Responding to last week’s Illinois Supreme Court ruling in favor of city workers and retirees, IEA General Counsel said, “Whether a union and employer could agree to changes through the collective bargaining process remains an open question.”
Lawyers for the City had argued before the Court that one of the reasons for the constitutionality of the City’s pension theft was that the City unions had gone along with it.
The Court rejected that argument.
“(The unions) were not acting as authorized agents within the collective bargaining process….Rather, ‘these negotiations were no different that legislative advocacy on behalf of any interest group supporting collective interested to a lawmaking body.’”
What the court said – in this case – was that the unions were not engaged in collective bargaining. They were acting no differently than any group lobbying in Springfield for legislation.
Is the IEA correct in saying that bargaining away our pension benefits by public employee unions is an open question?
Interestingly, the Mayor’s lawyers agree with the IEA General Counsel.
“Obviously, we would have preferred a win, but we don’t think the door is completely shut. They left the door open on collective bargaining as a possible,” said a top mayoral aide who asked to remain anonymous.
The Emanuel adviser specifically pointed to the approach that Il. Senate President John Cullerton (D-Chicago) has applied to the state pension crisis.
The central issue in all this is the concept of consideration.
My friend and colleague Glen Brown has written extensively on the issue of consderation.
Thee latest Cullerton plan was not devised by the Senate President alone. After some political mis-steps by the Governor, Bruce Rauner has his fingerprints on it as well.
The Cullerton pension plan summary:
Tier 1 members (hired before January 1, 2011) in SERS, SURS, TRS, and GARS are provided two choices and must make an election between the two choices.
COLA is the lessor of 3% OR ½ CPI, simple interest on the originally granted annuity in exchange for future increases in salary will count as pensionable salary.
No changes to current level of pension benefits; COLA remains at 3% annually, compounded in exchange for future salary increases will not count as pensionable salary.
Consideration and the Illinois Constitution demand that there can be no diminishment in our pension benefits. This applies to all current public employees from the day they were hired. And, of course, it applies to all current retirees.
Nothing in the Cullerton plan is anything but a diminishment of pension benefits.
It would still be a diminishment if the IEA bargained it.
The unions can engage in bargaining to improve our retirement benefits. But they cannot bargain a diminishment.