Florida Supreme Court Hears Rick Scott’s Appeal of Pension Reform Smackdown
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On March 6, Judge Jackie Fulford of the 2nd Judicial Circuit Court of Florida struck down two particularly controversial provisions of last year’s Senate Bill 2100. She ruled as unconstitutional the bill’s requirement that all employees, regardless of when hired, pay 3 percent of their salary toward their pension. Her ruling upheld the law with regard to those hired after July 1, 2011.
Fulford, ruling in favor of the public-sector unions which brought the suit, found that the changes were unconstitutional on three grounds:
- They constituted an unlawful impairment of employees’ contracts with the state of Florida.
- They were effectively an exercise of eminent domain without due compensation to those employees who had their property (i.e., expected benefits) taken from them.
- The Legislature violated state employees’ state constitutional right to collectively bargain over the terms and conditions of their employment.
At 9 a.m. Friday morning, the Supreme Court heard oral arguments as lawyers for the Scott administration and the unions took turns fielding questions from the justices as to why Fulford’s ruling should be overturned or upheld.
Overall, the justices appeared skeptical of the unions’ claim that the Legislature is constitutionally precluded from ever changing the compensation owed to state employees for work that hasn’t yet been performed.
Referring to a 1974 statute which said that the retirement plan established by law constituted a legally binding contract, Justice Charles Canady asked Ron Meyer, an attorney for the Florida Education Association, “Was it really the intent of the Legislature to bind itself forever, no matter what a future budget crisis might bring? That they may only increase benefits [for those already employed by the state], but never decrease them?”
Clearly frustrated with what he thought were weak arguments by Myer, but maintaining his good humor, Canady later remarked, “We all agree an employee of the state can be discharged. I have a hard time understanding how someone who does not have a continuing right to employment can have a continuing right to a benefit of employment. That just doesn’t make sense to me.”
Justice Barbara Pariente seemed similarly skeptical, if less colorful in her grilling.
“What motivation would the Legislature have had to handcuff themselves in this manner?,” she asked.
Justice R. Fred Lewis seemed open to the possibility that some state employee contracts, on a case-by-case basis, might protect against decrease of future benefits, but not all of them.
“Some contracts do say the state employer can do this [i.e., change benefits for future work], some say they can’t,” he said. “If a contract exists saying an employer can do this, how does an employer doing this violate the worker’s rights? Some of these contracts [explicitly] say the Legislature can alter future benefits.”
“Can you have a violation of constitutional rights, even if you’ve voluntarily waived them away?,” Lewis asked.
“Conceivably,” was Myer’s reply.
One question the justices tried to get a handle on was just how broad the scope of the Florida constitutional right to collectively bargain was.
“If they have right to collectively bargain, you don’t believe that someone on behalf of state must negotiate with public employees before any change in the law?” Pariente asked former Supreme Court justice Raoul Cantero, who argued the case on behalf of the state.
“That would be impossible,” Cantero averred. “Not only are there 11 state bargaining units, but there are hundreds of such units on county and municipal levels. How can you possibly negotiate with each of them?”
The hearing lasted for about 40 minutes, after which Gov. Scott issued a press release predicting a successful outcome to the case.
“This case is about our efforts to maintain a responsible and sustainable budget for the state of Florida,” Scott said. “Prior to this reform, Florida was one of only three states that did not require public employees to contribute to their pensions.”
Scott continued, “The legal question in the case is straightforward. The Legislature relied on and carefully followed a 30-year-old Florida Supreme Court case, which held that the Legislature can change the public pension system on a going-forward basis. We therefore expect the Supreme Court to follow its own prior decision.”
If the Supreme Court upholds the lower court’s ruling, it might require the state to refund, with interest, more than 655,000 state and local government workers who’ve seen a reduction in their benefits since July 2011. It would also purportedly leave as much as a $2 billion hole in the state budget.
Reach Eric Giunta at firstname.lastname@example.org or at (850) 727-0859.