T unions lose on coverage battle
Court paves way for plan switch; workers would pay more of costs
A Suffolk Superior Court judge has dismissed a lawsuit filed by MBTA labor unions that sought to prevent the transit agency from unilaterally switching them to the state employee insurance plan, a move that would strip the unions of some bargaining power but save the financially ailing agency nearly $30 million a year.
The ruling, which the unions plan to appeal, comes at a time of increasing political pressure on public employees in Massachusetts and across the country to absorb more of their health care costs and to cede bargaining rights to help balance strained budgets.
State officials hailed Judge Linda E. Giles’s ruling for removing a roadblock to implementing Governor Deval Patrick’s 2009 transportation legislation, which consolidated multiple agencies in an effort to cut costs and reduce bureaucracy.
“All of the provisions of the law are important, but this is [especially] important, and we are happy with the court’s decision,’’ Transportation Secretary Jeffrey B. Mullan said. “More importantly, everybody recognizes what a cost-saver this is.’’
Massachusetts Bay Transportation Authority employees have traditionally received some of the most generous health benefits in the public sector, including free coverage for retirees. The 2009 law called for moving them to the Group Insurance Commission, which already serves 300,000 state employees, retirees, and dependents.
That change means current MBTA employees would pay a higher percentage of their premiums — from 15 percent to 20 or 25 percent, depending on their hiring date — and greater out-of-pocket costs for physician visits and prescription drugs.
Douglas Taylor, a lawyer for the T’s largest union, said the lawsuit is not about the specific benefits but the right to negotiate them.
“It’s not that we say, ‘OK, we’re entitled to the best plan in the world, and you can’t take it away from us,’ ’’ said Taylor, a labor lawyer from Alexandria, Va., who has represented the Boston Carmen’s Union Local 589 for three decades. “Instead, the union is entitled to sit down with management and bargain over how that health care is going to be changed, if it needs to be changed.’’
In the decade that preceded the 2009 transportation legislation, the T’s annual health insurance costs more than doubled, soaring past $100 million a year.
Moving the MBTA’s 6,000 employees, plus a similar number of retirees, to the state’s larger, lower-cost pool came to be viewed on Beacon Hill as a needed relief valve for the transit authority. Particularly at issue was the T’s large number of young retirees, previously allowed to retire after 23 years, as well as its practice of picking up any costs not covered by Medicare once those retirees turned 65.
“This is a huge victory for the MBTA,’’ said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation. “At the same time, the MBTA employees and retirees will still have generous health benefits through the state’s plan.’’
Under the Group Insurance Commission, retirees pay 10 to 20 percent of health insurance costs. Instead of bargaining on plan design and contribution percentages, the terms for state employees are set by the commission and the Legislature.
The T has nearly 30 unions that represent all but 260 executives at the authority. The 2009 law called for moving nonunion employees into the Group Insurance Commission on Jan. 1, 2010, and shifting all union employees as their collective bargaining agreements expired in 2010 and 2011. Nearly two dozen unions sued in September 2009 to block the changes.
Giles denied the request from the unions and found in favor of the state law, in the process dismissing the case in a decision dated last Wednesday.
She signed it the same day House Speaker Robert A. DeLeo unveiled a proposal to strip municipal employees of most rights to bargain over health insurance copayments and deductibles, leaving them the right to bargain over premium contributions.
A day later, Boston labor leaders signed an unprecedented agreement with Mayor Thomas M. Menino to absorb $70 million in additional health costs over the next four years, while retaining their bargaining rights.
The transit unions’ lawsuit contended that Patrick’s transportation overhaul amounted to a breach of contract and violated state and federal constitutional rights. Giles wrote that the union arguments “failed to sustain their heavy burden in seeking to strike down legislation’’ and that even if they could prove the T had promised generous and permanent benefits, the state could override it if circumstances proved “reasonable and necessary.’’
Taylor, the lawyer for the Carmen’s Union, said the judge was mistaken. He said the state law violates a Federal Transit Act provision that requires transit agencies receiving federal grants to allow collective bargaining.
“Her analysis is that the protections that were put in place are not contracts,’’ he said. “We’re quite sure once the appellate court gets a look at it, that part of her decision will be set aside.’’
Richard A. Davey, MBTA general manager, said the decision will provide relief for the T.
“While we had an honest disagreement with labor, I think this is an important win . . . and a fair one,’’ he said. “Really, it’s asking both employees and retirees to contribute a proportion of health care which is on par with what a lot of our customers are seeing in their jobs.’’
Eric Moskowitz can be reached at email@example.com.