As readers may know, I have been doing a series of reviews/commentaries based on the Winter 2012 ABQ Journal of Labor & Employment Law, which is largely devoted to the recent travails of public sector collective
bargaining. One article, by Stephen F. Befort, asks why is unilateral change somehow more acceptable or possible in the public sector.
He begins with the premise that in tough economic times public employers frequently "take aim at workforce costs" and sometimes even unilaterally modify the terms of collective bargaining agreements. He contrasts this to the situation in the private sector, where such conduct is both a breach of contract and an unfair labor practice. He identifies the culprit, or source of this difference, as the "diffusion of authority" between the executive branch in charge of administrative and employment matters, and the legislative branch in charge of funding and law making.
First, "[t]his diffusion of authority creates the potential for unilateral change if the legislature fails to appropriate all the funds necessary to implement a contract negotiated by the executive branch." For example, in Police Benevolent Ass'n v. State, 818 So.2d 584 (Fla. Dist. Ct. App. 2002), the executive branch negotiated a 5% pay raise, but the Legislature only appropriated enough funds for a 2.5% increase. The Union filed suit, but the court "held that, pursuant to the separation of powers doctrine, the legislature had the exclusive right to appropriate funds and was not bound to fund the economic terms negotiated y the executive branch."
The same reasoning has been applied to actions by local bodies, such as school boards, dependent on an external funding source. In Philadelphia Federation of Teachers, Local No. 3 v. Thomas, the court said "the dependent funding scheme made the contract severable in nature, with each year of the contract subject to an implied condition precedent that adequate funding would be forthcoming."
Nonetheless, there are limits on the ability to get out from under CBAs based on funding limitations. The executive branch lacks authority to directly, unilaterally modify the CBA, or to unilaterally withhold funds that have been adequately appropriated, while the legislature can only work through its power of purse and may not directly modify a CBA, and also may not seek to revoke funds previously appropriated. Prof'l Eng'rs in Cal. Gov't v. Schwarzenegger, 239 P.3d 1186 (Cal. 2010), AFSCME/Iowa Council 61 v. State, 484 NW.2d 390 (1992); State of Florida v. Florida Police Benevolent Ass'n, 613 So.2d 415 (Fla. 1992); and Chiles v. United Faculty of Florida, 615 So.2d 671 (Fla. 1993).
Second, there is diffusion in authority due to the Legislature's law making function. As Befort notes, "[t]he usual ban on unilateral change also may not apply when a governmental entity with lawmaking authority ... enacts a statue or ordinance that attempts to alter the terms of an existing [CBA]. If that entity is not a statutory 'employer' under the pertinent state labor-management statute, the sole avenue for challenging such a modification is to proceed under state and federal constitutional provisions." He argues that under United States Trust Co. v. New Jersey, 431 US 1 (1977), there should be a "heightened standard for scrutinizing laws that impair public contracts" because of the State's self-interest and potential conflict is at stake, but that "[a] significant and apparently growing minority of decisions ... have afforded substantial deference to such modifications." See, e.g., Baltimore Teachers Union v. Mayor of Baltimore, 6 F.3d 1012 (4th Cir. 1993) (representing minority view of deference) ("at least some deference to legislative policy decisions to modify ... contracts in the public interest must be accorded"); compare Ass'n of Surrogates and Supreme Court Reporters Within the City of New York v. State (Surrogates I), 940 F.2d 766 (2d Cir. 1991) ("refusing to examine the governmental fiscal crisis without also regarding the 'personal fiscal crises" that a lag payroll scheme would cause).
Ultimately Befort concludes that this difference in the ability to unilaterally change public sector CBAs, as compared to private sector CBAs, and the growing judicial deference towards modifying public sector agreements, "represents an assessment that public-sector [CBAs] are not as worthy of protection as other types of governmental contracts." He further argues "[t]his view is an undesirable vestige of the discredited notion that public employees owe a duty of 'extra loyalty" to the state.'"
A number of other commentators, however, point the fundamental different between public and private sector bargaining, including the "public weal" or trust implicated in the former, and the difference in arms' length bargaining act between the two sectors. See R. Theodore Clark, Jr., Public Sector Collective Bargaining at the crossroads, The Urban Lawyer, Vol. 44, No. 1, Winter 2012, and Martin H. Malin, Labor & Employment, The Legislative Upheaval in Public Sector Labor Law. They would argue that the significant differences in public and private sector bargaining do justify their different treatment.
As I noted in the first blog in this series (Public Sector Collective Bargaining Woes), " 'truth' may be impossible to discern where politics, ideology and crisis intersect. Any view can be argued with the use of statistics, and the "right answer" one settles on will likely derive more from your worldview or political stripe, than any objectively and indisputably verified 'truth.'" Nonetheless, I continue to believe that these different "articles add important detail and nuance that can help us see a bigger picture and hopefully move beyond a purely mechanistic, ideological view" that so starkly marks public debate today.
As a side note, I myself am a public sector arbitrator. Accordingly, I readily admit that I benefit personally and hugely from a continued, vibrant public sector bargaining industry. That said, I recognize the need to reconcile my personal benefit/interest with the need for a wider, more thoughtful and nuanced discussion between stakeholders--precisely so the public sector can continue to remain vibrant.
A number of other commentators, however, point the fundamental different between public and private sector bargaining, including the "public weal" or trust implicated in the former, and the difference in arms' length bargaining act between the two sectors. See R. Theodore Clark, Jr., Public Sector Collective Bargaining at the crossroads, The Urban Lawyer, Vol. 44, No. 1, Winter 2012, and Martin H. Malin, Labor & Employment, The Legislative Upheaval in Public Sector Labor Law. They would argue that the significant differences in public and private sector bargaining do justify their different treatment.
As I noted in the first blog in this series (Public Sector Collective Bargaining Woes), " 'truth' may be impossible to discern where politics, ideology and crisis intersect. Any view can be argued with the use of statistics, and the "right answer" one settles on will likely derive more from your worldview or political stripe, than any objectively and indisputably verified 'truth.'" Nonetheless, I continue to believe that these different "articles add important detail and nuance that can help us see a bigger picture and hopefully move beyond a purely mechanistic, ideological view" that so starkly marks public debate today.
As a side note, I myself am a public sector arbitrator. Accordingly, I readily admit that I benefit personally and hugely from a continued, vibrant public sector bargaining industry. That said, I recognize the need to reconcile my personal benefit/interest with the need for a wider, more thoughtful and nuanced discussion between stakeholders--precisely so the public sector can continue to remain vibrant.
If you have any labor
or employment matters
that you would like to resolve privately through a knowledgeable and experienced
arbitrator or mediator, please feel free to contact Pilar Vaile, P.C. at (505)
247-0802, or info@pilarvailepc.com.
