Unique court case makes a hard road for Nutter

At last, high noon.

In Philadelphia, Mayor Michael Nutter has finally decided it’s time for a showdown with his labor nemesis, president Pete Matthews of AFSCME District Council 33, the city’s largest public employee union. But it won’t be easy for hizzoner, because a 1993 court ruling has made Pennsylvania an unusual, if not utterly unique place for public employee labor battles.

The last contract between the city and AFSCME District Council 33 expired more than three years ago, and members are working under the terms of the old deal. Nutter says he’s ready to give raises in a new contract but wants cost-saving pension and health plan changes, which the union flatly rejects.

“No givebacks,” Matthews has said again and again.

So what happens when a contract ends and an employer says he can’t afford the old deal, and can’t strike a new one?

You might think he could say, “Sorry, these are the terms I can afford. Come to work if you want `em, but I can’t keep paying what you got before.” And you might think he could simply implement new terms.

Not in Pennsylvania. Not if you’re a public employer.

In 1993, a court ruling on a Philadelphia Housing Authority contract dispute held that as long as those employees were coming to work and negotiating, PHA couldn’t legally impose new terms on them.

It was a battle. The Pennsylvania Labor Relations Board ruled in the union’s favor. It was reversed by Common Pleas Court, which held that PHA could impose new terms. That ruling was overturned by a divided Commonwealth Court, and the State Supreme Court let that stand. You can read the case here.

 The world changes

Veteran labor lawyer Deborah Willig brought the case, which was a game changer in Pennsylvania labor relations.

“A public employer has no right to unilaterally impose a change of conditions of employment during collective bargaining,” Willig told me when I stopped by her office.

What it means is that every public employer in Pennsylvania — every city, county, state agency or school district —  now finds its workers can extend a contract indefinitely, as long as they don’t walk off the job or break off negotiations.

Public officials such as Nutter find this tough in circumstances where they feel the unions have a deal — often involving benefits or pensions — that’s financially unsustainable. In those situations, unions might be willing to forgo potential wage increases for a long time to hold on to what they have in the benefit area. And under the PHA case, it seems the employers can’t do much about it.

I’ll set aside for the moment an assessment of the fairness of what Nutter is seeking. But it seems clear under the PHA court ruling he’ll have a hard time getting it.

If you’re wondering about the reasoning behind the court’s prohibition on public employers imposing terms, it’s rooted in the legal restrictions on public employees’ right to strike. Private employers can impose new terms because their unions can hit the bricks for as long as they want.

Many non-uniformed public employees can strike, but courts have held that their employers can get court injunctions to stop them if they can show public health or safety is imperilled. This is exactly how a 20-day municipal strike ended in 1986.

Anyway, the idea was that public employers had an edge over unions that private employers didn’t, so the PHA decision was supposed to even up the scales.

What now?

When I spoke to Shannon Farmer, the private attorney handling the city’s labor negotiations, she said she thinks Pennsylvania’s restriction on imposing new contract terms in unique in the nation. (I asked Willig the same question, and she wasn’t sure.) But Farmer cautioned that every contract dispute and every court case is fact-specific.

And while she didn’t say it, it seemed clear when Nutter and his team announced Wednesday that they were presenting the union a “final offer,” they were building the groundwork for a new court case.

“To be fair to our taxpayers, any contract must have ways to better control our costs,” Nutter said. “So we’ve proposed overtime reform and the right to furlough. Fairness for future taxpayers also means pension reform.”

This evokes powerful memories of the epic 1992 labor battle between newly elected Mayor Ed Rendell and the same city unions. When unions rejected Rendell’s calls for benefit and work rule changes, he declared an impasse and moved to implement his final offer.

That was before the PHA court case that changed the rules, so Rendell was successful in forcing a confrontation. After an 18-hour walkout, the unions settled and Rendell got most of what he wanted.

That contract left a bitter taste for union leaders that’s lasted a generation. Willig said for the city to implement new terms now, it would have to establish that negotiations are deadlocked under under the PHA court decision.

“And it states, and it’s particularly important in this case, that nobody can unilaterally decide what an impasse is,” Willig said.

If you listened to Nutter Wednesday, you could hear him making the case for a future court that an impasse exists because the union won’t negotiate.

“For five years, we’ve fought for fairness and reform,” he said. “The union response, unfortunately, has been consistently, `no, we will not negotiate on any of those issues.’ The answer has been consistently, `no.'”

Union leaders see this differently, of course. They say they’ve never stopped talking and are making counter proposals to the terms the city offered Wednesday.

Nutter has given the union two weeks to respond to his terms, and there appears to be no prospect he’ll get a contract he’ll accept. If he moves to implement his terms, it will trigger a legal battle that’s likely to last months, if not years.