Although this case does not directly involve a public safety union, it is a cautionary tale for public sector employers and the unions with whom they negotiate. AFSCME Local 2384 represents the unsworn personnel of the City of Phoenix, Arizona. The Local 2384 represents workers across several units. “Unit II” consists of about 1,500 skilled tradespeople, with just under half of them being union members. The CBA between Local 2384 and the City for Unit II acknowledges that Local 2384 shall have four, full-time paid release positions “to engage in lawful union activities,” as well as other provisions of paid leave and reimbursements for union members while on official union business.
The CBA states that the four full-time released employees “agree to participate in citywide task forces and committees, labor-management work groups, and a variety of health and safety committees.” Although the contract provides examples of what types of activities are approved for union release time – such as participating in the grievance/disciplinary process, collective bargaining, service on City and department task forces, and membership trainings – in practice, release time is used for unlisted activities like union recruitment. The City does not monitor how released employees spend their time, nor are released employees required to report their activities. The release time provisions cost the City about $499,000 per year, which the CBA explicitly notes is “part of the total compensation detailed in this agreement.” In other words, the cost of the release time is borne by the City.
Several Unit II employees who were not union members sued the City, arguing the release time provisions violated their free-speech, free-association, and right-to-work rights under the Arizona constitution. They further argued that the union leave provisions violated the state constitution’s “Gift Clause,” which requires that a benefit paid by a municipality must be in exchange for something valuable. The employees lost at trial court, and again on appeal. The courts rejected the employees’ argument that they were being forced to subsidize political speech and activity because the City, not the employees, bore the cost of the released time. As for the Gift Clause argument, the courts found that the release time provisions adequately served a public purpose. The employees appealed again to the Arizona Supreme Court, which reversed, finding the union leave provisions in violation of the Gift Clause.
The Court first noted that the Gift Clause “provides that neither the state nor its subdivisions shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation. To satisfy the Gift Clause, a public expenditure must (1) serve a public purpose and (2) be supported by adequate consideration.” In evaluating a Gift Clause challenge, the Court noted that it must consider the reality of the entire transaction. It determined that the cost to the City was too high, and the benefit to the City was too low, for the release time provisions to be supported with adequate consideration, and therefore, they were illegal: “The City costs are substantial, but the benefits are so negligible as to render them largely illusory. Local 2384 receives four full-time employees, who are released from their public duties but paid as if they were performing public work, for the Union to direct as it sees fit; an additional bank of 3,183 release time hours is established for the Union’s use; compensatory hours are provided to release-time employees for assigned duties outside of union activities; 150 hours are provided for seminars, lectures, and conventions; and up to $14,000 is made available to provide training for employee-relations skill development. The annual cost for release time is estimated at $499,000. In return, the MOU provides ‘examples’ of the uses of release time, and the City argues that ‘release time promotes cooperative labor relations and facilitates an open dialogue about employment issues.’ At best, these are anticipated indirect benefits that do not count as enforceable obligations for consideration purposes.”
The unmonitored promises of the released union employees to participate in City task forces and initiatives were not enough to justify the year-over-year cost of the release time provisions. Therefore, the release time was an unlawful gift under the state constitution.
Gilmore v. Gallego, No. CV-23-0130-PR, 2024 WL 3590669 (Ariz., 2024).