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Benton loses appeal over union lawsuit |
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Thursday, 31 January 2008 |
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By Lynda Hollenbeck Courier Staff A court has once again ruled against the city of Benton in a lawsuit filed by Local 2957 of the American Federation of State, County and Municipal Employees and retired employees.
The latest action came from the U.S. Court of Appeals, Eighth Circuit, in St. Louis. The court affirmed the district court’s judgment for the plaintiffs and denied the city’s motion to amend the action.
The suit stemmed from action taken by the 2003 City Council, which, by resolution in 2003 and a motion in 2004, discontinued medical retirement benefits promised to AFSCME employees — and paid by the city for many years — and also reduced other benefits included in a union contract.
City Attorney Brent Houston said the Eighth Circuit decision represents the third loss for Benton in this suit. No decision has been made regarding what, if any, action the city will take after the latest ruling, Houston said.
“I don’t anticipate there being any further appeals or a motion for rehearing, which could be the next step,” Houston said.
“Right now we are evaluating the decision with our attorney, David Fuqua, who represented the city on behalf of Central Arkansas Risk Management Association, which, effectively, is the city’s insurance agent.
“I believe this is a sound decision for those employees,” Houston said. “We intend to meet with Mr. Fuqua in the coming week to discuss the practical effects for the plaintiffs in this particular suit as well as the plaintiffs in the Garner lawsuit.”
Dan Garner, a retired Benton police detective, and other retired police officers filed a similar suit against the city.
“It’s the same issue, but a different contract,” Houston said.
“One thing that we’re reviewing in the decision is that in the AFSCME lawsuit, it dealt heavily on the contract term where 100 percent of their benefits would be paid after retirement. We’re determining if the other contracted issue has that equivalent decision.”
The city has not been out any litigation costs, Houston said.
“Our insurance company has paid the legal expenses for the city and the same insurance company will pay the attorneys if so ordered by the court,” the city attorney noted.
“The big question is how this decision will affect the Garner lawsuit and how it may affect other employees who were not plaintiffs in either suit,” he said.
“There are different contracts at issue,” Houston said. “The second issue is whether or not there were AFSCME employees who could have joined in the lawsuit but didn’t and whether or not the city is going to treat them any differently. Procedurally, I don’t think, as a matter of law, the city would have to pay them because they weren’t named plaintiffs. That will be a political decision of the city as far as whether they pay them.”
Houston declined to comment on how he believes the city should handle the court ruling. He was not involved in the earlier action of the city, having served as city attorney only since January 2007. Sam Ed Gibson was city attorney when the AFSCME case was filed.
“The Arkansas Municipal League represented the city at the very beginning regarding a motion to dismiss [the suit],” he said. “Then CARMA picked up the representation and David Fuqua became involved.
“The city lost the motion to dismiss, then filed an answer and sought a motion for judgment on the pleadings. We lost that in a hearing ... ”
In all of the decisions in the case, the rulings have stated that the city erred, Houston said. The courts have determined that the city breached its contract with the union
The changes teh city made in employee benefits occurred during a budgetary crisis when the majority of the aldermen contended the action was necessary for the city to become financially solvent.
In September 2003 the council enacted an ordinance providing for 11 paid holidays instead of 14. The city refused to arbitrate the dispute regarding holiday pay and, in March 2004, the council approved approved a motion to terminate insurance for the city’s medically retired employees.
All of the benefits the city eliminated had been negotiated through a collective bargaining process approved June 14, 2002. The agreement established rates of pay, hours of work and other conditions of employment, including giving the employees the 14 paid holidays.
Some of the aldermen contended that it wasn’t legal to pay for the retirees’ insurance, but the courts have ruled differently.
Following one of the rulings, in a meeting where the issue was discussed, Kathy Kirk, the city’s personnel director, contended the city had not eliminated the insurance because the retirees were told that they could continue carrying the insurance if they were willing to pay the cost of the premiums.
Alderman Steve Lee, a retired firefighter, quickly challenged that theory, noting that Kirk was misrepresenting the situation. He pointed out that he fulfilled his obligation to the city, but the city of Benton did not do the same for him.
Listed as defendants in the case were Mayor Rick Holland and Aldermen Doug Stracener, Phillip Montalvo, Karla J. Haley, Willie Floyd, Ray Freeman, Leroy Allen, Ann Hall, Claudine Ramsey, Robin Berry and Charles Cunningham. Only Stracener and Cunningham remain on the council.
When a vote was taken on the elimination of the benefits, three aldermen voted “no.” Those votes were cast by Floyd, Ramsey and Berry.
Following an earlier ruling, attorney Jim Nickels, who represented the AFSCME employees, said a basic premise was involved in the lawsuit: “The city promised the employees would have health insurance when they retired and that the city would pay for it, but the city reneged on the promise.”
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