Michigan Court of Appeals rules 3 percent retiree health care contribution invalid
The UAW is hailing a unanimous Michigan Court of Appeals Aug. 25 decision ruling that Michigan legislators violated the state Constitution by passing a law forcing state employees to contribute 3 percent of their wages to a state worker retiree health care fund.
The UAW was among the lawsuit's plaintiffs on behalf of 17,000 state workers represented by the UAW and its Local 6000.
The 17-page court decision notes that Michigan voters vested constitutional control over state employee compensation in the Michigan Civil Service Commission, and legislators violated the state constitution when they filled a hole in the state's 2010-2011 budget by mandating that 3 percent of state worker pay be redirected to a retiree health care fund to pay current state retiree health care benefits.
"The people expect that the system of checks and balances would be respected," wrote the court, "and a review of Michigan case law reveals that the [Civil Service Commission] and the executive branch have dealt cooperatively to address employee compensation in times of economic hardship. The people can and should expect shared sacrifice; however, it cannot come at the expense of constitutional nullification, and the Legislature cannot expect to balance the budget on the backs of state workers."
"This decision is on target and shows that the Michigan Legislature's end-runs around the Michigan Constitution to erode state employee compensation won't be tolerated," said UAW Vice President Cindy Estrada, who directs the union's Public Sector and Health Care Servicing Department. "We hope the Legislature learns a lesson from this decision and stops interfering in our efforts to work with the state to reinvent Michigan and address budget issues together in the existing Civil Service process."
The state began its unilateral 3 percent wage deduction in November 2010. A lower court ruling placed the money in an escrow account until the litigation's conclusion. Related unfair labor practice charges are still pending for hearing at the Michigan Civil Service Commission.
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