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SPRINGFIELD – Gov. Bruce Rauner did not impair the state’s contract with its largest union when he notified employees that he would lay them off, arbitrator Thomas Sonneborn ruled on March 14.
“Neither the union nor the arbitrator was elected to be the chief executive officer of this state,” he wrote.
“To suggest that other cuts could have been made or that other positions should have been cut is to supplant the judgment of the union for that of the state.”
He denied grievances that the American Federation of State, County and Municipal Employees filed after Rauner announced the layoffs last year.
Rauner agreed not to carry out the layoffs pending arbitration of the grievances.
He and two smaller unions await resolution of separate arbitration.
A day after Sonneborn issued his decision, AFSCME moved to overturn it in St. Clair County chancery court.
The union sought an injunction against Rauner last year but agreed not to pursue the case pending arbitration.
St. Clair County associate judge Christopher Kolker presides over that action.
Sonneborn held a grievance hearing in Chicago last November, and held two more in Springfield in December.
Management and budget chief Scott Harry testified that the pension debt as of last June 30 was $111 billion.
Harry said 25 percent of operational expenditures for fiscal year 2016 were dedicated to servicing the debt.
He said the state owed $4.4 billion in unpaid bills as the fiscal year began, and that the amount would grow to $10.6 billion in the fiscal year.
Deputy labor relations director John Terranova testified that 42 percent of employees in laid off positions could secure other employment with the state.
The union cross examined Harry and Terranova but presented no witnesses.
Sonneborn’s decision declared that, “At no time did the union question whether layoffs were an appropriate response to a lack of funds.”
He found that in May 2015, legislators passed a budget for fiscal year 2016 that called for $4 billion more in expenditures than revenues.
“Governor Rauner vetoed that budget as being ‘unbalanced’ and ‘unconstitutional,’ and the parties have been in a stalemate since,” he wrote.
He wrote that Rauner sought to fragment Democrat legislators by “in effect, forcing them to choose between providing for those less fortunate citizens who rely upon support from the state and the unions upon whose support many legislators rely.”
He wrote that the management and budget office contemplated $800 million in program cuts and staff reductions.
He wrote that roughly $20 million of that amount would come from layoffs.
“While $800 million clearly was insufficient to solve the state’s fiscal woes, the state viewed it as a step in what is likely to be a long process toward financial stability,” he wrote.
He wrote that under the union contract, “the state retains the exclusive right to lay off employees for a lack of work or other legitimate reasons.”
“The breadth of the management rights clause in the contract required the union to present clear evidence of an improper motive on the part of the state or some other indication the state was acting in an arbitrary or capricious manner,” he wrote.
He wrote that the layoff language has been part of agreements for decades and has been tested in many court battles and grievance arbitrations.
“Each time the language has been put to test in the past, the state has prevailed on the question of its authority to layoff,” he wrote.
“Neither that language nor the law permits the union or this arbitrator to supplant the governor’s decision making with their own.
“An award preventing the state from having the ability to take action in addressing such financial hardships would violate public policy.
“Of course the state could find $20 million to pay these employees, and if pressed, could likely find the balance of the $800 million to fund the programs at which they worked. But this argument ignores the painfully obvious.
“The state cannot continue to spend at the rate it is spending if no changes to revenues or expenditures are made.
“Arrearages in excess of $100 billion cannot continue to be ignored.”
Joseph Gagliardo, Thomas Bradley, David Moore and Brian Jackson, all of Laner Muchin law firm in Chicago, represented Rauner.
Stephen Yokich, of Dowd Bloch in Chicago, represented the union.
