3% Lawsuit Update

State Employer Could Face Contract Breach Claim

Under an agreement reached in 2008, non-exclusively represented state employees were supposed to receive a 1 percent raise in fiscal year 2009-10 and a 3 percent raise in 2010-11. Office of the State Employer, (OSE) supported the first raise, but opposed the second when it came before the civil service commission. The Court of Claims found the OSE breached its contract with MAGE in not supporting the consent agreement, and the Court of Appeals, Judge Karen Fort Hood, Judge E. Thomas Fitzgerald and Judge Peter O'Connell, upheld that ruling in an unpublished per curiam opinion (Michigan Association of Governmental Employees v. Michigan, COA docket No. 304920).

"Defendants assert that recommending the agreed-to three percent compensation increase was impossible due to Michigan's budget situation at the time," the court said. "However, the Office of the State Employer's only duty under the consensus agreement was to recommend the agreed-to compensation increase. The state's budgetary situation would not serve as an impediment to making a recommendation, which can be rejected."

The appellate panel agreed the Court of Claims could not order the pay increase be retroactively applied, but it could order damages for the breach of contract. The lower court had left determination of any damages for trial.  Click here to see the letter from MAGE attorney Brandon Zuk (pictured) and the Court of Appeals' favorable decision.