Friday, April 16, 2010

Info for Scott Walker and the (R) Majorities

Scott, pay attention to this.

An interesting case was just handed down in federal court in Rhode Island, which may provide a legal path for state governments to modify retiree benefits through legislation.

The gist of the decision is that once a union contract has expired, the state may have the right to alter retiree benefits promised under such contract. To oversimplify a bit, once the contract is over, the contractual rights under the contract are over.

Insurrection quotes the news article:

In a decision entered Tuesday, Smith rejected claims by the union that the reduction in benefits violated employee rights under the contract clauses of the Rhode Island and U.S. Constitutions. Contrary to the union claims, he said, no enforceable contract exists for retiree health benefits under the state’s past practice regarding retirees, the negotiated collective-bargaining agreement between Council 94 and the state, state statute and common law.

At the time the law took effect, on Oct. 1, 2008, the collective-bargaining agreement had expired and pronounced by the governor to have been “terminated” — an important legal distinction, according to the judge.

There will be an appeal, or several...

1 comment:

Anonymous said...

To my understanding, in this ruling, a government, through the passage of a law, could impose reduced benefits for NEW RETIREES during the "lag" time between an old contract and new contract, i.e. during collective bargaining process.

The union argued that the past terms ought to apply to those deciding to retire now, even during the give and take sessions by workers and government who are hammering out a new deal. I would imagine that if the old contract included specific language agreed to by the workers and government providing those new retirees with the same benefits of past workers during the ongoing negotiations, then the state would be prohibited from passing such a law reducing benefits.

Otherwise, I believe a state cannot unilaterally change the terms of an existing contract between the state workers and government, nor alter the negotiated benefits of state workers who retired under terms of an previous contract.

So it would seem the ruling affects NEW retirees and is a way to possibly circumvent negotiating in good faith.