HARRISBURG - Pennsylvania's highest court ruled yesterday that the state constitution does not prohibit the governor from continuing to employ and pay state employees during a budget impasse.

The state Supreme Court sided with state workers' unions and against the position that Gov. Rendell took in the months leading up to the July 2008 budget deal.

The unions had argued that the federal Fair Labor Standards Act trumped a section of the state constitution that requires an appropriation to be passed, in most cases, before money can be paid from the state treasury.

The justices agreed, ruling that the language "does not prohibit the Commonwealth from continuing to employ and pay all [Fair Labor Standards Act] nonexempt commonwealth employees in the event that the Pennsylvania legislature fails to pass a budget."

Kathy Jellison, president of Service Employees International Union Local 668 and a party to the lawsuit, said the decision undercut Rendell's argument that the furloughs he threatened were legally mandated. Rendell's position has been a major issue during contentious budget negotiations in recent years.

"Every budget year we go through this, and so one year we went through the layoffs, and then last year was the payless paydays," Jellison said. "So yeah, I think it will certainly help us going into the next budget year and future budget years."

A budget deadlock in 2007 led to a one-day furlough of 24,000 employees, and Rendell threatened similar action in 2008 before the sides reached an agreement. Rendell took furloughs off the table this year after the unions agreed to concessions, but there were "payless paydays" for state workers during the 101-day impasse and some layoffs.

The majority also said the federal law requires "timely payment of wages," which Justice Thomas Saylor addressed in a one-judge partial dissent.

The federal law, Saylor wrote, "does not contain an express provision dictating a time frame for the payment of wages; thus, the imposition of a timely payment requirement arises from judicial interpretation. While this interpretation may be reasonable in the context of private employers, its application to states that are operating in a state of fiscal crisis . . . implicates circumstances not contemplated by Congress."

David Fillman, the executive director of Council 13 of the American Federation of State, County, and Municipal Employees, and Rendell spokesman Gary Tuma declined to comment, saying they needed time to review the decision.

Read the opinion at http://go.philly.com/furlough