In October 2017, the City of Austin, Texas agreed to a new collective bargaining agreement with the local firefighters’ union. One controversial part of that agreement established what is known as Association Business Leave (ABL), a form of paid time off given to members of the firefighters’ union for the sole purpose of conducting union business. ABL lets union members receive a salary from Austin taxpayers for time spent on union business, including collective bargaining negotiations. In total, ABL can pay for up to 5,600 hours per year of union activity.

Several Austin taxpayers, represented by the Goldwater Institute, brought a lawsuit challenging ABL under multiple provisions in the Texas Constitution collectively known as the “Gift Clauses.” These provisions of the Texas Constitution forbid the government from using taxpayer money to grant gratuitous gifts to private entities. The taxpayers argued that ABL is an unlawful grant of public money to a private entity (the union) for non‐​public purposes in violation of the Gift Clauses.

In response, the union moved to dismiss the taxpayers’ complaint under the Texas Citizens Participation Act (TCPA), a statute designed to identify and dismiss frivolous, non‐​meritorious lawsuits brought with the intention to chill First Amendment rights. The trial court held that ABL did not violate the Gift Clauses, and the court also granted the union’s TCPA motion. The court not only awarded statutorily mandated attorneys’ fees of $115,250, it also imposed punitive sanctions on the taxpayer‐​plaintiffs of $75,000.

The taxpayers appealed to a Texas appeals court, which affirmed the trial court. The appeals court held that ABL is just one part of the bargained‐​for compensation provided in the collective bargaining agreement, and thus not a gratuitous grant of public funds. The appeals court also affirmed the award of attorneys’ fees and sanctions. The taxpayers have now petitioned the Supreme Court of Texas for review, and Cato has filed an amicus brief supporting that petition.

In the brief, we emphasize that this case presents several important issues arising under not only the Gift Clauses of the Texas Constitution but also the First Amendment to the U.S. Constitution. First, the appeals court’s conclusion that ABL is one part of the compensation for all firefighters (including non‐​union firefighters) would mean that ABL conflicts with the U.S. Supreme Court’s decision in Janus v. AFSCME (2018). If ABL came at the expense of other benefits that all Austin firefighters would have received in the CBA, then ABL effectively takes a portion of non‐​consenting firefighters’ compensation to support the Union’s private speech. Further ABL also takes taxpayer money to support union speech, another First Amendment violation.

Second, the award of attorneys’ fees and sanctions violates the First Amendment right of the taxpayer‐​plaintiffs’ to participate in public‐​interest litigation. The appeals court justified this exorbitant award, in large part, by referencing the taxpayer‐​plaintiffs’ desire to advance a particular anti‐​collective bargaining cause in this litigation. But the U.S. Supreme Court explicitly held in NAACP v. Button (1963) and In re Primus (1978) that advancing a cause through good‐​faith public‐​interest litigation is an important First Amendment right. The appeals court thus essentially punished the taxpayer‐​plaintiffs for exercising their First Amendment freedoms, potentially chilling future litigation.

Finally, this case presents the opportunity to clarify the definition of a “public benefit” under the Supreme Court of Texas’s Gift Clauses precedents. Here, the union is a private entity whose main objective is to increase its members’ salary and thus increase the cost of local government at the taxpayers’ expense. Our brief urges that the costs of public‐​sector unions should be seriously considered in determining whether it is in the “public interest” for Austin to pay people to pursue objectives averse to the taxpayers’ interests.

If allowed to stand, the appeals court’s opinion would invite public sector unions to undermine key First Amendment precedents, chill legitimate public‐​interest litigation, and diminish the Texas Constitution’s guarantees of limited government. The Supreme Court of Texas should take the case, correct these errors, and end this taxpayer abuse.