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...