Detroit Labor War Gears Up

DETROIT (CN) - A coalition of 30 labor unions claims in court that giving up more than $80 million in annual wages wasn't enough for Gov. Rick Snyder, who has "threatened the City [of Detroit] that it would be placed into receivership and have an emergency manager appointed if it continued the collective bargaining process with the city unions."

The unions claim Snyder is tortiously, and unconstitutionally, interfering with their contract rights, by pressuring the City Council to reject a new, cost-cutting union contract. They ask the court, in brief, to order the governor to butt out.

The complaint was scheduled for argument Monday afternoon before U.S. District Judge Arthur Tarnow. Deputy Mayor Kirk Lewis told local news media that the city planned to scrap the labor agreement without putting it to a vote.

The Detroit News reported today that if the City Council does not sign a consent agreement with the state, Snyder will appoint an emergency city manager on Thursday.

The City Council delayed an expected vote Tuesday, saying it wanted to see what will happen in court.

According to the News, a state appeals court is expected to rule today on whether the state's financial review team can meet to approve an agreement that would then be sent to the City Council. An Ingham County judge on Monday said the financial review team could not meet until after an April 11 hearing. The state appealed that order.

In the federal case, Judge Tarnow said Tuesday that he would rule by next Monday on the union coalition's lawsuit, the News reported.

The complaint from the union coalition states: "The state has threatened the city that it would be placed into receivership and have an emergency manager appointed if it continued the collective bargaining process with the city unions. Thirty (30) City of Detroit unions have been bargaining with the city since December 9, 2011 as a coalition ('coalition'), and on February 1st they reached a tentative agreement [TA] with the city, which involves tens of millions of dollars in concessions. There are roughly 5,000 members in the coalition. This TA was ratified by the unions on March 22, 2012. During a radio interview on WJR 760 AM on Friday, March 30, 2012, City of Detroit Council President Charles Pugh said that the governor issued the City Council a 'direct threat': if the City Council ratified that TA for the coalition, then the city would be placed in receivership and an emergency manager appointed. The city administration and City Council have neglected to ratify the TA which the unions have ratified. Thus, the state of Michigan is demanding that the city halt the coalition's bargaining process.

"Governor Rick Snyder and State Treasurer Andy Dillon have previously proposed that the city make all of its approximately 9,000 unionized employees work without enforceable contracts, in order to avoid an emergency manager. They had insisted that the city's unions give up their right to grieve or otherwise litigate the breach of their union contracts; city employees who are discharged or denied overtime pay lose the right to grieve under the union contract. After the media reported on this requirement of the state, for inclusion in the Detroit-State of Michigan consent agreement, the state modified the proposal, but still leaving the specter of frustration of the right of city employees to collectively bargain. There are many other provisions which the state demands to see, which are either impossible to attain or Draconian.

"If the State's threats take hold, the 30 unions in the coalition which have negotiated tentative agreements over the past several months, must discard those contracts, and start over with benchmarks mandated by the state. The state's actions are a violation of the Due Process Clause of Fifth and Fourteenth Amendments to the United States Constitution as well as Article I, section 17 of the Michigan Constitution, in that the Coalition unions and their members have lost the right to collectively bargain, given the threats and interference of the State. The state's actions are also violations of the Contract Clauses of the U.S. and Michigan Constitutions, in that the coalition unions had a contract - albeit with a condition subsequent of the formality of ratification by the City Council - and the state's threats and interference is impairing the right of contract of the plaintiffs. Plaintiffs also seek relief due to tortious interference of contract, and tortious interference of advantageous business relationship." (Reference to exhibit omitted.)

In November 2011, the mayor struck a deal with 48 labor unions, who agreed to accept wage cute due to the city's budget crisis, the complaint states.

Thirty unions, not including public safety workers, formed a coalition to avoid more pay cuts.

In February this year, the coalition says, its members agreed to pay more for health care, take another pay cut and change their retirement plans, saving Detroit more than $80 million a year.

The unions ratified the concessionary contract in March.

Typically, union ratification is followed by ratification from the Detroit City Council, the complaint states.

But the governor and treasurer demanded further negotiations and threatened to appoint an emergency manager if the City Council signed off on the coalition contract.

Named plaintiffs Joseph Valenti, (Co-Chief Negotiator for the Coalition of Unions of the City of Detroit, Regina Smith, George Moran and Michigan AFSCME Council 25 are represented by Richard Mack, with Miller & Cohen.

The City Council is expected to vote at 5 p.m. today (Wednesday) on the state's proposal, which would have a state-appointed advisory board oversee the city's financial restructuring, according to the Detroit News.

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