A pair of recent court rulings are giving unions new and potentially potent ammunition against furloughs of public employees.
On Aug. 18, a federal judge struck down a furlough plan in Prince George's County, Md., holding that the plan violated the U.S. Constitution by unilaterally cutting wages guaranteed through collective bargaining. On July 29, a state judge in Hawaii issued a similar ruling, saying a furlough violated the state constitution and criticizing officials for ordering unpaid leave without first negotiating with public employee unions.
Furloughs are the strategy du jour in states and municipalities hard hit by the recession. To date, more than 728,500 public employees in at least 21 states have taken or will soon be forced to take furloughs, according to the National Conference of State Legislatures. If other courts agree, the argument that furloughs illegally ignore union contracts could have wide implications: More than 3 million public employees nationwide are covered by collective-bargaining agreements, according to U.S. Department of Labor statistics.
Already, in furlough battles across the country, word of the Hawaii and Maryland rulings is spreading quickly. Bruce Lerner of Washington, D.C.'s Bredhoff & Kaiser, who represented the Fraternal Order of Police in the Maryland case, said he has received a handful of phone calls from unions that want to see his complaints and arguments. And unions in Ohio and Florida have called the Fraternal Order of Police, expressing interest in resurrecting failed furlough challenges, said a police union official.
In California, where state employees are suing in state court over furloughs ordered by Gov. Arnold Schwarzenegger, Paul E. Harris III, chief counsel of the Service Employees International Union Local 1000 in Sacramento, said he plans to cite the Maryland ruling in upcoming oral and written arguments. "We hope to achieve similar results here," he said.
THEY HAD A CONTRACT
As in the Maryland case, California employees are targeting the furloughs as contract violations. SEIU Local 1000 alleges that state employee furloughs announced in December and July are illegal pay cuts, and that Schwarzenegger used false pretenses to declare a state of emergency so that he could order unnecessary furloughs without prior negotiation. Harris described the Maryland ruling as "persuasive authority" for the California court.
Persuasive maybe, although the ruling must survive on appeal first, said Peter Conrad of New York's Proskauer Rose, who handles labor disputes on behalf of employers. That said, he's not counting on a reversal, and he predicted that unions will use this "to the maximum extent possible."
Unions will have a lot of fodder to use, Lerner said. During oral arguments before the U.S. District Court for the District of Maryland, he compared Prince George's County to a lawyer who loses his job and calls the mortgage company claiming he can't pay his loan, only to get caught later with a huge savings account. Or, in this case, $97 million in reserve funds that the county could have tapped, said Lerner.
It was a detail that didn't go unnoticed. "[A]lthough the County suggests to the Court that it faced dire circumstances and had no other reasonable alternatives, the record suggests otherwise," Judge Alexander Williams Jr. ruled on Aug. 18. He concluded that county furloughs ran "roughshod" over the unions "who in good faith negotiated a binding contract."