Capitol Fax.com - Your Illinois News Radar

Supremes rule against AFSCME on back pay case

Posted in:

Illinois

* Press release…

In a ruling issued today, the Illinois Supreme Court reversed earlier circuit and appellate court decisions regarding back wages owed to state employees, ruling that the wages are not owed in the absence of a legislative appropriation.

The back pay issue arose in July 2011 when then-Governor Pat Quinn refused to pay wage increases that the union had previously agreed to temporarily defer in light of the state’s fiscal challenges at the time. From that date to 2013, some 24,000 employees of five state agencies—the Illinois Department of Corrections, Department of Human Services, Department of Juvenile Justice, Department of Natural Resources and Department of Public Health—were not paid an average of $2,500 each that was required in their collective bargaining agreement. The case was brought by the American Federation of State, County and Municipal Employees (AFSCME) Council 31, the largest union representing public-service workers in state government.

AFSCME Council 31 Executive Director Roberta Lynch issued this statement:

“Today’s ruling is very disappointing. This was a case about the principle that someone who works for a living—in this instance, to protect public health, ensure safe prisons or care for the disabled—should be paid what they are owed for the work they have done. It was also about the integrity of state government—that when it enters into a contract, it must live up to its terms.

“Some 24,000 public-service workers in state government are owed an average of $2,500 each dating back to 2011. These are by far state government’s oldest unpaid bills, owed to working families that face medical bills, school costs, rent or mortgage and car payments or other expenses.

“The Court’s decision today raises the troubling prospect that government could benefit from a contractual agreement—in this case, the public services provided by many thousands of men and women—but refuse to fulfill its own obligations under that agreement if lawmakers and the governor do not enact a bill to fund them.

“Our union will keep working to see that every employee is paid in full. We urge lawmakers of both parties, the Governor and the Comptroller to support an appropriation that pays workers what they are owed for work they performed nearly five years ago.”

The full ruling is here.

posted by Rich Miller
Thursday, Mar 24, 16 @ 9:37 am

Comments

Is there something in the administrative rules or Statutes which prevents unpaid Employment Contracts from being pursued through the Court of Claims?

Comment by Beaner Thursday, Mar 24, 16 @ 9:40 am
Am I wrong in thinking this precedent could let the state stiff its vendors and the state universities for all back payment for stuff they did in anticipation of the state eventually passing a FY 16 budget?

Comment by hisgirlfriday Thursday, Mar 24, 16 @ 9:41 am
Does this mean that if there is no appropriation, the state doesn’t have to honor contracts? What the hell; did BR spend millions for that decision too?

Comment by WETHEPEOPLE Thursday, Mar 24, 16 @ 9:42 am
Smart people don’t “depend” on the come and will have planned a fiscally responsible budget. An AFSCME member earning over $80,000 in Springfield need not complain to anyone about paying their bills. Live within your means…SMH

Comment by Westward Thursday, Mar 24, 16 @ 9:44 am
You win some, you lose some.

Comment by 47th Ward Thursday, Mar 24, 16 @ 9:44 am
So in the future, it is in the best interest of ours state employees to not give our state government any breaks.

Got it.

Comment by VanillaMan Thursday, Mar 24, 16 @ 9:44 am
Ok not to sound selfish and all but –ruling that the wages are not owed in the absence of a legislative appropriation.– How does that square with the judicial order stating state employees must be paid?? Since we are currently without a legislative appropriation?

Comment by State Engineer Thursday, Mar 24, 16 @ 9:45 am
Not surprised that the court deferred to the legislature. In this horrendous political climate, and with our history of fiscal irresponsibility, good luck getting this money back.

Comment by Grandson of Man Thursday, Mar 24, 16 @ 9:45 am
“I don’t owe you the money because I didn’t appropriate the funds to pay you back.”

This probably needs to be thrown over to the federal court system so they can rule that state’s can’t declare bankruptcy by virtue of refusing to pay contractual obligations.

Comment by Anon Thursday, Mar 24, 16 @ 9:46 am
Smart people don’t “depend” on the come and will have planned a fiscally responsible budget. An AFSCME member earning over $80,000 in Springfield need not complain to anyone about paying their bills. Live within your means…SMH

Troll.

Comment by VanillaMan Thursday, Mar 24, 16 @ 9:46 am
Kilbrides partial dissent gives insight into what may happen with paying all those promises to agencies who have provided services for FY16 and no appropriation was made.

Comment by illinifan Thursday, Mar 24, 16 @ 9:46 am
adding, VM…wah.

Comment by Anonymous Thursday, Mar 24, 16 @ 9:48 am
Westward - if you are of a confessional faith or even Christian, ponder your faith a bit would you. Maybe read James 5:4. If you are not religious, quite being be a jerk.

Comment by Honeybear Thursday, Mar 24, 16 @ 9:49 am
It looks like it puts it us in complete shutdown state engineer. It puts Raner in federal court over required programs that cant be interrupted. Rauner will have to run the state himself without those pesky employees. Have at superstars.

Comment by illinois manufacturer Thursday, Mar 24, 16 @ 9:51 am
So if someone were to challenge last summer’s court orders requiring state employees to be paid without an appropriation, would those court orders be overturned too?

Comment by Nick Name Thursday, Mar 24, 16 @ 9:52 am
So does this mean I can fail to appropriate half of my mortgage payments from now on? And it’s ok according to the law? I know it is a contract but so was the owed monies from 2011.

Comment by Tony Thursday, Mar 24, 16 @ 9:53 am
Oh so this is why the protested Pat Quinn in 2012 at the Illinois State Fair.

Comment by Almost the Weekend Thursday, Mar 24, 16 @ 9:53 am
Vendors and contractors-
Cut your losses. Stop now. Just stop.

Comment by northsider (the original) Thursday, Mar 24, 16 @ 9:54 am
Hmm. While I don’t like the decision, I wonder if it changes the dynamic of brinksmanship. If state workers don’t have to be paid for time worked when the state hasn’t appropriated money, they can’t be asked to work, either. This should probably lead to a walk-out.

Comment by some doofus Thursday, Mar 24, 16 @ 9:55 am
Small business owners and social service providers. Looks like you will not be paid for services rendered to the state. Or as Montgomery Bruce would say, “excellent!”

Comment by Trolling Troll Thursday, Mar 24, 16 @ 9:55 am
Last summer’s order had been challenged. When the Supremes get around to a ruling, it will be bad news for state workers.

Comment by Anonymous Thursday, Mar 24, 16 @ 9:55 am
That was me at 9:55

Comment by SAP Thursday, Mar 24, 16 @ 9:56 am
Boilerplate language was in the front of every contract I’ve seen simply stating that if the legislature passes a bill and the Governor signs it into law that conflicts with language of the contract, the law wins. It doesn’t seem like a stretch to me that similar type language in the AFSCME could be construed to deny the back wages, unfortunately. It’s contract language that nobody looks at but is always there.

Comment by Mouthy Thursday, Mar 24, 16 @ 9:58 am
This ruling seems to contradict the one where the courts ruled that employees should get paid this year, even though there is no budget and no appropriation.

Comment by Austin Blvd Thursday, Mar 24, 16 @ 9:58 am
Bad job by AFSCME’s attorneys. They should never have “conceded” that the appropriations were not sufficient to pay the raises. There is a Florida case where the courts held that the “subject to appropriations” clause means no appropriation, no pay. However, they also noted that the lump sum appropriations for employee compensation were sufficient to pay the collective bargaining employees’ pay per the contract, and so the payments had to be made even though doing so would mean non-union employees couldn’t get paid in full.

Comment by Whatever Thursday, Mar 24, 16 @ 9:59 am
Oh so this is why the protested Pat Quinn in 2012 at the Illinois State Fair.

Which is why many voted for Rauner they were so mad. Not making excuses but when Rauner lied about his union intensions in the general people fell for it. We will never make that mistake again.

Comment by Honeybear Thursday, Mar 24, 16 @ 10:02 am
===How does that square with the judicial order stating state employees must be paid?===

The same thing I said last year for weeks. There is no constitutional basis to pay the workers without an appropriation. The lower courts over-stepped their bounds.

Comment by Rich Miller Thursday, Mar 24, 16 @ 10:08 am
From the ruling:
“multiyear collective bargaining agreements
are subject to the appropriation power of the State, a power which may only be
exercised by the General Assembly.”

One of the problems with collective bargaining in this state is that the assumption (or claim by unions) is that an agreement supersedes executive powers and legislative authority. It will be interesting to see the ramifications to the collective bargaining process and other collective bargaining issues at the local level as well. One of the questions is, can today’s public officials tie the hands of future decision makers, it appears that this ruling might indicate they are not and that we (rightly) need to rethink how collective bargaining and contracts are handled at the state and local level.

Comment by Ahoy! Thursday, Mar 24, 16 @ 10:09 am
As soon as the contract was broken with those employees, there should have been an immediate work stoppage until the dispute was resolved.

But the ILSC just made multi-year contracts with the state a whole lot riskier.

Comment by A Jack Thursday, Mar 24, 16 @ 10:10 am
Contracts are binding… Except when they’re not?
Yeah. That makes sense. Ugh.

Comment by Anonymous Thursday, Mar 24, 16 @ 10:11 am
So contracts mean nothing? Ok, I’m going to call sallie Mae and say I’m sorry but I have just not appropriated student loans into this years budget. They are welcome to sue but apparently the Illinois Supreme Court agrees with me… /s

Comment by There is power in a union... Thursday, Mar 24, 16 @ 10:16 am
This was probably the blunder that cost Pat Quinn the election.

Comment by Omega Man Thursday, Mar 24, 16 @ 10:18 am
A jack- our contract strictly forbids work stoppage, strike, slow-down etc. We followed our contract. We sued, we won. They didn’t pay. Now the courts are saying they don’t have too. Most reasonable people would be very angry at this. Wow, makes me wonder whether CTU has a stronger point with 4/1 than I thought. If they aren’t going to follow the laws why should we? I’m not saying we should not follow the law. I still think AFSMCE is doing the right thing but I now understand CTU and their decision better. OW it is so hard to be restrained, to be “cool”.

Comment by Honeybear Thursday, Mar 24, 16 @ 10:22 am
Seems pointless for AFSCME to “negotiate” with Rauner only. They have to have Madigan’s signoff on pay. In a way, this says that’s its ok to commit fraud as long as you have enough co-conspirators (majority of legislators elected by majority of voters).

Comment by Anotherretiree Thursday, Mar 24, 16 @ 10:24 am
Ahoy- I’m not sure if you’re aware of how close the state workforce is to collapse. Go ahead push it. Let’s see if anything happens without a workforce. We already are the smallest workforce per capita in the US. Several more of my coworkers are leaving in April. Now it’s the newer younger ones interviewing. Just last week I overheard the coworker in the cubical next to mine lining up an interview. Government is NOT like a business!!!!!!! It took a year in this position to START to effectively execute the vast amount of policy and statute.

Comment by Honeybear Thursday, Mar 24, 16 @ 10:27 am
Rich,

I agree the difference to me is the last thing Rauner wants IMHO is this to become a real shutdown and not a in name only shutdown. If AFSCME strikes their the bad guys IF state employees can’t be paid and can’t work because of him different dynamic.

Comment by State Engineer Thursday, Mar 24, 16 @ 10:28 am
@Rich Miller

== There is no constitutional basis to pay the workers without an appropriation. ==

How is that different from this:

== There is no constitutional basis to pay monthly pension benefits without an appropriation. ==

Comment by Bill White Thursday, Mar 24, 16 @ 10:28 am
Rich - wasn’t the order to pay state employees made by federal court based on federal labor law. They held their nose and bought that state still can’t identify those employees covered under parts of federal law so everyone gets paid. Of course how long is it plausible that the state can’t figure it out. This ruling is based on STATE law/Constitution. So if employee pay had been challenged in State court it likely would have fared differently i.e poorly.

What about the state by the Court that the budget/appropriations is the responsibility of the General Assembly? How soon before Rauner starts pointing to that and shouting even louder blame Madigan? This situation continues to deteriorate. Will be ever hit bottom or are we going to just keep digging deeper?

Comment by Hoping for Rational Thought Thursday, Mar 24, 16 @ 10:31 am
@bill white…to my knowledge pension payments are not subject to appropriation as they are not issued from GRF

Comment by illinifan Thursday, Mar 24, 16 @ 10:33 am
PS - Perhaps there is a difference, perhaps not.

If there is a difference, understanding why has become very important.

How is (a) different from (b)?

=a= There is no constitutional basis to pay the workers without an appropriation. =a=

-versus-

=b= There is no constitutional basis to pay monthly pension benefits without an appropriation. =b=

Comment by Bill White Thursday, Mar 24, 16 @ 10:35 am
This seems plausible and helps frame the challenges the state faces. Thanks!

@bill white…to my knowledge pension payments are not subject to appropriation as they are not issued from GRF

Comment by Bill White Thursday, Mar 24, 16 @ 10:37 am
I apologize if this is an ignorant question, but I tried Googling it and couldn’t find an answer. Does the current court order requiring state employees be paid hold until it is challenged and overturned? Or does that order automatically become void in the new fiscal year if an FY17 budget isn’t passed, and the unions would have to go to court again?

Comment by Curious Georgina Thursday, Mar 24, 16 @ 10:37 am
=== This was probably the blunder that cost Pat Quinn the election. ===

Correct me if I’m wrong but wasn’t the failure to approp on Madigan.

Today’s friend was yesterday’s enemy. Funny how life goes isn’t it.

Comment by Norseman Thursday, Mar 24, 16 @ 10:38 am
Bill White, the pension clause in the constitution does provide that basis. The SOC is saying there is nothing similar covering the pay.

Comment by Norseman Thursday, Mar 24, 16 @ 10:43 am
This seems counter to the US Constitution clause about not being able to impair contracts.

Comment by Anotherretiree Thursday, Mar 24, 16 @ 10:44 am
This is also a direct consequence of Lisa madigan refusing to drop the appeal after Quinn agreed to in the contract settlement in spring of 2013. After she refused to drop, we actually had to have a second round of ratification votes because the terms of our agreement with Quinn had changed.

The view that Quinn bungled this and handed Lisa a good appeal is what led to such lukewarm support of him among state workers in 2014. So he lost. Short sighted as it was this was the cause of many state workers cutting their nose off to spite their face.

Comment by There is power in a union... Thursday, Mar 24, 16 @ 10:45 am
Pension, debt, and GA salaries all have a continuing appropriation in law so they can be paid. That is how they are different than state employee salaries.

Comment by Hoping for Rational Thought Thursday, Mar 24, 16 @ 10:52 am
One thing not to forget is that some state employees (working for HFS and other agencies) do not have to worry about back pay because their agencies found the money in their budgets to pay the raise.

In DHS (and other agencies) we have people who were paid varying amounts of back pay, depending on how their jobs are funded, and some who were not paid anything.

Quinn later admitted he made a mistake by denying the raises. Maybe us dogging him at the state fair had something to do with that! This issue probably cost him the election.

Rauner (during the campaign, said to me that Quinn should have honored the contract). As governor, Rauner has kept silent.

This is not fair. This is un-American.

Comment by Omega Man Thursday, Mar 24, 16 @ 10:57 am
Why doesn’t Rauner take the decision of the lower court requiring the State to make payroll without an appropriation to a higher court now? Based on this ruling, he might win….right?

Comment by Big Thinker Thursday, Mar 24, 16 @ 11:01 am
this actually emphasizes my point about Rauner completely misunderstandn politics. the architect of the dont fund the union raises was Madiagn, and until Rauner Madigan was under fire for it. Rauner could have had Madigan as an ally for union reforms if he took a less scorched and salted earth approach. instead he made Madig an enemy and turned him back into a union ally erasing the badwill between the two.

Comment by Ghost Thursday, Mar 24, 16 @ 11:03 am
Quinns an co. surely knew this would happen. Another empty promise to get votes and funds from union. His pandering and budget making decisions were Neroesk. Constitution calls for checks and balances this was an attempt to circumvent it.

Comment by the Cardinal Thursday, Mar 24, 16 @ 11:04 am
===The same thing I said last year for weeks. There is no constitutional basis to pay the workers without an appropriation. The lower courts over-stepped their bounds.===

I do think it would be interesting to see what would happen when tens of thousands of state employees suddenly stop receiving their pay while still having the expectation to show up at work.

Especially in a community like Springfield that largely depends on incomes coming from state employees to drive the local economy.

Comment by Anon Thursday, Mar 24, 16 @ 11:07 am
Ahoy 10:09 - Section 15b of the Public Labor Relations Act:

Except as provided in subsection (a) above, any collective bargaining contract between a public employer and a labor organization executed pursuant to this Act shall supersede any contrary statutes, charters, ordinances, rules or regulations relating to wages, hours and conditions of employment and employment relations adopted by the public employer or its agents.

Comment by Original Rambler Thursday, Mar 24, 16 @ 11:08 am
Omega Man: “Maybe us dogging him at the state fair had something to do with that! This issue probably cost him the election.”

How did that dogging him work our for you?

Comment by Give Me A Break Thursday, Mar 24, 16 @ 11:11 am
Big thinker

Rauner argued for employees to be paid in those cases. He doesn’t want a true shutdown. Right now a significant portion of citizens don’t see it shutter every office and everyone sees it.

Comment by Mason born Thursday, Mar 24, 16 @ 11:21 am
So, I think I understand that the State never appropriated funds after 2011 for the back pay, but wouldn’t there have been an appropriation for the raises to begin with? Remember, the State cried poor, and AFSCME agreed to defer the raises.

Also, regarding other contracts, I can’t imagine every single state contract (with vendors) is mentioned specifically by name in line items in the appropriation bills. So, if that’s the case, wouldn’t any of those contracts be at risk in the future?

Comment by Moby Thursday, Mar 24, 16 @ 11:29 am
Mason born, but here’s where I bet we’ll see Rauners wheelhouse of perfidy shift to the ULTIMATE HOSTAGE, the entire state workforce. Talk about a hostage. He’s got us by the genitalia now.

Comment by Honeybear Thursday, Mar 24, 16 @ 11:30 am
Ghost, you’re on it.

Comment by Norseman Thursday, Mar 24, 16 @ 11:31 am
Bill White, do you exist solely on this post? Can you not read the other posts which explain your inane question?

Comment by Rich Miller Thursday, Mar 24, 16 @ 11:39 am
Honeybear

Yes and no on him having you by the shorts. This is a knife that cuts both ways. If he has to send everyone home and shutter the offices yes it hurts you but politically it hurts hima lot. Right now for most citizens life goes on I can get a liscense plate, I can renew my proffesional liscense, get a fishing liscence, buy a lottery ticket etc. Yes the disadvantaged are taking it hard but the majority are unaffected they may no theres not a budget but they don’t feel it. If every state office is closed all those things go bye bye. Everyone feels it. I suspect Madigan would pass a budget and if Rauner vetoed pass another that day. How long can the spineless R’s take it when there’s no state services because they won’t override the veto? Since AFSCME has no part in it it’s not “greedy union bosses” but an inept governor.

No he wants you at work at least until he can blame you for not being there.

Comment by Mason born Thursday, Mar 24, 16 @ 11:45 am
-know there’s no budget-

Comment by Mason born Thursday, Mar 24, 16 @ 11:50 am
I asked a question. It was answered to my satisfaction and I’m ready to move on.

Comment by Bill White Thursday, Mar 24, 16 @ 12:04 pm
@Give Me A Break “How did that dogging him work our for you?”

I held my nose and voted for Quinn. Too bad more people didn’t do the same. We are all paying the price now.

Comment by Omega Man Thursday, Mar 24, 16 @ 12:29 pm
i understand the outrage but if you take a step back this makes perfect sense. one safeguard of our govt is that a govenor cant apend money without an approp. Otherwise a govenor could enter contracts that fat exceed state income, and there is no oversight or way to stop those contracts other the. these approp rules.

for example Blago contracted for millions in flu shots from eruope without an approp to pay for it. by fed law the vaccine could not be imported and wnet to waste in england at an airport. the contractor femnaded payment, but the state was not obligated to pay as there was no approp.

The Ilinois labor act require an approp to fund any agreed to contract benefits. the union tried to negate the law they were aware of.

this has always been a problem. gov spendng on union contracts without any oversight. typically, GOP and dem govs, do small raises for the first 2 years and then backload large raises which hit after the election. they fixed this by limit g the ability to contract into the next term, BUT union contracts are spending without oversight.

there is an easy fix, in NY, the Union contract spending or financial provisions have to be approved by the General Assembly, just like a union contract has to be voted on by its members. pass the same law in IL to avoid this mess. it also makes the union accountable to more the. just the gov in negotiations.

NRUG ( not retired union guy)

Comment by Ghost Thursday, Mar 24, 16 @ 12:40 pm
excellent points mason born.

Comment by Honeybear Thursday, Mar 24, 16 @ 1:16 pm
“there is an easy fix, in NY, the Union contract spending or financial provisions have to be approved by the General Assembly, just like a union contract has to be voted on by its members. pass the same law in IL to avoid this mess. it also makes the union accountable to more the. just the gov in negotiations.’

Would this apply to areas like health insurance negotiations between the unions and the governor?
Would they have to go back to the GA for approval?

Comment by Federalist Thursday, Mar 24, 16 @ 1:20 pm
I’m surprised by this decision, and feel some compassion for the AFSCME members, but also have to say to them: Welcome to the world everyone else has been living in.

Comment by Anon and on and on Thursday, Mar 24, 16 @ 4:04 pm
IMO this is going to end up at SCOTUS for all the reasons JUSTICE KILBRIDE stated in his partial dissent. The court should have found that back pay is still owed but that, lacking funds or an appropriation, there was no legal basis to order payment. This is ripe for federal appeal because, as cited in the dissent, other states’ courts have reached a different conclusion … plus IL contract law is pretty much identical to federal law. We haven’t heard the end of this one.

Comment by RNUG Thursday, Mar 24, 16 @ 4:13 pm
And I agree with others; this is the end of multi-year contracts unless the State EXPLICITLY agrees to waive the appropriation requirement and/or the 4 Tops attend the bargaining sessions and sign off on any deal.

Comment by RNUG Thursday, Mar 24, 16 @ 4:17 pm
“And I agree with others; this is the end of multi-year contracts unless the State EXPLICITLY agrees to waive the appropriation requirement and/or the 4 Tops attend the bargaining sessions and sign off on any deal.”

RNUG, “or the 4 Tops attend the bargaining sessions and sign off on any deal.” I don’t see that happening - ever.

Comment by Mama Thursday, Mar 24, 16 @ 5:31 pm
Rich, will this decision by ISC force the governor and the 4 tops to pass a budget for FY2016 - 17??

Comment by Mama Thursday, Mar 24, 16 @ 5:34 pm
Awe this should be easy now…give AFSCME 25% increases to get a ratified contract then just don’t “appropriate” the increases. Problem solved. Wait a minute, how about we only “appropriate” about 50% of current employee salaries? You’re welcome Illinois!

Comment by recondite Thursday, Mar 24, 16 @ 5:56 pm
== Wait a minute, how about we only “appropriate” about 50% of current employee salaries? ==

Suspect the court would come to a different conclusion in that instance of self-dealing. In this case, they voided an arbitrator’s payment order.

Comment by RNUG Thursday, Mar 24, 16 @ 7:16 pm
== I don’t see that happening - ever. ==

-Mama-,

I assumed the 4 would send their seconds / authorized reps.

Comment by RNUG Thursday, Mar 24, 16 @ 9:48 pm