Seven Unions File Class Actions Against NY

ALBANY (CN) - Retired state employees and their unions filed seven class actions against Gov. Andrew Cuomo and the state, for cutting their health insurance benefits while increasing the share of premiums retirees must pay.

Cuomo on Oct. 1, 2011 decided to increase retirees' health-care contributions by 2 percent - raising them to roughly 12 percent from 10 percent for individual coverage (depending on the employee's grade) and to 27 percent from 25 percent for family coverage.

The New York State Public Employees Federation filed the complaint that will be cited in this report. Other plaintiff classes include members of the Civil Service Employees Association, the State Correctional Officers and Police Benevolent Association, the State Troopers Police Benevolent Association, the State Police Investigators Association, the New York State Law Enforcement Officers Union Council 82 and the United University Professions.

Together, they say they represent more than 100,000 of the state's more than 250,000 public workers.

They claim that the increases are unconstitutional because the state has no right to unilaterally "impair the obligation of contract of retired state employees."

The lawsuits, filed just before New Year's, capped a busy - and according to pundits, largely successful 2011 for Cuomo, who in his first year in office got a state budget passed on time - a rarity - negotiated new tax brackets with the notoriously intransigent Legislature, and negotiated new contracts with some of the same unions that now have squared off against him in court.

Little surprise then that he immodestly declared, "I am the government" in November. Little surprise that some now are bristling in the face of such wide-reaching change.

The state budget passed last spring forced the Public Employees Federation and the Civil Service Employees Association to concede nearly $500 million in wages and benefits to prevent a catastrophic round of layoffs that could have idled nearly 9,800 of their members.

The October insurance rate change for retirees was not part of the resulting collective bargaining agreements, and could not be, under state law, the union says.

In its lawsuit, the Public Employees Federation says the class consists of all living retired state employees who retired with 10 or more years of service between Jan. 1, 1983 and Oct. 1, 2011, and the spouses and dependents of those that have since died.

According to the union, retirement health insurance is deferred compensation for services rendered by the retirees during their working years. The union says that when an employee retires under such an agreement, the agreement continues to dictate retirement health insurance rights even after the expiration of that agreement.

"Without vesting, the plaintiffs who retired during the course of a collective bargaining agreement would lose their ability to protect any retirement health insurance benefits conferred in that agreement after receiving the benefit," according to the complaint. "Therefore, the respective collective bargaining agreements under which the plaintiffs retired, constitute the retired plaintiff's only opportunity to ensure the promised retirement health insurance benefits.

"The plaintiffs ... reasonably expected and still reasonably expect, that their retirement health insurance benefits will continue, because they were powerless to negotiate for the continuation of their benefits after they retired.

"Likewise, once negotiated, the retired PEF-plaintiffs never bargained for or agreed to any reduction of their fixed and vested retirement health insurance benefits."

The union seeks declaratory and injunctive relief on claims of breach of contract and violations of the U.S. and New York State Constitutions.

Cuomo spokesman Josh Vlasto said in a statement that the unions are way off the mark.

"The law clearly allows the administration to apply the terms of a new contract to retirees and it has been well-known standard practice to do so," Vlasto said.

The Public Employees Federation is represented by William P. Seamon of Albany.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit