Last week, the New Mexico Supreme Court ruled in favor of American Federation of State, County and Municipal Employees (AFSCME) and Communications Workers of America (CWA) members who argued that the state violated pay increases agreed upon in their 2007 collective bargaining agreement. The case involves former Gov. Bill Richardson freezing raises under mounting budget deficits and is now remanded down to District Court where the issue of back pay will be worked out. When finalized, the state could owe nearly 11,000 workers more than $20 million in back wages.
The high court ruled that the move “breached the State’s contractual obligations, and acted contrary to the legislative appropriation and to the [Collective Bargaining] Act.” Some background on the situation from the Santa Fe Reporter:
In the original bargained contracts, the state and the unions agreed to sliding-scale pay increases over the next few years. But in the midst of a pay freeze ordered by former Gov. Bill Richardson while the state faced large budget deficits, SPO changed the pay increases to a flat 2.9 percent. In return, they provided the lowered pay increases to 10,000 extra nonunion state employees. In the past, SPO Director Gene Moser called the decision a “question of equity.”
The current administration of Gov. Susana Martinez will now be on the hook for the former governor’s mishaps.
“The State chose to provide increased wages to those employees not covered by contract who had no contractual rights at the expense of those state employees who had enforceable contractual rights,” the order reads.
“The State Personnel Board took actions to allocate a portion of those appropriated funds to purposes other than fulfillment of the State’s contractual obligations. The effect of this action was to deprive those state employees covered by contract of sufficient funds to honor those contracts. Instead, the State chose to provide increased wages to those employees not covered by contract who had no contractual rights at the expense of those state employees who had enforceable contractual rights.”
Shane Youtz, who represented AFSCME and CWA in the case, told the Albuquerque Business Journal, “It was a quick decision from the Supreme Court, but it reflects the real simplicity of the legal issue.”
Gov. Martinez said the money would likely come out of the state’s reserve fund.