Union Fights 10% Wage Cut in Detroit Schools

DETROIT (CN) - A public employees union claims in court that Michigan enacted an unconstitutional law giving the governor and treasurer "unbridled power to declare a local 'financial emergency' whenever and wherever they see fit."

Michigan's American Federation of State, County and Municipal Employees (AFSCME) Council 25 sued Gov. Richard Snyder, Treasurer Andrew Dillon and the man Snyder appointed as emergency manager of Detroit Public Schools, Roy Roberts, in Federal Court.

The lawsuit was filed on behalf of non-certificated union members: i.e., not teachers, but classroom aides, bus workers and others.

AFSCME has a collective bargaining agreement with Detroit Public Schools (DPS) that expires at the end of 2013.

"Under the current collective bargaining agreement, AFSCME members gave up approximately $10.5 million dollars in concessions to DPS, primarily in the form of reduced pay and reduced health insurance," the complaint states.

"[Former Emergency Financial Manager Robert] Bobb told AFSCME's chief negotiator that the economic concessions would help DPS avoid bankruptcy.

"Bobb represented that he expected DPS to have no further operating deficits through the duration of the contract."

But in March 2011, Gov. Snyder signed the Local Government and School District Fiscal Accountability Act, which AFSCME says "is intended to provide the governor and the state treasurer with broad unchecked powers in the event of a so-called 'financial emergency' at the local government level."

The complaint states: "The Act provides the governor and state treasurer with the unbridled power to declare a local 'financial emergency' whenever and wherever they see fit, in their sole and absolute discretion. ...

"(O)n or about May 16, 2011, Governor Rick Snyder appointed Defendant Roy S. Roberts, Jr. to replace Robert Bobb as the DPS Emergency Manager."

Since his appointment, Roberts has reduced DPS's budget deficit from $300 million to $72 million, accordingto CBS News.

In July 2011, Roberts issued an order imposing several changes to AFSCME's bargaining agreement with the public schools, including:

"a. a 10 percent reduction in all wages;

"b. Imposition of a mandatory 20% employee premium contribution for medical and dental insurance;

"c. Discontinuation of payout of unused sick days upon retirement;

"d. Discontinuation of payment of any longevity bonus;

"e. Discontinuation of implementation and payment of annual increments," according to the complaint.

After a battle in court, U.S. District Judge George Steeh in March this year ordered the collective bargaining agreement to remain in force.

But only a few months later, "Defendant Roberts' agents indicated that the district was going to cut the wages of the employees by 10 percent, continuing from July 1, 2012 for the following year," according to the complaint.

"The district has not indicated its willingness to refrain from the cut.

"The cuts as delineated above ordered by the emergency manager constitute a serious impairment of the plaintiffs' collective bargaining agreement, and will irreparably injure the plaintiffs and their members who already have suffered substantial reductions in their livelihoods through concessions previously given."

AFSCME seeks an injunction and declaratory judgment that the defendants violated Article I, and the Fifth and 14th Amendments.

The union is represented by Richard Mack, with Miller Cohen.

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