Jonathan Bilyk May 5, 2016, 4:03pm

The Illinois Supreme Court has again sided with public worker retirees, saying retired Chicago Transportation Authority workers have a right to sue the CTA under the Illinois constitution’s so-called pension protection clause for requiring retirees to pay more for their health insurance.

However, a majority of justices determined the retirees held such a right only because their health insurance benefits were vested under the terms of the collective bargaining agreement in effect at the time they retired, not because agreements reached by unions are irrelevant compared to the protections afforded public workers and retirees under the state’s constitution.

“The mere fact that retirement benefits fall within the scope of section 5 of article XIII (the pension protection clause) does not mean that they are categorically insulated from modification in accordance with the terms of a CBA that has been approved by a union,” justices wrote in their majority opinion.

Justice Charles E. Freeman delivered the court’s majority opinion, with Chief Justice Rita B. Garman and justices Robert R. Thomas, Thomas L. Kilbride and Anne M. Burke concurring in the decision on the case docketed as  2016 IL 117638 Jerry Matthews, et. al.  vs Chicago Transit Authority.

While all justices believed the CTA retirees held the upper hand, justices Mary Jane Theis and Lloyd A. Karmeier disagreed with the majority’s reasoning, saying they believed the majority did not go far enough in upholding the rights of retirees in light of the court’s previous rulings on public worker retirement benefit protections.

The case had landed before the state high court in 2015, after an Illinois appellate panel overturned a Cook County judge’s ruling on the question of whether a group of CTA retirees had the right to sue the transit agency for altering the terms of the retirees’ health insurance plan.

The case first arose in 2011 when two groups – one made up of former CTA workers who retired before 2007 and another including current CTA workers and more recent retirees – filed suit in Cook County court over the CTA’s decision to force retirees to pay for a portion of their health benefits, when previously they did not. The CTA workers and retirees argued the decision violated the workers’ contractual rights under the CBA, and the state constitution’s pension protection clause.

The circuit court tossed the action brought by the current and recent retirees, saying their benefits were governed under the terms of the CBA negotiated by their union, which included the requirement they pay toward their health benefits, and thus they had no standing to bring suit.

The lower court also rejected the retiree action, saying the retirees’ health benefits weren’t vested, and they therefore lacked a constitutional right to protection from having those benefits modified by the CTA and the unions that had represented them.

On appeal, however, a panel of the Illinois First District Appellate Court demurred on the constitutional question, but said they believed the retirees should be allowed to sue on the grounds the health benefits were vested.

The Illinois Supreme Court, however, weighed in more strongly, saying the health benefits of these particular retirees should be protected under the state constitution’s language forbidding public bodies, like the CTA, from the altering the terms of public workers’ retirement benefits in ways that would “diminish or impair” those benefits.

According to the majority, led by Freeman, the CTA retirees should be allowed to sue for protection against the CTA’s payment demands because – while the changes were approved by the union following arbitration in 2007 – those workers had retired before the CBA was altered. Thus, their benefits were “vested” and subject to the constitutional protections.

However, the majority also indicated such benefits may not be quite as sacrosanct as the retirees had argued. They noted the retirees had attempted to argue, based on previous state high court rulings, that health benefits cannot be altered at any time, even if collectively bargained.

The majority rejected this contention, saying they believed the pension protection clause does have limits. If a union, in a CBA, agrees to measures which may conflict with workers’ constitutional or legal protections, the terms of that CBA would apply to those workers.

The pension protection clause, the justices said, doesn’t “transform a nonvested right to retirement benefits into one that is vested.”

Further, the majority noted they believed unions and public bodies have the explicit right under the law to negotiate a CBA that can reduce public workers’ health benefits, as well as others.

“The right to retiree health care is not separate and distinct from the rights created by collective bargaining,” the majority wrote.

The majority’s opinion and reasoning did not sit well with Theis and Karmeier.

While saying they agreed with the result of the majority’s opinion, they believed the majority veered off into legal territory upon which it did not need to tread.

Calling the majority’s analysis “problematic” and “an ill-advised detour,” Theis criticized the majority for discussing “vested benefits” at all. She said previous state Supreme Court decisions on the question of the protection of retiree health benefits should have sufficed to find the CTA transgressed the state constitution when it altered its retirees health insurance plans.

She said she agreed with the majority’s position that benefits can be “bilaterally modified through collective bargaining.” But she said, in this case, the retirees did not agree to any changes.

“Our constitution certainly does not prevent an agreement to modify pension benefits,” Theis wrote. “The question becomes whether … CTA retirees made such an agreement.”

Karmeier joined with Theis “well-reasoned” opinion, but said he also was troubled by the majority’s decision to discuss the abilities of unions to negotiate diminished benefits, at all. He said the majority opinion, more than being “ill-advised,” represents “an improper advisory opinion,” which Karmeier said transgressed precedent under which the court shied away from issuing opinions which “decide moot questions, render advisory opinions or consider issues where the result will not be affected.”

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Chicago Transit Authority
567 W Lake St
Chicago, IL 60661

Illinois Supreme Court
200 E Capitol Ave
Springfield, IL 62701

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