The importance of contractsWritten by Maggie Thurber | Toledo Free Press Writer | email@example.com
It seems that everywhere you turn these days, people are forgetting the importance of contracts and of abiding by them.
On a national and state level, politicians are discussing measures that would prevent one party in a contract from exercising their rights under that contract. Such actions are called — for the benefit of the masses — “moratoriums” on foreclosures. In actuality, it is the government deciding in favor of one party over another outside the structure of the courts, which is where contract disputes are supposed to be heard.
In Toledo, Mayor Carty Finkbeiner wanted to void contracts and reduce the pay of all the union employees under a claim of “exigent” circumstances. Toledo City Council said “no” to that idea and told the mayor to go back to the negotiating table to work out such conditions.
Finkbeiner had previously tried to furlough members of various unions but found himself, rightly so, being sued and losing those cases in court. The judges agreed with the unions that their contracts needed to be followed and that terms within those contacts needed to be met. They also ruled that disputes about the contracts had to be addressed through the processes delineated: grievances, fact finding and arbitration.
Recently, mayoral candidate Keith Wilkowski, apparently trying to build on the frustration citizens have about large bonuses and payouts to people who run their companies into the ground, attacked Finkbeiner over payouts of unused sick and vacation time to retiring employees. He said the mayor should end all severance payments to executive workers and temporarily suspend payments to union workers who retire this year. He got considerable media coverage.
Finkbeiner, in his response, pointed out that only one of the retirees was an “executive” (John Madigan) who had been employed by the city for decades and was “grandfathered in” on such terms. He also noted that the other retirees who received large payouts were members of unions who have contracts that govern such accumulation and payout of their time on the books.
Perhaps Carty had actually learned something from losing those cases in court?
Wilkowski, a lawyer and former law director for the city, should know that “temporarily suspending payments to union workers who retire this year” would most likely result in another lawsuit. But perhaps explaining the facts of the issue wouldn’t have sounded as good as in a press release.
The contracts our unions have with the city are — and have been — more generous that the city and taxpayers could afford. They contain terms, negotiated over the years, which are unsustainable whenever there is even the slightest bump in our economy. The compensation within those contracts is also much more generous than the taxpayers, who are footing the bills, could find in local employment. And the me-too clauses, which extend to other unions the benefits but no tradeoffs that a single union negotiates, have also caused costs to skyrocket.
I do not blame unions for asking for such terms, and I acknowledge that many of the benefits were in lieu of wage increase. I also do not blame citizens who are furious that they are paying for benefits for others that are so much greater than they could ever hope to have. But I do blame mayors and city council members for voting in favor of them — regardless of circumstances (including fact-finder reports and binding arbitration).
Contracts describe in detail the rights and obligations of the parties. A well-written contract provides the parties with a mutual understanding of the terms and conditions, ensuring that each party’s expectations will be met. They identify the procedures by which disputes are handled and lay out the conditions and processes for making changes. They are the basis for applying the “rule of law” within the courts.
So the questions are: Do we want to breech our contracts because the politicians have run the city into debt? Or because a candidate is trying to rile up populist anger over the amounts being paid out under the terms of those contracts? Do we want to have a city where binding agreements are no longer binding based upon the varying circumstances? And do we want to continue to incur the costs when parties to those contracts properly sue to ensure the terms are met?
These contracts need to be re-negotiated and concessions need to be made. But in the meantime, they are contracts and we have to honor them.
Former Lucas County Commissioner Maggie Thurber blogs at http://thurbersthoughts.blogspot.com/.