June 27, 2008
Legal Testimony Demonstrates Quagmire of Union
Negotiating Process
Choking Health Insurance Premium Costs Leave Few Options for City, Employees, and Retirees
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Judge John Cummings heard arguments and testimony Thursday afternoon, June 26, as well as received a large number of documents supporting various evidence/testimony. Cummings mid-way through the more than four hour hearing stated, “This gives me something to do this weekend.”
Actually, the court and the parties have their challenges formidably laid before them. The specific dates and interpretations vary, but the issue remains a known entity for all parties --- The city cannot afford continuation of the current health and retirement benefits package. Solomon’s wisdom falls upon the court to ascertain a plan that the employees, retirees and city can survive.
Previously, the city’s unions accepted Cadillac benefit plans in exchange for minimal or no wage increases. But, the city has lost population and along with it industry , retail, and other businesses. Without increasing revenues, the city has smaller pieces of economic pie to pass out to its employees and retirees and a smaller amount of services and greater fees for citizens.
Currently, city employees pay $12 a month for singles and $25 a month for families for health insurance. With the fiscal year ending Monday, June 30, Mayor David Felinton implemented the infamous Blue Cross Blue Shield Option Nine in renewing employee collective bargaining agreements while negotiations continue. Option Nine triggers a 600% premium and/or deductable increase, testified Carl Eastham, International Association of Firefighters Local 289 president . He added that when the Mayor announced the imposition of the Option it provided “no preparation to allow us to align our budgets accordingly.”
Still, the police and firefighters unions agree with the city that they have known during contract negotiations that their benefit packages would change --- a euphemism for cost more for less coverage.
Based on courtroom testimony and arguments, what brings the parties to this legal collision is a resolution passed in December by Huntington City Council which limited the amount of money that the city’s governing body would approve in the 2008-2009 budget for health insurance.
(You can read a copy of the Council Resolution by clicking here)
The unions for the police and fire departments have petitioned for an injunction that would prevent the city from putting any new rates into force until new contracts are ratified. Until then, the current contracts would remain in force. That is, except for the benefits and premiums. Option Nine will take effect July 1, 2008, unless the court steps in to block its imposition.
Legally, the grounds for injunctive relief surround irreparable harm to parties.
(You can read the Union’s Motion for a Temporary Injunction/TRO by downloading pdf here)
Retired Huntington Policeman Ray Berry told how the new plan would harm him. He’s a diabetic and suffers from multiple disorders. He testified that his prescriptions amount to $864 a month not including physicians’ fees and a breathing device. “That leaves me $300 to live on. I don’t have this kind of money, all I can do is come here (to court) and ask for relief.”
Obviously, Berry represented one of a pool of retirees who will not be able to make ends meet. The changes --- an euphemism for paying more and receiving less --- could cause bankruptcy , foreclosures, and death by seeking treatment until it’s too late. By contrast, for every employee and/or retiree, the city itself faces a similar dilemma; with no increase in revenue to cover the current benefit plan, they face financial ruin too.
Brandi Jacobs-Jones, director of Administration and Finance and a former member of City Council, testified, “There’s nothing else we can do. We’ve overturned every stone possible.” When the city put the health contract out for bid, they received only one response, from current provider Blue Cross/Blue Shield and all the submissions exceeded the amount allocated by council.
The court stated that it will make a ruling sometime on or before 1:30 p.m. Monday, June 30. That means, the change or status quo occurs 24 hours later. Of course, the winner or loser will appeal to the West Virginia Supreme Court of Appeals. But, the ruling in this case involves more than one side prevails over the other. Injunctive relief would maintain the status quo of the contracts (the pay which has been left untouched AND the benefit and premiums which have been increased). Employees would have more time to adjust their budgets, even though they have known for a year at least that some sort of increase would be occurring.
For the city, Patricia Proctor , of Steptoe and Johnson, one of two attorneys the administration hired, the status quo would cost about $700,000 per month.
That’s where Judge Cummings reminded the unions’ attorney, John F. Dascoli, that with an injunction a financial bond is normally requested. Hence, the union’s could be (at worst) required to post $700,000 a month to offset the city’s potential losses, until contracts are negotiated and the current court case resolved.
“The bond is put in place to pay the cost” of preserving the current conditions until the court decides who is right regarding the status quo.
Huntington’s administration maintains that immediate layoffs, possible fee increases, and a lessening of service will occur. Their brief in opposition concludes, in part:
“It has been acknowledged for several years that its obligations to its current and retired employees occupy too large a percentage of its annual budget, and the City can afford this no longer…the city’s expenditures on current and retired employee benefits equaled 39% of its budget this year. As a result, City services have suffered tremendous cuts and the public has suffered because of lack of funding for adequate police coverage, among other things. The streets and infrastructure have deteriorated. The city has drug violence and unsolved murders. Private citizens have formed groups to raise money to buy needed police equipment that the city cannot afford. The city cannot afford a paving program and it cannot keep up with the constant assault of graffiti artists and vandals.
“If the unions are successful in obtaining an injunction, it is the City’s taxpayers who will suffer. Either they will suffer even less services than the minimal amount now being offered , or they will suffer increased fees or taxes to pay several million additional dollars for the program the unions are demanding.”
(You can read the City’s Memorandum in Opposition by downloading Part 1 here in pdf and part 2 here in pdf.)
Judge Cummings stated that “neither side” addressed the bond. For by the same token, a denial of the injunction could put the city in a circumstance where they posted a bond in the amount of the benefit increases until the merits are heard in court. Of course, Proctor argued the collection of any money from city employees could be returned if the city lost. She did not consider the hardships , though, of the employees coming up with the money, even if the city later had to refund it --- perhaps, with interest.
The bond amounts , though, in injunctive matters are of judicial discretion. While Dasscoli asked that the bond be “waived,” the decision is totally that of Judge Cummings. He could issue the injunction, but if the unions could not post the bond, then the injunction would be dead in the water.
Or, either side, could appeal the amount of the bond set by Cummings to the West Virginia Supreme Court of Appeals. And, during the appellate period, either side could ask that either the status quo or the new rates be maintained pending a ruling.
Meanwhile, Judge Cummings nodded affirmatively that no labor litigation precedent exists in West Virginia law for the current fact pattern. Dasscoli called the court’s attention to a United States Court of Appeals case from the Second Circuit which involved cutting and/or shutting off pension benefits. There, the federal appeals court upheld an injunction for the retirees. They ordered Honeywell International to “provide premiums sufficient to secure guaranteed level of benefits, the reductions in medical coverage will cause (1) substantial risk to plaintiff’s health; (2) severe financial hardship; (3) the inability to purchase life’s necessities , and (4) anxiety associated with uncertainty … the district court’s holding comports with this Court’s understanding of irreparable harm as ‘harm shown to be non-compensable in terms of money damages.’
In the federal second circuit case, the court upheld the non-issuance of a bond by the district court which would have been posted by the class action of retirees.
It’s up to the court now….
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Negotiating Process
Choking Health Insurance Premium Costs Leave Few Options for City, Employees, and Retirees
By Tony Rutherford
Huntingtonnews.net Reporter
Huntington, WV (HNN) – Judge John Cummings heard arguments and testimony Thursday afternoon, June 26, as well as received a large number of documents supporting various evidence/testimony. Cummings mid-way through the more than four hour hearing stated, “This gives me something to do this weekend.”
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Previously, the city’s unions accepted Cadillac benefit plans in exchange for minimal or no wage increases. But, the city has lost population and along with it industry , retail, and other businesses. Without increasing revenues, the city has smaller pieces of economic pie to pass out to its employees and retirees and a smaller amount of services and greater fees for citizens.
Currently, city employees pay $12 a month for singles and $25 a month for families for health insurance. With the fiscal year ending Monday, June 30, Mayor David Felinton implemented the infamous Blue Cross Blue Shield Option Nine in renewing employee collective bargaining agreements while negotiations continue. Option Nine triggers a 600% premium and/or deductable increase, testified Carl Eastham, International Association of Firefighters Local 289 president . He added that when the Mayor announced the imposition of the Option it provided “no preparation to allow us to align our budgets accordingly.”
Still, the police and firefighters unions agree with the city that they have known during contract negotiations that their benefit packages would change --- a euphemism for cost more for less coverage.
Based on courtroom testimony and arguments, what brings the parties to this legal collision is a resolution passed in December by Huntington City Council which limited the amount of money that the city’s governing body would approve in the 2008-2009 budget for health insurance.
(You can read a copy of the Council Resolution by clicking here)
The unions for the police and fire departments have petitioned for an injunction that would prevent the city from putting any new rates into force until new contracts are ratified. Until then, the current contracts would remain in force. That is, except for the benefits and premiums. Option Nine will take effect July 1, 2008, unless the court steps in to block its imposition.
Legally, the grounds for injunctive relief surround irreparable harm to parties.
(You can read the Union’s Motion for a Temporary Injunction/TRO by downloading pdf here)
Retired Huntington Policeman Ray Berry told how the new plan would harm him. He’s a diabetic and suffers from multiple disorders. He testified that his prescriptions amount to $864 a month not including physicians’ fees and a breathing device. “That leaves me $300 to live on. I don’t have this kind of money, all I can do is come here (to court) and ask for relief.”
Obviously, Berry represented one of a pool of retirees who will not be able to make ends meet. The changes --- an euphemism for paying more and receiving less --- could cause bankruptcy , foreclosures, and death by seeking treatment until it’s too late. By contrast, for every employee and/or retiree, the city itself faces a similar dilemma; with no increase in revenue to cover the current benefit plan, they face financial ruin too.
Brandi Jacobs-Jones, director of Administration and Finance and a former member of City Council, testified, “There’s nothing else we can do. We’ve overturned every stone possible.” When the city put the health contract out for bid, they received only one response, from current provider Blue Cross/Blue Shield and all the submissions exceeded the amount allocated by council.
The court stated that it will make a ruling sometime on or before 1:30 p.m. Monday, June 30. That means, the change or status quo occurs 24 hours later. Of course, the winner or loser will appeal to the West Virginia Supreme Court of Appeals. But, the ruling in this case involves more than one side prevails over the other. Injunctive relief would maintain the status quo of the contracts (the pay which has been left untouched AND the benefit and premiums which have been increased). Employees would have more time to adjust their budgets, even though they have known for a year at least that some sort of increase would be occurring.
For the city, Patricia Proctor , of Steptoe and Johnson, one of two attorneys the administration hired, the status quo would cost about $700,000 per month.
That’s where Judge Cummings reminded the unions’ attorney, John F. Dascoli, that with an injunction a financial bond is normally requested. Hence, the union’s could be (at worst) required to post $700,000 a month to offset the city’s potential losses, until contracts are negotiated and the current court case resolved.
“The bond is put in place to pay the cost” of preserving the current conditions until the court decides who is right regarding the status quo.
Huntington’s administration maintains that immediate layoffs, possible fee increases, and a lessening of service will occur. Their brief in opposition concludes, in part:
“It has been acknowledged for several years that its obligations to its current and retired employees occupy too large a percentage of its annual budget, and the City can afford this no longer…the city’s expenditures on current and retired employee benefits equaled 39% of its budget this year. As a result, City services have suffered tremendous cuts and the public has suffered because of lack of funding for adequate police coverage, among other things. The streets and infrastructure have deteriorated. The city has drug violence and unsolved murders. Private citizens have formed groups to raise money to buy needed police equipment that the city cannot afford. The city cannot afford a paving program and it cannot keep up with the constant assault of graffiti artists and vandals.
“If the unions are successful in obtaining an injunction, it is the City’s taxpayers who will suffer. Either they will suffer even less services than the minimal amount now being offered , or they will suffer increased fees or taxes to pay several million additional dollars for the program the unions are demanding.”
(You can read the City’s Memorandum in Opposition by downloading Part 1 here in pdf and part 2 here in pdf.)
Judge Cummings stated that “neither side” addressed the bond. For by the same token, a denial of the injunction could put the city in a circumstance where they posted a bond in the amount of the benefit increases until the merits are heard in court. Of course, Proctor argued the collection of any money from city employees could be returned if the city lost. She did not consider the hardships , though, of the employees coming up with the money, even if the city later had to refund it --- perhaps, with interest.
The bond amounts , though, in injunctive matters are of judicial discretion. While Dasscoli asked that the bond be “waived,” the decision is totally that of Judge Cummings. He could issue the injunction, but if the unions could not post the bond, then the injunction would be dead in the water.
Or, either side, could appeal the amount of the bond set by Cummings to the West Virginia Supreme Court of Appeals. And, during the appellate period, either side could ask that either the status quo or the new rates be maintained pending a ruling.
Meanwhile, Judge Cummings nodded affirmatively that no labor litigation precedent exists in West Virginia law for the current fact pattern. Dasscoli called the court’s attention to a United States Court of Appeals case from the Second Circuit which involved cutting and/or shutting off pension benefits. There, the federal appeals court upheld an injunction for the retirees. They ordered Honeywell International to “provide premiums sufficient to secure guaranteed level of benefits, the reductions in medical coverage will cause (1) substantial risk to plaintiff’s health; (2) severe financial hardship; (3) the inability to purchase life’s necessities , and (4) anxiety associated with uncertainty … the district court’s holding comports with this Court’s understanding of irreparable harm as ‘harm shown to be non-compensable in terms of money damages.’
In the federal second circuit case, the court upheld the non-issuance of a bond by the district court which would have been posted by the class action of retirees.
It’s up to the court now….
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