Court Resurrects the Issue of Withheld Longevity Pay
By James Daniels, Attorney - Monday, October 22, 2018
Four years of withheld longevity pay – an issue that has long been regarded as collateral damage in Governor Bruce Rauner’s open war with the dozens of unions which represent more than 30,000 State employees – is apparently on the table again, due to an Appellate Court ruling out of the Fifth District.
When Governor Rauner took office in January of 2015, he inherited dozens of open collective bargaining contracts. One of his first tactics at the bargaining table was to freeze all longevity steps that were set forth in the contracts of the tens of thousands of employees working in the forty-three agencies under the Governor’s office. The Governor then proposed that all longevity steps be permanently eliminated and replaced with merit-pay provisions allowing for only 25% of all state workers to get an annual merit raise, based upon the Employer’s assessment of their quality of work.
Although accepted by a small minority of unions (including the Teamsters), this proposal was otherwise overwhelmingly rejected by the remaining bargaining teams, which proceeded to fight the Rauner Administration tooth and nail over his repeated attempts to remove some benefits and gut others (such as changing the State’s health insurance plan from “gold” to “bronze,” which would require employees to pay 40% of all healthcare costs). Notably, the Illinois FOP Troopers union took CMS to interest arbitration, and achieved a significant victory by obtaining a ruling that the Governor’s plans to convert the gold plan to bronze was unreasonable – a ruling that was upheld by the Courts, and hamstrung CMS’ ability to reduce statewide health insurance benefits.
While the Troopers litigated health insurance, some other unions whose contracts contained both longevity pay steps and “evergreen” clauses (which required that all benefits continue uninterrupted after the contract’s expiration date) filed Unfair Labor Practices against the Rauner Administration, citing the withholding of longevity pay as a bad-faith attempt to illegally coerce unions by unilaterally changing the longstanding terms and conditions that they had previously worked under.
AFSCME’s Unfair Labor Practice (ULP), filed over the withholding of longevity pay for 24,000 of its members, was initially dismissed by an Administrative Law Judge (ALJ) at the Illinois Labor Relation Board. That recommendation was subsequently upheld by the Board’s full panel on May 26, 2016. AFSCME then appealed the matter to the Fifth District Appellate Court for review.
Eighteen months later, on November 6, 2017, the Appellate Court reversed the Board’s decision, finding that Central Management Services (CMS), the personnel agency under the Governor’s Office, had illegally altered the status quo ante by withholding employees’ longevity steps, and remanded the matter back to the Board.
Predictably, the Rauner Administration appealed the matter to the Illinois Supreme Court. However, on March 22, 2018, the high Court declined to review the appeal, thus letting the Appellate Court’s ruling stand.
Two months later, on May 8, 2018, the Board requested AFSCME and CMS to file briefs describing what remedy was appropriate to satisfy the Appellate Court’s Order. After repeated attempts by CMS to delay the matter by raising procedural objections, the Board, on July 10, 2018, officially vacated its May 26, 2016 Order, and ruled that CMS had indeed committed an Unfair Labor Practice by withholding the longevity steps of AFSCME employees, thereby ignoring its statutory obligation to bargain in good faith.
On August 29, 2018, a State Labor Board compliance officer issued a directive requiring a hearing to establish remedial measures, and stating that all effected AFSCME employees were to be placed on their appropriate longevity step, with backpay issued with 7% interest. The directive also required the State to provide information regarding its claim that it had “insufficient funds” to pay raises for the past four years.
CMS did not comply. Instead, on October 1, 2018, it issued an 18-page letter arguing that the Board’s order would require at a minimum six to eight weeks of concerted effort, and that diverting manpower to do so could have inadvertent consequences such as “putting Illinois’ elderly populations at risk.” The letter also argued that the owed backpay should be limited to any amounts due prior to January 2016, which was the month that CMS had officially declared impasse with AFSCME. In its letter, CMS continued to contend that the Illinois legislature had not allocated enough funds to pay all of the withheld step increases.
It is anticipated by all parties that another Board hearing will be set to hash out these issues, and it is not unlikely that the result of that hearing may be appealed to the Appellate Court (yet again) for review.
Despite the fact that litigation over the withheld pay seems far from over, three things are manifestly clear: first, that it is essential to include in every contract an unambiguous “evergreen clause” which guarantees that all benefits (financial and otherwise) continue uninterrupted throughout the negotiation process, even after the Contract expires.
Second, it is clear that all unions (to include the FOP Labor Council) that stuck to their guns and did not fold when faced with the Governor’s demand to trade longevity pay for merit raises have been vindicated. At the very least, they protected their members from having their annual pay arbitrarily determined by their supervisors’ subjective opinion about their work-product – a fate now imposed upon all Teamsters who work under the Governor. At best, non-AFSCME bargaining members who remained at the table through this entire grueling process have more leverage now than ever before to bargain for their members’ right to be put on the proper longevity step, and – perhaps – to recover lost backpay.
The third and most essential takeaway from this four-year debacle is that the rights of working people will only be secured when we elect into office candidates who prove their commitment to advancing the rights of public servants, and who are friendly to Labor in general and law enforcement in particular. Until Illinois voters demand a change at the highest levels of State government, we will most likely see this worst-case scenario play out again and again.