The Buffalo News, May 12, 2010, Wednesday

The Buffalo News

May 12, 2010, Wednesday

The Buffalo News

Upholding furloughs in court seen as impossible

Union contracts hard to void, experts say
By Tom Precious

ALBANY — Gov. David A. Paterson faces a nearly impossible legal road to win federal court blessing for his furlough of 100,000 state workers, legal experts say.

For taxpayers, it would be better to resolve the legal issue promptly before the furloughs start next week and the state faces the prospect of being on the hook for back pay — plus interest payments — if the governor loses in court.

And if Paterson loses, the furloughed workers will have won what amounts to a free day off from work — with interest.

"It's very difficult to void the provisions that are in a union contract," said Rebecca Givan, an assistant professor and expert in collective bargaining at Cornell University's School of Industrial and Labor Relations.

"I think the state is in a very, very weak legal position because there are existing contracts with all the unions," added David Schlachter, a Suffolk County lawyer who won a 1991 case against the state on behalf of court employees who saw their salaries delayed by the state during a fiscal crisis.

The fact that New York faces a severe fiscal challenge is not enough, on its own, to let the state void the terms of a contract through furloughs, which amount to a 20 percent cut in pay for 100,000 executive branch workers.

"The fiscal emergency can be used in the case of bankruptcy, but we're not there yet. A dire situation is not the same as bankruptcy," Givan said.

Paterson said Tuesday that at the time the union contracts were signed in 2007 it was "not within the contemplation" that the recession would hit the state so hard that it could not meet the terms of the salary provisions.

His comments came after four separate legal actions were commenced by unions representing various state workers, as the prospect of furloughs beginning Monday appeared to be set following the Legislature's approval of Paterson's plan to cut the pay of 100,000 workers by requiring them to stay home one day a week without pay until a 2010 state budget is passed.

The unions — including the Civil Service Employees Association and Public Employees Federation, as well as those representing SUNY and City University of New York employees — filed lawsuits in federal court in Albany seeking a temporary restraining order against the furloughs and implementation of a 4 percent raise for state workers that has been delayed since April 1.

The unions argue that Paterson is violating the constitution by trying to change the terms of a contract — or, more precisely, "impairing the obligation of contracts" under the State Constitution. They say their wages are guaranteed under the collective-bargaining deal made by the state in 2007.

PEF also contends that the furloughs and pay freeze "constitute a deprivation of property without due process of law."

Judge Lawrence E. Kahn was assigned the case. A hearing on the matter is expected to be held today.

Legal and public employee union experts — as well as Democratic leaders of the State Senate and Assembly — say the governor faces a daunting challenge to get the furloughs to stick.

Other states, notably California, have gone the furlough route only to be turned back by federal courts. Some states, such as Hawaii and Illinois, have negotiated furlough days with public employee unions.

One of the few cases in the nation that might give Paterson hope was the 2006 federal court decision against a challenge by the Buffalo Teachers Federation to a wage freeze by the Buffalo Fiscal Stability Authority, also known as the control board.

But in that case, unlike the furlough legislation approved Monday night, the State Legislature went out of its way to document the long-term fiscal plight of Buffalo to justify giving the control board the powers to do things like freeze wages.

"You have to demonstrate more than just [being] short of money. You have to show that you didn't consider cutting wages or breaching union contracts on a par with other options like raising taxes," said Vincent Buzard, an attorney with Rochester's Harris Beach law firm who represented the Buffalo control board in the major legal decision.

"They're very difficult," Buzard said of the contract cases the state is now being forced to defend, "because the state would be arguing for an exemption to the constitutional protections against impairments of contracts, and exemptions for an emergency and protection of health and welfare of the state must be shown."

"When you're doing one of these, you have to make sure everyone is sharing the pain," he added.

But Buzard said courts don't automatically issue restraining orders in such cases, in part, because there is no permanent harm since the money can be repaid to any state workers affected by the furlough.

While Paterson has allies among some fiscal conservatives who call the state payroll too bloated, the impact of a furlough will be felt by many New Yorkers. The furloughs come as summer classes are set to begin for state university professors, and many state parks are seeing more visitors as the summer approaches.

The governor said Tuesday the public employee unions "left us with absolutely no choice" because they refused to go along with any of his ideas to save the state $250 million in payroll costs to help close a $9.2 billion deficit. He said others — like SUNY students, nursing homes and public schools — also are being asked to share in the fiscal pain. "They have volunteered no sacrifice during this great recession," Paterson said of the state worker unions.

But unions said Paterson's move is unilateral and counterproductive, arguing that the layoffs include money-generating positions such as auditors in the tax department and clerks at the motor vehicles agency. "Our attorneys feel we have a solid case," said Darcy Wells, a PEF spokeswoman.

Many contract experts agreed.

Schlachter, who beat the state in federal court on an impairment-of-contract lawsuit two decades ago, said courts look upon collective-bargaining agreements as a binding contract.

"Circumstances can change after a contract is signed, and the fact that there have been changes, whether anticipated or not, doesn't justify walking away from contracts," he said.

tprecious@buffnews.com