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Upholding furloughs in court seen as impossible

Published:May 12, 2010, 8:46 AM

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Updated: August 21, 2010, 10:11 AM

ALBANY — Gov. David A. Paterson faces a nearly impossible legal road to win federal

court blessing for his furlough of 100,000 state workers, legal experts say.

For taxpayers, it would be better to resolve the legal issue promptly before the furloughs

start next week and the state faces the prospect of being on the hook for back pay —

plus interest payments — if the governor loses in court.

And if Paterson loses, the furloughed workers will have won what amounts to a free day off

from work — with interest.

"It's very difficult to void the provisions that are in a union contract," said Rebecca

Givan, an assistant professor and expert in collective bargaining at Cornell University's

School of Industrial and Labor Relations.

"I think the state is in a very, very weak legal position because there are existing

contracts with all the unions," added David Schlachter, a Suffolk County lawyer who won a 1991

case against the state on behalf of court employees who saw their salaries delayed by the

state during a fiscal crisis.

The fact that New York faces a severe fiscal challenge is not enough, on its own, to let

the state void the terms of a contract through furloughs, which amount to a 20 percent cut in

pay for 100,000 executive branch workers.

"The fiscal emergency can be used in the case of bankruptcy, but we're not there yet. A

dire situation is not the same as bankruptcy," Givan said.

Paterson said Tuesday that at the time the union contracts were signed in 2007 it was "not

within the contemplation" that the recession would hit the state so hard that it could not

meet the terms of the salary provisions.

His comments came after four separate legal actions were commenced by unions representing

various state workers, as the prospect of furloughs beginning Monday appeared to be set

following the Legislature's approval of Paterson's plan to cut the pay of 100,000 workers by

requiring them to stay home one day a week without pay until a 2010 state budget is passed.

The unions — including the Civil Service Employees Association and Public Employees

Federation, as well as those representing SUNY and City University of New York employees

— filed lawsuits in federal court in Albany seeking a temporary restraining order

against the furloughs and implementation of a 4 percent raise for state workers that has been

delayed since April 1.

The unions argue that Paterson is violating the constitution by trying to change the terms

of a contract — or, more precisely, "impairing the obligation of contracts" under the

State Constitution. They say their wages are guaranteed under the collective-bargaining deal

made by the state in 2007.

PEF also contends that the furloughs and pay freeze "constitute a deprivation of property

without due process of law."

Judge Lawrence E. Kahn was assigned the case. A hearing on the matter is expected to be

held today.

Legal and public employee union experts — as well as Democratic leaders of the State

Senate and Assembly — say the governor faces a daunting challenge to get the furloughs

to stick.

Other states, notably California, have gone the furlough route only to be turned back by

federal courts. Some states, such as Hawaii and Illinois, have negotiated furlough days with

public employee unions.

One of the few cases in the nation that might give Paterson hope was the 2006 federal court

decision against a challenge by the Buffalo Teachers Federation to a wage freeze by the

Buffalo Fiscal Stability Authority, also known as the control board.

But in that case, unlike the furlough legislation approved Monday night, the State

Legislature went out of its way to document the long-term fiscal plight of Buffalo to justify

giving the control board the powers to do things like freeze wages.

"You have to demonstrate more than just [being] short of money. You have to show that you

didn't consider cutting wages or breaching union contracts on a par with other options like

raising taxes," said Vincent Buzard, an attorney with Rochester's Harris Beach law firm who

represented the Buffalo control board in the major legal decision.

"They're very difficult," Buzard said of the contract cases the state is now being forced

to defend, "because the state would be arguing for an exemption to the constitutional

protections against impairments of contracts, and exemptions for an emergency and protection

of health and welfare of the state must be shown."

"When you're doing one of these, you have to make sure everyone is sharing the pain," he

added.

But Buzard said courts don't automatically issue restraining orders in such cases, in part,

because there is no permanent harm since the money can be repaid to any state workers affected

by the furlough.

While Paterson has allies among some fiscal conservatives who call the state payroll too

bloated, the impact of a furlough will be felt by many New Yorkers. The furloughs come as

summer classes are set to begin for state university professors, and many state parks are

seeing more visitors as the summer approaches.

The governor said Tuesday the public employee unions "left us with absolutely no choice"

because they refused to go along with any of his ideas to save the state $250 million in

payroll costs to help close a $9.2 billion deficit. He said others — like SUNY students,

nursing homes and public schools — also are being asked to share in the fiscal pain.

"They have volunteered no sacrifice during this great recession," Paterson said of the state

worker unions.

But unions said Paterson's move is unilateral and counterproductive, arguing that the

layoffs include money-generating positions such as auditors in the tax department and clerks

at the motor vehicles agency. "Our attorneys feel we have a solid case," said Darcy Wells, a

PEF spokeswoman.

Many contract experts agreed.

Schlachter, who beat the state in federal court on an impairment-of-contract lawsuit two

decades ago, said courts look upon collective-bargaining agreements as a binding contract.

"Circumstances can change after a contract is signed, and the fact that there have been

changes, whether anticipated or not, doesn't justify walking away from contracts," he said.

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