City Can Replenish General Fund And Need Not Wait For Bankruptcy To Lay Off Police Officers

When the City of Ishpeming, Michigan laid off three police officers, the Ishpeming Police Officers Association challenged the layoffs in arbitration. The heart of the Association’s argument was that “the City’s attempt to support a ‘lack of funds’ argument by a desire to replenish the General Fund balance is wrong because full police funding was already in the budget.”

An arbitrator was unconvinced by the Association’s arguments. The Arbitrator concluded that the collective bargaining agreement gave the City the right to lay off employees because of lack of work, lack of funds, or “for other legitimate reasons.” In the Arbitrator’s view, the City “need not wait for bankruptcy to act,” particularly in the face of a declining population as well as diminishing state revenue sharing. Under such circumstances, the Arbitrator held, replenishing the City’s general fund was precisely the sort of “legitimate reason” allowed by the contract for layoffs.

City of Ishpeming, Michigan, LAIG ¶6195 (Holland, 2004).

This article appears in the April 2005 issue