Governors, state employee unions fight over furloughs

Only two months into fiscal year 2010, nineteen states have called for furloughs, with another two states looking for possible alternatives. Nearly a million state employees, including teachers and workers at public universities, are facing furloughs in the next two years, the National Conference of State Legislatures says. But a pair of recent court rulings are giving unions new ammunition against public employee furloughs.

On August 18, U.S. District Judge Alexander Williams Jr. decided that Prince George’s County, Maryland violated the U.S. Constitution when it furloughed 5,900 workers in the last fiscal year, the Washington Post reported.

“Although the County suggests to the Court that it faced dire circumstances and had no other reasonable alternatives, the record suggests otherwise and the County’s actions resemble trappings of doing that which was politically expedient,” Williams wrote in his opinion.

Maryland had $97 million in reserve funds that the county could have tapped, litigators against the state successfully argued. Prince George’s County officials have since sought a motion for a stay, arguing that if they repaid the disputed $17 million in wages now, and then overturned the ruling later, it would be virtually impossible to retrieve the funds.

On July 29, a state judge in Hawaii issued a similar ruling, after three state employee unions sued the state, saying a furlough violated the state constitution and criticizing officials for ordering unpaid leave without first negotiating with them. As late as last week, the Hawai’i Government Employees Association (HGEA) and Lingle administration appeared to be making progress on the proposed 24-day furlough for their fiscal year, starting in October, the Honolulu Advertiser reported. But a recent article in the National Law Review pointed to the rulings in Md. and Hawaii, saying they have resonating effects on the nearly twenty other states looking to save money through furloughs, such as California.

In California, where state employees are suing in state court over furloughs ordered by Gov. Arnold Schwarzenegger, Paul E. Harris III, chief counsel of the Service Employees International Union Local 1000 in Sacramento, said he plans to cite the Maryland ruling in upcoming oral and written arguments. “We hope to achieve similar results here,” he said.

But others interviewed by the National Law Review argued that most municipalities are initiating furloughs by going to the unions first and working out a deal. Oregon’s Governor Ted Kulongoski is a prime example. When faced with implementing a 20-day furlough over the next two years, Gov. Kulongoski approached the state’s largest employee union, made of over 21, 500 members to strike a deal. Again from the NLR:

Zachary Hummel, a partner in the New York office of Bryan Cave, said a third of his public clients have furloughed employees, and none have been sued. He added that each government employer either negotiated the furlough with the union or convinced the union there were no other options. Public employers must make the effort to show “that what you did was a reasonable response to an economic necessity,” he said.

If the nineteen states currently instituting furloughs are able to successfully implement them, the combined savings could be over $3.5 billion over the next two years. But public sector analysts worry that savings may come at too extreme a cost – to those who are left delivering government services. A new report by the Pew Center on the States, Government Performance Project says that state human resource professionals need to maintain a strategic vision when managing their workforces, now more than ever, during this recession. States need to continue aggressively recruit new talent, stem voluntary departures and develop and hire people with the skills needed to achieve the state’s future goals, Pew’s Stateline.org said after the report’s release.

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