AFSCME Council 25 v. State Employees' Retirement System
294 Mich. App. 1
| Mich. Ct. App. | 2011Background
- Plaintiffs, unions and individual members, challenged MCL 38.35 as unconstitutional under Const 1963, art 11, § 5 and contract rights.
- 2010 PA 185 added 3% employee contributions to health-care funding (MCL 38.35) for Nov 1, 2010–Sept 30, 2013 to fund retiree health benefits.
- The CSC previously controlled classified civil service compensation, with legislative override limited to a two-thirds vote within 60 days and not to reduce pay below pre-transmission levels.
- Legislature attempted to override a 3% wage increase via concurrent resolutions but failed to obtain the necessary two-thirds votes.
- With override failed, Legislature enacted MCL 38.35 to balance the state budget by reducing current employee compensation rather than wage increases.
- The Court of Claims granted summary disposition for plaintiffs, holding MCL 38.35 unconstitutional; defendants appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MCL 38.35 violates Const 1963, art 11, § 5 | Fort Hood argues CSC fixes compensation; legislature cannot override via 38.35 | Fort Hood states budget needs justify 38.35 as oversight remedy | Unconstitutional; MCL 38.35 void |
| Whether CSC has exclusive authority over compensation and operating rules | CSC controls rates of compensation and employment terms | Legislature may influence through budget and override mechanisms | CSC has plenary authority; legislative override exists but requires strict procedures |
| Whether the Legislature could enact 38.35 as a budgetary fix without CSC agreement | Legislature cannot set compensation reductions absent CSC agreement | Budget balancing justifies executive-legislative action | Legislature cannot validly override under 2/3 vote; statute unconstitutional |
| Whether the absence of a contractual agreement to 38.35 defeats its validity | No consent from employees; deduction not agreed to | Budgetary necessity overrides lack of explicit consent | Statutory deduction invalid absent constitutional authorization |
Key Cases Cited
- Parkwood Ltd Dividend Housing Ass’n v State Housing Dev Auth, 468 Mich 763 (2003) (Court discusses trial court jurisdiction and declaratory relief)
- Welfare Employees Union v Civil Service Comm, 28 Mich App 343 (1970) (CSC exclusive authority over hours worked and compensation in some contexts)
- Crider v Michigan, 110 Mich App 702 (1981) (CSC authority to order layoffs under art 11, §5)
- Mich Ass’n of Governmental Employees, 125 Mich App 180 (1983) (CSC rescission/deferral of wage increases; legislative veto limits)
- Pillon v Attorney General, 345 Mich 536 (1956) (constitutional limits; CSC authority not to be overridden easily)