In the first ruling of its kind, a bankruptcy judge held that the city of Vallejo, Calif., has the authority to void its existing union contracts in its effort to reorganize, saying public workers do not have the same protections as union workers at private companies. Municipal bankruptcy is so rare that no judge had yet ruled on whether Congressional reforms in the 1990s that required companies to provide worker protections before attempting to dissolve union contracts also applied to public workers' contracts.
In a First, Bankruptcy Judge Rules Calif. City Can Void Union Contracts
The National Law Journal
March 17, 2009