Risking second guessing, Jepsen opens negotiations in union case against Rowland

Attorney General George Jepsen’s decision Monday to withdraw his U.S. Supreme Court appeal and accept an invitation to open settlement negotiations with state employee unions over their claim for damages against former Gov. John G. Rowland won immediate praise from the public-sector unions that have been cool if not critical toward the first-term Democrat.

Gov. Dannel P. Malloy concurred with Jepsen’s decision, which marked a reversal of the attorney general’s original commitment to fight a U.S. Court of Appeals decision in May that concluded Rowland had acted illegally to punish union members in 2003 with layoffs, a finding that opened the state to what is likely to be tens of millions of dollars in damages.

“If we reach a negotiated settlement, it’s going to be a big number,” Jepsen said Monday. “It may be only cents on the dollar, but it’s going to be a big number.”

Jepsen conceded that his reversal will be viewed skeptically in some quarters, but he said he acted after weighing the financial risks to the state, not the political risks for himself or other Democrats up for re-election in 2014.

“No one’s ever accused me of not playing an issue like this straight,” Jepsen said. “I play all these issues very straight.”

Jepsen said he is on good terms with many unions, and the ones angry at him are unlikely to be mollified by Monday’s decision.

Many AFSCME members  recall that Jepsen helped reject an arbitration award for correction officers as a state Senate leader in 1997. It would have awarded members a 4 percent annual raise at a time when other unions were getting 2.5 percent.

More recently, Jepsen stopped passage of the so-called “captive audience” bill  with an opinion that federal labor law pre-empted the state from restricting how employers interact with their employees during union organizing drives.

“Put it this way: If you’re mad at me because of my office’s position on captive audience, how’s this going to help?” Jepsen said. “If you’re mad at me because 17 years ago, 16 years ago, when I was Senate majority leader, we rejected binding arbitration awards, for example, for the prison guards, how’s this going to help?”

Jepsen said the easiest course would have been to let the Supreme Court appeal run its course.

A three-judge panel of the U.S. Court of Appeals for the 2nd Circuit issued a unanimous ruling in May concluding that Rowland’s layoffs illegally targeted at members of unions that defied his call for concessions. Jepsen initially concluded that the decision was a threat to management rights and petitioned the Supreme Court to review the case.

The Democratic attorney general and former Republican governor, whom Jepsen tried to defeat in 2002 as the running mate of Bill Curry, separately files petitions in October. Rowland is free to pursue his petition, but chances of the court accepting the case are slimmer without the attorney general’s petition.

Jepsen said Monday he can can file a new petition to the Supreme Court if negotiations fail, though he would have to wait until damages are set by the trial court. The attorney general said his decision was prompted by a proposal last week from the state employee unions to suspend the appeal and open negotiations.

“We’re not losing any options at all,” Jepsen said. “We are trying to negotiate a settlement at the time of maximum leverage.”

Jepsen said the odds are against the U.S. Supreme Court agreeing to review the case, and the unions would have little incentive to settle once it was clear that the state had exhausted its appeals.

“If we were denied, it’s game over,” Jepsen said.

Jepsen said he has conferred with Malloy, and the governor agrees with his decision to explore a settlement. Jepsen declined to estimate how long talks might take, given that the first step would be an analysis of the economic losses sustained by the laid off workers, most of whom eventually regained their jobs. He declined to estimate the potential cost of a settlement, other than saying it would be millions of dollars.

Rowland and his secretary of policy and management, Marc Ryan, who each were sued by the coalition of state employee unions, said they were mystified by Jepsen’s decision.

“We continue to believe that the Second Circuit decision, if it stands, fundamentally hobbles public sector chief executives at all levels during the collective bargaining process,” Rowland and Ryan said in a written statement. “It will turn the collective bargaining process on its head and so favor unions in negotiations that public sector finances will be critically undermined in the future. We remain of the opinion that the ongoing appeal to the U.S. Supreme Court is absolutely necessary to protect taxpayers in CT and potentially throughout the nation.”

Jepsen told reporters that the case is complex, and he saw no chance of negotiating a settlement prior to a decision next year by the Supreme Court over whether to accept the case. Rowland ordered the layoffs of 2,800 workers; ultimately, 2,500 lost their jobs.

The withdrawal is a reversal of a decision Jepsen initially made last summer in consultation with his senior legal staff, a step he says he follows on every major case to de-politicize legal decisions. Jepsen said he made the call as a lawyer, not a politician, to withdraw his petition for certiorari, or cert, as a request for a Supreme Court review is known.

“If cert is denied three or four months from now, we’re sitting across the table with an emboldened adversary who’s holding most of the cards. This is the moment of maximum leverage,” Jepsen said.

In a certiorari petition for a hearing, Jepsen had argued that the decision in May by the 2nd Circuit hampers state and local governments by wrongly subjecting public officials to a review of their motives in layoffs, the ultimate pressure point when state or local governments seek concessions. The Connecticut Association of Boards of Education filed an amicus brief, urging the court to hear the case.

“We thought the state was on the same page with us as to the importance of urging the U.S. Supreme Court to hear this case given the far-reaching implications of the 2nd Circuit’s misguided decision,” Rowland and Ryan said. “We are unaware about any details of a proposed settlement and doubt if such a deal could be consummated before the Supreme Court decision to hear the case. Thus, we are mystified about why the state would now relent on this case at this critical juncture.”

Jepsen said there is no proposed settlement.

“Withdrawal of the petition is a necessary condition for meaningful negotiations to take place. As a practical matter, given the complexity of this case and the other pending related cases, these discussions simply cannot be completed in the time before the Supreme Court would rule upon our petition,” Jepsen said.

Jepsen said he personally informed Rowland of his decision in a phone call earlier Monday.

“It was very cordial, I think. He wished me luck at the end of it. He understands very clearly that we are not waiving, that we can still reassert our petition if the talks are not fruitful,” Jepsen said. “John Rowland is an extremely capable analyst, and I think he’s probably trying to work through as I did over the last week all the ways this thing could play out.”

David S. Golub, the lawyer for the coalition of 13 state employee unions that successfully sued Rowland, said the case appropriately forces public officials to show they are laying off employees to achieve specific economic ends, not as a general bludgeon in negotiations. Rowland constructed his layoffs with an eye toward maximum punishment of labor, not maximum savings, Golub said.

He said the impact of the 2nd Circuit decision is not nearly as broad as Rowland claims. The court, he said, clearly reacted to Rowland only going after union members to cut costs in 2003.

“Basically, the unions acknowledge that a governor has a right to make layoff decisions in a budget crisis. Unions don’t necessarily think that’s the best choice to make, but that’s a right the governor has,” Golub said Monday. “We specifically conceded that in our brief to the 2nd Circuit.”

Daniel E. Livingston, the chief negotiator for the employees bargaining coalition, said Jepsen made the right decision. It is past time to negotiate an end to an episode in which a governor singled out union members for punishment, he said.

“In America, no government official has the right to punish people for speaking with one voice, whether through their union or through any other lawful group. The 2nd Circuit’s decision finding unlawful then-Governor Rowland’s layoff of thousands of public service workers was a victory for the free speech rights of all Americans,” Livingston said.

“We appreciate the attorney general’s decision to withdraw the petition and sit down with us to try to work out a mutually agreeable settlement in the interests of public service workers and the public they serve, and we are hopeful that a mutually agreeable settlement can be reached to end the matter.”

Daniel J. Klau, who was hired by the state to represent Rowland and Ryan, declined comment.

 

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