Nutter sues for right to impose contract terms on 6,800 city workers

The Nutter administration filed suit Friday seeking permission from Philadelphia Common Pleas Court to impose new contract terms - including modest raises, potential furloughs, reduced overtime, and a new pension model for future employees - on about 6,800 workers represented by AFSCME District Council 33.

Announcing the lawsuit, a new tack in the city's four-year labor standoff, Nutter accused union leaders of holding their members "hostage."

"It truly is unfair to our employees or the taxpayers of this city for this circumstance to continue, seemingly forever," Nutter said.

But for practical purposes, the legal action was among the city's more conciliatory options, reflecting some uncertainty about the city's legal authority to impose contract terms.

It also allows city services, and workers' jobs, to continue as normal while lawyers argue the dispute in court, a process that could take months or years.

The city's latest offer includes a 2.5 percent raise, beginning a month after a contract is signed; 2 percent more on Jan. 1, 2014; but nothing for the last 31/2 years in which the unions have been working without a contract.

The offer would also reinstitute step increases, given to employees in their first five years, and longevity raises every five years after that. The city is also offering $25 million to D.C. 33's health and welfare fund, a benefit worth more than $2,000 to each union member, according to the city.

Base wages for the average D.C. 33 member would climb from $35,008 to $36,569 annually, according to the city's analysis, and average take-home pay would go from $39,216 annually to $42,318. (The city's numbers include reduced overtime and higher worker contributions to their own pensions, but significantly lower costs for health coverage.)

Finance Director Rob Dubow cited three major demands from the city on which he said the union leadership had not moved:

A proposal to put newly hired workers into a hybrid pension plan, with a defined-benefit piece capped at 25 percent of a worker's final salary, supplemented by city contributions to a retirement savings plan, similar to a 401(k). Workers already on the payroll could continue their current pension plan, but their contributions to it would increase from 1.93 to 3.20 percent of salary.

Authority to furlough employees for up to three weeks a year, if necessary, to deal with budget problems.

Work rules to eliminate double-time pay and generally require employees to work 40 hours before getting time and a half.

Union president Herman "Pete" Matthews said the combination of higher pension contributions and lost pay from furloughs "will negate any pay raise."

"If he didn't want to use the furlough days, why have it in there?" Matthews asked.

The union's top attorney, Samuel L. Spear, said the city's imposition of contract terms would be inconsistent with a 1993 Commonwealth Court decision overturning a similar move by the Philadelphia Housing Authority.

In that case, the court ruled that PHA could not impose its final offer on unionized workers as long they were working.

The city's top negotiator, attorney Shannon Farmer, said the current stalemate involved different facts.

In 1993, she said, PHA and its workers had tentative agreements on a number of points before management tried to implement its final offer. In the current situation, she said, "we have reached agreement on literally nothing over the past four years."