RACINE — Because of laws passed in 2011 under then-Gov. Scott Walker restricting union rights, the city making unilateral changes to health care benefits for employees and retirees at the end of 2019 appears legally justified, to the dismay of Racine’s union members and retirees.
But a lawsuit fighting the changes is still months from conclusion.
In the fall of 2019, City Hall — in dire financial straits and struggling to balance the next year’s budget — made its health care plans more expensive. The change affected all employees, including retirees, both for those not in unions and those unionized within the police and fire departments.
Current and former employees protested at City Hall, but the City Council approved the changes by one vote.
Within months, hundreds of retirees filed lawsuits against the city, seeking reinstatement of their original benefits.
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Upon reviewing the case, even the state arbitrator, Raleigh Jones, wrote that his initial reaction had been: “The City can’t unilaterally do that; that surely violates the contract!” according to a court document filed March 18. But upon reviewing the case, Jones ruled in the opposite.
The city is now seeking to have the lawsuit, which includes more than 300 plaintiffs, thrown out. But there’s no guarantee the unions have lost the court battle.
On March 18, after a hearing in which Local 321, the firefighters’ union, petitioned to have the decision of the arbitrator vacated, Racine County Circuit Court Judge Jon Fredrickson ruled against the union, laying grounds for an appeal.
Four days later, a union filing stated that “plaintiffs object to the city’s proposed order” that would have their case thrown out.
The next hearing is scheduled for June 24 in front of Racine County Circuit Court Judge Eugene Gasiorkiewicz.
CLICK HERE to read a selection of the documents associated with the lawsuit filed against the City of Racine
Arbitration and Act 32
During a meeting on Nov. 4, 2019 — after health care changes had been approved by the City Council, but before they took effect — according to a statement of facts from Jones, the arbitrator and an attorney: “At the meeting, Union officials stated that they agreed that the City had no legal obligation to negotiate with the Union regarding plan design changes, as a result of legal changes which were the result of Wisconsin Act 32.”
Wisconsin Act 32 was the first biennial state budget passed under Gov. Scott Walker in 2011, which along with Act 10 crippled collective bargaining for public employees in Wisconsin.
Jones wrote: “That same day (Nov. 4, 2019), the Union filed a complaint with the WERC (Wisconsin Employment Relations Commission, which provided the arbitrator) which alleged that the City refused to bargain with the Union on changes to health insurance benefits, had unilaterally modified health insurance benefits for Union members without first bargaining in good faith with the Union, and that the changes to the health benefits involved are mandatory subjects of bargaining.”
However, under state law, municipalities are prohibited from collective bargaining as it relates to the health plans offered to unionized employees. Essentially, a municipal employer can improve or reduce health benefits as it sees fit, and is not allowed to negotiate with the unions themselves unless employees’ direct premium contributions are to be adjusted.
The attorneys fighting the city’s decision on behalf of the plaintiffs allege that the city had violated its collective bargaining agreement by increasing “the employee premium share for the high deductible plan to 7.5% from 5% for active members and those who will retire under CBA” and by capping “the Medicare Part B premium at $135.50.”
“As a result of the changes made by the City to retiree health insurance, I have been expending significantly more funds for health insurance than I have ever paid as a retiree,” wrote one city retiree in an affidavit. That sentiment was shared by several other plaintiffs in affidavits, who also noted that many plaintiffs are living on fixed incomes as retirees and that the reduced benefits put them in dire straits.
Both sides knew that the health benefits offered were less desirable when they were offered in 2019. Racine Mayor Cory Mason wrote that other cuts considered to balance the 2020 budget would have been “worse.”
However, a filing by attorneys representing the city claimed “there are plaintiffs whose monthly premiums actually went down after the City’s changes.”
So, even though the design of the employees’ health care plan was changed, since their direct premium contributions were unchanged, collective bargaining was prohibited, Jones concluded.
In a document dated Aug. 27, 2019, the city said that the then-proposed “modifications to the employee health insurance plan design … would result in a potential savings for 2020 of approximately $3,200,000.”
That $3.2 million was a major piece of savings that allowed for the 2020 budget to be balanced.
Mason said that the city could have been facing another budget crisis in 2022 if it weren’t for substantial public aid from the federal government.
Among the signs carried by union members-turned-protesters outside City Hall in September 2019 were statements like “Hands Off Our Insurance” and “Cut Spending, Not Jobs.”
In photos: City employees call out mayor during protest of cost-saving health care changes in September 2019