Detroit AFSCME, Other Unions Go to Court VS. City Bankruptcy Plea

DETROIT—Saying Detroit city workers would get hurt unnecessarily, the city’s AFSCME affiliate, which represents them, went to court August 19 against Detroit’s bankruptcy filing.  Two city workers’ pension systems also filed, as did several other unions representing Detroit workers.

“The city, led by its unelected, politically appointed emergency manager hastily commenced this unconstitutional, unlawfully authorized proceeding seeking the haven of bankruptcy to illegally attempt to slash pension and other post-employment benefit obligations and cram such reductions down the throats of current and former city em-ployees such as the AFSCME Detroit employees,” District Council 25’s objection read.

Emergency manager Kevyn Orr, named the city’s financial czar by Right Wing GOP Gov. Rick Snyder – under a takeover law pushed through by Right Wingers in the GOP-run legislature – announced July 18 that the city was bankrupt and would file for reorganization under Chapter 9 of the bankruptcy code.

Detroit is one of several majority-minority governments in Michigan now under such czars, under a law enacted by the mostly white GOP legislative majority.  Others include the Detroit school district and the nearby city of Flint.

Orr said he offered city creditors pennies on the dollar to restructure its debts, and claimed they refused.  He claimed he offered to bargain with AFSCME, but its leaders replied Orr gave them a take-it-or-else package of demands.  Under the financial manager law, Orr can rip up contracts with its unions, including AFSCME, the Fire Fighters, the Teachers and the Utility Workers, who also objected to bankruptcy.

AFSCME, the retirees, and – in a separate objection – state Attorney General William Schuette (R) also told federal bankruptcy judge Steven Rhodes the emergency manager law breaks the state constitution, which bans violating retirees’ city and state pension rights.  AFSCME said Orr had not proven his case that Detroit is broke.

Rhodes set Sept. 6 as the deadline for the city’s reply to AFSCME and other creditors objecting to the bankruptcy filing, including 40 individuals who massed outside Detroit’s courthouse on the deadline day.   He will hold a formal hearing in October.

“Orr threatened weeks ago that pension benefits earned by city retirees through their years of public service and in exchange for less pay could not be protected in bankruptcy,” AFSCME national President Lee Saunders said when Orr first broached the bankruptcy petition idea.  “Now it appears he and Snyder are working hard to make good on that threat.  Detroit’s public service employees worked hard and played by the rules, and now their freedom to retire with dignity is in peril.”  Detroit has an estimated 21,000 city retirees, more than double its present workforce.