September 13, 2016

Arizona Supreme Court: Taxpayers must subsidize public employee union lobbyists

By Deborah J. La Fetra Senior Attorney

More than two years after oral argument, a majority of the Arizona Supreme Court today sided with Phoenix unions to require taxpayers to pay for union lobbyists ostensibly employed by the police department.  The court split 3-2 in the case, Cheatham v. DiCiccio. Justice Clint Bolick—former Goldwater Institute counsel for the plaintiffs, William R. Cheatham and Marcus Huey—was recused and replaced by appellate judge Joseph W. Howard.

The case arose when the City of Phoenix and the Phoenix Law Enforcement Association (PLEA), the police officers’ union, negotiated a contract whereby the city pays full salary and overtime for six full-time and 35 part-time employees who report to the union, and do the union’s work, including lobbying. This is called “release time.” Taxpayers Cheatham and Huey sued on the grounds the release time violated the state constitution’s Gift Clause requirement that all government expenditures must serve a “public purpose.”  The Arizona Court of Appeals permanently enjoined the contract because it found that the union benefitted to the tune of $1.7 million while the city did not benefit at all.

PLEA asked the Arizona Supreme Court to review the decision and PLF filed an amicus brief in support of the taxpayers, arguing that the “public purpose” requirement of the Gift Clause reflects the state constitution’s overall goals of fairness and accountability.  Three justices of the court did not see it that way, holding that the release time was merely a component of the overall compensation package negotiated by the city and the union, and that such provisions are common in public employee collective bargaining agreements.  By reviewing the release time as a minor component of the larger contract that as a whole serves a public purpose, the court held that the city received a corresponding benefit and there was, as a result, no violation of the Gift Clause.

Justices Timmer and Brutinel dissented.  Like the courts below, they viewed the release time provisions individually, arguing that the collective bargaining agreement as a whole should not immunize unconstitutional individual provisions.  In short, they would have found that “[n]o public purpose is served by diverting officers from safeguarding the public to work almost unchecked for PLEA” and “[t]o subsidize a labor organization under the guise of employee compensation violates the Gift Clause.”

As a result of this case, Arizona unions are emboldened to include ever-more-expansive provisions in their collective bargaining agreements, which are negotiated behind closed doors, without public awareness or opportunity to comment.  The court gives cities willing to cater to public employee unions carte blanche to do so, without accountability.  Given the growing financial crisis caused by public employee benefit plans and pensions, the court-sanctioned gift of release time is a slap in the face of Arizona taxpayers.

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