My law partner, Gabe Jiran, talks today about whether it’s all that easy to change the terms of a collective bargaining agreement.  Is it just as easy as a vote? Or does it require something more? The answer has implications for all employers.  

With all of the talk about the financial difficulties faced by the government, I, and others in here, sometimes get the question of whether the State of Connecticut or other states might try to change the laws on collective bargaining or try to pass legislation to alter the terms of its existing collective bargaining agreements.

Other states have started down this road, but it is not that easy.

Recently, the Connecticut Attorney General was asked to opine on whether the General Assembly could statutorily change the contracts covering State employees to address the fiscal crisis.  A link to the opinion is here.

The short answer is that the State could do so, such as by passing a statute that wage increases be delayed or eliminated in State contracts.

However, the United States Constitution imposes a pretty heavy burden on the State to justify any such changes.

The relevant factors are:

  1. the severity of the fiscal crisis;
  2. the nature and duration of the contractual changes;
  3. the extent that the State has attempted to implement other alternatives in the past;
  4. the extent to which the State has studied and made findings about the feasibility of other alternatives;
  5. whether these alternatives would be a less dramatic option;
  6. the extent to which the fiscal crisis existed or was foreseeable when the State entered into the existing contract; and
  7. the State’s representations during negotiations for the existing contract.

Based on cases utilizing some or all of these factors, the State would face an uphill battle if it wanted to change an existing contract.

For example, a federal appeals court struck down the State of New York’s plan to delay wage increases for employees because New York had alternatives such as raising taxes or shifting money around in its budget.  In another New York case, the same court found that a $1 billion deficit was not a dire enough fiscal crisis to justify a delayed wage increase.

However, one case found that the City of Buffalo was able to impose a wage freeze when it was undeniable that Buffalo was in a fiscal emergency and that the wage freeze was a last resort after looking at other options.

In discussing the matters with others here, we expect that Connecticut and other states will continue to look for creative options to address their financial situations with employees.

However, it is doubtful that these options will involve changes to existing contracts without negotiation with the unions involved.  In addition, any State attempts to change contracts in the private sector would be almost certain to fail.

Here’s a warning: If you don’t get involved with labor unions or collective bargaining agreements, you might as well skip over this next post because things don’t get much more technical (or mundane, depending on your perspective) than the following case discussion. 

In a divided 3-2 decision, the Connecticut Supreme Court held that the collective bargaining agreement between the named defendant, the town of Greenwich, and the Silver Shield Association, the union representing the town’s police officers, did not cover the promotion to the position of police captain, which is a position outside the bargaining unit. (Note: the decision will be officially released on February 24, 2009.)  Justice Katz writes the dissenting opinion.

The case, Honulik v. Town of Greenwich, will have some significance for those who practice labor law in the state because it will help define what areas should be the subject of mandatory bargaining and what areas shouldn’t.  In this case, the court was asked to examine, among other items, the scope of the "past practices" clause in the collective bargaining agreement. That clause stated:

All benefits and obligations which are not described in this [a]greement or in either the manual or plan and which are now enjoyed by or required of the employees are specifically included in this [a]greement by reference just as though each such benefit or obligation was specifically set forth.

Ultimately, the court concludes that other provisions of the agreement belie the notion that
the past practices clause governs the nonmandatory bargaining subject of promotion to police captain.  The court notes that:

We also observe that our conclusion leaves intact the current status of labor law in our state. To conclude that past practices clauses protect nonmandatory subjects of bargaining, in the absence of express language to the contrary, would set forth a rule of law that might have the perverse effect of encouraging municipalities and other employers to behave erratically with respect to permissive subjects of bargaining so as not to create a past practice precedent. That we will not do.

For employers (and even some labor/employment law attorneys), it’s hard to get excited about this case. It’s lengthy and fact-specific and doesn’t lend itself to some overarching analysis.  But this case does reinforce the notion that employers should get sound legal advice when negotiating the terms of an agreement with a union.  Nothing beats good quality drafting of collective bargaining agreements to avoid any future disputes later on.

As an aside, I can’t help but chuckle at the following footnote (footnote 17, if you’re curious), buried in Justice Katz’s dissent :

In light of the urgency to resolve this expedited public interest appeal as expeditiously as possible, I do not address the remaining arguments of the parties.

In case you are curious, the court held oral arguments on the case on April 15, 2008, nearly 10 months ago.