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Back wages, Chicago schools and plaintiffs attorneys all awarded money

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Illinois

Although state finances are stretched thin, the Illinois House approved a plan Wednesday to pay out more than $60 million owed to thousands of unionized state workers. […]

The dispute over the money dates to 2011, when former Gov. Pat Quinn reneged on wage increases for state workers approved under former Gov. Rod Blagojevich.

At the time, Quinn said state lawmakers failed to provide the money for the raises, while House Speaker Michael Madigan said the governor should find money in the existing budget to pay the wage hikes.

The American Federation of State, County and Municipal Employees union won a court order saying the money needs to be paid.

The vote was 88-23-2. All “No” votes were Republicans. Rep. Mike Smiddy (an AFSCME member) and freshman GOP Rep. Terri Bryant both voted “Present.” There’s no guarantee that Gov. Rauner will actually dole out the money if the bill also passes the Senate.

* Meanwhile…

Chicago Public Schools would get $33.3 million to soften the blow of recent state budget cuts under a plan approved Wednesday by the State Board of Education.

The money is part of a $97 million pot set aside to help struggling schools after lawmakers and Gov. Bruce Rauner agreed to cut education and other state services by 2.25 percent as the state faces a $1.6 billion funding shortfall in the current spending year.

For CPS, officials said that means what was to be a cut of $35 million will instead amount to a reduction of $1.7 million. The district is one of 32 that education officials identified as having less than 30 days cash on hand, though nearly 600 of the state’s 800 school districts will receive some money to offset the cuts.

However, officials acknowledged the cuts are still painful because they come late in the school year and districts had little time to plan for them. Robert Wolfe, the board’s chief financial officer, said it could take as long as three months for districts to receive the payments.

* And…

Lawyers representing state retirees in a case involving their health insurance premiums will receive a little more than $1.5 million in fees and costs for their work.

The amount, determined by Sangamon County Associate Judge Steven Nardulli, is less than half of the $3.1 million in compensation (including a multiplier) the lawyers sought during a court hearing two weeks ago.

Money to pay the fees will come out of the roughly $63 million in health insurance premiums collected from retirees. The money was deducted from their pension checks.

In his ruling, Nardulli said the attorney fees amount to about 2.37 percent of the premium money paid. In other words, when refunds are made, for every $100 in premium refunds due to an employee, $2.37 will be deducted to pay legal fees.

posted by Rich Miller
Thursday, Apr 16, 15 @ 9:08 am

Comments

VERY interesting the vote on the back pay…….a message being sent?

Comment by Former Merit Comp Slave Thursday, Apr 16, 15 @ 9:13 am
They longer they delay, the more they’ll have to pay us. Remember, the judge tacked a 7 percent interest rate on the amount owed.

Comment by State employee Thursday, Apr 16, 15 @ 9:18 am
Man, the GA Dems are taking full advantage of the opportunity an anti-labor Republican Governor gives them. I’m only a little surprised because it’s such smart politics, and I’m not used to seeing that from the Dems.

Comment by Arsenal Thursday, Apr 16, 15 @ 9:22 am
So, there’s a court order telling you to pay the money you owe people, and you vote “no?”

“No” what?

Comment by Wordslinger Thursday, Apr 16, 15 @ 9:23 am
“No” what?

“No, we don’t believe in contracts or the rule of law.”

– MrJM

Comment by MrJM Thursday, Apr 16, 15 @ 9:31 am
I believe Bryant and Smiddy voted present because both are among the 24,000 state employees still owed back wages.

Comment by Reality Check Thursday, Apr 16, 15 @ 9:35 am
===The American Federation of State, County and Municipal Employees union won a court order saying the money needs to be paid.===

I guess it’s more than Rauner ignoring the judicial branch of government?

Those lawyers who may have voted no, as officers of the Court, what are you saying by being “red lights”.

This is another tragic example of how those who swear to uphold the Constitution, really have little knowledge what that all entails.

It is not a stretch to say that those voting no are also voting against, in this instance, the legitimacy of the judicial branch of government and that ruling by courts, under the rule of law, are only acceptable if they find the ruling acceptable.

Like Rauner, calling the Illinois Supreme Court corrupt, aren’t these votes, seen in that prism, saying the same thing? Isn’t a “red light” saying “I do not believe this ruling is fair and just, and I don’t recognize the authority to make us pay”?

im not angry or upset, just really disappointed.

Comment by Oswego Willy Thursday, Apr 16, 15 @ 9:37 am
Although state finances are stretched thin, the Illinois House approved a plan Wednesday to pay out more than $60 million owed to thousands of unionized state workers.

The key word here is “owed”. The State is paying what it owes state workers for their work. The governor of Illinois made a contractual agreement through their unions and it is finally being honored.

Without unions, people get screwed. Without a marriage union, families are unstable. Without a union of states, there would be no United States of America. Unions are good.

That is why unions are good to not only be a part of, but good for our society as well. In this case, giving families more is good for everyone.

Governments should encourage any organizations which better our society. The idea that any government leader would attack such an organization should be recognized as creating instability within our society. During these tough economic times, we need each other, united in these organizations.

We have a governor who doesn’t value what unions do. So he will continue to perseverate upon their successes and twist the good news that working families have more by claiming society would benefit if these unions didn’t exist.

Don’t let him do that.

Comment by VanillaMan Thursday, Apr 16, 15 @ 9:38 am
Then you’re a better man than I, OW. I’m both angry and upset. Of course, “disappointed” is a baseline for these people, so there’s that.

Comment by CharlieKratos Thursday, Apr 16, 15 @ 9:46 am
@ OW- Honest question, because I’m coming in late to this game…

Could, if we read the evidence in the light most favorable to the defendant, the “Red Lights” be saying, “The Governor should find the money for this on his own authority,” as Madigan did, before he had this great opportunity to painlessly reset his relationship with labor?

Comment by Arsenal Thursday, Apr 16, 15 @ 9:48 am
While I understand Rep. Bryant’s vote due to her conflict of interest, I’ve got to think that it will come back to bite her. She’s got a lot of AFSCME members in her district.

Comment by Old Shepherd Thursday, Apr 16, 15 @ 9:51 am
- Arsenal -,

That may be, I dunno, but, if that is the case, petty politics of blame or accountability now trumps the ideal of the stature of a co-equal branch doing its Constitutional role?

Comment by Oswego Willy Thursday, Apr 16, 15 @ 9:55 am
A lot of people and entities are clearly and legally owed money by the state. Will they all have to get court orders to get paid? Liked MJM’s previous tactic of putting payment priorities of payables in Gov’s hands. Not sure why he’s switching now.

Comment by walker Thursday, Apr 16, 15 @ 10:18 am
@ OW

Well, yeah, it’s not MUCH better…but at least it’s something we’re used to seeing in IL government?

Tongue somewhat in cheek there…

Comment by Arsenal Thursday, Apr 16, 15 @ 10:24 am
Maybe the 23 were waiting to see which way the emperor’s thumb went.

Comment by Jocko Thursday, Apr 16, 15 @ 10:29 am
The biggest problem w/ Nardulli’s order is that he said, w/o citation, that he had no power to order the State to pay the attorney fees because the GA had not appropriated anything. So instead the fees have to come out of the money the State wrongfully w/h from the retirees. This still punishes the state pensioners and allows the State to get off free. I believe the judge would have the authority to order the state to pay the attorney’s fees or, at least, would expect more from the judge in response to the claim that simple platitudes. This begs the question of whether the final fee was fair or not.

Comment by D.P.Gumby Thursday, Apr 16, 15 @ 10:36 am
ignoring a court order is a total contradiction to what the Republicans have been saying…..they want to restore the rule of law to our country….upend the lawlessness they see in the Whitehouse where the constitution and laws are being ignored and bypassed with EO. Okay now they won’t vote to uphold a court order and the constitution….give me a break….this is the ultimate do what I say not what I do.

Comment by illlinifan Thursday, Apr 16, 15 @ 12:11 pm
The media is so appalling. To start off a story about payment pursuant to a court order, this joke of a reporter starts off with a blame the unions, suggestion of improper influence insinuation and only buries the information that the payment is pursuant to a court order way down in the story. As most people here have realized, the real story should be about legislators who want to defy a court order and not that the State must pay earned wages to its employees.

Comment by anon Thursday, Apr 16, 15 @ 1:32 pm
I wonder if there is anyway some of us could get in the union so we could get a raise - have not had one since 2003 - will leave soon - had it

Comment by fedup Thursday, Apr 16, 15 @ 1:56 pm
And why now instead of when the tax rate was 5% and the Governor at that time would have signed it. Is this approved now just so BR can veto it? Will the GA be ready to override the veto, or will they shrug and say…”we tried”??. So tired of state workers being demonized and used to make political points by one side, then the other. The majority of us deserve much more respect than that.

Comment by Johnnie F. Thursday, Apr 16, 15 @ 2:13 pm
GA and Governor pass law to strip retirees of health insurance. Obviously unconstitutional, but so what? Judge Nardulli agrees with the state but the ISC rules overwhelmingly against the state.

Now retirees (and retirees only) have to shell out $1.5 million to lawyers for bad law. So in the future, the state can do garbage like this again, lose, but employees/retirees still have to pay. Great precedent. I know the ‘American Rule’ but there are many exceptions and this should be one of them. But it won’t. The unions are swamped and the SUAA will do nothing but smile and say how great it is.

And on it goes.

Comment by Federalist Thursday, Apr 16, 15 @ 2:36 pm
@RNUG or someone who knows,

I read the following about $134,000 in interest earned. Is that all the state owes in interest on a cumulative $63,000,000?

Am I missing something?

“All of the interest earned, $134,600.00, is to be applied to the award of attorney fees. The balance of $1,367,411.10 is to be taken from the common fund. The funds are to be taken proportionally from each retiree refund, rather than equally from each retiree. The total award of attorney fees is approximately 2.37% of the money collected from retirees. In effect, for each $100.00 refunded to a retiree, that retiree will pay $2.37 in attorney fees. “

Comment by Federalist Thursday, Apr 16, 15 @ 2:39 pm
The legislators who voted present because they might be parties to the action did the right thing. Sort of what Deb Mell should have done by not participating during the Blago impeachment. As far as requiring the State to pay the attorneys’ fees, the judge correctly noted there is no provision for him to order it. (Judges had to pay when they won in Jorgensen v. Blago over the COLA issue.)The ISC filed an opinion today in Illinois State Treasurer v. Illinois Workers’ Compensation Commission, 2015 IL 117418, where they stricly construed the requirement that, since the Injured Workers’ Benefit Fund was not specifically excluded by statute, the Treasurer had to file an “appeal bond” for court review of an administrative decision. (Maybe a hint of clearly reading the constitution in the pension case.) The opinion also suggested if the GA belived the statutory construction they announced was not what it intended, they had every right to amend the law. Those two decisions certainly don’t fit Bruce’s “Judges who want to be legislators” theme.

Comment by West Side the Best Side Thursday, Apr 16, 15 @ 3:28 pm
Federalist, from the court order:

“The two funds have earned different interest rates, as escrowed funds are required to be desposited in a more secure, lower interest fund. The SERS retiree escrow has to earned $4,300.00.

The non-SERS funds have earned interest of $130,300.00.”

The total interest earned is $134,600.00.

Comment by Norseman Thursday, Apr 16, 15 @ 3:35 pm
Norseman,

Thanks so much for your explanation.

Do you know anything about SURS? Somehow that seems to be overlooked in Nardulli’s pay out plan. Or I am again missing something?

Comment by Federalist Thursday, Apr 16, 15 @ 5:24 pm
== Do you know anything about SURS? Somehow that seems to be overlooked in Nardulli’s pay out plan. ==

I need to double check, but I believe those of SURS who had retiree health insurance premiums withheld will be paid at the same time as the SERS retirees.

If you are referring to attorneys and their fees, the ones representing SURS were already paid by SUAA. And before you object to “paying twice”, the judge pointed out (and both Norseman and I also know for a fact) that the vast majority of the legal work (done early on) that resulted in the winning verdict, and the request to escrow the funds so we all COULD get refunds without a special appropriation, were done by the lawyers who were hired on a contingency basis by a group of individual retirees, not any particular retiree or union organization (although the individuals I know out of that group were also RSEA members).

According to the article, as far as Judge Nardulli is concerned, those lawyers on contingency are the ones who deserve to be paid … even though he cut down their billable hours and the class action multiplier a bit.

Full disclosure: although not one of the members who filed the initial suit, I do know one or two of them, and I also slightly know one attorney.

Comment by RNUG Thursday, Apr 16, 15 @ 5:39 pm
Fed, another excerpt:

In the case of members of SURS, the objection that they paid their attorneys to participate in this litigation and should not have to pay for attorney fees for others is not well-taken. The
court appreciates the participation of SUAA lawyers after the case was remanded by the Supreme Court for implementation of the judgment, particularly with respect to the hearings
regarding attorney fees. The fact remains that the work performed in overturning the assessment of health insurance premiums was performed by attorneys other than SUAA attorneys. SUAA lawyers did not participate in the initial proceedings in this court leading up to the appeal to the
Supreme Court, nor did they participate in the proceedings before the Supreme Court. To exclude SUAA members from sharing in the cost of the litigation would unfairly shift the burden of the attorney fees to other retirees, and would provide a benefit to SUAA members for which they did not contribute.”

Comment by Norseman Thursday, Apr 16, 15 @ 5:57 pm
Norseman,

The language you have cited I believe is from Nardulli who ruled against the retirees in the first place.

Pardon me if I do not take his ‘line’- hook, line and sinker.

I would agree that SUAA was a late comer and a hanger on and did little. But AFSCME did a lot and AFT as well. And yes I was a member of those organizations at one time.

I watched this very carefully and they represented ME quite well. did not need the attorneys who were not hired by me anyway.

Comment by Federalist Thursday, Apr 16, 15 @ 6:11 pm
Fed, it is from Nardulli’s order. I don’t want to get into a disagreement with you about the SUAA lawyers or Nardulli. Bottom line is that retirees won and we will receive all but 2.37% of our money back. Furthermore, we don’t have to pay any more premiums than was required under the old law. It also paved the way for a.quicker favorable ruling on SB 1. That’s a win win for all public sector retirees.

Comment by Norseman Thursday, Apr 16, 15 @ 8:13 pm
Norseman - Thursday, Apr 16, 15 @ 8:13 pm:

I agree with your reasoning on why the 2.37% is well worth it, and I’ll add one more of my own:

It was worth that small sum to see the GA get slapped down by the Supremes. Hopefully , their ruling on SB1 will be equally enjoyable, and be worded in such a way that all present and future GA’s and governors are forced to stop trying to weasel out ,and have to honor our earned retirement benefits, But that is probably just wishful thinking…

Comment by Roadiepig Thursday, Apr 16, 15 @ 9:15 pm
== But AFSCME did a lot and AFT as well. ==

Fact: those group’s lawyers did NOT ask for the premiums to be escrowed. It was only the lawyers representing the Kanerva group who made that request. I’ll admit it’s hearsay since I wasn’t present at the attorney conferences, but it’s my understanding those lawyers were opposed to requesting the escrow.

Had the money not been escrowed, it would have been deposited into one of the State funds and it would have required an appropriation by the GA to get the money back. Ask the union people still waiting for their court ordered back pay how well that waiting for the GA appropriation process works.

Those lawyers on contingency earned every bit of their payday just for that one request. Had it not been for that request, everyone else might be waiting several more years to get their premiums back.

Comment by RNUG Thursday, Apr 16, 15 @ 10:04 pm
@RNUg

One of the few times I have disagreed with you.

Are you certain that the he union lawyers were opposed to requesting the escrow?

Regardless, it is the lawyers who made the big bucks on the back of the rest of us. You may believe that padding of hours at $250 an hour is reasonable, I do not.

I do not know your educational and professional background but I certainly never made that type of money and I have two Masters and a Doctorate, was a Full Professor at age 36 and was in academia for 29 years.

But I guess beauty, or in this case money, is in the eye of the beholder.

Comment by Federalist Thursday, Apr 16, 15 @ 10:54 pm
- Federalist -

Like I said up front, I wasn’t in the room when they were meeting, so whether or not anyone disagreed is hearsay.

As far as my financial perspective goes, I’m just a normal middle to upper middle class guy.

For the rest of it, we’ll just have to agree to disagree.

Like - Norseman - said, the retirees won and, for a lot of us, the cost is minor.

Comment by RNUG Friday, Apr 17, 15 @ 1:10 am