Contractual Obligation Without Language
The technical considerations of language and history are likely different, but this outcome in Woonsocket doesn’t bode well for pension reforms, I’d say:
The city argued that language in one section of the contract mentions dental coverage and refers only to active employees, while other sections extend health-care coverage to retirees, but not dental care.
“The language of the 2002 and 1990 [collective-bargaining agreements] provides little guidance on the issue of dental benefits,” Gallo wrote. So a review was warranted “of all the facts and circumstances surrounding the formation” of the two agreements “as well as the ongoing relationship” between the plaintiffs and the city. The judge found that “an agreement creating an obligation may nonetheless be inferred” from the sides’ actions and that the city “had an ongoing practice of providing dental benefits to members of the Police Department” regardless of their age.
So the “i” that wasn’t dotted was that the contract didn’t explicitly say whether or not retirees received dental care, and politicians past were perfectly willing to provide it. It is mildly humorous that the judge would cite an “ongoing practice” that the city wishes to end as a reason that the practice must remain ongoing.
Part of the problem, it seems to me, is that unions and judges alike have an expectation that public officials will continue to handle their budgets as loose collections of expenditures. If savings on something like retiree dental benefits are blocked, they’ll dig around for services on which to cut back or push for tax increases. They ought to make it clear that they have only so much money allocated for personnel, so the lost savings will have to be made up in other ways; salary reductions would make the clearest statement.
Of course, by that route, we run into arbitration, which is binding for public safety employees, which really emphasizes the tilted playing field created by public unionization. The union organizations invest resources to elect friendly public officials. They then negotiate with those same politicians with much more visibility and privilege in the process than is provided to other taxpayers and voters. When circumstances change — whether because of taxpayer reaction when the details are revealed or because hard times arrive — they go to court, where other public employees are apt to find inferred rights. Where the proposed changes are applied to new contracts, rather than existing benefits, the unions can dig in and wait for arbitration, whereby an unelected mediator with more incentive to please unions than taxpayers is hired to resolve the differences, in some cases issuing edicts that have the force of law.