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AFSCME loses appeal over canceled raises

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Illinois

* From the AP…

A federal appeals court is backing Gov. Pat Quinn over pay raises his administration canceled for thousands of union workers.

A U.S. District Court dismissed an effort by the American Federation of State, County and Municipal Employees to force the administration to pay the raises. The Seventh U.S. Court of Appeals on Thursday upheld that ruling.

The appeals court ruled the 11th Amendment prevents the union from prevailing because ruling in AFSME’s favor would force the state to spend money.

* The 11th Amendment…

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

* More…

Originally the 11th Amendment only forbade actions by non-citizens against a defendant state. But Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890) extended the doctrine of such sovereign immunity, holding that the 11th Amendment barred suit even by citizens of that defendant state. All private parties were subject to the amendment, although other states and the federal government could still bring actions against a state.

* Back to the coverage…

AFSCME’s suit contended the state violated both its union contracts and the equal protection clause of the U.S. Constitution. The union sought a court ruling that would force the state to pay the raises. […]

The equal protection claim made by the union requires it to “plausibly allege that no reasonably conceivable set of facts supports the pay freeze as a rational instrument of cost savings,” the appeals cout added.

“Instituting cost-savings measures is unquestionably a legitimate governmental interest, particularly for a government in such dire straits,” the court said.

* AFSCME react…

“The governor has a moral obligation, and under the union contract and an arbitrator’s order, a legal one, to rescind his illegal pay freeze and make employees whole,” AFSCME said in a written statement. “It is regrettable that he has provoked litigation instead of complying with the contract and the law. We … will consider further steps as we pursue the case now pending in state court as well.”

posted by Rich Miller
Friday, May 18, 12 @ 9:06 am

Comments

Doesnt this in effect place any contracts negotiated by agencies for ANYTHING in jepordy? This is a very bad precident.

Comment by He Makes Ryan Look Like a Saint Friday, May 18, 12 @ 9:08 am
This was the Federal Court punting. The State Court case is the essential one

Comment by Generation X Friday, May 18, 12 @ 9:11 am
So let me get this straight. I go into a legally binding contract, that I have required concessions to get, and then I can say, sorry I don’t have the money.

Can I get a deal like that?

Comment by Pale Rider Friday, May 18, 12 @ 9:19 am
Not so sure this court case is a good thing considering the pension reform the legislature is undertaking. Having said that, freezing of raises is exactly the right thing to do. I’m sorry but you don’t deserve a 2% raise every year just because you are in a union. Come on really

Comment by Political Junkie Friday, May 18, 12 @ 9:29 am
–It is regrettable that he has provoked litigation instead of complying with the contract and the law.–

No matter what your opinion in, the fact is AFSME brought this to court, not the Governor.

Second, if the courts upheld AFSME’s complaint, this would have set off very dangerous president. Essentially, it would allow a governor to enter into a contract (with a union, business or whatever) and forced the General Assembly (the power of the purse) to pay the bill. Think about the unintended consequences of what this would have created and how the deterioration of the balance of powers. Remember, the General Assembly did not appropriate the money for the raises, under their own admission.

These contracts can’t be viewed as a simple two party contract; they are much more involved with constitutional issues. A Governor can not mandate spending on behalf of an entire state.

Comment by Ahoy! Friday, May 18, 12 @ 9:29 am
Shouldnt this be pending in Illinois Court of Claims?

Comment by Peter Snarker Friday, May 18, 12 @ 9:31 am
This is basic black letter law. I don’t even have to read the opinion. A state cannot be sued in federal court unless the plaintiff is another state.

This is just an AFSCME PR stunt trying to show their members they are doing something even if it was a complete waste of effort. Wake up people. You are getting it from both ends.

Comment by Anon1 Friday, May 18, 12 @ 9:32 am
Doesn’t AFSCME get it? The state has no money. Do they want the state to issue checks that will bounce? I’m also owed $$$ by a near-bankrupt company, but I will never see it. That is life. I have a judgment that I can use to paper my wall. Why do public employees think they are different?

Comment by Ace Matson Friday, May 18, 12 @ 9:33 am
I understand that this is a State issue but I fear that this course could get complicated & ugly. If I’m AFSMCE I’m wondering if nothing in the contract is ‘real’ without GA approval. I’m curious how you would bargain in that scenario. Do they need another 177 seats at the bargaining table? Does anything that the Gov’s Office or CMS say in negotiations really mean anything? Kind of like explaining to my CFO what that clause in the contract about “appropriated funds” really means!

Comment by BCross Friday, May 18, 12 @ 9:33 am
-I’m sorry but you don’t deserve a 2% raise just because you are in a union-

Deserve has nothing to do with it. 2 parties bargained for and came to an agreement where each party received something in consideration for something. Nobody put a gun to the State’s head to agree to this contract. One side has performed their end of the contract. One side has not and it isn’t any more complicated than that

Comment by Generation X Friday, May 18, 12 @ 9:34 am
If 75 million can be found to fund the day cares then the State was not out of money and had a contractual obligation to fund the raises. No matter how noble the purpose was in funding the day care providers there was absolutely nothing compelling the State to fund the providers. There was an obligation to pay the raises however.

If someone owes $1,000 in back alimony and suddenly “finds” $1000 they have an obligation to pay the alimony. If they decide to give that $1,000 to feed the hungry the Court is still going to hold them in contempt, no matter how noble the cause

Comment by Generation X Friday, May 18, 12 @ 9:40 am
-Generation X
Actually it is more complicated than that, the state is broke, actually you know what broke doesn’t even work anymore. The state is crumbling and if union members really expect a 2% pay raise and on top of that free healthcare for retirees, and 3% COLA’s then im down blaming the GA (which is tough since I believe this mess to be their fault). Now I blame the union members for not realizing that in times like these everyone has to give a little and im sorry but receiving a raise when no one else is getting one is not giving

Comment by Political Junkie Friday, May 18, 12 @ 9:42 am
–“The governor has a moral obligation, and under the union contract and an arbitrator’s order, a legal one, to rescind his illegal pay freeze and make employees whole,” AFSCME said in a written statement. –

Um, didn’t the district and appellate courts consider the law in their rulings?

Comment by wordslinger Friday, May 18, 12 @ 9:43 am
Quinn keeps blaming the General Assembly for not appropriating money for the NEGOTIATED raises. This is true, however, he signed the budget knowing this. Quinn and the GA are both to blame!! Pay me what you owe me!!

Comment by Gallery Walker Friday, May 18, 12 @ 9:46 am
I would not want to but the states bonds if they dont have to pay. This concerns me more than anything one of those ratings agencies says.

Comment by western illinois Friday, May 18, 12 @ 9:47 am
Political Junkie: You don’t have a clue. All but 13 state agencies received thier raises. Where did that money come from???????

Comment by fedup Friday, May 18, 12 @ 9:51 am
==Deserve has nothing to do with it. 2 parties bargained for and came to an agreement where each party received something in consideration for something. …..it isn’t any more complicated than that==

I don’t know if you are of gen-x age as your handle implies. But if you are–and if your comment is an indication of your basic expectations of life– I fear you are going to spend a great deal of it being sorely disappointed in many of the people and the situations that you encounter along life’s way.

Comment by Responsa Friday, May 18, 12 @ 9:56 am
Whether it is the State, private company or an individual “I’m broke” is not an available defense in a contract action. The state courts will likely make this very clear at some point in the proceedings.

Comment by Generation X Friday, May 18, 12 @ 10:00 am
I don’t care if it is AFSCME the matter is how do you negotiate ANY contract (lease etc.) on a multi year basis? The Gov can move money around and say the legislators did not provide funding for it. It could be for ANY big ticket item, or construction project. IT IS BAD FOR ILLINOIS.

Comment by He Makes Ryan Look Like a Saint Friday, May 18, 12 @ 10:01 am
To Responsa

Expectations in life and expectations in Court are two wholly different things. We are discussing legal issues here. The State will have to pay these raises. What I expect from people or life is completely irrelevant to the topic

Comment by Generation X Friday, May 18, 12 @ 10:06 am
Basic expectations of life? Like - a contract being a binding legal agreement between two or more parties, enforceable by law? You mean expectations like that?

Seriously - if all it takes for the State to get out of a contract - any contract - is for the GA to not appropriate the money for it, then this has an impact far beyond AFSCME by creating a new form of extortion. Give us what we want or we won’t “appropriate” money for your contract.

Comment by Name Withheld Friday, May 18, 12 @ 10:09 am
==Shouldnt this be pending in Illinois Court of Claims?==
I was wondering the same thing. It would have seemed strange for the federal court to overturn Quinn’s actions, but I don’t understand why this wasn’t in the state court instead.

Comment by Robert Friday, May 18, 12 @ 10:12 am
Two points.

First, one thing I have thought about recently as far as irony is concerned is that Republicans and (especially) business interests are very big on upholding contracts. As much as some interests may not long a union contract that promises COLAs and mid-year adjustments, it is a contract. I’m quite sure that a business would not accept a client breaking a contract or that a bank would not accept a borrower refusing to pay a mortgage.

Second, is this enough of a precedence at the federal court level to spell doom for AFSCME, IEA and IFT challenges to the Quinn-Madigan pension and retiree health legislation? And no, I’m not advocating either way, but merely positing the question.

Comment by Team Sleep Friday, May 18, 12 @ 10:14 am
AFSCME is in negotiations with the state now for the next four-year contract. Maybe this should be a reminder to the Quinn admin’s negotiators that they should consider what the state and its taxpayers can afford and make sure the money is there before signing off on pay increases,

Comment by cassandra Friday, May 18, 12 @ 10:14 am
That should’ve read “may not like a union contract”, not “long a union contract”.

Comment by Team Sleep Friday, May 18, 12 @ 10:15 am
I did not receive the raise (yeah, I survived)…it’s not a matter of ‘deserve’. What this little stunt did was nothing more than a game of pick n choose and attempt to divide members against itself. Seriously, if all the state had to do is ignore what CMS bargains at the table by a crafty little trick of not appr. the funds, why give to to some? Why the selective of agencies in such a ‘random’ manner? If the state is broke, the state is broke. Really, how does the GA decide what person in what agency with the same job title will be honored by bargained wage and another in a different agency under the same bargained agreement not? It was nothing more than a game. Fact is, none of the agencies have any money for operational needs unless the GA appr. it. It was a toe in the water to test the waters.

Comment by Cindy Lou Friday, May 18, 12 @ 10:23 am
Regardless of the outcome in the state courts, I believe that negotiations between AFSCME and the state will never be the same again. Who would agree to a backloaded contract after this? Why would the union agree to any form of deferred compensation?

Comment by AC Friday, May 18, 12 @ 10:28 am
The point that is being missed here is the following.

There was a contract between the State, The Governor, and several unions.

The Governor came to the employees and said, “If you will do these things to lower costs,take furlough days, defer raises, and come up with other ways to save a targeted amount we (I) will not make any cuts in raises or employees until the end of the contract. And he, or his designee, signed those memorandums of understanding.

So now you have two documents that are contracts that state the employees will get their raises.

Then the Gov arbitrarily gave the raises to some employees in those unions, but refused them for others. This is the point that needs to be hammered home and for which their is no defense. A clerical in one agency got the raise and steps and a clerical in another did not just because of the agency they worked for. They both have the same job title, they both are in the same union. One gets what they were promised and the other does not.

This is blatant discrimination. I am not meaning to bring race or anything else into this but it is the same exact situation as if the Governor said, if you are of this ethnicity you get a raise and if you are of a different ethnicity you don’t. Or if it depended on what your religion was. Catholics get the raise, Protestants don’t. When you separate out a certtain segment of an equal group of people and deny them what you have promised them, yet keep the promise to other segments of the same group based on where they work, that is discrimination. And that is against everything employers are allowed to do or should be allowed to do. Especially the state

Comment by Irish Friday, May 18, 12 @ 10:30 am
@Cass
My understanding from a union rep, not confirmed, is the current negotiations are for a 2-year contract. Extremely little information coming out as usual.

Comment by Ready To Get Out Friday, May 18, 12 @ 10:38 am
I am very concerned about dangerous presidents; we all should be. But, I don’t know exactly what that has to do with this particular issue.

Comment by steve schnorf Friday, May 18, 12 @ 10:54 am
Steve.

Freudian slip? “Presidents” as opposed to “precedents”?

Comment by LINK Friday, May 18, 12 @ 11:06 am
Quinn continues to pass out promotions and raises to his managers & adds layers of Deputy Directors in Cook Co. like they’re candy at Easter…. while expecting downstate and the rank and file to fund his cronyism largess…..

Comment by Anon Friday, May 18, 12 @ 11:07 am
snark-see 9:29

Comment by steve schnorf Friday, May 18, 12 @ 11:09 am
**I am very concerned about dangerous presidents; we all should be. I don’t know exactly what that has to do with this particular issue.**

If AFSCME ends up losing, this would basically mean that no economic provisions in collective bargaining agreements are binding. I find that to be a dangerous precedent.

Comment by dave Friday, May 18, 12 @ 11:11 am
Jesus wept

Comment by steve schnorf Friday, May 18, 12 @ 11:13 am
I, too, work in one of the agencies that didn’t get the raise. Why not? It should either be all or none. If the state can get out of this by saying they don’t have the money, then they can do that to any contractual obligation. I suspect the Illinois courts will rule differently, since judges have a “contract” with the state, too.

Comment by lincolnlover Friday, May 18, 12 @ 11:16 am
Collective bargaining issues do not go to the Court of Claims. They go to an arbitrator or the Labor Relations Board.

Comment by Anonymous Friday, May 18, 12 @ 11:16 am
“The governor has a moral obligation”

Are they serious?

The various pension loophole seekers may have a *moral* obligation, but the Guv doesn’t. Guv doesn’t have a *moral* obligation to raise taxes on everyone else, or cut spending on [dept X], or release 20% of prisoners or whatever else, in order to make good on a pay raise. Guv DOES have a moral obligation to balance those competing interests.

Unless they are arguing that their endorsement WAS a QPQ for the raises/layoffs/etc pledges from Quinn, personally.

Comment by Chris Friday, May 18, 12 @ 11:23 am
Steve, Rich,
This might be a little off the subject but not much. I think it has been mentioned on this blog that pension related things should not be negotiated in contracts. If I misread that then I apologize, but if it is true how close to the line can the two sides get? and what is the penalty?

For example the reduction of the COLA would have to be done legislatively and could not be negotiated. Correct?

Comment by Irish Friday, May 18, 12 @ 11:23 am
I sure hope anon 11:07 is wrong. But I fear perhaps not.

Comment by cassandra Friday, May 18, 12 @ 11:40 am
I’m in the union and I think the precedent is bad win or lose. The contract should be enforced, but if the governor doesn’t have the appropriation, what can he really do? The bad part was that the pay raises were given to some but not all members.

The union needs Derrick Smith’s lawyer to use that holocaust comparison on this.

Comment by Anon Friday, May 18, 12 @ 11:42 am
Ready to Get Out:

The GA passed a law that prohibits labor contracts from extending into a new Governor’s term. Given that the next Governor’s term will start in January 2014, the next labor contracts will end on June 30, 2014 (yes that is beyond January but the law allows it to extend 6 months into the term to allow for it to end at the end of a fiscal year).

Comment by Demoralized Friday, May 18, 12 @ 11:43 am
@Demorialize

I was thinking that wasn’t sure on the details. Thanks for clarifying.

Comment by Ready To Get Out Friday, May 18, 12 @ 11:48 am
This is a very significant case. What the Appeals Court said here may be quoted in future government contract cases.

Comment by Steve Bartin Friday, May 18, 12 @ 11:51 am
This is not a dangerous precedent or for that matter any kind of precedent. The Federal Courts do not have jurisdiction to order States to pay money. (I know some things look like they do but those situations were carved out over centuries.) So they go to State Court. The case is dismissed because the State Court does not have jurisdiction. The case goes to the Court of Claims. Perhaps they loose. Perhaps they win. If they win they do not get paid until the Legislature appropriates the money.

There is nothing new here. The only surprise is that some people are surprised.

Comment by Bigtwich Friday, May 18, 12 @ 11:54 am
–”Given that the next Governor’s term will start in January 2014″–

next governor election is not until 4 Nov 2014…Quinn was elected on 2 Nov 2010.

Comment by Cindy Lou Friday, May 18, 12 @ 11:59 am
Steve Schnorf–the wit and wisdom of Emily Litella seems to have been lost for many readers.

Comment by Responsa Friday, May 18, 12 @ 12:18 pm
Fir the record the union did win through an arbitrator. What I have never heard is for the deferred raises some employees agreed to furlough days state wide. Did those who took furloughs get their money back? Also the governor made his own mess by not abiding by the IL constitution in signing an unbalanced budget. The people who are really getting thr short end of the stick are people who promoted. They took jobs with more responsibility and are now not being compensated for them yet in some cases are working evenings and nights. Hard to believe with this going on thr state continues to hire. How do you hire more employees of you can’t pay the ones you have?

Comment by Andwhenuthinkuhaveseenitall Friday, May 18, 12 @ 12:41 pm
It occurs to me many of you are not fully informed of the legal actions being taken on the pay raise issue and the far reaching ramifications. The first action by AFSCME was to take it to arbitration. The ruling from arbitration was the State had to pay the raises. From the decision: “As a remedy, the State is
directed to immediately pay that 2% increase for all bargaining unit classifications and steps and continue to pay that increase. Within 30 days from the date of this award, the State shall make whole those employees who did not receive the
increases effective July 1, 2011.

Quinn & Company filed a lawsuit within the State of Illinois in the Circuit Court of Cook County to fight the award. The next hearing date for this case is June 23, 2012. It is expected the judge will issue a ruling at that time.

When Quinn & Co. filed suit in state court, AFSCME filed suit in federal court citing breach/impairment of contract under the contract clause of the U.S. Constitution. All the federal court decision states is that AFSCME cannot sue the state in federal court. The federal court’s decision made no judgment about the proceedings to enforce the favorable arbitration award in the Circuit Court of Cook County.

Of course CMS can bargain multi-year contracts. They do it with vendors all the time, and yes, those contracts are subject to the contract clause of the IL consitution. They have also been bargaining multi-year agreemens with the unions since 1975. Section 21 of the IL Public Labor Relations Act states “[s]ubject to the appropriation power of the employer, employers and exclusive representatives may negotiate multi-year collective bargaining agreements pursuant to the provisions of this Act …”. Therefore the bargaining agreement is not subject to appropriations at the whim of the GA.

This would not just affect State employees. It impacts every public employee whether state, county, city, municipal, etc. As the arbitrator said in his decision if Quinn and Co. prevails on this, no public union in IL would want to negotiate multi-year agreements, because any government body would be able to break contracts with employees in the out-years by not appropriating enough funds in their budgets for raises etc.

By the way the current AFSCME contract being negotiated is for three years. It has to end by June 2015 (within six months of each new term for the Governor).

Comment by KurtInSpringfield Friday, May 18, 12 @ 1:04 pm
I have employees who are both AFSCME and Teamster members. Both are paid from the same fund, in this case a revolving fund. The GA does not appropriate money for this fund just expenditure authority. The Teamster employees were given their raises the AFSCME employees were not. What’s wrong with this picture?

Comment by State Supervisor Friday, May 18, 12 @ 1:10 pm
Thanks, Kurt. I thought that was the process, but its nice to have it so clearly stated.

Comment by lincolnlover Friday, May 18, 12 @ 2:50 pm
R-yes, and she and I continue to be concerned about the lack of flea erections in many 3rd world countries

Comment by steve schnorf Friday, May 18, 12 @ 3:16 pm
Did anyone besides Bigtwitch actually read the decisions? All the federal courts said was “you can’t bring that suit against a state in federal court.” They said nothing about who was right or wrong. The state courts will decide who is right and who is wrong.

Comment by anonymous Friday, May 18, 12 @ 4:56 pm