Are Furloughs Unconstitutional? Unions Claim Victory in Maryland

Fraternal Order of Police v. Prince Geroge's County (U.S. District Court, Maryland) (Issued on 8/18/09)

Unions representing public employees throughout the nation have been crowing about a recent federal court decision in Maryland finding that Prince George’s County violated the federal Constitution when it furloughed nearly 6,000 county employees for 80 hours during fiscal year 2009.

Facts

Facing a $57 million budget deficit, the county implemented a furlough plan for employees. The unions sued the county arguing that the furlough plan violated the Contracts Clause of the Constitution. The district court agreed. The court held that the furloughs substantially impaired the bargaining agreements which were voluntarily entered into by both the unions and the county. Central to the court’s holding was the fact that—according to the court—the county did not fully explore alternatives to furloughs. The court also noted that the county had over $230 million in reserves—half of which were unrestricted funds—and that the county had recently touted its fiscal health in order to bolster its financial rating when issuing over $100 million in bonds.

Comments

The unions have been widely circulating this case since it represents one of the few victories unions can claim on this issue. However, what effect might this decision have in California? In my opinion, none.

First, the decision is a district court decision. While the decision is intriguing, it has no precedential value. Second, this case involved a constitutional claim and did not address any issues under labor law. This is because Maryland labor law only covers employees of the state and its school system. In contrast, all of California’s public sector employers are subject to one of several collective bargaining statutes and most of California’s public employees have exclusive representatives. Thus, in California, most furlough programs have been negotiated with unions. When furloughs are negotiated there cannot be any violation of the federal Constitution’s contracts clause.

I suppose the constitutional issue could arise if a California public employer unilaterally imposed furloughs on employees while an MOU was in effect. However, such an action is far more likely to draw an unfair practice charge with PERB. (The exception is the State of California itself which pursuant to the Dills Act, Gov Code 3516.5, has the authority to implement changes within the scope of representation during in emergency situations). Presumably, a union could also bring a breach of contract action under state law in such a situation.

The only other situation where furloughs might be imposed would be upon impasse as part of an employer's last, best, and final offer. However, in an impasse situation the MOU has already expired. So again, there cannot be any violation of the federal Constitution’s contracts clause.

So while unions around the nation may consider this case a victory, I don’t see it having any effect in California.

[Many thanks to Genevieve Ng for helping me draft this post]