Gilmore v. Gallego – 4/18/2023

May 1, 2023

The Arizona Court of Appeals Division One holds that release-time provisions benefitting union members in an employment agreement with a public employer do not violate the Gift Clause in the Arizona Constitution or the constitutional rights of non-union employees.

In 2019, the City of Phoenix and a union that acts as the employee representative for a unit of skilled tradespeople agreed to a memorandum of understanding (MOU) that set forth the terms of employment for all employees in the unit, regardless of whether they were members of the union.  The MOU included provisions for “release time,” which permitted employees to be released from their job duties without loss of pay in order to perform other activities, most of which were union related.  Two skilled mechanics who were not members of the union sued the City for declaratory and injunctive relief based on their claims that the release time provisions in the MOU violated the Arizona Constitution.  They argued that by agreeing to fund the release time as part of the MOU, the City compelled all employees in the unit to financially contribute to the union, regardless of whether they belonged to it or agreed with its viewpoints and activities, which in turn violated their rights to free speech, free association, and to work.  They also argued that the release time provisions violated the Gift Clause in the Arizona constitution. 

At the close of discovery, both parties filed motions for summary judgment.  The superior court entered summary judgment for the City, holding that the mechanics’ free speech, free association and right to work claims failed because the City, not its employees, were responsible for funding release time.  The court held that the Gift Clause claim also failed because release time serves a public purpose and is not grossly disproportionate so as to constitute a subsidy to the union.  The court awarded attorney fees to the defendants as the prevailing party in a matter arising out of contract.  The mechanics appealed.

The court of appeals affirmed in a split decision.  The entire panel agreed with the superior court that release time was paid for by the City out of its tax revenues, not by non-Union employees, as evidenced by the fact that non-union employees did not have their wages or benefits adjusted to fund release time, and the City would not have had to raise employees’ wages if release time were eliminated.  The mechanics’ free speech, free association, and right-to-work claims therefore failed because the mechanics could not show any compelled contributions to the union.

The majority of the panel affirmed the superior court’s holding that the release time provisions did not violate the Gift Clause because (1) the release time served a public purpose, and (2) the cost of the release time to the City was not far exceeded by consideration paid.  The court said that the public purpose requirement was easily satisfied because, on at least two prior occasions, Arizona courts have found that similar release time provisions served a public purpose.  Controlling case law also established that there was no disproportionality of consideration.  The court looked at the release time provisions in the context of the entire MOU.  Balancing what employees promised to do (work according to terms imposed by the City and set forth in the MOU) with what the City gave in exchange (a compensation and benefits package that included the release time provisions), the court said that there was no indication that the values were grossly disproportionate. 

Judge Bailey filed a separate opinion focused on the Gift Clause.

Judge Thumma authored this opinion, in which Judge Gass joined.  Judge Bailey concurred in part and dissented in part.

Posted by: Heather Robles