Judge Sides With Atlanta In Pension Reform Lawsuit; Firefighters Consider Possible Appeal

ATLANTA, GA – A lawsuit against the City of Atlanta over Mayor Kasim Reed’s 2011 overhaul of its employee pension program was overturned by the Fulton County Superior Court in a unanimous vote. The city has called it a “historic” victory for the city, but the firefighter’s union who filed the case considers the decision to be a tragedy.
Mayor Kasim Reed expressed his satisfaction with the proceedings at a press conference last Wednesday. He appeared along with city attorney Cathy Hampton and the rest of her legal team — affectionately called “the pension posse” — who worked on the case since its filing last November.

The city’s pension reform, which was first enacted three years ago, is a “defined contribution” plan. The reforms increased employees’ financial contribution to pensions and, in effect, reduced the city’s financial obligation. The controversial plan followed a “defined contribution” pension model that Reed said required the city to pay $144 million per year in pensions costs — a liability that city officials claimed hindered the city’s economic sustainability.

According to Reed, the city has already saved over $36 million with increased employee contributions and could save more than $160 million in total over the next three decades.

To Reed, pension reform is not only a benefit to the city finances, but a blessing for workers. “We are keeping our promise to our retirees by asking our current employees to contribute a bit more,” he said.

“This is truly a victory for the pensioners and for the plaintiffs because what this means is that they can [be sure that] the promised income will be there when they retire.” said Hampton. “So let’s not lose sight of who really wins today.”

But Stephen Borders, president of the Atlanta Professional Firefighters union and the principal filer of the lawsuit, does not see the city’s firefighters as victors. The outcome of the case solidifies his concern that the city will continue to manipulate pension terms in the future and silence the collective voice of public safety workers.

Borders says the city’s current control over the pension plan essentially “prices [workers] out of pensions until [they] can’t afford to stay.” That reality is already affecting veteran firefighters.

“How does the city plan to keep these veteran workers now that they don’t have the security that they thought they had last week in their pension?,” Borders said. “What kind of programs and compensation are you going to offer to keep these people [who are] actively looking for other jobs now?”

The obvious tension between the city and the firefighters’ union is clear. Reed says that the union’s legal actions were unexpected since they helped negotiate the reforms in 2011.

“[T]hey sued us after being part of the agreement and including several of their terms and requests in the agreement,” Reed says.

Though the union helped implement the new pension plan, Borders says the city refused to discuss whether the reforms were in fact legal once further concerns came to light. “So our only option was to ask the courts to decide,” said Borders.

In response, Reed declined to raise wages for the firefighters. But Borders says the issue of wage compression was already an issue previous to the lawsuit. Wage compression occurs when a new employee receives a higher salary than veteran workers — an issue partially exacerbated by the Great Recession that city officials have not addressed for some of its employees.

“The administration was not moving forward with [wage concerns] and two years ago, when we were saying the same things, there still were no raises,” Borders said.

If there are talks of an appeal, Reed’s advice to the union is simple: “Good luck.”

Borders says the union and its attorneys will be meeting soon to discuss its next moves.

In terms of repairing the broken relationship between the mayor’s administration and the union, Reed is certain that he won’t be making the first move.

“I’m not the person who broke the faith,” he said. “You’re not going to see any first step from me, not one. But I remain open to having a conversation and good dialogue.”

Borders looks forward to that good dialogue. “I plan on reaching out to the mayor,” he said. “I want to repair our relationship. Unfortunately, he holds all the cards.”

Because Georgia is a right to work state and Atlanta has not adopted collective bargaining statute, Borders says the union is in a lobbying position with the city. A better relationship between the two entities would be essential for any negotiation to fix firefighters’ concerns.

In a particularly memorable statement last Wednesday, Reed summed up his views on the lawsuit: “The city doesn’t exist to pay employees, the city exists to serve citizens.”

“You get what you pay for,” Borders said in response. “If you’re going to be a subpar employer for public safety with subpar salaries and subpar benefits, even if the numbers are up, you’re going to have to expect subpar performance. And we’re going to lose some of our best veterans.”

From Clatl.com