit.

After this suit was filed, the DWD received a second complaint from a member of the UFCW union stating that he wished to revoke his dues checkoff authorization upon 30 days’ notice. The DWD rejected preemption arguments made by an employer, and again concluded that the Wisconsin Right to Work law prohibited any dues checkoff authorization that was not terminable by the employee on 30 days’ notice.

Preemption challenge. The union challenged the Right-to-Work law provision that prohibited dues checkoff authorizations unless revocable upon 30 days’ notice by employee. According to the union, the state law prohibition was preempted by Sec. 302(c)(4) of the LMRA, which expressly permits dues checkoff authorizations so long as the deductions are not “irrevocable [by the employee] for a period of more than one year.”

SeaPak controls. In SeaPak, a district court determined that a similar Georgia state statute regulating duration of dues checkoff agreements was preempted by federal labor law. Without discussion, the Supreme Court summarily affirmed that decision, and SeaPak has not been overruled. The state argued that the SeaPak decision relied solely on the doctrine of conflict preemption in deciding that the Georgia statute was preempted. However, the court here found that SeaPak expressly discussed and relied on both conflict and field preemption. The SeaPak court held that “[t]he area of checkoff of union dues has been federally occupied to such an extent under 301 that no room remains for state regulation in the same field.” The jurisdiction statement filed with the Supreme Court likewise confirmed that both field and conflict preemption were at issue in SeaPak.

Those issues having been presented and decided by the Supreme Court, the SeaPak decision controls this case. Moreover, the state pointed to no significant doctrinal developments that undermine SeaPak’s conclusion that the NLRA occupies the field of dues checkoff authorizations. It also cited no cases that directly undermined SeaPak’s analysis of conflict preemption.

Obstacle to federal objectives. Further, contrary to the state’s assertion, conflict preemption can exist regardless of whether compliance with state and federal law is impossible, if the state law stands “as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Thus, a state law limiting the irrevocability of dues checkoff agreements to 30 days directly conflicts with the federal law permitting unions to bargain for longer periods of irrevocability. Consistent with SeaPak and the numerous court decisions that have followed it, Wisconsin’s law regulating dues checkoff agreements does not come within the Sec. 14(b) exception to federal preemption, and it is preempted both because it overlaps with, and is in conflict with, federal regulation under the LMRA. Accordingly, Wisconsin’s dues checkoff authorization provision is preempted.