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Wednesday, April 4, 2012

Did Milwaukee County Blow Its Furlough Case?

Walker's Act 10 likely prevents the union from negotiating a settlement

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More than a year after Gov. Scott Walker stepped down as Milwaukee County executive, the Milwaukee County Board of Supervisors is still trying to clean up his multimillion-dollar budget mess.

And, ironically, Walker's own Act 10, which guts public employees' bargaining rights, could be preventing supervisors from cutting a deal with the county's largest union.

In February, Milwaukee County Circuit Court Judge William Sosnay ruled that Walker's imposition of up to 26 furlough days on some county employees in 2010 was illegal. The suit had been brought by AFSCME District Council 48, which had won a favorable decision in front of the Wisconsin Employment Relations Commission.

Sosnay affirmed that Walker could have legally imposed unpaid furloughs for up to 45 hours per year, but was prohibited from imposing unpaid furloughs exceeding that limit.

Sosnay ordered the county to reimburse the affected employees for back pay, plus compound interest.

Estimates range from $4 million to $9 million if the 2010 furlough days and the 13 furlough days imposed in 2011 are calculated in the back pay owed to employees. The county is accruing $33,000 in interest each month, about $1 million so far.

Despite the ticking clock, a board committee voted to hold over the decision until May. That means the county will begin to appeal Judge Sosnay's decision.

"What the appeal does is buy us time to consider a settlement offer with the union and also weigh the options regarding continuing on with the appeal," said Supervisor Joe Sanfelippo, chair of the Personnel Committee. "Our attorneys are telling us that we have a very solid case. We were very disappointed with the decision that Judge Sosnay made. And they feel that there's quite a bit of case law that would get his decision overturned."

Sanfelippo said that while the board knew that the county could potentially be on the hook for workers' back pay, it hadn't set aside money for it in the current budget.

"If we just try to take that money out of the operating budget, what'll happen is that when we get down toward the end of the year and the budget is out of balance, the county executive [Chris Abele] is going to be forced to bring it into budget," Sanfelippo said. "And how is he going to do that? He could end up laying off the very people that we're paying now, at the front end, for these furlough days."


A Missed Opportunity

But can the county negotiate a settlement with AFSCME, as Sanfelippo argues?

AFSCME District 48 head Richard Abelson says no, thanks to Walker's Act 10, which prohibits public employee unions with a contract from negotiating anything beyond very limited pay increases.

He said the union has no power to bargain without a binding collective bargaining contract, which has expired.

"The union had a heck of a lot more flexibility to negotiate when we could bargain," Abelson said. "And now we virtually have no flexibility in alleviating the county's burden on this case. If we try to settle the case, we could potentially get sued because we've given up moneys that would otherwise have been paid."

He said the old contract would have allowed the union to make concessions and trade-offs to reduce the county's tab. Lacking a contract, however, the union cannot cut any deals, Abelson said.

Sanfelippo called the union's bargaining powers "kind of a gray area" and argued that its leadership could cut a deal, since the furloughs had been imposed when the union had a contract with the county.

"And if the union can't speak on behalf of every employee, then the county can go right around and try to reach an agreement with each employee on an individual basis," Sanfelippo said. "Sure, it's a little bit more work, but for the active employees still working, they've got a vested interest in seeing a settlement happen."

Besides, he said, the union would want to ease the county's financial burden.

"They're well aware of the financial situation the county is in," Sanfelippo said. "It doesn't do anybody any good to pay out the furlough money today and then next week you end up having to lay off people or invoke more furlough days."

Abelson said AFSCME had tried to negotiate a settlement when it still had a valid contract that would have allowed the county to pay out 15 to 20 cents on each dollar owed. But the county declined to take that offer.

"This shows just how incredibly shortsighted they are," Abelson said.

Sanfelippo said the offer hadn't been good enough.

"They did make an offer, but it didn't match the savings we needed to realize," Sanfelippo said. "The savings were already written into the budget. Our hands were tied."

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