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Pay raise case in a legal dodgeball

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Illinois

* Cook County Judge Richard Billik Jr. ruled last month that an arbitrator that had ruled in favor of AFSCME over Gov. Pat Quinn’s refusal to grant pay raises needed to consider whether the $75 million needed to fund the raises wasn’t appropriated by the General Assembly. According to AFSCME, the arbitrator declined and has kicked the case back to the judge…

Arbitrator Ed Benn has declined a Cook County judge’s remand of the case regarding Gov. Quinn’s refusal to pay negotiated wage increases, stating that the issues involved are beyond the purview of an arbitrator.

In late June, Cook County Circuit Court Judge Richard Billik referred the case regarding Quinn’s refusal to pay negotiated wage increases to Arbitrator Ed Benn for fact-finding. The judge said that he wanted the Quinn Administration to have the opportunity to establish its public policy defense and directed the arbitrator to make a determination regarding the Administration’s claim that there are “insufficient appropriated funds” to allow payment of the wage increases.

On Monday, July 16 Arbitrator Benn issued a decision in which he declined to accept the case. Benn wrote that unanswered questions in the case are matters of law that must be considered by the court. “[A]rbitrators interpret collective bargaining agreements and courts interpret statutes, the Constitution and public policy,” he wrote.

Consequently, Benn stated, he is returning the case to Judge Billik.

The arbitrator also underscored the gravity of the state’s claim that it is not bound by a contract should the legislature fail to appropriate what the executive branch deems are sufficient funds. “[T]his dispute has other ramifications of immense importance beyond this case and impacts the collective bargaining process in this State,” Benn wrote.

Benn had previously determined that Quinn’s pay freeze was a clear violation of the AFSCME collective bargaining agreement and ordered the governor to pay the wage increases. The case has been tied up in court for over a year after the governor refused to comply and instead filed suit to vacate Benn’s award.

In his decision, Benn emphasized the significant previous sacrifices made by state employees to help balance the budget, and Governor Quinn’s failure to keep his end of the agreement. “The concessions granted by the Union to the State … in the CSAs [Cost Savings Agreements] amounted to approximately $400,000,000. … [A]fter accepting the concessions … the State agreed to pay a 2% wage increase on July 1, 2011 … and then failed to make that 2% payment to all employees. That is a contract violation as I found.”

* AFSCME’s statement…

Governor Quinn has broken his word to the men and women who provide vital public services, he is directly violating a collective bargaining agreement, and now it is clear that he has provoked a legal challenge to the very bedrock of the collective bargaining rights of workers in Illinois. It is shameful that a governor who pays lip service to the best interests of working people has put in motion this litigious assault on the basic tenets of good labor relations. We shouldn’t have to win a court battle to make the governor respect workers, honor their contract and comply with the law, but we will do whatever it takes to uphold our collective bargaining agreement and protect workers’ rights.

Some background here and here.

posted by Rich Miller
Tuesday, Jul 17, 12 @ 3:24 pm

Comments

Benn is also the fact finder in the dispute between Chicago Public Schools and the Chicago Teachers Union. Busy guy.

Comment by Don't Worry, Be Happy Tuesday, Jul 17, 12 @ 3:28 pm
Benn’s a good arbitrator, and that’s a solid decision to kick the AFSCME case back into the court system.

Comment by Lycurgus Tuesday, Jul 17, 12 @ 3:31 pm
I thought it was odd to begin with that the judge would “remand” the case back to the arbitrator. The arbitrator had already mad his ruling. It’s not up to the arbitrator to decide if the state had the money to give the raises or not, only to interpret the CBA. I think the judge tried to punt and got it shoved back in his face. I think this was the right call by the arbitrator.

I do agree that this case has consequences. If in the end the judge sides with the state then I don’t really see the point of having any further CBA’s as they relate to economics. It would seem that a ruling in favor of the state would essentially mean that the state is heretofor never bound by any agreements regarding money in the future.

Comment by Demoralized Tuesday, Jul 17, 12 @ 3:44 pm
It really boils down to what a contract means…besides, if not enough money was appropriated, then why did everyone but 14,000 get their negotiated raises? If this ruling stands for the state, then no contract is valid anymore.

Comment by Captain Illini Tuesday, Jul 17, 12 @ 3:46 pm
I think the arbitrator made the correct decision. If I were AFSCME I’d be concerned about Billik. He seems to be looking for a way to avoid making an adverse decision against the state.

Comment by Norseman Tuesday, Jul 17, 12 @ 3:47 pm
That’s one hot potato.

Sounds like the judge was looking for an easy way out. Oops. Tough decisions come with the robes. He should give it his best shot then wait for the appellate court, then the Supremes to rip his decision to shreds. Happens all the time.

Comment by 47th Ward Tuesday, Jul 17, 12 @ 3:58 pm
All they need to do is look at each State Agency that didn’t get their raises and see how much money was lapsed on June 30th. That will tell the courts that the money was there for the raises. This would save the courts time and all of the lawyers fees but that seems too simple!!

Comment by Fedup2 Tuesday, Jul 17, 12 @ 4:05 pm
@Fedup2 -

We are in a crazy, messed up world if contracts entered into by the Governor are subject to appropriation by the General Assembly.

Could the Governor refuse to pay the state’s electric bill if the GA didn’t appropriate the money?

Comment by Yellow Dog Democrat Tuesday, Jul 17, 12 @ 4:22 pm
The State could have found the money. Ignoring the Gov’s ability to move some money around, it is within the discretion of each agency director to transfer a larger percentage within line items in their budget. 2% could have been found if Quinn directed it be done.

Comment by RNUG Tuesday, Jul 17, 12 @ 4:23 pm
I’m glad it got kicked back to the courts. I want to know if the governor can legally violate a collective bargaining agreement.

Comment by Wensicia Tuesday, Jul 17, 12 @ 4:56 pm
Though legally indefensible I now fully expect an adverse ruling from Billik. The impossibility or “public policy” argument is ludicrous for many reasons pointed out above. RNUG probably stated it best and this has more far reaching ramifications than collective bargaining. This tampers with the foundations of Contract Law in general

Comment by Generation X Tuesday, Jul 17, 12 @ 4:56 pm
Where are all the right winger republican comments on this? Are you for contract law, or not?

Comment by PublicServant Tuesday, Jul 17, 12 @ 5:01 pm
Yellow Dog Demo hits on the central issue. If the State prevails, then the General Assembly by inaction can void any sort of contract or indebtedness. At that point, the government of Illinois ceases to exist for all practical purposes. Did someone call Illinois a 3rd World country? Even in the 3rd World contracts are honored.

Comment by Skirmisher Tuesday, Jul 17, 12 @ 5:09 pm
PublicServant @ 5:01,

I more or less fit that category. If you’re a regular, you’ve already seen my comments often enough

Comment by RNUG Tuesday, Jul 17, 12 @ 5:15 pm
Without using any transfers there is $5.8 million in the payroll line of the Department of Revenue that will lapse so why not pay the COLA’s and step increases with that.

Comment by Accounting Nerd Tuesday, Jul 17, 12 @ 5:15 pm
Skirmisher @ 5:09:

I’ve previously noted on other days that there is a non-appropriation clause buried in the boilerplate fine print used for State purchasing contracts. They don’t need a ruling to get out of a contract with that boilerplate, just the cooperation of the GA at budget time to non-fund a specific line item that is only associated with one contract. In 35 years, I only saw it used once … but it was always there.

As far as I know, that non-appropriation clause has never been inserted into any union contract and I doubt the unions would accept such a clause in their contracts.

Comment by RNUG Tuesday, Jul 17, 12 @ 5:21 pm
I’d like to use this guy to represent retiree interests instead of AFSCME.

See https://capitolfax.com/2012/07/16/the-rumor-patrol/#comment-11207330

Comment by PublicServant Tuesday, Jul 17, 12 @ 5:27 pm
Once it was annoynced that Billick wouldn’t be ruling on the 26th of June but the 2nd of July, there was crazy end of the year spending that occured, 500-700k. I’d say the money has been there waiting to rightfully go to staff. Based on timing of the court ruling and fiscal year…we were told to spend it.

Comment by Anonymous Tuesday, Jul 17, 12 @ 5:40 pm
@ Anonymous - Tuesday, Jul 17, 12 @ 5:40 pm:
This is one of those areas of State budgeting/accounting that has always troubled me - FY End Spending Sprees. There is the mindset that the agency must spend all its appropriations so that it won’t receive less money in the next FY. Now I know that money is sometimes held to the end of the year, and then spent in the final days on things that are needed but where adequate funds might be unknown until late. However, much of the time the money is just “spent” to make sure no “surplus” remains at FY end. If we could find some way to reward for not “spree spending”, I believe the State could realize some serious savings. Oh yeah, right, I’m dreaming …

Comment by Anonymous Tuesday, Jul 17, 12 @ 6:11 pm
===I’d like to use this guy to represent retiree interests instead of AFSCME.===

Unfortunately, what you like is not in state statutes. The statute says CMS decides. If it agrees to work with AFSCME, then that’s all you’re gonna get. Sorry, man.

Comment by Rich Miller Tuesday, Jul 17, 12 @ 6:22 pm
You don’t sound too sorry Rich. I’m asking for fair representation, not your reality speech. I realize it’s not in the statutes. I’m asking whether, in your opinion, it would be an idea worth considering on the legal side to fairly represent retiree interests? Your position seems to be it’s as good as your going to get, without even offering an opinion on the reasonability of the idea. I thought you were better than that Rich. I don’t want retirees to get railroaded. Can’t you even back reasonable representation, or do you see no problems with defacto AFSCME representation for retirees. I mean, it’s ok if you want to say it’s as good as your likely to get, but that’s the easy way out.

Comment by PublicServant Tuesday, Jul 17, 12 @ 6:32 pm
Or you could ignore me…

Comment by PublicServant Tuesday, Jul 17, 12 @ 6:54 pm
Whoever pushed for Benn as mediator did his/her job right. Good response to the Remand, which was in error anyway. This is going to the Supremes through the 1st District…AFSMCE should get it there ASAP.

Judge Billik can be pretty good, but not known for speed unless pushed. So push him. Benn helped that by not sitting on this.

Comment by park Tuesday, Jul 17, 12 @ 6:57 pm
Why would anyone want to do business in Illinois if legal contracts mean so little?

Comment by Liberty First Tuesday, Jul 17, 12 @ 7:02 pm
If this violation of a collective bargaining agreement is allowed to stand, it will do more against unions than all that Scott Walker allegedly does to them.
Benn is not dodging anything. He is on the money.
I am very impressed.

Comment by Richard Afflis Tuesday, Jul 17, 12 @ 7:13 pm
Dog, the failure to appropriate language was standard in virtually all state contracts I ever saw

Comment by steve schnorf Tuesday, Jul 17, 12 @ 7:19 pm
I’ve appeared before Judge Billik countless times over the past 18 years ago, from the time that he was trying small cases in Municipal up to now that he’s in Chancery. He’s one of the smartest judges in the building. If he says that the arbitrator needs to find facts, then the arbitrator needs to find facts. It is amazing that some arbitrator would tell a judge to pound sand.

Comment by Skeeter Tuesday, Jul 17, 12 @ 7:40 pm
I hate to say this but isnt the constitutional contrct protection of pensions just as worthless as the union contracts if this holds ? On the bright side,isn’t our bond debt now vulnerable ?Lets just repudiate it. We need to do this quickly b4 California thinks of it. The right wing will correct this so only one state will get to do it ! We need to be the one !

Comment by YepAnotherRetiree Tuesday, Jul 17, 12 @ 9:06 pm
I have to agree with Steve. The “non-approp”
Clause was standard State contract language in AA’s experience. Probably the most whined about by State contractors, too, with “Drug-Free Workplace” a close second.

Comment by Arthur Andersen Tuesday, Jul 17, 12 @ 9:33 pm
The state gave away $300 million in tax breaks to Chicago corporations but couldn’t appropriate $75 million to pay all the employees per the contract. Now they are filing peremptory rulings to retroactively change the pay plan for some agencies.

http://www.cyberdriveillinois.com/departments/index/register/register_volume36_issue28.pdf

On Page 10518 of the Illinois Register, 4 more agencies were removed from the pay freeze list for FY2012.

“In other words, the employees represented by AFSCME bargaining units at the Deaf and Hard of Hearing Commission, Guardianship and Advocacy Commission, HPA and Prisoner Review Board are not subject to the frozen negotiated-rates-of-pay during fiscal year (FY) 2012.”

Comment by Kevin Highland Tuesday, Jul 17, 12 @ 9:55 pm
Had an interesting chat earlier. I’ll just say everything to date was just a warm-up … you ain’t seen nothing yet.

Comment by RNUG Tuesday, Jul 17, 12 @ 10:07 pm
AFACME is only interested in one thing, UNION DUES. They could care less about anything else. When the contract is ratified, they count the votes. When the committees are sent to convention to Re-elect King Henry, They count the votes. If you have ever been a member of AFSCME, can you remember council 31 not the local spending any money for any employees benefit. Might as well not have a contract, it will not be followed. Contract negotiations should be STOPPED now, until the old contract is followed. If this was a private company the Federal Department of Labor would already be involved. But just keep the dues flowing and AFSCME will keep the Employees quit. The Governor of COOK county and AFSCME are in bed together.

Comment by Bob Tuesday, Jul 17, 12 @ 10:27 pm
Benn is not all that. The appellate court overturned his decision that would have imposed no discipline on the Chicago firefighters who participated in that drunken, racist party in the firehouse. Now he thinks Chicago teachers should get a 15 to 20 percent raise in this economy? And remember when he recently blasted Chicago IG Ferguson for thinking fire inspectors who deliberately padded their mileage should be fired for that theft? He seems to lean heavily in favor of the union side no matter the facts.

Comment by Anonymous Tuesday, Jul 17, 12 @ 10:41 pm
OMG!!! Lets pray the final ruling is in favor of the union contract instead of the state. If the state wins, we can all kiss our pensions good-bye!

Comment by Mama Wednesday, Jul 18, 12 @ 12:13 am
@Schnorf -

That’s true — except for collective bargaining contracts, as RNUG points out. I’m pretty sure its true of other contracts as well.

I agree this one is going to the Supreme Court, and keep in mind it has far-reaching implications all the way down to your local school districts.

Imagine your local teachers agreeing to a 1 percent pay raise over the next three years in exchange for a contractual guarantee to maintain the number of teachers and class sizes.

Then the school board can simply refuse to appropriate money for the pay raises and cut the number of teachers?

What?

Executive powers are fully vested in the Governor. That includes collective bargaining power. Once the state enters into a contract, we are on the hook, regardless of whether or not the General Assembly refuses to appropriate the money.

Eventually, the courts will force them to pay. Or Illinois will never enter into a contract again.

Frankly, I find this to be a senseless argument by the Governor. Why would any Executive want to cede their collective bargaining power to the General Assembly?

Thanks Skirmisher,

Comment by Yellow Dog Democrat Wednesday, Jul 18, 12 @ 7:15 am
I will say in the Governor’s political defense that AFSCME’s ire should be directed at the General Assembly.

Unfortunately, the governor’s efforts to direct their attention in that direction have not been effective.

Comment by Yellow Dog Democrat Wednesday, Jul 18, 12 @ 7:54 am
And, following up on the debate earlier this week: this is the kind of stuff that is likely to draw a primary challenge for the governor. “Missteps” are one thing, but a “misstep” that alienates a large section of the party’s political base that has a history of making large political contributions is another.

If Rutherford or another labor-neutral Republican emerges as a frontrunner in that primary, its easy to see AFSCME recruiting a primary opponent for Quinn, figuring they’d be better off either way.

Comment by Yellow Dog Democrat Wednesday, Jul 18, 12 @ 7:58 am