Legal News

Ruling allows city to void union contracts

By Richard Binder

In the first ruling of its kind, a bankruptcy judge held the city of Vallejo, Calif. has the authority to void its existing union contracts in its effort to reorganize, holding public workers do not enjoy the same protections Congress gave union workers at private companies.

Many lawyers are seeing this as a potentially groundbreaking motion that is being watched closely.  Kelly Woodruff of Farella, Braun & Martel in San Francisco says, "If the city of Vallejo succeeds in using bankruptcy to void union contracts I am sure others will follow."

Vallejo, a suburb of San Francisco, issued a statement saying the union challenge of the city's insolvency "at a time of an unprecedented economic downturn and the labor groups ongoing intransigence regarding the modifications of their labor agreements has cost the city more than $3.5 million in bankruptcy costs. These funds could have provided critical municipal services to the Vallejo community," the city stated.

Read the full story at NLJ.

Full post as published by Legal Pad | LA on March 17, 2009 (boomark / email).