Fordham Law


Nutter seeks high court's OK to impose his terms on city workers

James Brudney in philly.com, March 01, 2013

Media Source

CALL IT the Grand Imposition.

In the last two months, Mayor Nutter's standoff with the city's largest union has gone from a dead-end cold war to a blistering dispute with enormous implications for cities and unions across Pennsylvania.

Nutter has asked the state Supreme Court for permission to impose contract terms unilaterally on blue-collar District Council 33, which has been working on the terms of an expired contract since 2009. The case has prompted the state's leading labor and government groups to sound the clarion for their respective causes.

If Nutter succeeds, the case could change labor negotiations across Pennsylvania by significantly shifting power to mayors and governors, according to labor-law experts who have weighed in on the issue. Collective bargaining in the public sector would essentially mirror the private sector, where management's negotiating power comes from the eventuality of imposed terms and where labor's best weapon is the threat of a strike - a threat experts say could be fulfilled more often if Nutter prevails.

The administration argues that such a power shift would correct a system in which unions hold disproportionate sway - or, as Nutter often puts it, the ability "to hold the city hostage." Labor leaders say it would give managers the trump card in negotiations.

No matter how you slice it, the outcome of the case will have profound impact on the 6,800 workers directly involved, on public-sector employees across Pennsylvania and on Nutter's legacy in City Hall. 

Dare to strike

Only a dozen states allow government workers to strike, and those that do usually have strict policies to avert that possibility, said Martin Malin, a Chicago-Kent College of Law professor. In Pennsylvania, one of the strongest barriers is a 1993 Commonwealth Court decision stopping managers from imposing terms unless workers strike.

Malin summed up the majority's opinion in that 2-1 decision as: "If the employer is allowed to make a unilateral change at the point of impasse, the employer will in effect be daring the union to strike - and we don't want the union to do that."

Striking down that case, as Nutter wants, would give mayors and governors "a pretty big incentive" to resist compromise because they could get a more favorable outcome if talks stall, said Fordham University law professor Jim Brudney. "Going forward, [mayors] will be much less likely to make concessions," he said.

As a result, more frequent strikes might be likely.

After terms are imposed, "that whole dynamic changes, and [the workers] virtually have no choice but to go on strike," said Ken Dau-Schmidt, professor at the University of Indiana law school.

Asked about the possibility of more strikes, Nutter said, "I'm not going to speculate on something that has not even been heard yet."

Shannon Farmer, the city's chief negotiator, said strikes would not occur more frequently because the workers wouldn't get paid or be eligible for unemployment benefits.

Additionally, she said, managers wouldn't necessarily take an unbending approach because reaching a deal is better policy than working without contracts.

"The public employer wants the certainty of knowing the contract is settled," she said.

Proponents of Nutter contend that an equally paralyzing circumstance is in place now: It's the unions, they say, that benefit from clinging to unreasonable terms - even when the city is strapped for cash - because mayors can't move past expired contracts.

"There's no incentive for the union to agree to any terms they don't like," Farmer said. Imposing terms, she noted, would not replace the need for a new contract, so negotiations may advance if the status quo changes.

Zack Stalberg, president of the good-government group Committee of Seventy, said he supports the effort to reduce labor costs.

"In the private sector if you hit an impasse, the employer can impose conditions," Stalberg said. "So if there's a ruling that puts the taxpayers on the same footing as shareholders in a company, to me that seems fair."

The mayor filed the case in Common Pleas Court but has asked that it be expedited by the state Supreme Court, where major statewide unions and government-executive groups have filed briefs to support their sides. It's unclear how soon the case could be decided.

 A 'hybrid' legacy

Stabilizing the city's pension fund, which is vastly underfunded and falls further behind every year, is one of Nutter's top goals for his second term.

The contract he is pushing would require new hires to go into a new "hybrid" system of a reduced defined benefit and a 401(k), rather than the substantial defined benefit they now receive. It also includes savings in overtime rules and three weeks of possible furloughs, along with incremental raises and aid for the union's health-care fund.

If he loses, Nutter's hand will be weakened when he comes back to the table. But with a win, he can claim huge long-term savings with DC33, and may also be able to break a similar deadlock with white-collar District Council 47.

Ed Rendell, who, as mayor, was on the losing end of the 1993 decision, said managers need the right to impose terms to control costs. He added that winning the case will be an important moment for Nutter.

"I think his legacy is fairly secure, but I think he would be loath to leave office without resolving this or without having a contract," said Rendell.

Nutter's legacy is also secure in the eyes of organized labor.

He's become a lightning rod for national union leaders upset with Democrats who no longer give carte-blanche support. Lee Saunders, president of the American Federation of State, County and Municipal Employees, recently singled out Nutter and Illinois Gov. Pat Quinn as "turncoats."

"Look at Nutter . . . He goes to the Republican-controlled Pennsylvania Supreme Court to get a legal decision that would let him shove his contract down our throats," Saunders said, according to the Huffington Post.